RFIL
RF Industries, Ltd.
$10.32
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 38.4% above fair value
You pay
$10.32
Bear
$4.35
Fair
$7.45
Bull
$10.78
Bear
$4.35
-57.9%
8% stage 1 growth, 11% discount
Fair
$7.45
-27.8%
13% stage 1 growth, 11% discount
Bull
$10.78
+4.5%
17% stage 1 growth, 11% discount
Adjust Assumptions
13.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
42%
Implied Market Multiple
36.2x
Market is pricing in (growth)
16.9%
vs 13.4% base
Summary
Using a two-stage FCF DCF with 13% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $7.45 per share.
Warnings
Stock-based employee pay equals 1163% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
This stock is 54% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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