No. of Recommendations: 9
Interesting choice of numbers...the ending valuation (~50 x FCF) seems a bit optimistic for the end of a potential investment horizon. That would be counting on the market many years in the future will still be anticipating a vast rate/amount of growth. Which may be true, or may not.
I'd be more likely to pencil in an average of 5% in the stretch 5-10 years out (i.e., 20 x FCF). Owner earnings aren't going to exceed free cash flow, and I never assuming anything is going to trade at a multiple above the teens many years in the future. It happens on occasion, but it can't reliably be forecast.
Jim
