TDG
TransDigm Group Incorporated
$1,213.51
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 53.9% above fair value
You pay
$1,213.51
Bear
$202.16
Fair
$788.60
Bull
$1,439.21
Bear
$202.16
-83.3%
9% stage 1 growth, 11% discount
Fair
$788.60
-35.0%
15% stage 1 growth, 11% discount
Bull
$1,439.21
+18.6%
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
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 $1569.30 from 39 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $788.60 per share.
Warnings
Wall Street's average price target is $1569.30 (from 39 analysts). Our estimate is 71% 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