A Corporate Executive Board Valuation

I just did a 3 stage DCF valuation of Corporate Executive Board, which stated that there will be three phases of CEB’s growth

  1. Extraordinary Growth: Next 5 years of 20% per annum
  2. Transition: Years 6-10 declining from 20 to 10% growth
  3. Growth Into Perpetuity of 6.5%
  4. I also gradually expanded operating margins as they have tons of operating leverage and the business requires less investments in the future when they transition from growth stock to cash cow (eventual result, post year 10).

Some basic info about their business is available on their website, and on this blog.I got a value of $168 per share with this, compared to its current price on about $75. The stock has been hit hard recently due to some concerns about subscriber growth going forward and the cross sell ratio of programs. I think that the stock has been hit unfairly and that the market percieves as being worse than they are. If anyone noticed any errors I did or ways to refine/improve this, please tell me.

The PDF link is available here 

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