Balchem Corporation consists of four business segments: ARC Specialty Products, SensoryEffects (formerly Food, Pharma and Nutrition), Animal Nutrition & Health, and Industrial Products. Through ARC Specialty Products, Balchem provides specialty-packaged chemicals for use in healthcare and other industries. The company was founded in 1967 and is based in New Hampton, New York.
BCPC Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Balchem Corp with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Balchem Corp ranked in the 28th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. The most interesting components of our discounted cash flow analysis for Balchem Corp ended up being:
Interest coverage, a measure of earnings relative to interest payments, is 16.85; that's higher than 86.94% of US stocks in the Basic Materials sector that have positive free cash flow.
The business' balance sheet reveals debt to be 7% of the company's capital (with equity being the remaining amount). Approximately only 17.63% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
BCPC's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 45.95% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Balchem Corp? See JHX, AUY, OR, IFF, and USLM.
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