ROKU
Roku, Inc.
$152.67
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 164.7% above fair value
You pay
$152.67
Bear
$38.28
Fair
$57.68
Bull
$80.63
Bear
$38.28
-74.9%
11% stage 1 growth, 12% discount
Fair
$57.68
-62.2%
18% stage 1 growth, 12% discount
Bull
$80.63
-47.2%
23% stage 1 growth, 12% discount
Adjust Assumptions
17.7%
12.0%
3.0%
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
40%
Implied Market Multiple
98.8x
Market is pricing in (growth)
32.6%
vs 17.7% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (45 analysts)
$161.38
Divergence from AlphaVal
64%
Summary
Using a two-stage FCF DCF with 18% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $57.68 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 $161.38 (from 45 analysts). Our estimate is 64% 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