Modiv Industrial (Modiv Industrial) Intrinsic Value: DCF (FCF Based) : $59.66 (As of Jun. 09, 2024)

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Modiv Industrial Intrinsic Value: DCF (FCF Based) Chart

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Competitive Comparison of Modiv Industrial's Intrinsic Value: DCF (FCF Based)

For the REIT - Diversified subindustry, Modiv Industrial's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

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Modiv Industrial's Price-to-DCF (FCF Based) Distribution in the REITs Industry

For the REITs industry and Real Estate sector, Modiv Industrial's Price-to-DCF (FCF Based) distribution charts can be found below:

* The bar in red indicates where Modiv Industrial's Price-to-DCF (FCF Based) falls into.

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Modiv Industrial Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.43%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 20%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Modiv Industrial's average Free Cash Flow Growth Rate in the past 3 years was 48.90%, which is no less than 20%. GuruFocus defaults => Growth Rate: 20%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. Free Cash Flow per Share: fcf = $1.909.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Modiv Industrial's Intrinsic Value: DCF (FCF Based) for today is calculated as

set x = (1+g1)/(1+d) = (1+0.2)/(1+0.11) = 1.0810810810811
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Modiv Industrial  (NYSE:MDV) Intrinsic Value: DCF (FCF Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.

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Be Aware

What you need to know about the DCF model:

1. The DCF model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

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Modiv Industrial Intrinsic Value: DCF (FCF Based) Related Terms

Thank you for viewing the detailed overview of Modiv Industrial's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: DCF (Earnings Based) Intrinsic Value: DCF (Dividends Based) Intrinsic Value: Projected FCF Free Cash Flow Free Cash Flow per Share Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) Margin of Safety % (DCF Dividends Based)

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Modiv Industrial (Modiv Industrial) Business Description

Executives

Aaron Scott Halfacre	officer: CEO	2100 REXFORD ROAD, SUITE 300, CHARLOTTE NC 28211
Nolan Thomas H Jr	director	14631 NORTH SCOTTSDALE RD, SUITE 200, SCOTTSDALE AZ 85254
Kimberly J Smith	director	2325 E CAMELBACK RD, SUITE 1100, PHOENIX AZ 85016
Raymond J Pacini	officer: CFO	550 SOUTH HOPE STREET, SUITE 2850, LOS ANGELES CA 90071
Adam Scott Markman	director	TWO NORTH RIVERSIDE PLAZA, SUITE 600, CHICAGO IL 60606
Tirondola Connie	director	14 DAYDREAM LN, ANDOVER NJ 07821
Asma Ishaq	director	120 NEWPORT CENTER DRIVE, NEWPORT BEACH CA 92660
Curtis B Mcwilliams	director	450 SOUTH ORANGE AVENUE, ORLANDO FL 32801
Group Of Trophy, Llc	10 percent owner	21140 S. AVALON BLVD, CARSON CA 90745
Joe F Hanauer	director	361 FOREST AVE, LAGUNA BEACH CA 92651
Sandra G Sciutto	officer: CAO	6 EXECUTIVE CIRCLE, SUITE 250, IRVINE CA 92614
David Perduk	officer: CIO	PO BOX 1705, LAGUNA BEACH CA 92652
John Harold Davis	officer: CFO	3090 BRISTOL STREET, SUITE 550, COSTA MESA CA 92626
Jeffrey Randolph	other: Trust Manager	3080 BRISTOL STREET, SUITE 550, COSTA MESA CA 92626
John C Wang	director