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Old Dominion Freight Line, Inc. (ODFL) Intrinsic Value

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

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Old Dominion Freight Line, Inc. (ODFL)

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Intrinsic Value (DCF)

Current$173.57
→
Intrinsic$104.72
-40%
$71.33$104.72$168.15
Market implies 30% growth for 5 years
Current price reflects execution expectations above 17% growth — not unreasonable for quality businesses.
At $174, the market prices in continued strong cash flow growth (30%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $71 → Bull $168. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →13%15%17%19%
8%$127$138$149$162
10%$89$97$105$113
12%$69$74$80$86
14%$55$60$65$69

Bull Case

  • Bull case ($168) with 20% growth, 9% discount rate

Bear Case

  • Bear case ($71) implies 59% downside at 13% growth, 12% discount
  • Price reflects 30% growth expectations vs 17% historical — high bar to clear
  • Trading 40% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$1.03B
Year 2$1.21B
Year 3$1.41B
Year 4$1.64B
Year 5$1.91B
Terminal$28.08B

📐 Model Inputs

Growth Rate16.5%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$887.97MTTM 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 ODFL stock undervalued or overvalued?
🔴 OVERVALUED

ODFL trades at $173.57 vs. our DCF-derived intrinsic value of $104.72, implying -38% downside. Using a 10.0% WACC and 16.5% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($153.90) suggests limited upside.

What is ODFL's intrinsic value?

Using a 5-year DCF model: Base FCF of $888M, projected at 16.5% 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 $60M net debt and dividing by 0.22B shares: Bear $70.49 | Base $104.72 | Bull $153.90. Current price $173.57 implies -38% to base case.

How is ODFL's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.5% 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 ($22.73B).

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: 25.6x.