VERX
Vertex, Inc.
$13.77
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 75.9% above fair value
You pay
$13.77
Bear
$4.81
Fair
$7.83
Bull
$11.24
Bear
$4.81
-65.1%
9% stage 1 growth, 11% discount
Fair
$7.83
-43.1%
16% stage 1 growth, 11% discount
Bull
$11.24
-18.4%
20% stage 1 growth, 11% discount
Adjust Assumptions
15.5%
11.0%
3.0%
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
56.6x
Market is pricing in (growth)
22.8%
vs 15.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$16.17
Divergence from AlphaVal
52%
Summary
Using a two-stage FCF DCF with 16% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $7.83 per share.
Warnings
Stock-based employee pay equals 801% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $16.17 (from 18 analysts). Our estimate is 52% below the consensus -- consider that gap carefully.
This stock is 48% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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