WEX
WEX Inc.
$171.48
Platform & Compounding FCF
70%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 32.2% below fair value
You pay
$171.48
Bear
$196.57
Fair
$252.89
Bull
$306.72
Bear
$196.57
+14.6%
5% stage 1 growth, 11% discount
Fair
$252.89
+47.5%
9% stage 1 growth, 11% discount
Bull
$306.72
+78.9%
12% stage 1 growth, 11% discount
Adjust Assumptions
9.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
13.2x
Market is pricing in (growth)
3.4%
vs 9.0% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$190.57
Divergence from AlphaVal
33%
Summary
Using a two-stage FCF DCF with 9% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $252.89 per share.
Warnings
Stock-based employee pay equals 33% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $190.57 (from 32 analysts). Our estimate is 33% above 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