TRNS
Transcat, Inc.
$86.23
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 231.0% above fair value
You pay
$86.23
Bear
$16.23
Fair
$26.05
Bull
$35.61
Bear
$16.23
-81.2%
6% stage 1 growth, 11% discount
Fair
$26.05
-69.8%
10% stage 1 growth, 11% discount
Bull
$35.61
-58.7%
13% stage 1 growth, 11% discount
Adjust Assumptions
9.7%
11.0%
3.0%
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
39%
Implied Market Multiple
53.4x
Market is pricing in (growth)
22.1%
vs 9.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$123.60
Divergence from AlphaVal
79%
Summary
Using a two-stage FCF DCF with 10% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $26.05 per share.
Warnings
Stock-based employee pay equals 140% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $123.60 (from 10 analysts). Our estimate is 79% 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