As of June 9, 2025, National Instruments Corp's estimated intrinsic value ranges from $10.63 to $62.83 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $62.83 | +4.7% |
| Discounted Cash Flow (5Y) | $57.29 | -4.5% |
| Dividend Discount Model (Multi-Stage) | $46.86 | -21.9% |
| Dividend Discount Model (Stable) | $23.89 | -60.2% |
| Earnings Power Value | $10.63 | -82.3% |
Is National Instruments Corp (NATI) undervalued or overvalued?
With the current market price at $59.98, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate National Instruments Corp'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 | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.98 | 1.09 |
| Cost of equity | 8.4% | 11.0% |
| Cost of debt | 4.5% | 4.5% |
| Tax rate | 14.2% | 16.2% |
| Debt/Equity ratio | 0.07 | 0.07 |
| After-tax WACC | 8.1% | 10.5% |
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 | $33 | $4,839M | 80.1% |
| 10-Year Growth | $38 | $5,462M | 63.5% |
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 | $170M |
| Discount Rate (WACC) | 10.5% - 8.1% |
| Enterprise Value | $1,618M - $2,105M |
| Net Debt | $450M |
| Equity Value | $1,168M - $1,655M |
| Outstanding Shares | 133M |
| Fair Value | $9 - $12 |
| Selected Fair Value | $10.63 |
| Metric | Value |
|---|---|
| Market Capitalization | $7965M |
| Enterprise Value | $8415M |
| Trailing P/E | 44.40 |
| Forward P/E | 43.50 |
| Trailing EV/EBITDA | 17.15 |
| Current Dividend Yield | 185.52% |
| Dividend Growth Rate (5Y) | 5.03% |
| Debt-to-Equity Ratio | 0.07 |
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% | $18.85 |
| Discounted Cash Flow (5Y) | 25% | $14.32 |
| Dividend Discount Model (Multi-Stage) | 20% | $9.37 |
| Dividend Discount Model (Stable) | 15% | $3.58 |
| Earnings Power Value | 10% | $1.06 |
| Weighted Average | 100% | $47.19 |
Based on our comprehensive valuation analysis, National Instruments Corp's weighted average intrinsic value is $47.19, which is approximately 21.3% below the current market price of $59.98.
Key investment considerations:
Given these factors, we believe National Instruments Corp is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.