LRCX
Lam Research Corporation
$347.49
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 369.1% above fair value
You pay
$347.49
Bear
$54.75
Fair
$74.07
Bull
$93.29
Bear
$54.75
-84.2%
6% stage 1 growth, 12% discount
Fair
$74.07
-78.7%
11% stage 1 growth, 12% discount
Bull
$93.29
-73.2%
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
94.1x
Market is pricing in (growth)
32.0%
vs 10.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (50 analysts)
$376.68
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 $376.68 (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