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TopBuild Corp. (BLD) Intrinsic Value

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

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TopBuild Corp. (BLD)

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Intrinsic Value (DCF)

Current$474.48
→
Intrinsic$775.62
+63%
$515.82$775.62$1,268.52
Market implies 13% growth for 5 years
DCF analysis suggests BLD could have 63% upside at 25% growth — verify assumptions match your view.
At $474, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $516 → Bull $1269. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$963$1044$1130$1221
10%$662$717$776$838
12%$496$537$580$626
14%$390$422$457$493

Bull Case

  • Bull case ($1269) offers 167% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (13%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($516) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$883.35M
Year 2$1.10B
Year 3$1.38B
Year 4$1.73B
Year 5$2.16B
Terminal$31.73B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$706.68MTTM 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 BLD stock undervalued or overvalued?
🟢 UNDERVALUED

BLD trades at $474.48 vs. our DCF-derived intrinsic value of $635.92, implying +43% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of BLD's future cash flows. The bear case ($403.89) still suggests upside, providing margin of safety.

What is BLD's intrinsic value?

Using a 5-year DCF model: Base FCF of $707M, projected at 25.0% 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 $1.18B net debt and dividing by 0.03B shares: Bear $403.89 | Base $635.92 | Bull $977.61. Current price $474.48 implies +43% to base case.

How is BLD's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% 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 ($20.69B).

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.