TGM's two-stage DCF values Sprout Social, Inc. (SPT) between $6.80 and $11.14 depending on assumptions, with a base case of $8.73. Growth is taken from the company's own record (5-year revenue CAGR (FCF growth too volatile to use) (capped at 18%)), fading to 2.5% long-run; the discount rate (8.9%) reflects its beta.
What would today's price require?
$10.13 is justified only if free cash flow grows about +22.1% a year (fading to 2.5% long-run) at a 8.9% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 15.0%/yr | 9.9% | $6.80 |
| Base case | 18.0%/yr | 8.9% | $8.73 |
| Optimistic | 20.0%/yr | 7.9% | $11.14 |
Current Price
$10.13
Market-Implied Growth
+22.1%/yr
vs +25.2% 5Y actual
Model Scenario Range
$6.80 – $11.14
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 SPT (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 $16.1M · 0.06B shares · net cash $40.5M
Estimated Fair Value
$8.73
-13.9% vs $10.13
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 $10.13; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.9% | $10.69 | $11.59 | $12.69 | $14.07 | $15.85 |
| 7.9% | $9.01 | $9.62 | $10.34 | $11.20 | $12.26 |
| 8.9% | $7.79 | $8.23 | $8.73 | $9.31 | $10.00 |
| 9.9% | $6.87 | $7.19 | $7.55 | $7.97 | $8.45 |
| 10.9% | $6.14 | $6.39 | $6.67 | $6.98 | $7.33 |
