EMCOR Group, Inc. (EME) Intrinsic Value

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

Popular:

EMCOR Group, Inc. (EME)

View Full Profile →

Intrinsic Value (DCF)

Current$660.65
Intrinsic$1,027.52
+56%
$706.34$1,027.52$1,636.90
Market implies 13% growth for 5 years
DCF analysis suggests EME could have 56% upside at 25% growth — verify assumptions match your view.
At $661, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $706 → Bull $1637. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$1260$1359$1465$1578
10%$887$955$1028$1104
12%$681$732$786$843
14%$551$591$633$678

Bull Case

  • Bull case ($1637) offers 148% 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 ($706) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
Loading charts...

5-Year Free Cash Flow Projection

Year 1$1.67B
Year 2$2.08B
Year 3$2.60B
Year 4$3.25B
Year 5$4.07B
Terminal$59.86B

📐 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$1.33BTTM 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.

Frequently Asked Questions

Is EME stock undervalued or overvalued?
🟢 UNDERVALUED

EME trades at $660.65 vs. our DCF-derived intrinsic value of $854.82, implying +30% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of EME's future cash flows. The bear case ($567.96) still suggests upside, providing margin of safety.

What is EME's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.33B, 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 $-991M net debt and dividing by 0.05B shares: Bear $567.96 | Base $854.82 | Bull $1277.25. Current price $660.65 implies +30% to base case.

How is EME'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 ($39.02B).

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.