ZD
Ziff Davis, Inc.
$52.39
Platform & Compounding FCF
75%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 48.3% below fair value
You pay
$52.39
Bear
$80.52
Fair
$101.28
Bull
$120.25
Bear
$80.52
+53.7%
4% stage 1 growth, 11% discount
Fair
$101.28
+93.3%
7% stage 1 growth, 11% discount
Bull
$120.25
+129.5%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
37%
Implied Market Multiple
8.7x
Market is pricing in (growth)
-2.5%
vs 7.2% 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 $52.25 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $101.28 per share.
Warnings
Stock-based employee pay equals 95% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $52.25 (from 13 analysts). Our estimate is 117% 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