KLAC
KLA Corporation
$182.80
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 70.6% above fair value
You pay
$182.80
Bear
$60.32
Fair
$107.14
Bull
$164.68
Bear
$60.32
-67.0%
12% stage 1 growth, 12% discount
Fair
$107.14
-41.4%
19% stage 1 growth, 12% discount
Bull
$164.68
-9.9%
25% stage 1 growth, 12% discount
Adjust Assumptions
19.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (19% base case)
Terminal Value % of EV
42%
Implied Market Multiple
63.5x
Market is pricing in (growth)
26.6%
vs 19.4% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (44 analysts)
$223.88
Divergence from AlphaVal
52%
Summary
Using a two-stage FCF DCF with 19% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $107.14 per share.
Warnings
Wall Street's average price target is $223.88 (from 44 analysts). Our estimate is 52% 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