VMI
Valmont Industries, Inc.
$513.43
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 99.5% above fair value
You pay
$513.43
Bear
$199.06
Fair
$257.36
Bull
$310.39
Bear
$199.06
-61.2%
4% stage 1 growth, 12% discount
Fair
$257.36
-49.9%
7% stage 1 growth, 12% discount
Bull
$310.39
-39.5%
9% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
32%
Implied Market Multiple
34.8x
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 $475.50 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $257.36 per share.
Warnings
Wall Street's average price target is $475.50 (from 14 analysts). Our estimate is 57% 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