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BWX Technologies, Inc. (BWXT) Intrinsic Value

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

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BWX Technologies, Inc. (BWXT)

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Intrinsic Value (DCF)

Current$213.25
→
Intrinsic$70.51
-67%
$44.65$70.51$119.63
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
Range: Bear $45 → Bull $120. 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: $120).
Discount ↓Growth →16%18%20%22%
8%$88$97$105$115
10%$59$64$71$77
12%$43$47$51$56
14%$32$36$39$43

Bull Case

  • Bull case ($120) with 24% growth, 9% discount rate

Bear Case

  • Bear case ($45) implies 79% downside at 16% growth, 12% discount
  • Trading 67% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($120) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$305.74M
Year 2$366.88M
Year 3$440.26M
Year 4$528.31M
Year 5$633.98M
Terminal$9.33B

📐 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$254.78MTTM 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 BWXT stock undervalued or overvalued?
🔴 OVERVALUED

BWXT trades at $213.25 vs. our DCF-derived intrinsic value of $70.51, implying -64% 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 ($111.66) suggests limited upside.

What is BWXT's intrinsic value?

Using a 5-year DCF model: Base FCF of $255M, 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 $981M net debt and dividing by 0.09B shares: Bear $42.57 | Base $70.51 | Bull $111.66. Current price $213.25 implies -64% to base case.

How is BWXT'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 ($7.46B).

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.