AMD
Advanced Micro Devices, Inc.
$537.37
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 132.2% above fair value
You pay
$537.37
Bear
$142.59
Fair
$231.45
Bull
$335.52
Bear
$142.59
-73.5%
10% stage 1 growth, 12% discount
Fair
$231.45
-56.9%
17% stage 1 growth, 12% discount
Bull
$335.52
-37.6%
22% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
40%
Implied Market Multiple
158.0x
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 $452.91 from 70 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $231.45 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 $452.91 (from 70 analysts). Our estimate is 75% 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