SMTC
Semtech Corporation
$187.30
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 483.2% above fair value
You pay
$187.30
Bear
$21.54
Fair
$32.12
Bull
$43.08
Bear
$21.54
-88.5%
7% stage 1 growth, 12% discount
Fair
$32.12
-82.9%
12% stage 1 growth, 12% discount
Bull
$43.08
-77.0%
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
119.9x
Market is pricing in (growth)
35.3%
vs 12.3% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (32 analysts)
$211.69
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 $211.69 (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