ADBE
Adobe Inc.
$283.33
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 53.6% below fair value
You pay
$283.33
Bear
$388.40
Fair
$611.10
Bull
$861.00
Bear
$388.40
+37.1%
9% stage 1 growth, 12% discount
Fair
$611.10
+115.7%
16% stage 1 growth, 12% discount
Bull
$861.00
+203.9%
20% stage 1 growth, 12% discount
Adjust Assumptions
15.5%
12.0%
3.0%
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
39%
Implied Market Multiple
13.1x
Market is pricing in (growth)
4.9%
vs 15.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (63 analysts)
$265.63
Divergence from AlphaVal
130%
Summary
Using a two-stage FCF DCF with 16% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $611.10 per share.
Warnings
Wall Street's average price target is $265.63 (from 63 analysts). Our estimate is 130% 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