SMTC
Semtech Corporation
$142.43
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 343.5% above fair value
You pay
$142.43
Bear
$21.54
Fair
$32.12
Bull
$43.08
Bear
$21.54
-84.9%
7% stage 1 growth, 12% discount
Fair
$32.12
-77.5%
12% stage 1 growth, 12% discount
Bull
$43.08
-69.8%
16% stage 1 growth, 12% discount
Adjust Assumptions
12.3%
12.0%
3.0%
Key Value Driver
FCF growth rate (12% base case)
Terminal Value % of EV
36%
Implied Market Multiple
91.7x
Market is pricing in (growth)
31.6%
vs 12.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$210.36
Divergence from AlphaVal
85%
Summary
Using a two-stage FCF DCF with 12% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $32.12 per share.
Warnings
Wall Street's average price target is $210.36 (from 32 analysts). Our estimate is 85% 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