AMAT
Applied Materials, Inc.
$408.94
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 122.7% above fair value
You pay
$408.94
Bear
$120.17
Fair
$183.65
Bull
$253.54
Bear
$120.17
-70.6%
9% stage 1 growth, 12% discount
Fair
$183.65
-55.1%
15% stage 1 growth, 12% discount
Bull
$253.54
-38.0%
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
59.7x
Market is pricing in (growth)
25.7%
vs 14.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (55 analysts)
$659.83
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 $183.65 per share.
Warnings
Wall Street's average price target is $659.83 (from 55 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