SAIC
Science Applications International Corporation
$126.75
Platform & Compounding FCF
50%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 28.7% below fair value
You pay
$126.75
Bear
$143.45
Fair
$177.72
Bull
$207.46
Bear
$143.45
+13.2%
3% stage 1 growth, 11% discount
Fair
$177.72
+40.2%
5% stage 1 growth, 11% discount
Bull
$207.46
+63.7%
7% stage 1 growth, 11% discount
Adjust Assumptions
5.3%
11.0%
3.0%
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
12.0x
Market is pricing in (growth)
2.0%
vs 5.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$117.00
Divergence from AlphaVal
52%
Summary
Using a two-stage FCF DCF with 5% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $177.72 per share.
Warnings
Wall Street's average price target is $117.00 (from 18 analysts). Our estimate is 52% 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