ZWS
Zurn Elkay Water Solutions Corporation
$48.38
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 13.9% above fair value
You pay
$48.38
Bear
$29.84
Fair
$42.48
Bull
$55.32
Bear
$29.84
-38.3%
7% stage 1 growth, 11% discount
Fair
$42.48
-12.2%
11% stage 1 growth, 11% discount
Bull
$55.32
+14.4%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
27.0x
Market is pricing in (growth)
13.0%
vs 11.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$58.67
Divergence from AlphaVal
28%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $42.48 per share.
Warnings
Wall Street's average price target is $58.67 (from 9 analysts). Our estimate is 28% 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