OLED
Universal Display Corporation
$82.18
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 7.6% below fair value
You pay
$82.18
Bear
$68.10
Fair
$88.94
Bull
$110.07
Bear
$68.10
-17.1%
7% stage 1 growth, 12% discount
Fair
$88.94
+8.2%
11% stage 1 growth, 12% discount
Bull
$110.07
+33.9%
15% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
36%
Implied Market Multiple
24.6x
Market is pricing in (growth)
13.7%
vs 11.4% 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 $88.94 per share.
Warnings
Wall Street's average price target is $141.00 (from 19 analysts). Our estimate is 49% 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