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MSA Safety Incorporated (MSA) Intrinsic Value

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

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MSA Safety Incorporated (MSA)

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Intrinsic Value (DCF)

Current$183.03
→
Intrinsic$141.55
-23%
$93.34$141.55$233.13
Market implies 22% growth for 5 years
MSA trades at a premium to our conservative estimate — investors expect above-average performance.
At $183, the market prices in continued strong cash flow growth (22%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $93 → Bull $233. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →12%14%16%18%
8%$173$189$206$224
10%$119$130$142$154
12%$89$97$106$115
14%$70$77$84$91

Bull Case

  • Bull case ($233) offers 27% upside at 19% growth, 9% discount

Bear Case

  • Bear case ($93) implies 49% downside at 13% growth, 12% discount
  • Price reflects 22% growth expectations vs 16% historical — high bar to clear
  • Trading 23% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$280.19M
Year 2$324.13M
Year 3$374.97M
Year 4$433.78M
Year 5$501.81M
Terminal$7.38B

📐 Model Inputs

Growth Rate15.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$242.21MTTM 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 MSA stock undervalued or overvalued?
🔴 OVERVALUED

MSA trades at $183.03 vs. our DCF-derived intrinsic value of $141.55, implying -16% downside. Using a 10.0% WACC and 15.7% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($211.13) suggests limited upside.

What is MSA's intrinsic value?

Using a 5-year DCF model: Base FCF of $242M, projected at 15.7% 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 $401M net debt and dividing by 0.04B shares: Bear $92.79 | Base $141.55 | Bull $211.13. Current price $183.03 implies -16% to base case.

How is MSA's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 15.7% 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 ($6.00B).

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: 24.8x.