ZWS
Zurn Elkay Water Solutions Corporation
$48.00
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 16.9% above fair value
You pay
$48.00
Bear
$29.21
Fair
$41.06
Bull
$52.96
Bear
$29.21
-39.2%
7% stage 1 growth, 11% discount
Fair
$41.06
-14.5%
11% stage 1 growth, 11% discount
Bull
$52.96
+10.3%
14% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
40%
Implied Market Multiple
29.1x
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 $54.71 from 8 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $41.06 per share.
Warnings
Wall Street's average price target is $54.71 (from 8 analysts). Our estimate is 31% 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