- Investors may be asking whether TriMas at around US$36.61 is still offering value after a strong run, or if most of the easy upside has already been priced in.
- The stock has returned 4.2% over the last 7 days, is roughly flat over 30 days with a 1.3% decline, and is up 0.9% year to date, while the 1 year return stands at 56.8% and the 5 year return at 22.2%.
- Recent attention around TriMas has focused on how its share price performance lines up with its fundamentals and whether the current level reflects a fair assessment of the business. Investors are weighing those price moves against independent valuation work to judge if the risk and reward still look acceptable.
- On Simply Wall St's valuation checks, TriMas has a value score of 3 out of 6. The next sections will compare different valuation approaches and then finish with a way to pull all those methods together into a clearer view of what the stock might be worth.
Approach 1: TriMas Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model estimates what a company could be worth by projecting its future cash flows and discounting them back to today using a required return. It focuses on the cash that might be available to shareholders rather than accounting earnings.
For TriMas, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month Free Cash Flow is about $79.9 million. Simply Wall St then uses analyst inputs where available and extends them with its own assumptions, producing ten year cash flow projections that reach $187.7 million in 2035, with each year discounted back to today in the model.
Pulling these discounted cash flows together, the DCF output suggests an estimated intrinsic value of about $92.67 per share. Against a recent share price of around $36.61, this implies an intrinsic discount of roughly 60.5%, which indicates that the shares are trading well below this model’s estimate of value.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests TriMas is undervalued by 60.5%. Track this in your watchlist or portfolio, or discover 58 more high quality undervalued stocks.
Approach 2: TriMas Price vs Earnings
For a profitable business, the P/E ratio is a useful way to think about value because it links what you pay per share to the earnings that company is currently generating. Investors usually accept a higher or lower P/E depending on how they view the company’s growth prospects, stability and risk profile, so there is no single “correct” level for every stock.
TriMas is trading on a P/E of 19.1x, which is close to the Packaging industry average of about 15.3x and in line with its peer group average of 19.4x. To go a step further, Simply Wall St also calculates a proprietary “Fair Ratio” for TriMas of 14.5x. This is the P/E level that might be expected given factors such as the company’s earnings growth outlook, industry, profit margins, market cap and specific risks.
The Fair Ratio is designed to be more tailored than a simple comparison with industry or peer averages because it builds in these company specific inputs rather than treating all Packaging stocks as the same. Comparing TriMas’ current P/E of 19.1x with the Fair Ratio of 14.5x suggests the shares are pricing in more optimism than this model implies.
Result: OVERVALUED
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Upgrade Your Decision Making: Choose your TriMas Narrative
Earlier it was mentioned that there is an even better way to think about valuation, so Narratives are introduced here as your own clear story for TriMas. A Narrative links what you believe about its business and drivers to specific forecasts for future revenue, earnings and margins. The Simply Wall St Community page then turns this into a fair value that you can compare with the current price to decide if TriMas looks attractive or expensive. It also automatically updates that fair value as new information such as the appointment of a new CFO or fresh earnings arrives. One investor might build a Narrative around the analysts’ assumptions that support a fair value of about US$41.50 and a scenario where revenue, margins and a future P/E of 49.64x justify that view. Another might plug in more cautious assumptions that lead to a lower fair value, and both can quickly see how their own story lines up against the latest market price.
Do you think there's more to the story for TriMas? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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