DCF screen using SEC data — here's what looks undervalued and overvalued right now
u/hmasb ·
Reddit — r/ValueInvesting
· March 21, 2026 at 13:43
· ⬆ 15 pts
· 💬 17 comments
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Summary
The author built an automated DCF valuation tool using SEC data to separate fundamental value ("beer") from speculative premium ("foam").
The analysis identifies UPS as significantly undervalued, while TSLA, PLTR, and CAT are flagged as highly overvalued based on current cash flows.
Quality assessment: Well-researched DD. The author uses standard DCF methodology (WACC, terminal growth, FCF) to ground their thesis, though it also serves as a soft promotion for their free web tool.
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I built a workflow that pulls data from SEC 10-K / 10-Q filings and runs a DCF model to estimate intrinsic value.
Originally this was just for myself — I got tired of rebuilding spreadsheets every time I wanted to sanity-check whether a stock price was actually supported by fundamentals.
I ran it across the names currently in my model and a few stood out.
**Most fundamentally backed right now:**
|Ticker|Company|Beer Score|Key Insight|
|:-|:-|:-|:-|
|UPS|United Parcel Service|100|Trading \~30% below intrinsic value|
|O|Realty Income|82|Strong yield + near fair value|
|PEP|PepsiCo|90|Defensive, well-supported by cash flow|
|HON|Honeywell|86|Industrial with solid earnings backing|
|ABT|Abbott Laboratories|100|Healthcare name trading near fair value|
**Names where my DCF shows a large gap between price and fundamentals:**
|Ticker|Company|Beer Score|Speculation|
|:-|:-|:-|:-|
|TSLA|Tesla|45|\~55% of price is speculation|
|PLTR|Palantir|14|Large premium vs current fundamentals|
|CAT|Caterpillar|49|\~51% speculation despite strong earnings|
**Detailed examples:**
**TSLA** — \~$368 market price vs \~$164 intrinsic value. P/E of \~344x with $4.4B free cash flow on $96.8B revenue. Great company, but over half the current price depends on future expectations rather than current earnings power.
**UPS** — \~$96 market price vs \~$136 intrinsic value. P/E of \~14.6x with $9.2B in free cash flow. One of the few large caps where price sits well below the DCF estimate right now.
**CAT** — \~$681 market price vs \~$335 intrinsic value. $9.8B in free cash flow on $67.1B revenue — strong fundamentals, but the stock has run up enough that roughly half the price is now speculation. Not every "boring industrial" is cheap.
**What stood out:**
1. **Industrials are mixed, not uniformly cheap.** UPS looks undervalued but CAT screens expensive despite strong cash flows.
2. **TSLA is still a story stock.** The business is real, but valuation is still driven heavily by expectations.
3. **Defensive names are quietly stable.** PEP, HON, and ABT are much closer to fair value than most high-growth names.
**Method:**
* SEC filings (10-K / 10-Q) from EDGAR
* Discounted Cash Flow (DCF)
* 5-year growth assumptions
* Sector-based WACC (\~8–11%)
* Terminal growth \~2.5–3%
The output is a simple ratio: how much of the stock price is backed by fundamentals vs how much depends on expectations.
I put the tool online for free if anyone wants to check specific tickers: [justthebeer.com](http://justthebeer.com)
The naming is just a metaphor — "beer" = fundamental value, "foam" = speculation premium.
Not investment advice. DCF is sensitive to assumptions — I'm more interested in whether the direction makes sense than treating these as precise price targets.
Happy to share assumptions or debate any of these.
UPS is trading at ~$96 compared to a DCF-derived intrinsic value of ~$136, with a P/E of ~14.6x and $9.2B in free cash flow. The stock is trading at a ~30% discount to its intrinsic value, making it one of the few large caps where price sits well below fundamental estimates. Long UPS as a fundamentally backed value play with a strong margin of safety. DCF assumptions (WACC, terminal growth) may be too optimistic; macroeconomic slowdowns could impact shipping volumes and FCF.
TSLA trades at ~$368 vs an intrinsic value of ~$164, with a P/E of ~344x. Approximately 55% of the current stock price is "foam" (speculation), relying heavily on future expectations rather than current earnings power. Avoid TSLA at current levels due to a massive disconnect between price and current fundamentals. Tesla could execute perfectly on future growth initiatives (robotaxi, AI), causing the market to continue ignoring traditional valuation metrics.
CAT trades at ~$681 compared to an intrinsic value of ~$335. Despite strong fundamentals ($9.8B FCF), the stock has run up so much that roughly 51% of the price is now speculative premium. Avoid CAT; it proves that not every "boring industrial" is cheap in the current market. Continued infrastructure spending and industrial booms could sustain the premium valuation longer than expected.
This Reddit post, published March 21, 2026,
features u/hmasb
discussing UPS, TSLA, CAT.
3 trade ideas extracted by AI with direction and confidence scoring.