WRLD
World Acceptance Corporation
$192.06
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 69.6% below fair value
You pay
$192.06
Bear
$527.41
Fair
$632.23
Bull
$722.37
Bear
$527.41
+174.6%
3% stage 1 growth, 11% discount
Fair
$632.23
+229.2%
5% stage 1 growth, 11% discount
Bull
$722.37
+276.1%
6% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
34%
Implied Market Multiple
6.4x
Market is pricing in (growth)
-7.0%
vs 5.0% base
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $632.23 per share.
Warnings
Stock-based employee pay equals 56% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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