Nordson CorporationNDSNNASDAQ

Overview Intelligence Charts News Fundamentals DCF Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $191.43 per share(market-calibrated)

-36.0%

Upside to Fair Value

Current

$299.29

Pure Model

$182.21

Fair Value

$191.43

Bull Case

$220.16

Bear Case

$147.31

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

5.51%

Calibrated Growth

3.07%

Fair value uses 75% model / 25% market-implied terminal growth. Pure model: $182.21.

What's Driving This Ratingfor NDSN

✓

CapEx already efficient

CapEx at 1.77% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 24.43% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects 4.15% revenue growth, fading to 2.25% by Year 10. Revenue reaches $3.8B (vs $2.8B today).

🎯

Market pricing in higher long-term growth

To justify $299.29, the market implies 5.51% perpetual growth — 326bps above the model's 2.25%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 75.81% indicates efficient cash generation. FCF reaches $821M by Year 10 (21.79% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.00

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)9.01%

Cost of Debt

Pre-tax Cost of Debt2.84%

Tax Rate18.94%

After-tax Cost of Debt2.30%

Equity Weight (E/V)89.01%

Debt Weight (D/V)10.99%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (89.01% × 9.01%) + (10.99% × 2.30%)

= 8.27%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$2.9B	$3.2B	$3.4B	$3.5B	$3.8B
EBIT	$710M	$779M	$823M	$861M	$920M
Tax	$135M	$147M	$156M	$163M	$174M
NOPAT	$576M	$631M	$667M	$698M	$746M
+ Depreciation	$125M	$138M	$145M	$152M	$162M
- Capex	$51M	$56M	$60M	$62M	$67M
- Δ NWC	$29M	$35M	$19M	$20M	$21M
Free Cash Flow	$620M	$677M	$734M	$768M	$821M
Discount Factor	0.924	0.788	0.672	0.573	0.452
Present Value	$573M	$534M	$493M	$440M	$371M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$821M

Terminal Growth Rate2.25%

WACC8.27%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$13.9B

PV of Terminal Value$6.3B

Exit Multiple Method

Year 10 EBITDA$1.1B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$19.5B

PV of Terminal Value$8.8B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$4.8B

PV of Terminal Value$6.3B

Enterprise Value$11.0B

(-) Net Debt$2.0B

Equity Value$9.1B

Shares Outstanding57M

Price per Share$160.06

Exit Multiple Method

PV of Projected FCFs$4.8B

PV of Terminal Value$8.8B

Enterprise Value$13.6B

(-) Net Debt$2.0B

Equity Value$11.6B

Shares Outstanding57M

Price per Share$204.35

Pure Model Fair Value

$182.21

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
6.27%	$230.59	$239.82	$251.35	$266.14	$285.84
7.27%	$198.67	$204.47	$211.42	$219.90	$230.49
8.27%	$173.82	$177.69	$182.21	$187.54	$193.93
9.27%	$153.66	$156.37	$159.46	$163.02	$167.17
10.27%	$136.83	$138.79	$140.99	$143.48	$146.32

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$147.31

-50.8% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.25

Base Case

$182.21

-39.1% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 1.00

Bull Case

$220.16

-26.4% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 0.85

Key Assumptions & Drivers• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth4.15%

Year 3 Revenue Growth4.53%

Year 5 Revenue Growth2.25%

Year 7 Revenue Growth2.25%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin24.43%

Terminal EBIT Margin25.49%

Tax Rate18.94%

Historical Capex / Rev1.77%

NWC / Revenue25.45%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 18x EV/EBITDA (Industrials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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