CRM
Salesforce, Inc.
$234.69
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 45.3% below fair value
You pay
$234.69
Bear
$275.96
Fair
$428.98
Bull
$596.67
Bear
$275.96
+17.6%
9% stage 1 growth, 11% discount
Fair
$428.98
+82.8%
14% stage 1 growth, 11% discount
Bull
$596.67
+154.2%
19% stage 1 growth, 11% discount
Adjust Assumptions
14.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
16.6x
Market is pricing in (growth)
6.5%
vs 14.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (98 analysts)
$271.91
Divergence from AlphaVal
58%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $428.98 per share.
Warnings
Stock-based employee pay equals 47% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $271.91 (from 98 analysts). Our estimate is 58% above 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