URI
United Rentals, Inc.
$1,044.86
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 149.1% above fair value
You pay
$1,044.86
Bear
$63.67
Fair
$419.44
Bull
$771.46
Bear
$63.67
-93.9%
6% stage 1 growth, 12% discount
Fair
$419.44
-59.9%
10% stage 1 growth, 12% discount
Bull
$771.46
-26.2%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (10% base case)
Terminal Value % of EV
35%
Implied Market Multiple
68.8x
Market is pricing in (growth)
27.7%
vs 10.5% 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 $1133.75 from 41 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $419.44 per share.
Warnings
Wall Street's average price target is $1133.75 (from 41 analysts). Our estimate is 90% 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