SQ
Block, Inc.
$83.46
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 27.0% below fair value
You pay
$83.46
Bear
$70.22
Fair
$114.30
Bull
$169.31
Bear
$70.22
-15.9%
12% stage 1 growth, 12% discount
Fair
$114.30
+37.0%
20% stage 1 growth, 12% discount
Bull
$169.31
+102.9%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
27.0x
Summary
Using a two-stage FCF DCF with 20% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $114.30 per share.
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