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Core & Main, Inc. (CNM) Intrinsic Value

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

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Core & Main, Inc. (CNM)

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Intrinsic Value (DCF)

Current$57.86
→
Intrinsic$90.53
+56%
$57.67$90.53$152.86
Market implies 15% growth for 5 years
DCF analysis suggests CNM could have 56% upside at 25% growth — verify assumptions match your view.
At $58, the market prices in continued high-teens cash flow growth (15%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $58 → Bull $153. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$114$124$135$147
10%$76$83$91$98
12%$55$60$66$72
14%$42$46$50$55

Bull Case

  • Bull case ($153) offers 164% upside at 30% growth, 9% discount
  • 36% margin of safety vs. base case estimate
  • Market-implied growth (15%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($58) 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$732.50M
Year 2$915.63M
Year 3$1.14B
Year 4$1.43B
Year 5$1.79B
Terminal$26.31B

📐 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$586.00MTTM 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 CNM stock undervalued or overvalued?
🟢 UNDERVALUED

CNM trades at $57.86 vs. our DCF-derived intrinsic value of $72.86, implying +31% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of CNM's future cash flows. The bear case ($43.52) still suggests upside, providing margin of safety.

What is CNM's intrinsic value?

Using a 5-year DCF model: Base FCF of $586M, 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 $2.50B net debt and dividing by 0.20B shares: Bear $43.52 | Base $72.86 | Bull $116.07. Current price $57.86 implies +31% to base case.

How is CNM'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 ($17.16B).

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.