ZWS
Zurn Elkay Water Solutions Corporation
$47.61
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 11.5% above fair value
You pay
$47.61
Bear
$29.92
Fair
$42.69
Bull
$55.67
Bear
$29.92
-37.2%
7% stage 1 growth, 11% discount
Fair
$42.69
-10.3%
11% stage 1 growth, 11% discount
Bull
$55.67
+16.9%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.4%
11.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
26.6x
Market is pricing in (growth)
12.8%
vs 11.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (9 analysts)
$58.33
Divergence from AlphaVal
27%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $42.69 per share.
Warnings
Wall Street's average price target is $58.33 (from 9 analysts). Our estimate is 27% 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