VMI
Valmont Industries, Inc.
$546.83
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 94.9% above fair value
You pay
$546.83
Bear
$219.08
Fair
$280.62
Bull
$336.59
Bear
$219.08
-59.9%
4% stage 1 growth, 12% discount
Fair
$280.62
-48.7%
7% stage 1 growth, 12% discount
Bull
$336.59
-38.4%
9% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
32%
Implied Market Multiple
36.5x
Market is pricing in (growth)
19.0%
vs 7.2% 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 $565.00 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $280.62 per share.
Warnings
Wall Street's average price target is $565.00 (from 14 analysts). Our estimate is 63% 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