Patrick Industries is a manufacturer of component products and distributor of building products serving the recreational vehicle, manufactured housing, kitchen cabinet, office and household furniture, fixtures and commercial furnishings, marine, and other industrial markets. The company was founded in 1959 and is based in Elkhart, Indiana.
PATK Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for PATK, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Patrick Industries Inc ranked in the 77th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 260%. The most interesting components of our discounted cash flow analysis for Patrick Industries Inc ended up being:
Its compound free cash flow growth rate, as measured over the past 5.5 years, is 0.37% -- higher than 73.48% of stocks in our DCF forecasting set.
Patrick Industries Inc's weighted average cost of capital (WACC) is 8%; for context, that number is higher than merely 16.13% of tickers in our DCF set.
Relative to other stocks in its sector (Basic Materials), Patrick Industries Inc has a reliance on debt greater than 66.93% of them.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
CF, BECN, SBSW, AWI, and UFPI can be thought of as valuation peers to PATK, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.
Moody's Investors Service ("Moody's") upgraded its ratings for Patrick Industries, Inc. (Patrick), including the company's corporate family rating (CFR; to B1 from B2) and probability of default rating (to B1-PD from B2-PD). Concurrently, Moody's affirmed the company's B3 senior unsecured debt ratings. "Patrick proved more resilient and outperformed our expectations in 2020, and we anticipate continued strength in the market rebound for recreational vehicles at both the retail and wholesale levels, which should drive improved earnings and cash flow and in turn support a return to the former B1 benchmark corporate family rating," says Shirley Singh, Moody's lead analyst for the company.
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In this article we will check out the progression of hedge fund sentiment towards Patrick Industries, Inc. (NASDAQ:PATK) and determine whether it is a good investment right now. We at Insider Monkey like to examine what billionaires and hedge funds think of a company before spending days of research on it. Given their 2 and […]