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Dorman Products, Inc. (DORM) Intrinsic Value

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

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Dorman Products, Inc. (DORM)

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Intrinsic Value (DCF)

Current$128.79
→
Intrinsic$164.56
+28%
$106.83$164.56$274.18
Market implies 14% growth for 5 years
DORM shows 28% potential upside using 20% growth — reasonable if fundamentals hold.
At $129, the market prices in 14% annual cash flow growth — a moderate expectation aligned with historical trends (20%).
Range: Bear $107 → Bull $274. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →16%18%20%22%
8%$204$223$242$263
10%$139$151$165$179
12%$102$112$122$132
14%$79$87$94$103

Bull Case

  • Bull case ($274) offers 113% upside at 24% growth, 9% discount
  • 22% margin of safety vs. base case estimate
  • Market-implied growth (14%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($107) implies 17% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$229.95M
Year 2$275.94M
Year 3$331.13M
Year 4$397.36M
Year 5$476.83M
Terminal$7.02B

📐 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$191.63MTTM 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 DORM stock undervalued or overvalued?
🟢 UNDERVALUED

DORM trades at $128.79 vs. our DCF-derived intrinsic value of $164.56, implying +31% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of DORM's future cash flows. The bear case ($102.20) still suggests upside, providing margin of safety.

What is DORM's intrinsic value?

Using a 5-year DCF model: Base FCF of $192M, 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 $516M net debt and dividing by 0.03B shares: Bear $102.20 | Base $164.56 | Bull $256.39. Current price $128.79 implies +31% to base case.

How is DORM'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 ($5.61B).

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.