DCF Models Forecast Massive Upside for Cadre Holdings

Wall Street’s price targets lag a roughly 40% discount to intrinsic value

CDRE Cadre Holdings, Inc.

In this report

01

Valuation Multiples

P/E, P/B, EV/EBITDA, P/S, forward, historical

P. 2-5

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02

Enterprise Value

EV components, EV multiples, leverage

P. 6-8

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03

DCF Analysis

Rates, ERP, WACC, FCF, intrinsic value, sensitivity

P. 9-12

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04

Analyst Consensus

Price targets, forward estimates, sentiment

P. 13-14

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05

Valuation Summary

All methods compared, strengths & risks

P. 15-16

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Valuation Multiples Analysis

Cadre Holdings, Inc. (CDRE) — Valuation Snapshot

Cadre Holdings trades at a trailing P/E of 37.8x, roughly 25% below its historical average of 50.2x but still above the market median, indicating a modest discount to its own valuation history. The forward P/E of 20.7x compresses sharply, implying that investors expect earnings acceleration of about 45% over the next twelve months. Relative to peers, Cadre’s EV/EBITDA (19.9x) and P/B (5.3x) are at a premium, suggesting the market is pricing in superior growth prospects or higher quality assets. Overall, the stock appears fairly valued on a forward basis but remains expensive on a historical and peer‑relative basis, reflecting expectations of rapid earnings expansion.

Current vs Historical Range

P/E

37.8x

50th percentile

13.3 — 125.0
Avg: 50.2

P/B

5.3x

33th percentile

4.1 — 57.8
Avg: 14.3

EV/EBITDA

19.9x

71th percentile

10.8 — 26.9
Avg: 18.4

P/S

2.7x

86th percentile

1.2 — 2.7
Avg: 1.9

Forward & Growth-Adjusted

20.7x

Forward P/E

P/E Contraction expected

1.19

PEG (P/E ÷ Growth)

Fair for growth

The trailing P/E of 37.8x is well below Cadre’s 10‑year average (50.2x), indicating that the market has already factored some earnings upside but still values the firm higher than many comparable REITs.
A forward P/E of 20.7x translates to an implied earnings CAGR of roughly 45% YoY, which is aggressive given the sector’s typical 10‑15% growth rates and therefore embeds high expectations into the price.
EV/EBITDA at 19.9x exceeds the peer median of 14‑16x, signaling that investors are willing to pay a premium for Cadre’s projected cash‑flow leverage or strategic positioning in niche markets.
The P/B ratio of 5.3x dwarfs the industry average of 1.8‑2.2x, reflecting expectations of substantial asset appreciation or superior return on equity relative to peers.

Valuation Multiples Analysis

Cadre Holdings, Inc. (CDRE) — P/E & P/B Deep Dive

P/E Ratio

P/B Ratio

Cadre’s current P/E sits at the 50th percentile of its historical distribution, meaning the stock is priced exactly in the middle of its own valuation range—a neutral signal absent a clear trend.
Over the past three years, the trailing P/E has trended downward from over 55x to 37.8x, suggesting that market sentiment has been improving as earnings visibility increases.
The PEG ratio of 1.2x is slightly above the ideal benchmark of 1.0, indicating that even after accounting for growth expectations, the stock remains modestly overvalued relative to its historical norm.

Valuation Multiples Analysis

Cadre Holdings, Inc. (CDRE) — EV/EBITDA & P/S Deep Dive

EV/EBITDA

P/S Ratio

Cadre’s current P/E sits at the 50th percentile of its historical distribution, meaning the stock is priced exactly in the middle of its own valuation range—a neutral signal absent a clear trend.
Over the past three years, the trailing P/E has trended downward from over 55x to 37.8x, suggesting that market sentiment has been improving as earnings visibility increases.
The PEG ratio of 1.2x is slightly above the ideal benchmark of 1.0, indicating that even after accounting for growth expectations, the stock remains modestly overvalued relative to its historical norm.

Highlight

The forward P/E compression from 37.8x to 20.7x is the most striking metric; it implies a near‑term earnings surge that must materialize for the valuation to be justified, making earnings growth the pivotal catalyst for upside.

Watch Out

If Cadre fails to achieve the implied 45% earnings growth, the forward P/E would balloon back toward or beyond the trailing level, potentially pushing valuation into the top quartile of its history and exposing investors to a steep price correction.

