TGM's two-stage DCF values American Public Education, Inc. (APEI) between $29.07 and $44.84 depending on assumptions, with a base case of $35.73. 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 (11%) reflects its beta.
What would today's price require?
$45.74 is justified only if free cash flow grows about +22.2% a year (fading to 2.5% long-run) at a 11% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 12.0%/yr | 12.0% | $29.07 |
| Base case | 15.0%/yr | 11.0% | $35.73 |
| Optimistic | 18.0%/yr | 10.0% | $44.84 |
Current Price
$45.74
Market-Implied Growth
+22.2%/yr
vs +15.0% 5Y actual
Model Scenario Range
$29.07 – $44.84
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 APEI (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 $29.7M · 0.02B shares · net cash $70.5M
Estimated Fair Value
$35.73
-21.9% vs $45.74
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 15.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $45.74; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.0% | $41.57 | $43.80 | $46.36 | $49.34 | $52.87 |
| 10.0% | $36.79 | $38.45 | $40.33 | $42.47 | $44.94 |
| 11.0% | $33.03 | $34.31 | $35.73 | $37.33 | $39.14 |
| 12.0% | $30.00 | $31.00 | $32.11 | $33.34 | $34.71 |
| 13.0% | $27.51 | $28.31 | $29.20 | $30.16 | $31.23 |
