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Trimble Inc. (TRMB) Intrinsic Value

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

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Trimble Inc. (TRMB)

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Intrinsic Value (DCF)

Current$78.57
→
Intrinsic$66.91
-15%
$44.56$66.91$109.32
Market implies 29% growth for 5 years
TRMB appears fairly valued — current price aligns with our DCF estimate.
At $79, the market prices in continued strong cash flow growth (29%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $45 → Bull $109. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$83$90$97$105
10%$57$62$67$72
12%$43$46$50$54
14%$34$37$39$43

Bull Case

  • Bull case ($109) offers 39% upside at 29% growth, 9% discount

Bear Case

  • Bear case ($45) implies 43% 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$620.12M
Year 2$772.51M
Year 3$962.34M
Year 4$1.20B
Year 5$1.49B
Terminal$21.97B

📐 Model Inputs

Growth Rate24.6%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$497.80MTTM 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 TRMB stock undervalued or overvalued?
🔴 OVERVALUED

TRMB trades at $78.57 vs. our DCF-derived intrinsic value of $55.82, implying -32% downside. Using a 10.0% WACC and 24.6% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($85.69) suggests limited upside.

What is TRMB's intrinsic value?

Using a 5-year DCF model: Base FCF of $498M, projected at 24.6% 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 $775M net debt and dividing by 0.25B shares: Bear $35.53 | Base $55.82 | Bull $85.69. Current price $78.57 implies -32% to base case.

How is TRMB's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 24.6% 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 ($14.57B).

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.