MODEL VERDICT
Friedman Industries, Incorporated (FRD)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| EV/EBITDA 17 industry peers | $23.94 | +21.2% | 20% | A- | Peer Data |
| Industry Median P/E 11 industry peers | $19.75 | +0.0% | 15% | A | Peer Data |
| EV/EBIT 15 industry peers | $1.15 | -94.2% | 8% | B+ | Peer Data |
| EV To Revenue 18 industry peers | $57.97 | +193.5% | 4% | B | Data |
| Price / Sales 18 industry peers | $57.69 | +192.1% | 3% | B | Model Driven |
| Earnings Yield 12 industry peers | $20.80 | +5.3% | 2% | B | Data |
| Weighted Output Blended model output | $21.89 | +10.9% | 100% | 59 | SLIGHTLY UNDERVALUED |
| EPS Growth ↓ | P/E Multiple → | 19× | 21× | 23× (Current) | 25× | 27× |
|---|---|---|---|---|---|
| Bear Case (4%) | $17 | $19 | $21 | $23 | $24 |
| Conservative (7%) | $18 | $19 | $21 | $23 | $25 |
| Base Case (10.0%) | $18 | $20 | $22 | $24 | $26 |
| Bull Case (14%) | $19 | $21 | $23 | $25 | $27 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 9.01 | 6.08 | 4.80 | 23.55 | 7.22 |
| EV/EBIT | 6.55 | 4.61 | 2.84 | 17.76 | 5.57 |
| EV/EBITDA | 8.61 | 4.70 | 2.72 | 29.85 | 10.48 |
| P/FCF | 8.02 | 6.20 | 2.39 | 17.27 | 6.53 |
| P/FFO | 6.90 | 5.34 | 4.21 | 15.18 | 4.13 |
| P/TBV | 0.86 | 0.86 | 0.58 | 1.07 | 0.17 |
| P/AFFO | 13.35 | 8.64 | 7.49 | 32.53 | 9.84 |
| P/B Ratio | 0.86 | 0.86 | 0.58 | 1.07 | 0.17 |
| Div Yield | 0.01 | 0.01 | 0.01 | 0.03 | 0.01 |
| P/S Ratio | 0.29 | 0.23 | 0.21 | 0.52 | 0.11 |
Based on our peer multiples analysis with 15 valuation metrics, the model estimates FRD's fair value at $21.89 vs the current price of $19.75, implying +10.9% upside potential. Model verdict: Slightly Undervalued. Confidence: 59/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $21.89 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $15.15 (P10) to $26.87 (P90), with a median of $20.12.
FRD's current P/E of 22.7x compares to the industry median of 22.7x (11 peers in the group). This represents a +0.0% discount to the industry. The historical average P/E is 9.0x over 6 years. Signal: Fair Value.
No analyst coverage data is available for FRD.
The model confidence score is 59/100, based on: data completeness (18), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: --10 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Multiple compression: FRD trades at the 4550th percentile of its historical P/E range. A reversion to median (9.0×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that FRD's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.5σ, meaning margins are 0.5 standard deviations below their historical average. If margins revert to the 6-year mean (5.3%), the model estimates fair value drops by 520.0% to approximately $19. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.