...

Enact Holdings, Inc. (ACT) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Enact Holdings, Inc. (ACT)

View Full Profile →

Intrinsic Value (DCF)

Current$38.66
→
Intrinsic$78.39
+103%
$53.35$78.39$125.99
Market implies 1% growth for 5 years
DCF analysis suggests ACT could have 103% upside at 8% growth — verify assumptions match your view.
At $39, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $53 → Bull $126. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$93$102$111$121
10%$66$72$78$85
12%$51$56$60$65
14%$42$45$49$53

Bull Case

  • Bull case ($126) offers 226% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($53) with 6% growth, 12% discount rate
Loading charts...

5-Year Net Income Projection

Year 1$743.11M
Year 2$802.56M
Year 3$866.77M
Year 4$936.11M
Year 5$1.01B
Terminal$14.88B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Net Income$688.07MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses Net Income (FCF not meaningful for insurers). See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare ACT vs BRK.BStock Screener

Frequently Asked Questions

Is ACT stock undervalued or overvalued?
🟢 UNDERVALUED

ACT trades at $38.66 vs. our DCF-derived intrinsic value of $78.39, implying +96% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of ACT's future cash flows. The bear case ($56.53) still suggests upside, providing margin of safety.

What is ACT's intrinsic value?

Using a 5-year DCF model: Base FCF of $688M, projected at 8.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $144M net debt and dividing by 0.16B shares: Bear $56.53 | Base $78.39 | Bull $107.61. Current price $38.66 implies +96% to base case.

How is ACT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($12.49B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 18.2x.