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Installed Building Products, Inc. (IBP) Intrinsic Value

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

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Installed Building Products, Inc. (IBP)

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Intrinsic Value (DCF)

Current$314.40
→
Intrinsic$292.08
-7%
$191.49$292.08$482.92
Market implies 27% growth for 5 years
IBP appears fairly valued — current price aligns with our DCF estimate.
At $314, the market prices in continued strong cash flow growth (27%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $191 → Bull $483. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$365$396$429$464
10%$248$269$292$316
12%$184$200$216$234
14%$143$155$169$183

Bull Case

  • Bull case ($483) offers 54% upside at 30% growth, 9% discount

Bear Case

  • Bear case ($191) implies 39% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$314.25M
Year 2$392.81M
Year 3$491.02M
Year 4$613.77M
Year 5$767.21M
Terminal$11.29B

📐 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$251.40MTTM 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 IBP stock undervalued or overvalued?
🟡 FAIRLY VALUED

IBP trades at $314.40, within 10% of our $237.99 intrinsic value estimate. At 10.0% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $148.16 (bear) to $370.29 (bull).

What is IBP's intrinsic value?

Using a 5-year DCF model: Base FCF of $251M, 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 $651M net debt and dividing by 0.03B shares: Bear $148.16 | Base $237.99 | Bull $370.29. Current price $314.40 implies -14% to base case.

How is IBP'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 ($7.36B).

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.