Is Martin Marietta Materials Inc (MLM) overvalued?
On Equity Rank's model estimate, MLM trades close to its fair value (7% above it). Martin Marietta Materials Inc (MLM) last closed at $518.15; the multi-method model fair value is $485.50.
| Price | Model fair value | Price vs model |
|---|---|---|
| $518.15 | $485.50 | 7% above |
What the answer rests on
- 1 of 9 valuation methods put MLM's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, MLM's free cash flow would need to grow about 15.3% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 24.3% a year.
- MLM trades at 39.4 times its last year's earnings, against a median of 20.8 for 43 profitable Materials companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 2% above to 61% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind MLM's fair value · What prices assume · Other companies