Methodology

How each fair value is produced, with the standing defaults from WATCHLIST.md.

Pipeline (each trading day, ~7:30 AM ET / 5:30 AM MST Phoenix)

Financial Data Collector pulls prices, shares, cash/debt, beta, TTM financials, consensus FY1/FY2, multiples, earnings dates and news from public sources (Yahoo Finance, stockanalysis.com / S&P GMI, U.S. Treasury) into data/DATE/.
DCF Analyst runs a 5-year DCF (FCF after SBC) with bear/base/bull and a WACC × g sensitivity grid into dcf/DATE/.
Relative Valuation Analyst values each name on peer NTM P/E, NTM EV/Sales, TTM EV/EBITDA and FY1 P/FCF (25th / median / 75th) into relative/DATE/.
Fair Value Coordinator blends, applies margin-of-safety rules, flags issues, writes reports/DATE.md, emails it, and rebuilds this site.

Fair value and call rules

Blended FV = 0.5 × DCF base + 0.5 × relative mid. If the DCF is not meaningful (negative FCF), FV = relative mid, low confidence.
Divergence = |DCF base − relative mid| ÷ relative mid. > 25% → indicative; > 50% → low confidence.
Margin of safety = (FV − price) ÷ FV. Cheap if ≥ 20%; Rich if price ≥ 15% above FV; otherwise Fair. SPCX (short history, wide ranges) uses 30% both ways.

Comps basis change (from the next run)

New default from 2026-11-11 (Kevin approved): comps are SBC-consistent with the DCF. P/E and P/FCF use GAAP EPS and FCF minus SBC (not adjusted / non-GAAP consensus); EV/EBITDA uses EBITDA minus SBC where available. If only adjusted consensus exists, it is converted using the latest SBC and noted.

Today's comps (2026-11-11) still predate that change, so they are labelled adjusted basis on every ticker page. That mismatch (DCF deducts SBC, comps don't) is a main reason DCF and relative differ by more than 25% on every name with a DCF. Runs from 2026-11-12 onward are labelled by what the analyst file states.

Default assumptions (from WATCHLIST.md)

Margin of safety: a stock is "cheap" when price is at least 20% below blended fair value, "rich" when at least 15% above it, otherwise "fair". Use 30% for SPCX and other names with short histories or very wide ranges.
Blended fair value = 50% DCF base + 50% relative midpoint, unless the two differ by more than 25%. Then flag it and show both.
DCF: 5-year explicit forecast plus terminal value (Gordon growth, cross-checked with an exit multiple). WACC from CAPM using the 10-year Treasury yield, a 5.0% equity risk premium, and the observed beta. Terminal growth 2.5% to 3.0% (base 2.5%). Sensitivity grid of WACC +/-1% and terminal growth +/-0.5%.
Relative: SBC-consistent with the DCF. P/E and P/FCF use GAAP EPS and FCF minus SBC (not adjusted/non-GAAP consensus); EV/EBITDA uses EBITDA minus SBC where available. If only adjusted consensus exists, convert using the latest SBC and note it.
Relative (general): forward-year multiples preferred (NTM P/E, EV/EBITDA, EV/Sales, P/FCF), peer median, interquartile range for low/high.
Per-share values use diluted shares outstanding and the latest net cash/debt.
SBC is treated as a cash cost in every DCF (FCF = OCF − capex − SBC). Standing default from 2026-11-11.
Prefer diluted share counts (Data Collector's diluted/implied shares; never the basic count when they differ, e.g. SPCX 13.581B not 8.247B).
When FCF is negative so a DCF is not meaningful (currently AMZN, SPCX), blended fair value = relative mid only, marked low confidence.

Methods

Discounted Cash Flow (DCF) with sensitivity (DCF Analyst)
Market / relative valuation: comps and multiples (Relative Valuation Analyst)
Inputs: latest financials, estimates, multiples from public sources (Financial Data Collector)

Ticker-specific notes

SPCX peer set for relative valuation: aerospace/defense (e.g. LMT, NOC, RTX, GD, RKLB), satellite/communications (e.g. ASTS, IRDM, VSAT, SATS), and AI/AI-infrastructure (e.g. NVDA, PLTR, GOOG, MSFT). Report each group's implied range separately, then a blended range. Expect wide ranges; flag limited trading history.

Rules

Public data only. No paid logins without Kevin's approval.

Delivery

Report saved to reports/YYYY-MM-DD.md, posted in Kevin's Grok Bot chat, and emailed to kevin.fladell@gmail.com every trading morning.

Key assumptions as applied in the 2026-11-11 report

10Y Treasury 4.98% (Nov 10); ERP 5.0%; observed 5Y beta; cost of debt 10Y + 1.0%, 21% tax; WACC floor 8%; terminal growth 2.5% base; bear/bull = WACC ±1% plus lower/higher growth; sensitivity grid WACC ±1%, g 2.0–3.0%.
DCF FCF = OCF − capex − SBC (SBC treated as cash cost; new standing default). Start growth = 90% of the lower of consensus 3Y CAGR and FY2/FY1 growth, fading to g over 5 years.
Relative: peer 25th / median / 75th of NTM P/E, NTM EV/Sales, TTM EV/EBITDA, FY1 P/FCF; weights per ticker file.
Blended FV = 50% DCF base + 50% relative mid (relative only for AMZN, SPCX). Flag when |DCF − relative| / relative > 25%. Margin of safety = (FV − price) / FV. Cheap if price ≥20% below FV; Rich if price ≥15% above FV; SPCX uses 30% both ways.

Known data gaps (2026-11-11)

Relative ranges are priced off Nov 10 fundamentals/close; EV-based per-share values don't depend on price, but they were not re-scraped this morning.
Share counts: relative files used stockanalysis shares, which match Data Collector's diluted/implied counts within 0.2% for every ticker (SPCX 13.58B vs 13.581B), so no rescaling was needed. Note 'implied' shares = market cap / price, not a full treasury-method diluted count.
Method mismatch: the DCF subtracts SBC, while comps use consensus (mostly non-GAAP, SBC-excluded) EPS. That is a main reason DCF and relative differ >25% on all 7 names with a DCF; treat blended values as indicative.
No 5-year own-multiple history for any name; forward EBITDA consensus unavailable (EV/EBITDA is TTM); AMZN retail comps (WMT, COST) and SATS unavailable (GSAT used).
Cost of debt is an assumption (10Y + 1.0%); SPCX has no observed beta.

Change log

2026-11-10 sample run (coordinator only; DCF without SBC deduction; basic shares).
2026-11-11 SBC treated as a cash cost in every DCF; diluted/implied share counts preferred; SPCX valued on three peer groups (30/40/30); v2 report re-run on teammates' outputs.
2026-11-12 onward: comps on GAAP EPS / FCF minus SBC.