ADBE
Adobe Inc.
$244.76
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 48.9% below fair value
You pay
$244.76
Bear
$311.61
Fair
$478.69
Bull
$662.59
Bear
$311.61
+27.3%
9% stage 1 growth, 12% discount
Fair
$478.69
+95.6%
15% stage 1 growth, 12% discount
Bull
$662.59
+170.7%
19% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
38%
Implied Market Multiple
11.8x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $341.12 from 62 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $478.69 per share.
Warnings
Wall Street's average price target is $341.12 (from 62 analysts). Our estimate is 62% above the consensus -- consider that gap carefully.
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