On the four Ms, Acushnet Holdings earns 89 for management and 46 for moat. The management score rests on a return on invested capital of 11.8% and a gross margin of 47.3% — figures that describe a business turning capital into profit efficiently. Debt sits at 1.37x equity. The moderate moat and exceptional management are not the same judgement, and the gap between them is where the argument about this business sits.
The valuation runs on assumptions chosen to understate rather than flatter. Growth is modelled at 9.7% a year, below the 10.0% actually measured over the last decade — the model caps growth rather than extrapolating a good run forwards. The exit multiple assumed is 19.4x. That produces an intrinsic value of $44.24, a 10-CAP price of $34.99 and a payback time price of $43.38, with the value zone set at the highest of the three, $43.38. Today's price of $83.41 is 92% above it.
The price is above the value zone and the business scores 46 for moat and 89 for management. Neither test argues for paying up here.
| Price | $83.41 |
| Market cap | $4.9B |
| P/E ratio | 22.7x |
| Return on invested capital | 11.8% |
| Gross margin | 47.3% |
| Debt to equity | 1.37x |
| Free cash flow yield | 2.5% |
| Growth rate used | 9.7% |
| Growth rate measured | 10.0% |
| Exit multiple assumed | 19.4x |
| Company | Moat | Buy price |
| Garrett Motion Inc (GTX) | 26 | $20.36 |
| Floor & Decor Holdings Inc-A (FND) | 51 | $41.91 |
| Vail Resorts Inc (MTN) | 11 | $123.82 |
| Gentex Corp (GNTX) | 66 | $29.05 |
Every number above is built on assumptions that can be changed. In Moatly you can move the growth rate, the exit multiple and the margin of safety and watch every figure recalculate, so you are testing your own view of Acushnet Holdings rather than accepting ours.