ACTG
Acacia Research Corporation
$4.66
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 83.4% below fair value
You pay
$4.66
Bear
$16.44
Fair
$28.06
Bull
$42.66
Bear
$16.44
+252.9%
12% stage 1 growth, 11% discount
Fair
$28.06
+502.2%
20% stage 1 growth, 11% discount
Bull
$42.66
+815.4%
26% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
46%
Implied Market Multiple
4.1x
Summary
Using a two-stage FCF DCF with 20% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $28.06 per share.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions