ACTG
Acacia Research Corporation
$4.18
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 86.5% below fair value
You pay
$4.18
Bear
$18.04
Fair
$31.03
Bull
$47.34
Bear
$18.04
+331.5%
12% stage 1 growth, 11% discount
Fair
$31.03
+642.2%
20% stage 1 growth, 11% discount
Bull
$47.34
+1032.5%
26% stage 1 growth, 11% discount
Adjust Assumptions
20.0%
11.0%
3.0%
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
46%
Implied Market Multiple
3.0x
Market is pricing in (growth)
-19.9%
vs 20.0% base
Summary
Using a two-stage FCF DCF with 20% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $31.03 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