GOOG
Alphabet Inc.
$353.19
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 4.0% above fair value
You pay
$353.19
Bear
$192.19
Fair
$339.46
Bull
$521.78
Bear
$192.19
-45.6%
12% stage 1 growth, 11% discount
Fair
$339.46
-3.9%
19% stage 1 growth, 11% discount
Bull
$521.78
+47.7%
25% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
52.8x
Market is pricing in (growth)
21.9%
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 $425.18 from 79 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $339.46 per share.
Warnings
Wall Street's average price target is $425.18 (from 79 analysts). Our estimate is 31% 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