STGW
Stagwell Inc.
$8.98
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 62.3% below fair value
You pay
$8.98
Bear
$12.60
Fair
$23.82
Bull
$36.58
Bear
$12.60
+40.3%
10% stage 1 growth, 12% discount
Fair
$23.82
+165.3%
16% stage 1 growth, 12% discount
Bull
$36.58
+307.4%
21% stage 1 growth, 12% discount
Adjust Assumptions
16.1%
12.0%
3.0%
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
39%
Implied Market Multiple
14.8x
Market is pricing in (growth)
6.7%
vs 16.1% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (8 analysts)
$10.50
Divergence from AlphaVal
127%
Summary
Using a two-stage FCF DCF with 16% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $23.82 per share.
Warnings
Stock-based employee pay equals 186% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $10.50 (from 8 analysts). Our estimate is 127% 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