GOOG
Alphabet Inc.
$347.82
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 5.1% above fair value
You pay
$347.82
Bear
$187.41
Fair
$331.01
Bull
$508.80
Bear
$187.41
-46.1%
12% stage 1 growth, 11% discount
Fair
$331.01
-4.8%
19% stage 1 growth, 11% discount
Bull
$508.80
+46.3%
25% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
51.9x
Market is pricing in (growth)
21.7%
vs 19.4% 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 $400.72 from 79 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $331.01 per share.
Warnings
Wall Street's average price target is $400.72 (from 79 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