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ATI Inc. (ATI) Intrinsic Value

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

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ATI Inc. (ATI)

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Intrinsic Value (DCF)

Current$124.42
→
Intrinsic$25.52
-79%
$14.84$25.52$45.80
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
Range: Bear $15 → Bull $46. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $46).
Discount ↓Growth →16%18%20%22%
8%$33$36$40$44
10%$21$23$26$28
12%$14$16$18$20
14%$10$11$13$14

Bull Case

  • Bull case ($46) with 24% growth, 9% discount rate

Bear Case

  • Bear case ($15) implies 88% downside at 16% growth, 12% discount
  • Trading 79% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($46) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$201.72M
Year 2$242.06M
Year 3$290.48M
Year 4$348.57M
Year 5$418.29M
Terminal$6.15B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$168.10MTTM 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. See FAQ below for full methodology.

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Frequently Asked Questions

Is ATI stock undervalued or overvalued?
🔴 OVERVALUED

ATI trades at $124.42 vs. our DCF-derived intrinsic value of $25.52, implying -79% downside. Using a 10.0% WACC and 20.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($42.51) suggests limited upside.

What is ATI's intrinsic value?

Using a 5-year DCF model: Base FCF of $168M, projected at 20.0% 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 $1.17B net debt and dividing by 0.15B shares: Bear $13.99 | Base $25.52 | Bull $42.51. Current price $124.42 implies -79% to base case.

How is ATI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% 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 ($4.92B).

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: 29.3x.