ARLO
Arlo Technologies, Inc.
$13.03
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 184.6% above fair value
You pay
$13.03
Bear
$3.93
Fair
$4.58
Bull
$5.18
Bear
$3.93
-69.8%
5% stage 1 growth, 12% discount
Fair
$4.58
-64.9%
8% stage 1 growth, 12% discount
Bull
$5.18
-60.2%
11% stage 1 growth, 12% discount
Adjust Assumptions
8.2%
12.0%
3.0%
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
33%
Implied Market Multiple
61.7x
Market is pricing in (growth)
26.2%
vs 8.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$18.33
Divergence from AlphaVal
75%
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $4.58 per share.
Warnings
Stock-based employee pay equals 418% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $18.33 (from 11 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