MeritValue

GRACO INC

GGGdata completeness 100%18 fiscal years on file
The thesis, from the filings

GRACO INC earns about 29% on invested capital, far above its ~9% cost of capital, and has bought back 3% of its shares over 5 years — the marks of a durable business run for its owners. The estimate methods put fair value between $29.77 and $147.29 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$1.99B1$2.14B2$2.2B3$2.11B3$2.24B3
Net income$439.9M4$460.6M5$506.5M6$486.1M6$521.8M6
Operating cash flow$456.9M7$377.4M8$651M9$621.7M9$683.6M9
Capital expenditure$133.6M10$201.2M11$184.8M12$106.7M12$45.7M12
Free cash flow (derived)$323.3M7$176.2M8$466.2M9$515M9$637.9M9
Total debt$150M13$75M14$014$015$1.62M15
Cash & equivalents$624.3M16$339.2M17$538M18$675.3M19$624.1M19
Diluted shares174.5M172.9M172.2M172.4M169.2M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$156.83
your share of equity
Profit it earned you last year
$30.84
Free cash flow it threw off
$37.7
Debt you’d be carrying
$0.1

10 shares is a claim on $156.83 of net worth that earned you $30.84 and generated $37.7 of cash last year, against $0.1 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
29% avg · 5y
FY21 36%FY22 29%FY23 30%FY24 25%FY25 26%

It earned about 29% on invested capital, year after year, against a ~9% cost of capital — the footprint of real pricing power. Competition usually drags returns like this back down; here it hasn't.

seeing a moat in the numbers →
Management signal · capital allocation
−3% shares · 5y

Share count is down 3% over 5 years — management has been buying back stock, quietly handing owners a bigger slice. Total debt has fallen 99% — deleveraging.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $29.77 and $147.29 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$147.29
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth16.9%
  • fcfBase$515M
DCF · Growth Exit 5Y
$91.47
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth16.9%
  • fcfBase$515M
Earnings Power Value
$29.77
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$486.1M
  • growthAssumed0.0%
Graham Number
$32.97
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years16.9%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $91.47
The three cases
Bear0.0%$47.16
Base16.9%$91.47
Bull20.0%$102.9

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 16.9%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000042888-24-000010 (Revenues)
  2. 10-K · period ending 2022-12-30 · accession 0000042888-25-000011 (Revenues)
  3. 10-K · period ending 2023-12-29 · accession 0000042888-26-000081 (Revenues)
  4. 10-K · period ending 2021-12-31 · accession 0000042888-24-000010 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-30 · accession 0000042888-25-000011 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-29 · accession 0000042888-26-000081 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000042888-24-000010 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-30 · accession 0000042888-25-000011 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-29 · accession 0000042888-26-000081 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000042888-24-000010 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-30 · accession 0000042888-25-000011 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-29 · accession 0000042888-26-000081 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000042888-23-000008 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2022-12-30 · accession 0000042888-24-000010 (LongTermDebtNoncurrent)
  15. 10-K · period ending 2024-12-27 · accession 0000042888-26-000081 (LongTermDebtCurrent)
  16. 10-K · period ending 2021-12-31 · accession 0000042888-23-000008 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2022-12-30 · accession 0000042888-24-000010 (CashAndCashEquivalentsAtCarryingValue)
  18. 10-K · period ending 2023-12-29 · accession 0000042888-25-000011 (CashAndCashEquivalentsAtCarryingValue)
  19. 10-K · period ending 2024-12-27 · accession 0000042888-26-000081 (CashAndCashEquivalentsAtCarryingValue)