Arcosa, Inc.

AI-generated fair value estimate for this company.

Method: 5-year unlevered multi-stage FCF DCF: base unlevered FCF built from TTM FCF of $133.4M plus an after-tax interest addback (approximately $59.6M, from $1.51B debt at approximately 5% pre-tax, 21% tax) = $193.0M Year-0 FCF; grown at 6% per year for 5 years to $258.3M; WACC of 8.25% (82.6%/17.4% equity/debt weights, 9% cost of equity, 3.95% after-tax cost of debt); terminal growth 2.5% (terminal value $4,605M); PV of stage-1 FCFs ($906.7M) plus PV of terminal value ($3,098.3M) = enterprise value $4,005.0M, less net debt of $1.08B (cash $432.1M, debt $1.51B) = equity value $2,925.0M divided by 49.11M shares.

Reasoning: Arcosa is a capital-intensive, M&A-active infrastructure/industrials company with real, positive but currently capex-suppressed FCF ($133.4M TTM on $2.92B revenue, a 4.6% margin), so an unlevered FCF DCF with an interest addback (to avoid double-counting debt effects) and a moderate WACC/growth blend is appropriate; the resulting value sits well below the current $146.22 price, implying the market is pricing in materially higher normalized FCF margins/M&A growth than this conservative base case assumes.