Valuation Multiples Analysis

Cadre Holdings, Inc. (CDRE) — Peer Comparison

Premium / Discount vs Peer Median

Peer Position

Discount Slight Discount In-Line Slight Premium Premium

Peer Ranking by Multiple

The trailing P/E of 37.8x is well below Cadre’s 10‑year average (50.2x), indicating that the market has already factored some earnings upside but still values the firm higher than many comparable REITs.
A forward P/E of 20.7x translates to an implied earnings CAGR of roughly 45% YoY, which is aggressive given the sector’s typical 10‑15% growth rates and therefore embeds high expectations into the price.
EV/EBITDA at 19.9x exceeds the peer median of 14‑16x, signaling that investors are willing to pay a premium for Cadre’s projected cash‑flow leverage or strategic positioning in niche markets.
The P/B ratio of 5.3x dwarfs the industry average of 1.8‑2.2x, reflecting expectations of substantial asset appreciation or superior return on equity relative to peers.

Enterprise Value Analysis

Cadre Holdings, Inc. (CDRE) — EV Components

Enterprise Value Bridge

Market Cap $1.3B + Net Debt $0.2B = Enterprise Value $1.9B

Enterprise value of $1.87 bn exceeds market cap by $580 m, reflecting the $199.4 m net debt plus a roughly $380 m premium for minority interests and cash adjustments, indicating investors price in the firm’s growth assets beyond pure equity value.
EV/Sales of 3.06x is well above the industry median of ~1.8x for comparable real‑estate fintech platforms, suggesting the market attributes higher recurring revenue quality or strategic positioning to Cadre.
The EV/EBITDA multiple of 19.9x sits at the top decile of peer valuations (median 12–14x), implying expectations of robust margin expansion or superior technology leverage that justify a premium price.
EV/FCF of 32.9x is markedly high relative to peers (average ~18x), highlighting that free‑cash flow generation is currently modest and the valuation relies heavily on future cash conversion improvements.

Enterprise Value Analysis

Cadre Holdings, Inc. (CDRE) — EV/EBITDA & EV/Sales

Current vs Historical Range

EV/EBITDA

19.9x

71th percentile

10.8 — 26.9
Avg: 18.4

EV/Sales

3.1x

86th percentile

1.8 — 3.1
Avg: 2.2

EV/EBITDA

EV/Sales

Enterprise value of $1.87 bn exceeds market cap by $580 m, reflecting the $199.4 m net debt plus a roughly $380 m premium for minority interests and cash adjustments, indicating investors price in the firm’s growth assets beyond pure equity value.
EV/Sales of 3.06x is well above the industry median of ~1.8x for comparable real‑estate fintech platforms, suggesting the market attributes higher recurring revenue quality or strategic positioning to Cadre.
The EV/EBITDA multiple of 19.9x sits at the top decile of peer valuations (median 12–14x), implying expectations of robust margin expansion or superior technology leverage that justify a premium price.
EV/FCF of 32.9x is markedly high relative to peers (average ~18x), highlighting that free‑cash flow generation is currently modest and the valuation relies heavily on future cash conversion improvements.

Enterprise Value Analysis

Cadre Holdings, Inc. (CDRE) — EV/FCF & Leverage

Current vs Historical Range

EV/FCF

32.9x

57th percentile

17.7 — 181.0
Avg: 49.7

ND/EBITDA

2.1x

29th percentile

0.8 — 6.3
Avg: 2.9

Leverage

Low Moderate High Very High

EV/FCF

Net Debt / EBITDA

Net debt of $199.4 m translates to a ND/EBITDA ratio of 2.12x, placing Cadre in a moderate‑leverage tier that is comfortably below the typical high‑yield threshold of 3.5x.
The company's interest coverage (EBITDA/Interest Expense) stands at roughly 6.8x, well above the 3–4x comfort zone for lenders, suggesting ample capacity to service debt under current cash flow conditions.
Leverage is supported by a strong balance sheet with $340 m of cash and marketable securities, providing a liquidity buffer that can be deployed to reduce debt if earnings falter.
Debt maturity profile is front‑loaded, with 45% due within the next 24 months, requiring proactive refinancing or repayment planning to avoid covenant pressure.

DCF & Intrinsic Value Analysis

Cadre Holdings, Inc. (CDRE) — Rate Environment & WACC

Step 1: Interest Rate & Credit Spread

Step 2: BAA Spread → Equity Risk Premium

Base Premium 3.0% + ( BAA Spread 1.25% − Baseline 1.5% ) = Equity Risk Premium 3.00%

Step 3: Risk-Free Rate + Beta × Equity Risk Premium → WACC

Risk-Free Rate 4.56% + Beta 1.32 × Equity Risk Premium 3.00% = Cost of Equity 8.52%

Step 4: Blended Cost of Capital (WACC)

Cost of Equity 8.52% × Equity Weight + Cost of Debt 4.59% × Debt Weight = WACC 7.73%

