WCN
Waste Connections, Inc.
$155.71
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 55.1% above fair value
You pay
$155.71
Bear
$60.90
Fair
$100.39
Bull
$138.25
Bear
$60.90
-60.9%
5% stage 1 growth, 11% discount
Fair
$100.39
-35.5%
9% stage 1 growth, 11% discount
Bull
$138.25
-11.2%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
42.2x
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 $205.58 from 33 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $100.39 per share.
Warnings
Wall Street's average price target is $205.58 (from 33 analysts). Our estimate is 73% 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