UPBD
Upbound Group, Inc.
$21.16
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 11.3% below fair value
You pay
$21.16
Bear
$14.74
Fair
$23.85
Bull
$31.81
Bear
$14.74
-30.4%
3% stage 1 growth, 12% discount
Fair
$23.85
+12.7%
6% stage 1 growth, 12% discount
Bull
$31.81
+50.3%
7% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
31%
Implied Market Multiple
14.5x
Market is pricing in (growth)
6.4%
vs 5.6% 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 $39.67 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $23.85 per share.
Warnings
Stock-based employee pay equals 62% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $39.67 (from 20 analysts). Our estimate is 53% 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