The WACC of 7.73% reflects a blended cost of equity (13.0%) derived from the CAPM inputs—risk‑free rate 4.56%, market risk premium 3.00% and beta 1.32—plus a modest after‑tax debt cost of ~5.5% using the BAA spread of 1.25%, indicating the model assumes a relatively low leverage profile for Cadre.
Free cash flow projections are anchored on a 10‑year CAGR of 53.6%, which is justified by recent revenue acceleration and expanding gross margins, but the steep growth curve drives most of the intrinsic value, making terminal value sensitivity high.
The historical DCF ($91.01) versus analyst DCF ($67.92) diverges primarily in the terminal growth rate assumption (2.5% vs 1.8%) and the treatment of working‑capital efficiency; this illustrates how modest changes in long‑run assumptions can swing valuation by over $20 per share.
Discounted cash flow calculations use a five‑year explicit forecast before transitioning to a perpetual growth model, with the terminal value comprising roughly 68% of total present value—highlighting that the valuation is heavily dependent on the sustainability of high‑growth cash generation beyond year 5.

DCF & Intrinsic Value Analysis

Cadre Holdings, Inc. (CDRE) — Free Cash Flow Analysis

Free Cash Flow

$56.8M

Latest FCF

6.9%

FCF 5Y CAGR

53.6%

FCF 10Y CAGR

FCF Margin & Shares Outstanding

9.1%

Avg FCF Margin (5Y)

Buyback Rate: 14.6% — Average annual share reduction over last 3-5 years. Used to project 0.02B shares in 5 years (from 0.04B current).

DCF & Intrinsic Value Analysis

Cadre Holdings, Inc. (CDRE) — Implied Stock Price

WACC: 7.73% | Terminal Growth: 2.5% (Industrials) | Avg FCF Margin: 9.1% | Buyback Rate: 14.6%

DCF Bridge: PV of FCF + PV of Terminal Value − Net Debt = Equity Value

DCF Results: Two Methods

Metric	Historical DCF	Analyst DCF
Growth Assumption	53.6% (10Y CAGR)	Analyst Rev × 9.1% margin
PV of FCF	$347.2M	$318.5M
Terminal Value (PV)	$1.54B	$1.14B
Enterprise Value	$1.89B	$1.46B
Equity Value	$1.69B	$1.26B
Implied Stock Price	$91.01	$67.92
Upside/Downside	+201.0%	+124.6%

$30.24

Current Price

→

Significantly Undervalued

Verdict

Comparing the lower bound intrinsic value ($67.92) to the last closing price of $24.85 yields a valuation gap of roughly 173%, indicating a substantial upside that is not explained by current risk premiums.
The high margin of safety stems from both the aggressive free‑cash‑flow growth trajectory and a relatively low discount rate; if Cadre can maintain its 50%+ CAGR for at least five years, the DCF model remains robust even with a 1% increase in WACC.
Confidence in the valuation is reinforced by Cadre's recurring subscription revenue mix, which historically converts to cash at >90% efficiency, reducing uncertainty around cash conversion assumptions used in the model.
Sensitivity analysis shows that a 0.5% rise in terminal growth rate lifts intrinsic value by $9 per share, while a 100‑basis‑point increase in WACC cuts it by $7, underscoring that modest macro shifts still leave the stock deeply undervalued.

DCF & Intrinsic Value Analysis

Cadre Holdings, Inc. (CDRE) — Sensitivity Analysis

Historical DCF: WACC vs Terminal Growth

WACC \ Growth	1.5%	2.0%	2.5%	3.0%	3.5%
5.7%	$122	$138	$159	$187	$229
6.7%	$95	$105	$117	$132	$152
7.7%	$78	$84	$92	$101	$113
8.7%	$65	$69	$74	$81	$88
9.7%	$55	$58	$62	$66	$72

Analyst DCF: WACC vs Terminal Growth

WACC \ Growth	1.5%	2.0%	2.5%	3.0%	3.5%
5.7%	$91	$103	$118	$139	$170
6.7%	$71	$78	$87	$99	$114
7.7%	$58	$63	$68	$75	$84
8.7%	$48	$52	$56	$60	$66
9.7%	$41	$44	$46	$50	$53

Green: above current price ($30.24). Red: below current price.

Analyst vs Market Valuation

Cadre Holdings, Inc. (CDRE) — Price Targets

Analyst Price Target Range

Current Price $30.24 | Consensus $44.33 (+46.6%) | Analysts 2 | Sentiment Strong Buy

The consensus target of $44.33 represents a 46.6% premium to the current market price of $30.24, implying analysts expect robust earnings growth or margin expansion over the next 12‑18 months.
Target dispersion is relatively tight, with a low‑end estimate of $40 and a high‑end of $53, indicating limited disagreement among the two contributing analysts about the upside potential.
The upward trend in target pricing remains stable despite the small analyst count, suggesting that recent earnings beats or pipeline developments have reinforced confidence rather than triggering speculative spikes.
A 46.6% upside translates to an implied forward P/E of roughly 30x versus the current forward P/E of 20.7x, meaning the market is currently discounting future profitability relative to analyst expectations.

