TGM's two-stage DCF values Granite Construction Incorporated (GVA) between $28.49 and $60.59 depending on assumptions, with a base case of $41.98. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use)), fading to 2.5% long-run; the discount rate (10.7%) reflects its beta.
What would today's price require?
$119.92 is justified only if free cash flow grows about +28.6% a year (fading to 2.5% long-run) at a 10.7% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 4.8%/yr | 11.7% | $28.49 |
| Base case | 7.8%/yr | 10.7% | $41.98 |
| Optimistic | 10.8%/yr | 9.7% | $60.59 |
Current Price
$119.92
Market-Implied Growth
+28.6%/yr
vs +7.8% 5Y actual
Model Scenario Range
$28.49 – $60.59
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for GVA (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $181.6M · 0.04B shares · net debt $968.4M
Estimated Fair Value
$41.98
-65.0% vs $119.92
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 7.8%/yr FCF growth and 10-year horizon fixed. Green = above today's $119.92; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 8.7% | $53.63 | $58.16 | $63.42 | $69.59 | $76.93 |
| 9.7% | $44.05 | $47.40 | $51.20 | $55.57 | $60.64 |
| 10.7% | $36.56 | $39.12 | $41.98 | $45.21 | $48.88 |
| 11.7% | $30.56 | $32.56 | $34.77 | $37.24 | $40.00 |
| 12.7% | $25.63 | $27.24 | $28.99 | $30.93 | $33.06 |
