ATEN
A10 Networks, Inc.
$24.46
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 13.6% above fair value
You pay
$24.46
Bear
$15.04
Fair
$21.54
Bull
$28.53
Bear
$15.04
-38.5%
8% stage 1 growth, 11% discount
Fair
$21.54
-12.0%
14% stage 1 growth, 11% discount
Bull
$28.53
+16.7%
18% stage 1 growth, 11% discount
Adjust Assumptions
13.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
32.6x
Market is pricing in (growth)
15.5%
vs 13.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (21 analysts)
$36.00
Divergence from AlphaVal
40%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $21.54 per share.
Warnings
Stock-based employee pay equals 48% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $36.00 (from 21 analysts). Our estimate is 40% 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