DBX
Dropbox, Inc.
$37.73
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 58.5% below fair value
You pay
$37.73
Bear
$55.93
Fair
$90.87
Bull
$128.51
Bear
$55.93
+48.2%
8% stage 1 growth, 11% discount
Fair
$90.87
+140.8%
14% stage 1 growth, 11% discount
Bull
$128.51
+240.6%
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
13.9x
Market is pricing in (growth)
4.0%
vs 13.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$26.83
Divergence from AlphaVal
239%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $90.87 per share.
Warnings
Stock-based employee pay equals 59% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $26.83 (from 16 analysts). Our estimate is 239% 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