As of May 29, 2025, Echo Global Logistics Inc's estimated intrinsic value ranges from $39.01 to $340.62 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $340.62 | +606.1% |
| Discounted Cash Flow (5Y) | $216.14 | +348.1% |
| Dividend Discount Model (Multi-Stage) | $182.57 | +278.5% |
| Dividend Discount Model (Stable) | $119.62 | +148.0% |
| Earnings Power Value | $39.01 | -19.1% |
Is Echo Global Logistics Inc (ECHO) undervalued or overvalued?
With the current market price at $48.24, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Echo Global Logistics Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.54 | 0.84 |
| Cost of equity | 5.5% | 8.6% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 21.2% | 27.5% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 5.2% | 8.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $216 | $5,661M | 89.3% |
| 10-Year Growth | $341 | $8,893M | 80.0% |
| 5-Year EBITDA | $85 | $2,254M | 73.1% |
| 10-Year EBITDA | $148 | $3,884M | 54.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $67M |
| Discount Rate (WACC) | 8.1% - 5.2% |
| Enterprise Value | $836M - $1,291M |
| Net Debt | $50M |
| Equity Value | $785M - $1,240M |
| Outstanding Shares | 26M |
| Fair Value | $30 - $48 |
| Selected Fair Value | $39.01 |
| Metric | Value |
|---|---|
| Market Capitalization | $1252M |
| Enterprise Value | $1303M |
| Trailing P/E | 21.41 |
| Forward P/E | 17.46 |
| Trailing EV/EBITDA | 6.05 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.11 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $102.19 |
| Discounted Cash Flow (5Y) | 25% | $54.04 |
| Dividend Discount Model (Multi-Stage) | 20% | $36.51 |
| Dividend Discount Model (Stable) | 15% | $17.94 |
| Earnings Power Value | 10% | $3.90 |
| Weighted Average | 100% | $214.58 |
Based on our comprehensive valuation analysis, Echo Global Logistics Inc's weighted average intrinsic value is $214.58, which is approximately 344.8% above the current market price of $48.24.
Key investment considerations:
Given these factors, we believe Echo Global Logistics Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.