RUSHA
Rush Enterprises, Inc.
$68.89
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 43.5% below fair value
You pay
$68.89
Bear
$88.46
Fair
$122.00
Bull
$154.44
Bear
$88.46
+28.4%
6% stage 1 growth, 11% discount
Fair
$122.00
+77.1%
9% stage 1 growth, 11% discount
Bull
$154.44
+124.2%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
11.7x
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 $82.00 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $122.00 per share.
Warnings
Wall Street's average price target is $82.00 (from 17 analysts). Our estimate is 65% above 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