IREN
IREN Limited
$41.28
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Overvalued
Trading 81.9% above fair value
You pay
$41.28
Bear
$7.07
Fair
$22.70
Bull
$35.25
Bear
$7.07
-82.9%
18% rev growth, 14% terminal margin
Fair
$22.70
-45.0%
30% rev growth, 18% terminal margin
Bull
$35.25
-14.6%
35% rev growth, 21% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 18%
Terminal Value % of EV
69%
Implied Market Multiple
30.2x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $82.17 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $22.70 per share.
Warnings
Our estimate assumes profit margins grow from 0% to 18% over 10 years. If that improvement stalls, the company is worth considerably less.
Wall Street's average price target is $82.17 (from 14 analysts). Our estimate is 90% below the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep