What is Hub Group, Inc. worth?
With the base-case assumptions below, a discounted cash flow model on Hub Group, Inc.'s reported free cash flow gives $32,705.91 per share.
Inputs from the filings
Three sets of assumptions
| Case | Growth yrs 1-5 | Discount rate | Value per share | Value vs price |
|---|---|---|---|---|
| Bear | -3.5% | 10.0% | $19,545.60 | - |
| Base | 1.5% | 9.0% | $32,705.91 | - |
| Bull | 6.5% | 8.0% | $58,331.72 | - |
Sensitivity: base case value per share
| 1.5% | 2.0% | 2.5% | 3.0% | 3.5% | |
|---|---|---|---|---|---|
| 7.0% | $41,894.32 | $44,658.17 | $48,036.21 | $52,258.76 | $57,687.75 |
| 8.0% | $35,069.11 | $36,861.46 | $38,979.69 | $41,521.57 | $44,628.31 |
| 9.0% | $30,066.43 | $31,291.91 | $32,705.91 | $34,355.59 | $36,305.20 |
| 10.0% | $26,242.87 | $27,114.35 | $28,102.03 | $29,230.80 | $30,533.24 |
| 11.0% | $23,225.91 | $23,864.80 | $24,578.86 | $25,382.18 | $26,292.60 |
Where the presets come from
Base: years 1 to 5 grow at Hub Group, Inc.'s revenue growth rate over the last 5 fiscal years (1.5% a year), held between -5% and 15%. Years 6 to 10 grow halfway between that and the long-run rate of 2.5%. Future cash is discounted at 9% a year.
Bear: 5 points less growth, 2% long-run growth, 10% discount rate. Bull: 5 points more growth (at most 25%), 3% long-run growth, 8% discount rate.
Value per share = (present value of 10 years of free cash flow + present value of everything after + cash - debt) / diluted shares.
This is a model run on assumptions, not a recommendation or a price target. Small changes in the discount rate or growth move the result a lot, as the table above shows. Change them yourself in the calculator.
Adjust the assumptions
Move the sliders for growth, long-run growth and discount rate, or switch to average free cash flow, and see the value per share change.
Adjust the assumptions