Vontier Corporation (VNT) DCF Valuation & Fundamental Primer
Vontier Corporation (VNT) currently trades at $38.05 with an enterprise value of $4.28B. Our proprietary institutional model rates Vontier Corporation at 83/100 (Grade: A · High-Quality Compounder). The current market price prices in an implied 5-year revenue CAGR of 20.4% vs. historical growth of 15.7% (Fairly Priced to Fundamentals).
Institutional fundamental teardown of Vontier Corporation (VNT) covering SEC 10-K/10-Q cash flow conversion, SBC dilution friction, and Reverse-DCF valuation hurdles.
Vontier Corporation (VNT) 3-Scenario DCF Valuation Range
Stress-test VNT'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: $38.05).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $35.59 -6% | $37.66 -1% | $40.07 +5% | $42.93 +13% | $46.35 +22% |
| 9.3% | $32.22 -15% | $33.85 -11% | $35.72 -6% | $37.89 -0% | $40.44 +6% |
| 10.0% | $29.45 -23% | $30.76 -19% | $32.24 -15% | $33.94 -11% | $35.90 -6% |
| 10.8% | $27.13 -29% | $28.20 -26% | $29.40 -23% | $30.76 -19% | $32.30 -15% |
| 11.5% | $25.16 -34% | $26.05 -32% | $27.04 -29% | $28.14 -26% | $29.39 -23% |
Institutional Software Quality Scorecard (83/100 · Grade A)
Strong fundamentals, above-average cash generation, and robust competitive positioning.
Elite deferred revenue float; FCF exceeds operating income by >20%
Standard software SBC dilution; modest equity transfer to employees
High-quality software margins with healthy balanced growth and profitability
Positive net cash cushion; self-funding operations with zero insolvency risk
Core Investment Strengths & Moats
- High-grade cash conversion: FCF is 671% of EBIT driven by upfront annual collections
- Healthy unit economics: 79.9% gross margin
- Net cash positive: $397.4M balance sheet buffer
Key Operational & Dilution Risks
Reverse-DCF Solver: What Growth is Priced Into VNT?
Market implies 20.4% annual revenue growth over next 5 years (32.1% dilution-adjusted), in line with company run-rate.
Headline Reverse-DCF ignores Stock-Based Compensation (13.4% of revenue) and annual share dilution (1.8%/yr). Accounting for both requires 32.1% 5-year revenue CAGR to justify $38.05/sh on a true per-share economic cash flow basis.
Vontier Corporation (VNT) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $777.6M | $777.6M | $899.7M | $1.04B | $1.20B | $1.39B | $1.61B |
| Gross Profit | $621.3M | $621.3M | $718.9M | $831.7M | $962.3M | $1.11B | $1.29B |
| Operating Income (EBIT) | $27.2M | $27.2M | $31.5M | $36.4M | $42.2M | $48.8M | $56.4M |
| Stock-Based Compensation (SBC) | $104.2M | $104.2M | $120.6M | $139.5M | $161.4M | $186.7M | $216.0M |
| Unlevered Free Cash Flow (FCF) | $182.7M | $182.7M | $211.4M | $244.6M | $283.0M | $327.5M | $378.9M |
| SBC-Adjusted True Cash Flow | $78.5M | $78.5M | $90.9M | $105.1M | $121.6M | $140.7M | $162.8M |
Software & Cloud Services Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = -22.4 + 0.67 × (Rule of 40) · R² = 76%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 |
|---|---|---|---|---|---|---|---|---|
| Vontier Corporation | VNT | $5.52B | $777.6M | 79.9% | 23.5% | 39.2% | 13.4% | 6.6× |
| 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 | 6.6× | $5.12B | $5.52B | $38.05 | 0.0% |
| -20% Multiple Compression | 5.3× | $4.10B | $4.50B | $30.99 | -20.0% |
| -35% Multiple Compression | 4.3× | $3.33B | $3.73B | $25.69 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $3.89B | $4.29B | $29.53 | -24.1% |
Frequently Asked Questions: Vontier Corporation (VNT) Valuation
What is Vontier Corporation (VNT)'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, Vontier Corporation (VNT) has a Base Case implied value of $32.24 per share (with a Bear Case of $16.56 and a Bull Case of $52.79), compared to its current price of $38.05. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Vontier Corporation (VNT)'s Rule of 40 score and Free Cash Flow margin?
Vontier Corporation achieves a Rule of 40 score of 39.2%, combining a 15.7% revenue growth run-rate with a 23.5% TTM free cash flow margin on $777.6M 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 VNT stock according to Reverse-DCF analysis?
At $38.05 per share (Enterprise Value of $5.12B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 20.4%, compared to Vontier Corporation's historical CAGR of 15.7%. Overall market expectations are rated as "Fairly Priced to Fundamentals".
How does Vontier Corporation compare to Software & Cloud Services software peers?
Vontier Corporation (VNT) earns an institutional Software Quality Score of 83/100 (Grade A — High-Quality 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 Vontier Corporation (VNT)'s valuation?
Vontier Corporation recorded $104.2M in TTM stock-based compensation (13.4% of revenue). When treating SBC as a cash-equivalent compensation expense, Vontier Corporation's SBC-adjusted free cash flow yield is 1.4%, scoring 16/25 on our Shareholder Dilution Friction pillar.