DCF
BNY Mellon Alcentra Global Credit Income 2024 Target Term Fund, Inc.
stock NYSE

I appreciate your concern. But your post has little data or information. Everything is just conjecture or opinion. Come on. You can do better than that.
No Low-Effort Posts - All stock posts must contain at least a basic explanation of the company or some financial information. It doesn't have to be a full DCF or investment thesis, but state what YOU like/dislike about the stock, don’t just ask other people to do research for you.
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No Low-Effort Posts - All stock posts must contain at least a basic explanation of the company or some financial information. It doesn't have to be a full DCF or investment thesis, but state what YOU like/dislike about the stock, don’t just ask other people to do research for you.
Simple beginner questions about value investing are welcome. “Low Effort” is at the discretion of the moderators. Short stock questions/recommendations are appropriate as comments in our pinned Weekly Megathread.
Consider posting in the [Weekly Megathread](https://www.reddit.com/r/ValueInvesting/?f=flair_name%3A%22Weekly%20Megathread%22)

A DCF is a valuation framework, not proof of what the business will do. The assumptions about revenue growth, margins and terminal economics are what determine the result. Calling the problems “structural” because consensus currently forecasts stagnant earnings is circular.
Anyhow you still haven’t figured out how you arrived at 57. Goodluck.

A DCF is the only way to value a business that actually works and can have predictive power for stock movements.
9x is not cheap, the issues with the business are structural, that's why earnings aren't predicted to grow for the next 5 years. Yes, you're welcome to imagine a bunch of things might happen but that's just copium to justify overpaying for a business in decline.

Your framework is valid if you’re doing a DCF, but a DCF isn’t the only way to value a business. One can see the estimated future/normalized earnings, apply a conservative multiple one is willing to pay for the business at that point, and calculate the implied annualized return from today’s price.
More importantly, saying 9x earnings is expensive simply because earnings are currently stagnant isn’t a dynamic model and misses the key question: why are earnings declining? LULU’s revenue is still growing and its share count is shrinking. If EPS is declining despite that, the issue is primarily margin pressure. The investment thesis therefore comes down to whether that margin deterioration is structural or fixable/temporary. We can stagnant and decline for many reasons, impairment m&a d&a business deformation etc.
If margins are permanently impaired, even 9x may not be cheap. If margins stabilize or recover while revenue grows and buybacks continue reducing the share count, 9x could be very cheap.

Can you repost this with the flair “ai written content”. Tks
No Low-Effort Posts - All stock posts must contain at least a basic explanation of the company or some financial information. It doesn't have to be a full DCF or investment thesis, but state what YOU like/dislike about the stock, don’t just ask other people to do research for you.
Simple beginner questions about value investing are welcome. “Low Effort” is at the discretion of the moderators. Short stock questions/recommendations are appropriate as comments in our pinned Weekly Megathread.
Consider posting in the [Weekly Megathread](https://www.reddit.com/r/ValueInvesting/?f=flair_name%3A%22Weekly%20Megathread%22)

My DCF valuation was based on a 30x terminal FCF multiple with 10% WACC giving $144, but I use a variety of methods with weighting to give a more realistic fair value

ASML is currently trading above most major discounted cash flow (DCF) and quantitative intrinsic value (IV) estimates

Recommending stocks for a rising rate environment is missing some fundamentals on how equities are priced. Pick any method, DCF, CAPM etc (or ask AI) and rising rates causes stocks to fall, often more than bonds.

