TGM's two-stage DCF values FreightCar America, Inc. (RAIL) between $7.67 and $12.65 depending on assumptions, with a base case of $10.01. Growth is taken from the company's own record (5-year revenue CAGR (capped at 18%)), fading to 2.5% long-run; the discount rate (11.3%) reflects its beta.
What would today's price require?
$6.76 is justified only if free cash flow grows about +9.3% a year (fading to 2.5% long-run) at a 11.3% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 12.3% | $7.67 |
| Base case | 18.0%/yr | 11.3% | $10.01 |
| Optimistic | 20.0%/yr | 10.3% | $12.65 |
Current Price
$6.76
Market-Implied Growth
+9.3%/yr
vs +24.4% 5Y actual
Model Scenario Range
$7.67 – $12.65
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 RAIL (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 $17.5M · 0.03B shares · net debt $44.8M
Estimated Fair Value
$10.01
+48.0% vs $6.76
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 18.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $6.76; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.3% | $12.06 | $12.83 | $13.70 | $14.72 | $15.90 |
| 10.3% | $10.39 | $10.97 | $11.62 | $12.35 | $13.20 |
| 11.3% | $9.07 | $9.52 | $10.01 | $10.57 | $11.19 |
| 12.3% | $8.00 | $8.35 | $8.74 | $9.17 | $9.65 |
| 13.3% | $7.11 | $7.40 | $7.71 | $8.05 | $8.42 |
