PUBM
PubMatic, Inc.
$10.36
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 40.4% below fair value
You pay
$10.36
Bear
$13.20
Fair
$17.39
Bull
$21.61
Bear
$13.20
+27.5%
7% stage 1 growth, 12% discount
Fair
$17.39
+67.9%
11% stage 1 growth, 12% discount
Bull
$21.61
+108.6%
14% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (11% base case)
Terminal Value % of EV
35%
Implied Market Multiple
10.1x
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 $13.50 from 16 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $17.39 per share.
Warnings
Wall Street's average price target is $13.50 (from 16 analysts). Our estimate is 38% above 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