KLAC
KLA Corporation
$1,888.38
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 28.3% above fair value
You pay
$1,888.38
Bear
$739.53
Fair
$1,471.75
Bull
$2,451.94
Bear
$739.53
-60.8%
14% stage 1 growth, 12% discount
Fair
$1,471.75
-22.1%
23% stage 1 growth, 12% discount
Bull
$2,451.94
+29.8%
30% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (23% base case)
Terminal Value % of EV
44%
Implied Market Multiple
70.1x
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 $1819.38 from 44 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $1471.75 per share.
Warnings
Wall Street's average price target is $1819.38 (from 44 analysts). Our estimate is 27% 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