TDG
TransDigm Group Incorporated
$1,214.43
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 57.1% above fair value
You pay
$1,214.43
Bear
$198.21
Fair
$773.17
Bull
$1,411.06
Bear
$198.21
-83.7%
9% stage 1 growth, 11% discount
Fair
$773.17
-36.3%
15% stage 1 growth, 11% discount
Bull
$1,411.06
+16.2%
19% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
43%
Implied Market Multiple
56.0x
Market is pricing in (growth)
22.7%
vs 14.8% 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 $1517.89 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $773.17 per share.
Warnings
Wall Street's average price target is $1517.89 (from 39 analysts). Our estimate is 70% 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