SPHR
Sphere Entertainment Co.
$133.31
Platform & Compounding FCF
75%
Two-stage FCF DCF
Moderate
·
Conviction
Overvalued
Trading 25.6% above fair value
You pay
$133.31
Bear
$66.84
Fair
$106.11
Bull
$148.04
Bear
$66.84
-49.9%
8% stage 1 growth, 12% discount
Fair
$106.11
-20.4%
14% stage 1 growth, 12% discount
Bull
$148.04
+11.1%
18% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
37%
Implied Market Multiple
35.7x
Market is pricing in (growth)
18.7%
vs 13.5% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $182.86 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $106.11 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 $182.86 (from 14 analysts). Our estimate is 52% 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