OLED
Universal Display Corporation
$94.31
Platform & Compounding FCF
50%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 1.6% below fair value
You pay
$94.31
Bear
$69.50
Fair
$95.84
Bull
$123.87
Bear
$69.50
-26.3%
8% stage 1 growth, 12% discount
Fair
$95.84
+1.6%
13% stage 1 growth, 12% discount
Bull
$123.87
+31.3%
17% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
28.9x
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