AMAT
Applied Materials, Inc.
$454.71
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 147.7% above fair value
You pay
$454.71
Bear
$120.12
Fair
$183.57
Bull
$253.43
Bear
$120.12
-73.6%
9% stage 1 growth, 12% discount
Fair
$183.57
-59.6%
15% stage 1 growth, 12% discount
Bull
$253.43
-44.3%
19% stage 1 growth, 12% discount
Adjust Assumptions
14.8%
12.0%
3.0%
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
38%
Implied Market Multiple
66.4x
Market is pricing in (growth)
27.2%
vs 14.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (53 analysts)
$666.30
Divergence from AlphaVal
72%
Summary
Using a two-stage FCF DCF with 15% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $183.57 per share.
Warnings
Wall Street's average price target is $666.30 (from 53 analysts). Our estimate is 72% 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