ATEN
A10 Networks, Inc.
$25.39
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 16.9% above fair value
You pay
$25.39
Bear
$15.17
Fair
$21.72
Bull
$28.77
Bear
$15.17
-40.3%
8% stage 1 growth, 11% discount
Fair
$21.72
-14.5%
14% stage 1 growth, 11% discount
Bull
$28.77
+13.3%
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
33.6x
Market is pricing in (growth)
15.9%
vs 13.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (20 analysts)
$29.67
Divergence from AlphaVal
27%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $21.72 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 $29.67 (from 20 analysts). Our estimate is 27% 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