ROAD
Construction Partners, Inc.
$112.86
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 54.5% above fair value
You pay
$112.86
Bear
$29.09
Fair
$73.03
Bull
$124.59
Bear
$29.09
-74.2%
10% stage 1 growth, 11% discount
Fair
$73.03
-35.3%
17% stage 1 growth, 11% discount
Bull
$124.59
+10.4%
22% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
44%
Implied Market Multiple
63.0x
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 $146.33 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $73.03 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 $146.33 (from 9 analysts). Our estimate is 63% 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