ATEN
A10 Networks, Inc.
$29.16
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 36.4% above fair value
You pay
$29.16
Bear
$14.93
Fair
$21.37
Bull
$28.31
Bear
$14.93
-48.8%
8% stage 1 growth, 11% discount
Fair
$21.37
-26.7%
14% stage 1 growth, 11% discount
Bull
$28.31
-2.9%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
39.1x
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 $20.33 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $21.37 per share.
Warnings
Stock-based employee pay equals 48% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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