Old Dominion Freight Line, Inc.ODFLNASDAQ

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Strong Sell

Fair Value: $109.97 per share(market-calibrated)

-47.1%

Upside to Fair Value

Current

$207.94

Pure Model

$101.86

Fair Value

$109.97

Bull Case

$122.95

Bear Case

$81.84

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

7.89%

Calibrated Growth

4.22%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $101.86.

What's Driving This Ratingfor ODFL

↓

CapEx normalizing toward maintenance

Historical CapEx is 11.89% of revenue (heavy investment phase). Model fades this to 3.50% by Year 10, freeing up ~$673M in annual FCF. This is the biggest driver of long-term cash flow improvement.

✓

Premium margins already priced in

EBIT margin of 27.11% 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 1.14% revenue growth, fading to 2.25% by Year 10. Revenue reaches $8.0B (vs $5.5B today).

↔

Perpetuity and exit methods disagree

Perpetuity growth gives $80.26/share (13.2x terminal FCF) while exit multiple gives $123.46/share (26.2x terminal FCF). The 18x EV/EBITDA exit reflects current market multiples, while the perpetuity method with 2.25% growth is more conservative. The base case averages both methods.

🎯

Market pricing in higher long-term growth

To justify $207.94, the market implies 7.89% perpetual growth — 564bps 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 68.64% indicates efficient cash generation. FCF reaches $1.8B by Year 10 (22.53% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.22

Market Risk Premium4.50%

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

Cost of Equity (Re)9.99%

Cost of Debt

Pre-tax Cost of Debt2.13%

Tax Rate24.80%

After-tax Cost of Debt1.60%

Equity Weight (E/V)99.91%

Debt Weight (D/V)0.09%

WACC Calculation

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

WACC = (99.91% × 9.99%) + (0.09% × 1.60%)

= 9.98%

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	$5.6B	$6.4B	$7.2B	$7.5B	$8.0B
EBIT	$1.5B	$1.7B	$1.9B	$2.0B	$2.2B
Tax	$374M	$433M	$482M	$504M	$539M
NOPAT	$1.1B	$1.3B	$1.5B	$1.5B	$1.6B
+ Depreciation	$318M	$368M	$410M	$428M	$458M
- Capex	$661M	$646M	$586M	$472M	$281M
- Δ NWC	$2M	$11M	$5M	$5M	$6M
Free Cash Flow	$788M	$1.0B	$1.3B	$1.5B	$1.8B
Discount Factor	0.909	0.752	0.622	0.514	0.386
Present Value	$716M	$769M	$797M	$761M	$698M

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

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.8B

Terminal Growth Rate2.25%

WACC9.98%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$23.9B

PV of Terminal Value$9.2B

Exit Multiple Method

Year 10 EBITDA$2.6B

Exit Multiple (EV/EBITDA)18.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$47.4B

PV of Terminal Value$18.3B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$7.5B

PV of Terminal Value$9.2B

Enterprise Value$16.8B

(-) Net Debt-$80M

Equity Value$16.8B

Shares Outstanding210M

Price per Share$80.26

Exit Multiple Method

PV of Projected FCFs$7.5B

PV of Terminal Value$18.3B

Enterprise Value$25.8B

(-) Net Debt-$80M

Equity Value$25.9B

Shares Outstanding210M

Price per Share$123.46

Pure Model Fair Value

$101.86

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%
7.98%	$122.54	$125.11	$128.14	$131.74	$136.10
8.98%	$109.75	$111.52	$113.56	$115.93	$118.72
9.98%	$99.15	$100.42	$101.86	$103.50	$105.38
10.98%	$90.18	$91.12	$92.16	$93.34	$94.66
11.98%	$82.46	$83.16	$83.95	$84.81	$85.78

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

$81.84

-60.6% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 1.52

Base Case

$101.86

-51.0% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 1.22

Bull Case

$122.95

-40.9% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 1.04

Key Assumptions & Drivers• Industrials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth1.14%

Year 3 Revenue Growth5.98%

Year 5 Revenue Growth2.25%

Year 7 Revenue Growth2.25%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin27.11%

Tax Rate24.80%

Historical Capex / Rev11.89%

Terminal Capex / Rev3.50%

NWC / Revenue3.15%

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.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance