SPHR
Sphere Entertainment Co.
$140.76
Platform & Compounding FCF
75%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 22.6% above fair value
You pay
$140.76
Bear
$73.61
Fair
$114.85
Bull
$158.88
Bear
$73.61
-47.7%
8% stage 1 growth, 12% discount
Fair
$114.85
-18.4%
14% stage 1 growth, 12% discount
Bull
$158.88
+12.9%
18% stage 1 growth, 12% discount
Adjust Assumptions
13.5%
12.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
37%
Implied Market Multiple
29.3x
Market is pricing in (growth)
16.0%
vs 13.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (14 analysts)
$187.88
Divergence from AlphaVal
39%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $114.85 per share.
Warnings
Stock-based employee pay equals 177% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $187.88 (from 14 analysts). Our estimate is 39% 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