RM
Regional Management Corp.
$42.22
Platform & Compounding FCF
65%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 89.5% below fair value
You pay
$42.22
Bear
$276.81
Fair
$400.57
Bull
$516.38
Bear
$276.81
+555.6%
5% stage 1 growth, 11% discount
Fair
$400.57
+848.8%
8% stage 1 growth, 11% discount
Bull
$516.38
+1123.1%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
37%
Implied Market Multiple
7.2x
Market is pricing in (growth)
-5.4%
vs 8.2% base
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $400.57 per share.
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