Power Solutions International, Inc. (PSIX) DCF Valuation
Why we don't show a single “fair value” for PSIX
A trailing-FCF DCF can't fairly anchor Power Solutions International, Inc. right now — free cash flow is currently depressed by a heavy investment cycle while revenue keeps growing. For a company in this position, trailing free cash flow understates what the business actually earns for owners, so any “fair value” built on it would be misleadingly low. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$37.99 is justified only if free cash flow grows about +24.0% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 6.8%/yr | 12.5% | $16.43 |
| Base case | 9.8%/yr | 11.5% | $21.21 |
| Optimistic | 12.8%/yr | 10.5% | $27.68 |
| Analyst DCF (FMP) | independent reference — different model | $17.21 | |
Current Price
$37.99
Market-Implied Growth
+24.0%/yr
vs +8.1% 5Y actual
Base-Case Model Value
$21.21
model output — not a price target
PSIX DCF Fair Value Calculator
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for PSIX (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 $36.0M · 0.02B shares · net debt $57.5M
Estimated Fair Value
$27.11
-28.6% vs $37.99
Sensitivity — fair value by discount rate × terminal growth
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 9.8%/yr FCF growth and 10-year horizon fixed. Green = above today's $37.99; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $33.71 | $35.17 | $36.85 | $38.78 | $41.03 |
| 10.5% | $29.10 | $30.16 | $31.35 | $32.70 | $34.24 |
| 11.5% | $25.45 | $26.24 | $27.11 | $28.09 | $29.19 |
| 12.5% | $22.49 | $23.09 | $23.75 | $24.47 | $25.28 |
| 13.5% | $20.05 | $20.51 | $21.02 | $21.57 | $22.17 |
About Power Solutions International, Inc.
Power Solutions International, Inc. (PSIX) is a global entity operating across the United States, North America, the Pacific Rim, and Europe, specializing in the engineering, manufacturing, marketing, and sale of sophisticated engines and power systems. The company offers alternative-fuel power solutions designed for original equipment manufacturers (OEMs) in both off-highway industrial sectors and on-road vehicle markets. Additionally, PSIX develops large-scale, custom-engineered electrical power generation systems. Its product range extends to basic engine blocks, equipped with integrated fuel system components, as well as comprehensive, pre-packaged power systems. These complete units include a wide array of integrated parts such as front accessory drives, cooling mechanisms, electronic controls, air intake and fuel delivery systems, protective housings, power takeoff (PTO) systems, exhaust systems, hydraulic components, enclosures, mounting brackets, hoses, tubes, packaging, and telematics. PSIX produces both compression and spark-ignited internal combustion engines capable of running on diverse fuels like natural gas, propane, gasoline, diesel, and various biofuels. These engines are deployed across the energy, industrial, and transportation markets. The applications for the company's power solutions are extensive. In the power generation sphere, they support standby and prime power, demand response, microgrid systems, renewable energy resilience, and combined heat and power facilities. Industrial uses encompass arbor equipment (e.g., wood chippers, stump grinders), material handling (forklifts), facility maintenance (sweepers/industrial scrubbers, ice resurfacing equipment), aerial lift platforms, irrigation pumps, and a range of oil and gas operations including compression, lifts, and pump jacks, alongside off-road utility vehicles and ground support equipment. Within the transportation sector, PSIX caters to light and medium-duty vocational trucks and vans, school and transit buses, and terminal and utility tractors. Power Solutions International, Inc. also holds a strategic collaboration agreement with Weichai Power Co., Ltd. The company was founded in 1985 and its headquarters are located in Wood Dale, Illinois.
- Sector
- Industrials
- Industry
- Industrial - Machinery
- CEO
- Constantine Xykis