XYZ
Block, Inc.
$74.55
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 49.0% below fair value
You pay
$74.55
Bear
$74.96
Fair
$146.08
Bull
$242.90
Bear
$74.96
+0.6%
14% stage 1 growth, 12% discount
Fair
$146.08
+95.9%
24% stage 1 growth, 12% discount
Bull
$242.90
+225.8%
31% stage 1 growth, 12% discount
Adjust Assumptions
23.9%
12.0%
3.0%
Key Value Driver
FCF growth rate (24% base case)
Terminal Value % of EV
44%
Implied Market Multiple
25.7x
Market is pricing in (growth)
14.2%
vs 23.8% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (39 analysts)
$97.47
Divergence from AlphaVal
50%
Summary
Using a two-stage FCF DCF with 24% growth decelerating over 15 years, discounted at 12%, the base-case intrinsic value is $146.08 per share.
Warnings
Stock-based employee pay equals 93% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $97.47 (from 39 analysts). Our estimate is 50% 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