Vontier Corporation (VNT) Intrinsic Value

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

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Vontier Corporation (VNT)

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Intrinsic Value (DCF)

Current$38.88
Intrinsic$28.74
-26%
$15.89$28.74$53.17
Market implies 13% growth for 5 years
VNT trades at a premium to our conservative estimate — investors expect above-average performance.
At $39, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (8%).
Range: Bear $16 → Bull $53. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →4%6%8%10%
8%$36$41$45$50
10%$22$25$29$32
12%$15$17$19$22
14%$10$12$14$16

Bull Case

  • Bull case ($53) offers 37% upside at 10% growth, 9% discount
  • Conservative 8% growth assumption is achievable based on track record

Bear Case

  • Bear case ($16) implies 59% downside at 6% growth, 12% discount
  • Price reflects 13% growth expectations vs 8% historical — high bar to clear
  • Trading 26% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$372.38M
Year 2$402.17M
Year 3$434.35M
Year 4$469.10M
Year 5$506.62M
Terminal$7.45B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$344.80MTTM 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.

Frequently Asked Questions

Is VNT stock undervalued or overvalued?
🔴 OVERVALUED

VNT trades at $38.88 vs. our DCF-derived intrinsic value of $28.74, implying -25% downside. Using a 10.0% WACC and 8.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($43.74) suggests limited upside.

What is VNT's intrinsic value?

Using a 5-year DCF model: Base FCF of $345M, projected at 8.0% 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 $1.84B net debt and dividing by 0.15B shares: Bear $17.52 | Base $28.74 | Bull $43.74. Current price $38.88 implies -25% to base case.

How is VNT's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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 ($6.26B).

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: 18.2x.