MKSI
MKS Inc.
$324.69
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 102.9% above fair value
You pay
$324.69
Bear
$83.01
Fair
$160.06
Bull
$237.37
Bear
$83.01
-74.4%
7% stage 1 growth, 12% discount
Fair
$160.06
-50.7%
11% stage 1 growth, 12% discount
Bull
$237.37
-26.9%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
56.9x
Market is pricing in (growth)
25.1%
vs 11.0% 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 $407.75 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $160.06 per share.
Warnings
Wall Street's average price target is $407.75 (from 29 analysts). Our estimate is 81% 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