RFIL
RF Industries, Ltd.
$18.75
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 201.2% above fair value
You pay
$18.75
Bear
$3.58
Fair
$6.22
Bull
$9.03
Bear
$3.58
-80.9%
8% stage 1 growth, 12% discount
Fair
$6.22
-66.8%
13% stage 1 growth, 12% discount
Bull
$9.03
-51.8%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
60.8x
Summary
Using a two-stage FCF DCF with 13% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $6.22 per share.
Warnings
Stock-based employee pay equals 1163% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions