LRCX
Lam Research Corporation
$327.92
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 342.7% above fair value
You pay
$327.92
Bear
$54.75
Fair
$74.07
Bull
$93.29
Bear
$54.75
-83.3%
6% stage 1 growth, 12% discount
Fair
$74.07
-77.4%
11% stage 1 growth, 12% discount
Bull
$93.29
-71.6%
14% stage 1 growth, 12% discount
Adjust Assumptions
10.7%
12.0%
3.0%
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
88.8x
Market is pricing in (growth)
31.2%
vs 10.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (50 analysts)
$371.29
Divergence from AlphaVal
80%
Summary
Using a two-stage FCF DCF with 11% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $74.07 per share.
Warnings
Wall Street's average price target is $371.29 (from 50 analysts). Our estimate is 80% 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