GOOGL
Alphabet Inc.
$349.68
Platform & Compounding FCF
80%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 4.4% above fair value
You pay
$349.68
Bear
$189.61
Fair
$334.89
Bull
$514.76
Bear
$189.61
-45.8%
12% stage 1 growth, 11% discount
Fair
$334.89
-4.2%
19% stage 1 growth, 11% discount
Bull
$514.76
+47.2%
25% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
46%
Implied Market Multiple
52.2x
Market is pricing in (growth)
21.8%
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 $411.80 from 83 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $334.89 per share.
Warnings
Wall Street's average price target is $411.80 (from 83 analysts). Our estimate is 29% 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