According to Zyberno's model, First Seacoast Bancorp, Inc. (FSEA) has a negative estimated 5-year annual return of -23.4%. The stock is trading above Zyberno's DCF intrinsic value estimate with a Margin of Safety of -100.0%.
💰 Based on Intrinsic Value: $7.8M
DCF valuation using Owner Earnings growing at 45.84% annually
🛡 Margin of Safety: -100.00%
Trading above intrinsic value - limited upside
📈 Return Breakdown
Method 1 in Depth: Convergence using the Margin of Safety
The expected return measures your total annualized return over 5 years, combining two sources of potential gains: the valuation gap closing (margin of safety) and the business continuing to grow. This gives you a complete picture of what you could earn as an investor.
"The value of any stock, bond or business today is determined by the cash inflows and outflows - discounted at an appropriate interest rate - that can be expected to occur during the remaining life of the asset."- Warren Buffett
The Two-Step Calculation
Expected return is calculated in two steps:
Step 1: Project intrinsic value forward 5 years
Future IV = Current IV × (1 + growth rate) ^ 5
Step 2: Calculate annualized return to that future value
Expected Return = ((Future IV / Current Price) ^ (1/5) - 1) × 100
This approach recognizes that as the business grows, its fair value grows too. Your return comes from both the current undervaluation and participating in that growth.
FSEA's Calculation
Step 1: Future Intrinsic Value
$1.81 × (1 + 45.84%)^5 = $11.97
Step 2: Annualized Return
($11.97 / $17.19)^0.2 - 1 = -23.40% annually
What This Return Includes
Example Scenarios
How margin of safety and growth rate combine to determine expected return:
| Scenario | From Valuation Gap | From Growth | Total Return |
|---|---|---|---|
| Fair value (0% MoS), 8% growth | 0% | ~8% | ~8% |
| 20% below IV, 8% growth | ~4.6% | ~8% | ~12.9% |
| 50% below IV, 8% growth | ~14.9% | ~8% | ~24.0% |
Note: The components don't add linearly due to compounding, but this illustrates how both factors contribute to your total return.
Key Assumptions
This calculation assumes:
- The stock price converges to fair value over 5 years
- The company continues growing Owner Earnings at the historical rate (45.84%)
- No major disruptions to the business model
- Our DCF intrinsic value calculation is reasonably accurate
⚠ Important Limitations
This is a theoretical return based on valuation convergence and projected growth. Actual returns may differ due to:
- Market sentiment keeping the stock over/undervalued longer than 5 years
- Growth rates changing due to competitive pressures or economic conditions
- Intrinsic value estimates involving assumptions that may prove incorrect
- Market sentiment, interest rates, and macro factors affecting prices
Always conduct your own research and consider multiple valuation methods before investing.
🔗 The Valuation Trilogy
Expected Return is the third piece of Zyberno's valuation framework - it combines intrinsic value and margin of safety into a single projected return:
Higher intrinsic value + higher margin of safety = higher expected return
📊 Full FSEA Stock Report →
See complete financial analysis with 250+ metrics.
💰 FSEA Intrinsic Value →
Detailed DCF methodology and how we calculate fair value.
🛡 FSEA Margin of Safety →
Detailed analysis of the margin between price and value.
👤 FSEA Owner Earnings →
The cash flow metric that powers our DCF valuation.
🔁 FSEA ROIC →
Return on Invested Capital - business quality metric.
💵 FSEA Free Cash Flow →
Cash generation after capital expenditures.
🪙 FSEA EPS →
Earnings Per Share history and growth trends.
☷ FSEA Brina Gap →
Fundamental growth vs. what the market price is implicitly assuming.
📏 FSEA Momentum →
12-1 price momentum and 52-week-high position - market context, not valuation.
Summary: FSEA Investment Return Potential
According to Zyberno's model, First Seacoast Bancorp, Inc. (FSEA) has a negative estimated 5-year annual return of -23.4%. The stock is trading above Zyberno's DCF intrinsic value estimate with a Margin of Safety of -100.0%.
Based on Zyberno's DCF analysis, First Seacoast Bancorp, Inc. offers an expected annual return of -23.40% over the next 5 years — rated as Negative return potential by Zyberno's model. This projection combines two sources: the -100.00% margin of safety closing, plus 45.84% annual business growth.
At the current price of $17.19, if FSEA converges to fair value and continues growing at 45.84%, Zyberno's projected 5-year price target is $11.97 per share. For complete analysis, view the full FSEA stock report.
Zyberno's expected return is the direct output of projecting owner earnings forward at the historical growth rate, discounted at a 10% hurdle rate. We publish what the math produces — if the model says 15% annual return at the current price, that is what we show.
Frequently Asked Questions
What is FSEA's expected return?
First Seacoast Bancorp, Inc.'s expected annual return is -23.40% over the next 5 years, based on our DCF intrinsic value of $7.8M compared to the current market cap of $73.7M.
What is FSEA's price target?
Zyberno's 5-year price target for FSEA is $11.97 per share. This is based on today's intrinsic value of $1.81 growing at 45.84% annually.
Is FSEA a good investment?
FSEA shows limited return potential of -23.40% annually. The stock may be trading above our estimate of intrinsic value.
How is expected return calculated?
Expected return is calculated in two steps: First, we project intrinsic value forward 5 years using the growth rate (Future IV = Current IV × (1 + growth rate)^5). Then, we calculate the annualized return from current price to that future fair value: ((Future IV / Current Price)^(1/5) - 1) × 100. This captures both the return from the valuation gap closing and the return from business growth over the period.
What is the difference between expected return and projected return?
Expected return, projected return, and investment return potential all refer to the same concept: the anticipated annualized gain from an investment. At Zyberno, we calculate this as your total expected return - combining both the return from any margin of safety (valuation gap) and the return from business growth over the 5-year period. This is distinct from historical returns which measure past performance.