OLED
Universal Display Corporation
$77.94
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 18.7% below fair value
You pay
$77.94
Bear
$69.50
Fair
$95.84
Bull
$123.87
Bear
$69.50
-10.8%
8% stage 1 growth, 12% discount
Fair
$95.84
+23.0%
13% stage 1 growth, 12% discount
Bull
$123.87
+58.9%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
23.2x
Market is pricing in (growth)
12.8%
vs 13.4% 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 $141.00 from 19 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $95.84 per share.
Warnings
Wall Street's average price target is $141.00 (from 19 analysts). Our estimate is 43% 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