ARLO
Arlo Technologies, Inc.
$14.11
Platform & Compounding FCF
70%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 211.0% above fair value
You pay
$14.11
Bear
$3.90
Fair
$4.54
Bull
$5.13
Bear
$3.90
-72.4%
5% stage 1 growth, 12% discount
Fair
$4.54
-67.8%
8% stage 1 growth, 12% discount
Bull
$5.13
-63.6%
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
68.1x
Market is pricing in (growth)
27.5%
vs 8.2% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$18.67
Divergence from AlphaVal
76%
Summary
Using a two-stage FCF DCF with 8% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $4.54 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 $18.67 (from 11 analysts). Our estimate is 76% 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