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The Marzetti Company (MZTI) Intrinsic Value

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

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The Marzetti Company (MZTI)

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Intrinsic Value (DCF)

Current$169.73
→
Intrinsic$206.22
+21%
$141.80$206.22$328.54
Market implies 13% growth for 5 years
MZTI shows 21% potential upside using 18% growth — reasonable if fundamentals hold.
At $170, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (18%).
Range: Bear $142 → Bull $329. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →14%16%18%20%
8%$250$270$292$316
10%$177$191$206$222
12%$137$147$159$171
14%$111$119$128$138

Bull Case

  • Bull case ($329) offers 94% upside at 22% growth, 9% discount
  • 18% margin of safety vs. base case estimate
  • Market-implied growth (13%) ≤ historical CAGR (18%)

Bear Case

  • Bear case ($142) implies 16% downside at 15% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$240.57M
Year 2$284.40M
Year 3$336.22M
Year 4$397.48M
Year 5$469.90M
Terminal$6.91B

📐 Model Inputs

Growth Rate18.2%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$203.50MTTM 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 MZTI stock undervalued or overvalued?
🟢 UNDERVALUED

MZTI trades at $169.73 vs. our DCF-derived intrinsic value of $206.22, implying +25% upside. At a 10.0% WACC and 18.2% projected FCF growth, the market appears to be underpricing the present value of MZTI's future cash flows. The bear case ($138.42) still suggests upside, providing margin of safety.

What is MZTI's intrinsic value?

Using a 5-year DCF model: Base FCF of $203M, projected at 18.2% 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 $-106M net debt and dividing by 0.03B shares: Bear $138.42 | Base $206.22 | Bull $304.80. Current price $169.73 implies +25% to base case.

How is MZTI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 18.2% 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 ($5.56B).

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: 27.3x.