GRMN
Garmin Ltd.
$294.13
Platform & Compounding FCF
65%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 73.8% above fair value
You pay
$294.13
Bear
$123.63
Fair
$169.20
Bull
$215.81
Bear
$123.63
-58.0%
7% stage 1 growth, 11% discount
Fair
$169.20
-42.5%
12% stage 1 growth, 11% discount
Bull
$215.81
-26.6%
15% stage 1 growth, 11% discount
Adjust Assumptions
11.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
40%
Implied Market Multiple
43.8x
Market is pricing in (growth)
19.4%
vs 11.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$320.25
Divergence from AlphaVal
47%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $169.20 per share.
Warnings
Wall Street's average price target is $320.25 (from 28 analysts). Our estimate is 47% 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