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Full Truck Alliance Co. Ltd. (YMM) Intrinsic Value

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

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Full Truck Alliance Co. Ltd. (YMM)

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Intrinsic Value (DCF)

Current$10.09
→
Intrinsic$103.39
+925%
$72.15$103.39$162.67
Market implies 1% growth for 5 years
DCF analysis suggests YMM could have 925% upside at 25% growth — verify assumptions match your view.
At $10, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $72 → Bull $163. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$126$136$146$157
10%$90$96$103$111
12%$70$75$80$85
14%$57$61$65$69

Bull Case

  • Bull case ($163) offers 1512% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($72) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$3.62B
Year 2$4.52B
Year 3$5.65B
Year 4$7.07B
Year 5$8.84B
Terminal$130.01B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$2.90BTTM 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 YMM stock undervalued or overvalued?
🟢 UNDERVALUED

YMM trades at $10.09 vs. our DCF-derived intrinsic value of $86.59, implying +300% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of YMM's future cash flows. The bear case ($58.69) still suggests upside, providing margin of safety.

What is YMM's intrinsic value?

Using a 5-year DCF model: Base FCF of $2.90B, projected at 25.0% 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 $-5.75B net debt and dividing by 1.05B shares: Bear $58.69 | Base $86.59 | Bull $127.69. Current price $10.09 implies +300% to base case.

How is YMM's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% 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 ($84.76B).

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.