ADI
Analog Devices, Inc.
$406.19
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 58.4% above fair value
You pay
$406.19
Bear
$162.51
Fair
$256.41
Bull
$359.71
Bear
$162.51
-60.0%
9% stage 1 growth, 11% discount
Fair
$256.41
-36.9%
14% stage 1 growth, 11% discount
Bull
$359.71
-11.4%
19% stage 1 growth, 11% discount
Adjust Assumptions
14.5%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
47.1x
Market is pricing in (growth)
20.4%
vs 14.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (54 analysts)
$480.24
Divergence from AlphaVal
47%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $256.41 per share.
Warnings
Wall Street's average price target is $480.24 (from 54 analysts). Our estimate is 47% below 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