Sensata Technologies Holding plc (ST) DCF Valuation & Fundamental Primer
Sensata Technologies Holding plc (ST) currently trades at $35.21 with an enterprise value of $4.41B. Our proprietary institutional model rates Sensata Technologies Holding plc at 91/100 (Grade: A+ · Elite SaaS Compounder). The current market price prices in an implied 5-year revenue CAGR of 16.4% vs. historical growth of 15.2% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Sensata Technologies Holding plc (ST) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Sensata Technologies Holding plc (ST) 3-Scenario DCF Valuation Range
Stress-test ST's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $35.21).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $37.23 +6% | $39.36 +12% | $41.83 +19% | $44.76 +27% | $48.27 +37% |
| 9.3% | $33.78 -4% | $35.45 +1% | $37.37 +6% | $39.60 +12% | $42.21 +20% |
| 10.0% | $30.94 -12% | $32.28 -8% | $33.81 -4% | $35.55 +1% | $37.55 +7% |
| 10.8% | $28.56 -19% | $29.66 -16% | $30.89 -12% | $32.28 -8% | $33.87 -4% |
| 11.5% | $26.55 -25% | $27.46 -22% | $28.47 -19% | $29.60 -16% | $30.88 -12% |
Institutional Software Quality Scorecard (91/100 · Grade A+)
Exceptional unit economics, disciplined equity dilution, and fortress balance sheet.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
Elite Tier-1 SaaS compounder with high gross margin and superior Rule of 40
Zero-debt fortress balance sheet with abundant net cash liquidity
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 175% of EBIT driven by upfront annual collections
- Top-quartile software unit economics: 80.0% gross margin and 41.8% Rule of 40 score
- Fortress capital structure: Zero debt and $510.0M in pure net cash
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into ST?
Market implies 16.4% annual revenue growth over next 5 years (25.7% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (12.0% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 25.7% 5-year revenue CAGR to justify $35.21/sh on a true per-share economic cash flow basis.
Sensata Technologies Holding plc (ST) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $722.4M | $722.4M | $832.3M | $958.8M | $1.10B | $1.27B | $1.47B |
| Gross Profit | $578.0M | $578.0M | $665.8M | $767.0M | $883.6M | $1.02B | $1.17B |
| Operating Income (EBIT) | $109.8M | $109.8M | $126.5M | $145.7M | $167.9M | $193.4M | $222.8M |
| Stock-Based Compensation (SBC) | $86.7M | $86.7M | $99.9M | $115.1M | $132.5M | $152.7M | $175.9M |
| Unlevered Free Cash Flow (FCF) | $192.2M | $192.2M | $221.4M | $255.0M | $293.8M | $338.5M | $389.9M |
| SBC-Adjusted True Cash Flow | $105.5M | $105.5M | $121.5M | $140.0M | $161.3M | $185.8M | $214.0M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -26.5 + 0.75 × (Rule of 40) · R² = 80%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Sensata Technologies Holding plc | ST | $5.13B | $722.4M | 80.0% | 26.6% | 41.8% | 12.0% | 6.4× |
| ServiceNow | NOW | $152.61B | $10.98B | 79.2% | 31.1% | 54.2% | 15.9% | 13.9× |
| Workday, Inc. | WDAY | $50.35B | $8.00B | 75.0% | 27.4% | 43.9% | 19.0% | 6.4× |
| Salesforce | CRM | $217.10B | $37.90B | 77.2% | 32.8% | 42.8% | 8.4% | 5.8× |
| Datadog | DDOG | $46.05B | $2.68B | 80.8% | 31.1% | 57.7% | 21.3% | 17.4× |
| Snowflake Inc. | SNOW | $71.79B | $3.63B | 66.5% | 25.2% | 57.7% | 40.8% | 20.0× |
| Hubspot | HUBS | $19.89B | $2.63B | 85.0% | 21.3% | 52.7% | 19.2% | 7.7× |
| Peer Cohort Median Benchmark (N=6) | 78.2% | 29.2% | 53.5% | 19.1% | 10.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 6.4× | $4.62B | $5.13B | $35.21 | 0.0% |
| -20% Multiple Compression | 5.1× | $3.70B | $4.21B | $28.87 | -20.0% |
| -35% Multiple Compression | 4.2× | $3.00B | $3.51B | $24.11 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $3.61B | $4.12B | $28.30 | -21.8% |
Frequently Asked Questions: Sensata Technologies Holding plc (ST) Valuation
What is Sensata Technologies Holding plc (ST)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Sensata Technologies Holding plc (ST) has a Base Case implied value of $33.81 per share (with a Bear Case of $17.84 and a Bull Case of $54.57), compared to its current price of $35.21. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Sensata Technologies Holding plc (ST)'s Rule of 40 score and Free Cash Flow margin?
Sensata Technologies Holding plc achieves a Rule of 40 score of 41.8%, combining a 15.2% revenue growth run-rate with a 26.6% TTM free cash flow margin on $722.4M in trailing twelve-month revenue. In the Software & Cloud Services peer cohort, the median Rule of 40 benchmark is 53.5%.
What revenue growth rate is priced into ST stock according to Reverse-DCF analysis?
At $35.21 per share (Enterprise Value of $4.62B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 16.4%, compared to Sensata Technologies Holding plc's historical CAGR of 15.2%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Sensata Technologies Holding plc compare to Software & Cloud Services software peers?
Sensata Technologies Holding plc (ST) earns an institutional Software Quality Score of 91/100 (Grade A+ — Elite SaaS Compounder). Across its Software & Cloud Services peer group (NOW, WDAY, CRM, DDOG, SNOW), the cohort trades at a median EV/TTM Revenue multiple of 10.8× and a median gross margin of 78.2%.
How does Stock-Based Compensation (SBC) impact Sensata Technologies Holding plc (ST)'s valuation?
Sensata Technologies Holding plc recorded $86.7M in TTM stock-based compensation (12.0% of revenue). When treating SBC as a cash-equivalent compensation expense, Sensata Technologies Holding plc's SBC-adjusted free cash flow yield is 2.1%, scoring 16/25 on our Shareholder Dilution Friction pillar.