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DXP Enterprises, Inc. (DXPE) Intrinsic Value

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

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DXP Enterprises, Inc. (DXPE)

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Intrinsic Value (DCF)

Current$120.69
→
Intrinsic$103.61
-14%
$60.53$103.61$185.40
Market implies 23% growth for 5 years
DXPE appears fairly valued — current price aligns with our DCF estimate.
At $121, the market prices in continued strong cash flow growth (23%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $61 → Bull $185. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$133$147$162$177
10%$84$94$104$114
12%$57$64$72$80
14%$40$45$51$58

Bull Case

  • Bull case ($185) offers 54% upside at 24% growth, 9% discount

Bear Case

  • Bear case ($61) implies 50% downside at 16% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$92.57M
Year 2$111.09M
Year 3$133.30M
Year 4$159.96M
Year 5$191.96M
Terminal$2.82B

📐 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$77.14MTTM 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 DXPE stock undervalued or overvalued?
🟡 FAIRLY VALUED

DXPE trades at $120.69, within 10% of our $103.61 intrinsic value estimate. At 10.0% WACC and 20.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $57.07 (bear) to $172.13 (bull).

What is DXPE's intrinsic value?

Using a 5-year DCF model: Base FCF of $77M, 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 $528M net debt and dividing by 0.02B shares: Bear $57.07 | Base $103.61 | Bull $172.13. Current price $120.69 implies -6% to base case.

How is DXPE'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 ($2.26B).

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.