RMBS
Rambus Inc.
$142.98
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Fair Value
Trading 16.9% below fair value
You pay
$142.98
Bear
$85.73
Fair
$172.01
Bull
$292.48
Bear
$85.73
-40.0%
15% stage 1 growth, 12% discount
Fair
$172.01
+20.3%
25% stage 1 growth, 12% discount
Bull
$292.48
+104.6%
32% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (25% base case)
Terminal Value % of EV
45%
Implied Market Multiple
44.3x
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 $135.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $172.01 per share.
Warnings
Wall Street's average price target is $135.67 (from 14 analysts). Our estimate is 33% 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