SPHR
Sphere Entertainment Co.
$108.94
Platform & Compounding FCF
75%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 5.3% below fair value
You pay
$108.94
Bear
$73.75
Fair
$115.06
Bull
$159.17
Bear
$73.75
-32.3%
8% stage 1 growth, 12% discount
Fair
$115.06
+5.6%
14% stage 1 growth, 12% discount
Bull
$159.17
+46.1%
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
23.2x
Market is pricing in (growth)
12.8%
vs 13.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (16 analysts)
$172.20
Divergence from AlphaVal
33%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $115.06 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 $172.20 (from 16 analysts). Our estimate is 33% 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