AEIS
Advanced Energy Industries, Inc.
$310.19
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 89.7% above fair value
You pay
$310.19
Bear
$104.12
Fair
$163.49
Bull
$230.96
Bear
$104.12
-66.4%
9% stage 1 growth, 11% discount
Fair
$163.49
-47.3%
16% stage 1 growth, 11% discount
Bull
$230.96
-25.5%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
138.9x
Market is pricing in (growth)
35.0%
vs 15.8% base
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 $423.88 from 25 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $163.49 per share.
Warnings
Stock-based employee pay equals 38% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $423.88 (from 25 analysts). Our estimate is 82% 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