QCOM
QUALCOMM Incorporated
$173.47
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 26.1% below fair value
You pay
$173.47
Bear
$157.57
Fair
$234.79
Bull
$317.17
Bear
$157.57
-9.2%
8% stage 1 growth, 12% discount
Fair
$234.79
+35.3%
13% stage 1 growth, 12% discount
Bull
$317.17
+82.8%
18% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (13% base case)
Terminal Value % of EV
37%
Implied Market Multiple
17.4x
Market is pricing in (growth)
8.9%
vs 13.5% 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 $218.50 from 69 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $234.79 per share.
Warnings
Stock-based employee pay equals 50% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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