ROAD
Construction Partners, Inc.
$95.50
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 34.5% above fair value
You pay
$95.50
Bear
$28.29
Fair
$71.02
Bull
$121.15
Bear
$28.29
-70.4%
10% stage 1 growth, 11% discount
Fair
$71.02
-25.6%
17% stage 1 growth, 11% discount
Bull
$121.15
+26.9%
22% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
44%
Implied Market Multiple
55.2x
Market is pricing in (growth)
22.5%
vs 17.1% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $136.25 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $71.02 per share.
Warnings
Stock-based employee pay equals 36% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $136.25 (from 9 analysts). Our estimate is 60% below the consensus -- consider that gap carefully.
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