Martin Marietta Materials, Inc. (MLM) Intrinsic Value & DCF Valuation
Construction Materials · NYSE
Current Price
$534.92
Intrinsic Value
$465.16
-15.0% margin of safety
What Is Martin Marietta Materials, Inc.'s Intrinsic Value?
As of 2026-08-21, the base-case DCF model estimates the intrinsic value of Martin Marietta Materials, Inc. (MLM) at $465.16 per share, compared with a market price of $534.92, a margin of safety of -15.0%. The base case assumes 9.7% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $390.24 to $550.18. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Martin Marietta Materials, Inc. (MLM) Undervalued?
At $534.92, MLM trades about 15.0% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Aggregated Scale and Distribution Network
MLM's extensive network of quarries and distribution facilities across the U.S. creates significant logistical advantages. This scale makes it difficult for smaller competitors to replicate their reach and service capabilities.
↑High Capital Intensity and Permitting Barriers
Establishing new aggregate quarries requires substantial capital investment and navigating complex, time-consuming environmental and zoning regulations. This acts as a significant barrier to entry for new players.
↑Pricing Power in Localized Markets
In many of its operating regions, MLM holds a dominant or near-dominant position in aggregate supply. This allows for considerable pricing power due to limited local alternatives for essential construction materials.
INVESTMENT RISKS
↓Cyclicality of Construction Industry
MLM's performance is highly dependent on the health of the broader construction and infrastructure spending cycles. Economic downturns or reduced government spending can significantly impact demand for its products.
↓Transportation and Fuel Cost Volatility
The cost of transporting aggregates is a significant factor in their delivered price. Fluctuations in fuel prices and transportation availability can directly impact MLM's margins and competitiveness.
↓Potential for New Material Substitutes
While aggregates are fundamental, long-term technological advancements could introduce viable, cost-effective substitutes for certain construction applications, potentially eroding demand for traditional materials.
Base case
MLM base case valuation
Intrinsic Value
$465.16
Margin of safety
-15.0%
Expected annual return
-2.8%
Base case assumptions: 9.7% annual growth, 10.0% discount rate, 30x exit multiple, 5 year projection. Data as of 2026-08-21.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the MLM valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Martin Marietta Materials, Inc. respond.
Open DCF Calculator for MLMCompany Overview
Martin Marietta Materials, Inc. functions as a company specializing in natural resource-derived building materials. This enterprise delivers a wide range of aggregates and other heavy construction components to the building industry, serving both domestic and international markets. Its product portfolio includes foundational raw materials like crushed stone, sand, and gravel, in addition to manufactured items such as ready-mix concrete, asphalt, and comprehensive paving solutions. These offerings are essential for infrastructure projects, commercial and residential developments, and various other sectors including railroads, agriculture, utilities, and environmental applications. Beyond its core construction offerings, Martin Marietta also produces magnesia-based chemicals, which are utilized in industrial, agricultural, and environmental contexts. The company further supplies dolomitic lime, primarily for steel manufacturing and soil stabilization. Its broader chemical products contribute to areas such as flame retardants, wastewater treatment, and pulp and paper production, among other environmental uses. Established in 1939, the firm's main office is situated in Raleigh, North Carolina.
Financial Metrics — MLM Stock Valuation Data
Revenue/Share (TTM)
$111.30
FCF/Share (TTM)
$13.48
ROIC (TTM)
5.5%
ROE (TTM)
23.1%
P/FCF
39.7x
EV/EBITDA
18.2x
FCF Yield
2.52%
Debt/Equity
0.52x
Based on trailing twelve-month data, MLM shows a free cash flow per share of $13.48 and a ROIC of 5.5%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 39.7x and FCF yield of 2.52% are important context metrics when evaluating MLM's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of MLM?
Martin Marietta Materials, Inc. currently generates $13.48 in free cash flow per share. At the current price of $534.92, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is MLM undervalued?
MLM trades at a P/FCF ratio of 39.7x with a free cash flow yield of 2.52%. This P/FCF is in a moderate range. However, whether MLM is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value MLM stock using DCF?
To perform a DCF valuation on Martin Marietta Materials, Inc.: (1) Start with the trailing free cash flow per share ($13.48) as the base, (2) project future FCF growth over 5-10 years based on Construction Materials industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting MLM's risk profile — with a debt-to-equity of 0.52x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to MLM?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Martin Marietta Materials, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Construction Materials trends, then discounting those amounts to today's dollars. MLM's ROIC of 5.5% means the company's return on invested capital sits below the level that typically clears its cost of capital.
How does WACC affect MLM stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For MLM, with a debt-to-equity ratio of 0.52x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 18.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See MLM PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value MLM with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.