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FirstService Corporation (FSV) Intrinsic Value

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

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FirstService Corporation (FSV)

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Intrinsic Value (DCF)

Current$163.13
→
Intrinsic$164.17
+1%
$102.45$164.17$281.34
Market implies 20% growth for 5 years
FSV appears fairly valued — current price aligns with our DCF estimate.
At $163, the market prices in continued high-teens cash flow growth (20%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $102 → Bull $281. Current price implies expectations near the base case.
Discount ↓Growth →16%18%20%22%
8%$207$226$247$270
10%$136$150$164$179
12%$98$108$118$130
14%$73$81$89$98

Bull Case

  • Bull case ($281) offers 72% upside at 24% growth, 9% discount
  • 1% margin of safety vs. base case estimate
  • Market-implied growth (20%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($102) implies 37% downside at 16% growth, 12% discount
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5-Year FFO Projection

Year 1$359.57M
Year 2$431.49M
Year 3$517.78M
Year 4$621.34M
Year 5$745.61M
Terminal$10.97B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$299.64MTTM 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. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is FSV stock undervalued or overvalued?
🟡 FAIRLY VALUED

FSV trades at $163.13, within 10% of our $164.17 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 $97.50 (bear) to $262.33 (bull).

What is FSV's intrinsic value?

Using a 5-year DCF model: Base FCF of $300M, 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 $1.34B net debt and dividing by 0.05B shares: Bear $97.50 | Base $164.17 | Bull $262.33. Current price $163.13 implies +6% to base case.

How is FSV'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 ($8.77B).

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.