ROKU
Roku, Inc.
$156.79
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 188.0% above fair value
You pay
$156.79
Bear
$37.12
Fair
$54.43
Bull
$74.45
Bear
$37.12
-76.3%
10% stage 1 growth, 12% discount
Fair
$54.43
-65.3%
17% stage 1 growth, 12% discount
Bull
$74.45
-52.5%
22% stage 1 growth, 12% discount
Adjust Assumptions
16.8%
12.0%
3.0%
Key Value Driver
FCF growth rate (17% base case)
Terminal Value % of EV
40%
Implied Market Multiple
101.6x
Market is pricing in (growth)
33.0%
vs 16.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$161.29
Divergence from AlphaVal
66%
Summary
Using a two-stage FCF DCF with 17% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $54.43 per share.
Warnings
Stock-based employee pay equals 401% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $161.29 (from 45 analysts). Our estimate is 66% 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