AMD
Advanced Micro Devices, Inc.
$484.64
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 76.7% above fair value
You pay
$484.64
Bear
$168.98
Fair
$274.29
Bull
$397.61
Bear
$168.98
-65.1%
10% stage 1 growth, 12% discount
Fair
$274.29
-43.4%
17% stage 1 growth, 12% discount
Bull
$397.61
-18.0%
22% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
40%
Implied Market Multiple
142.4x
Market is pricing in (growth)
37.7%
vs 17.3% 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 $575.29 from 70 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $274.29 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 $575.29 (from 70 analysts). Our estimate is 80% 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