SQ
Block, Inc.
$83.46
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 33.2% below fair value
You pay
$83.46
Bear
$68.38
Fair
$124.91
Bull
$201.87
Bear
$68.38
-18.1%
14% stage 1 growth, 12% discount
Fair
$124.91
+49.7%
24% stage 1 growth, 12% discount
Bull
$201.87
+141.9%
31% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (24% base case)
Terminal Value % of EV
44%
Implied Market Multiple
28.2x
Market is pricing in (growth)
15.5%
vs 23.8% 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 $94.00 from 75 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $124.91 per share.
Warnings
Wall Street's average price target is $94.00 (from 75 analysts). Our estimate is 51% above 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