KEYS
Keysight Technologies, Inc.
$346.56
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 101.0% above fair value
You pay
$346.56
Bear
$140.55
Fair
$172.38
Bull
$200.92
Bear
$140.55
-59.4%
4% stage 1 growth, 11% discount
Fair
$172.38
-50.3%
7% stage 1 growth, 11% discount
Bull
$200.92
-42.0%
8% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
52.2x
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 $370.78 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $172.38 per share.
Warnings
Wall Street's average price target is $370.78 (from 16 analysts). Our estimate is 71% 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