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Modine Manufacturing Company (MOD) Intrinsic Value

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

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Modine Manufacturing Company (MOD)

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Intrinsic Value (DCF)

Current$127.07
→
Intrinsic$77.77
-39%
$50.71$77.77$129.10
Current price reflects execution expectations above 25% growth — not unreasonable for quality businesses.
Range: Bear $51 → Bull $129. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$97$106$115$124
10%$66$72$78$84
12%$49$53$57$62
14%$38$41$45$48

Bull Case

  • Bull case ($129) offers 2% upside at 30% growth, 9% discount

Bear Case

  • Bear case ($51) implies 60% downside at 20% growth, 12% discount
  • Trading 39% above base case — execution must exceed assumptions to justify
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$161.63M
Year 2$202.03M
Year 3$252.54M
Year 4$315.67M
Year 5$394.59M
Terminal$5.81B

📐 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$129.30MTTM 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 MOD stock undervalued or overvalued?
🔴 OVERVALUED

MOD trades at $127.07 vs. our DCF-derived intrinsic value of $63.22, implying -51% downside. Using a 10.0% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($98.80) suggests limited upside.

What is MOD's intrinsic value?

Using a 5-year DCF model: Base FCF of $129M, 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 $378M net debt and dividing by 0.05B shares: Bear $39.05 | Base $63.22 | Bull $98.80. Current price $127.07 implies -51% to base case.

How is MOD'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 ($3.79B).

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.