ATI
ATI Inc.
$183.75
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 158.3% above fair value
You pay
$183.75
Bear
$49.11
Fair
$71.14
Bull
$92.18
Bear
$49.11
-73.3%
5% stage 1 growth, 11% discount
Fair
$71.14
-61.3%
9% stage 1 growth, 11% discount
Bull
$92.18
-49.8%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
85.3x
Market is pricing in (growth)
28.3%
vs 9.0% base
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 $181.00 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $71.14 per share.
Warnings
Wall Street's average price target is $181.00 (from 29 analysts). Our estimate is 81% 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