KEYS
Keysight Technologies, Inc.
$374.66
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 228.2% above fair value
You pay
$374.66
Bear
$93.15
Fair
$114.15
Bull
$132.97
Bear
$93.15
-75.1%
4% stage 1 growth, 11% discount
Fair
$114.15
-69.5%
7% stage 1 growth, 11% discount
Bull
$132.97
-64.5%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.5%
11.0%
3.0%
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
52.7x
Market is pricing in (growth)
21.9%
vs 6.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$416.63
Divergence from AlphaVal
73%
Summary
Using a two-stage FCF DCF with 7% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $114.15 per share.
Warnings
Wall Street's average price target is $416.63 (from 16 analysts). Our estimate is 73% 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