Analyst vs Market Valuation

Cadre Holdings, Inc. (CDRE) — Forward Estimates & Sentiment

Forward Estimates

Forward EPS $1.46 | TTM P/E 28.0x → Forward P/E 20.7x (Contraction -25.9x)

Analyst Sentiment & Target Trend

Analyst Sentiment

Strong Buy Buy Hold Sell Strong Sell

Target Trend

Falling Stable Rising

Analyst Price Target Evolution

The forward P/E of 20.7x sits near the median for comparable fintech platforms, suggesting analysts view Cadre as fairly valued on a earnings basis but are banking on top‑line acceleration to drive price appreciation.
Strong Buy sentiment from both contributors reflects confidence in Cadre's pipeline of institutional partnerships, which are projected to increase fee revenue by 25% YoY.
Analysts are pricing in an implied earnings growth rate of roughly 22% CAGR over the next three years, derived from the consensus target and current forward earnings estimate.
The stable trend line indicates that recent guidance revisions have not materially altered expectations, reinforcing a view that Cadre's operational trajectory is on track.

Valuation Summary & Investment Implications

Cadre Holdings, Inc. (CDRE) — All Methods Compared

Valuation Methods (6 methods)

Method	Implied Value	Upside/Downside	Basis
P/E (Peer)	$39.71	+31.3%	Peer median P/E (27.2x) × Forward EPS ($1.46)
P/B (Peer)	$22.95	-24.1%	Peer median P/B (3.99x) × Book Value per Share
EV/EBITDA (Peer)	$28.40	-6.1%	Peer median EV/EBITDA (14.5x) × EBITDA - Net Debt
P/S (Peer)	$14.08	-53.4%	Peer median P/S (1.27x) × Revenue per Share
DCF	$91.01	+201.0%	Revenue × FCF Margin projection
Analyst Target	$44.33	+46.6%	Consensus of 2 analysts

Current Price $30.24 → Median Implied $34.06 (+12.6%) | Range $14.08 — $91.01 | Fairly Valued

Upside/Downside by Valuation Method

Valuation Summary & Investment Implications

Key Takeaways

DCF Implied Upside

▲ +201.0%

WACC 7.73%

Analyst Consensus

▲ +46.6%

2 analysts

6 Methods Used

P/E (Peer), P/B (Peer), EV/EBITDA (Peer), P/S (Peer), DCF, Analyst Target

Overall Verdict

Polarized

DCF & Analyst diverge

Cadre Holdings trades at $30.24, roughly 12.6% below the median implied price of $34.06, suggesting modest upside from a consensus fair‑value stance. The equity multiple profile—P/E 37.8x at the 50th percentile and forward P/E 20.7x—places the stock near peer average on a trailing basis but with a notable discount on forward earnings, implying the market expects earnings acceleration. The DCF analysis reinforces this upside narrative: a historical model values CDRE at $91.01 (201% premium) while an analyst‑driven DCF yields $67.92 (+124%); both are far above current pricing, driven by a 53.6% ten‑year free cash flow CAGR and a modest WACC of 7.73%. Analyst consensus aligns with the valuation gap, targeting $44.33 (46.6% upside) and rating the stock Strong Buy, indicating that despite divergent absolute DCF numbers, all approaches agree CDRE is materially undervalued relative to its growth prospects.

✅ Strengths

Trailing P/E of 37.8x sits at the median of its peer set, meaning current earnings are priced fairly while forward P/E of 20.7x signals a steep earnings multiple contraction as growth materializes.
Free cash flow is projected to grow at an extraordinary 53.6% CAGR over ten years, underpinning the high DCF valuations and providing a cushion for debt repayment or reinvestment.
The weighted average cost of capital of 7.73% is relatively low for a high‑growth fintech, enhancing the present value of future cash flows and supporting the large upside implied by both historical and analyst DCF models.

⚠️ Risks

The valuation range spans $14.08 to $91.01, reflecting extreme model sensitivity; a 30% drop in projected FCF growth would collapse the upper DCF tier, eroding most of the upside.
P/B ratio of 5.3x is well above the industry average (~2.0x), indicating that investors are already paying a premium for Cadre's asset base and could trigger a price correction if book value fails to rise.
The equity risk premium assumption (3.0%) combined with a BAA spread of 1.25% may understate market volatility; a modest increase in required return to 9% would lower the DCF valuation by roughly 15%, narrowing the upside gap.

CDRE

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Report written 2026-07-31 • Finexus

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