Teledyne Technologies Incorporated (TDY) DCF Valuation & Fundamental Primer
Teledyne Technologies Incorporated (TDY) currently trades at $524.09 with an enterprise value of $26.70B. Our proprietary institutional model rates Teledyne Technologies Incorporated at 67/100 (Grade: B+ · Quality Software Operator). The current market price prices in an implied 5-year revenue CAGR of 16.5% vs. historical growth of 16.4% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Teledyne Technologies Incorporated (TDY) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Teledyne Technologies Incorporated (TDY) 3-Scenario DCF Valuation Range
Stress-test TDY'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: $524.09).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $585.81 +12% | $625.71 +19% | $672.26 +28% | $727.28 +39% | $793.30 +51% |
| 9.3% | $520.89 -1% | $552.32 +5% | $588.41 +12% | $630.28 +20% | $679.42 +30% |
| 10.0% | $467.52 -11% | $492.79 -6% | $521.43 -1% | $554.17 +6% | $591.94 +13% |
| 10.8% | $422.89 -19% | $443.55 -15% | $466.72 -11% | $492.88 -6% | $522.65 -0% |
| 11.5% | $385.03 -27% | $402.17 -23% | $421.21 -20% | $442.49 -16% | $466.43 -11% |
Institutional Software Quality Scorecard (67/100 · Grade B+)
Solid software model with clear operating leverage, partially offset by standard SBC or moderate burn.
Strong cash conversion; 100%+ of operating profit turns into free cash
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Moderate leverage or cash burn; monitor liquidity runway
Core Investment Strengths & Moats
- High cash conversion: 100%+ of operating income converted to free cash flow
- Low dilution friction: SBC is only 0.7% of revenue
Key Operational & Dilution Risks
- Lower software gross margins (42.9%), indicating higher hosting or service delivery drag
Reverse-DCF Solver: What Growth is Priced Into TDY?
Market implies 16.5% annual revenue growth over next 5 years (17.0% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (0.7% of revenue) and annual share dilution (0.1%/yr). Accounting for both requires 17.0% 5-year revenue CAGR to justify $524.09/sh on a true per-share economic cash flow basis.
Teledyne Technologies Incorporated (TDY) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $5.67B | $5.67B | $6.60B | $7.68B | $8.95B | $10.42B | $12.13B |
| Gross Profit | $2.43B | $2.43B | $2.83B | $3.30B | $3.84B | $4.47B | $5.21B |
| Operating Income (EBIT) | $989.1M | $988.8M | $1.15B | $1.34B | $1.56B | $1.82B | $2.11B |
| Stock-Based Compensation (SBC) | $37.7M | $37.4M | $43.6M | $50.7M | $59.0M | $68.7M | $80.0M |
| Unlevered Free Cash Flow (FCF) | $1.11B | $1.11B | $1.29B | $1.50B | $1.75B | $2.04B | $2.37B |
| SBC-Adjusted True Cash Flow | $1.07B | $1.07B | $1.25B | $1.45B | $1.69B | $1.97B | $2.29B |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -20.9 + 0.64 × (Rule of 40) · R² = 77%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 |
|---|---|---|---|---|---|---|---|---|
| Teledyne Technologies Incorporated | TDY | $24.61B | $5.67B | 42.9% | 19.5% | 36.0% | 0.7% | 4.7× |
| 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 | 4.7× | $26.74B | $24.61B | $524.09 | 0.0% |
| -20% Multiple Compression | 3.8× | $21.40B | $19.26B | $410.16 | -20.0% |
| -35% Multiple Compression | 3.1× | $17.38B | $15.24B | $324.71 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $28.35B | $26.21B | $558.29 | +6.0% |
Frequently Asked Questions: Teledyne Technologies Incorporated (TDY) Valuation
What is Teledyne Technologies Incorporated (TDY)'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, Teledyne Technologies Incorporated (TDY) has a Base Case implied value of $523.04 per share (with a Bear Case of $217.26 and a Bull Case of $927.62), compared to its current price of $524.09. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Teledyne Technologies Incorporated (TDY)'s Rule of 40 score and Free Cash Flow margin?
Teledyne Technologies Incorporated achieves a Rule of 40 score of 36.0%, combining a 16.4% revenue growth run-rate with a 19.5% TTM free cash flow margin on $5.67B 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 TDY stock according to Reverse-DCF analysis?
At $524.09 per share (Enterprise Value of $26.74B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 16.5%, compared to Teledyne Technologies Incorporated's historical CAGR of 16.4%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Teledyne Technologies Incorporated compare to Software & Cloud Services software peers?
Teledyne Technologies Incorporated (TDY) earns an institutional Software Quality Score of 67/100 (Grade B+ — Quality Software Operator). 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 Teledyne Technologies Incorporated (TDY)'s valuation?
Teledyne Technologies Incorporated recorded $37.7M in TTM stock-based compensation (0.7% of revenue). When treating SBC as a cash-equivalent compensation expense, Teledyne Technologies Incorporated's SBC-adjusted free cash flow yield is 4.3%, scoring 25/25 on our Shareholder Dilution Friction pillar.