LRCX
Lam Research Corporation
$351.41
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 53.4% above fair value
You pay
$351.41
Bear
$129.80
Fair
$229.04
Bull
$351.62
Bear
$129.80
-63.1%
12% stage 1 growth, 12% discount
Fair
$229.04
-34.8%
20% stage 1 growth, 12% discount
Bull
$351.62
+0.1%
25% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
84.9x
Market is pricing in (growth)
30.6%
vs 19.6% base
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 $361.17 from 50 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $229.04 per share.
Warnings
Wall Street's average price target is $361.17 (from 50 analysts). Our estimate is 56% 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