MSFT
Microsoft Corporation
$492.43
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 29.6% above fair value
You pay
$492.43
Bear
$235.64
Fair
$379.98
Bull
$543.01
Bear
$235.64
-52.1%
9% stage 1 growth, 11% discount
Fair
$379.98
-22.8%
16% stage 1 growth, 11% discount
Bull
$543.01
+10.3%
20% stage 1 growth, 11% discount
Adjust Assumptions
15.6%
11.0%
3.0%
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
42.2x
Market is pricing in (growth)
18.9%
vs 15.6% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (82 analysts)
$547.74
Divergence from AlphaVal
31%
Summary
Using a two-stage FCF DCF with 16% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $379.98 per share.
Warnings
Wall Street's average price target is $547.74 (from 82 analysts). Our estimate is 31% 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