A couple of people asked whether the Brina Gap produces identifiable calls or only statistics. Fair question, so below is the marquee list from the paper.
For anyone arriving cold: the Brina Gap measures the difference between the growth a business can fundamentally sustain, calculated as ROIC times reinvestment rate, and the growth the market is already pricing in, recovered by running a DCF backwards from enterprise value. Negative means the price demands growth the business has no mechanical way to fund.
Ten right, five wrong on the list below. That ratio is not the framework's hit rate and should not be read as one, since these are selected large-gap cases on well-known companies, not a complete enumeration. The measured accuracy is 58.9% on the expensive side across 927 windows, and roughly chance on the cheap side. Figures below are five-year annualized total return against SPY, every window resolved.
The five it got wrong first, since those are more informative than the wins.
Apple FY2011 (gap −18.4, realized +2.7). Nike FY2012 (−32.9, +4.4). Netflix FY2020 (−22.4, +1.0). UnitedHealth FY2019 (+10.3, −0.8) and UnitedHealth FY2020 (+4.9, −16.7).
Those five break into three separate failures. Apple and Nike are the same structural blind spot: both showed large negative gaps, meaning the price was demanding more growth than existing economics could fund, and then Apple built Services and Nike ran through 2015. The model takes a snapshot of current ROIC and treats it as a ceiling, so a business that raises its own ceiling is the exact case it cannot see. No tuning fixes that, because the information is not in the filings yet.
The UnitedHealth pair is the inverse: positive-gap calls, cheap on the numbers, run over by COVID-era disruption in managed care. Netflix FY2020 is a marginal directional miss that would flip on a slightly different window.
The correct calls, for completeness: NVDA FY2012 (+13.6, +40.4), UNH FY2012 (+42.2, +20.0), MSFT FY2013 (+7.8, +17.5), UNH FY2015 (+64.3, +9.6), AAPL FY2013 (+3.9, +8.1), AAPL FY2012 (+5.2, +4.9), PYPL FY2020 (−20.7, −40.4), MA FY2020 (−16.0, −4.4), MRK FY2018 (−16.8, −0.8), KO FY2020 (−17.7, −0.6).
Two things about that list I would rather flag myself than have someone find. PayPal 2020 is the call I would actually point at, since it was flagged expensive while still a consensus favorite. NVIDIA 2012 I would treat with suspicion, because every backtest ever built finds NVIDIA in 2012. And note how undramatic the middle of the expensive side is: Merck, Coca-Cola and Mastercard were all correctly called and all three underperformed by under five points a year, two of them by under one.
The statistical claims live in the backtest rather than in fifteen names: point-in-time S&P 500, 1,504 completed five-year windows, delisted and acquired companies carried through to their real outcomes. Full list with reasoning on each is in section 6.5 of the working paper (Zenodo DOI 10.5281/zenodo.19052189, SSRN 6361659), misses included.

True, the cyclical nature of their business is probably the part I need to stress harder. My bear case still has revenue growing every year, so it may not be capturing a proper downcycle.
Though I’m still trying to reconcile that, holding the other assumptions constant, the reverse DCF is giving me roughly -15% annual revenue growth at this price, rather than earnings.
I can definitely see earnings being lumpy given the WFE cycle, but do you think KLAC’s revenue could actually contract at anything close to that rate over a 5-year period? What sort of 5-year revenue path you’d use instead?

What inputs are you using for your DCF? Discount rate (WACC)? Terminal growth/multiple?
I agree your estimates seem too high. It seems the likelihood for export restriction is high leading to a 30% reduction in revenue, which as you note is likely being priced in. If this combines with a demand reset in fab equipment the combined factors could result in a re-rate below the 52-week low (\~$80).
I think it’s a buy here but my valuation is showing more fairly valued (\~$195) vs a $250 1yr target.

I’ve been looking at KLA Corp (KLAC).
I ran my DCF and got:
Bear: $372
Base: $612
Bull: $831
Current price: around $187
When even the bear case is roughly 2x the market price, I am curious about what I may be missing or which assumption is too optimistic.
The basic thesis is that KLA continues benefiting from more complex semiconductor manufacturing, especially leading-edge chips, HBM, advanced packaging and its growing installed base, but growth gradually slows from here.
Latest numbers are still pretty strong. Revenue was $3.7B, up 15.2% YoY, FCF was $817M and net cash around $2.1B. Semiconductor Process Control grew about 11.9% and services about 16.5%. Capex was also only around 2.8% of revenue.
At around $187, I get something close to -15.3% annual revenue growth implied by the current price. Over the last five years, KLAC grew revenue at roughly 14.4% a year.
Obviously past growth doesn’t mean future growth will continue at anything close to that rate. But going from +14% historical growth to something like -15% implied growth feels like a pretty big change in expectations.
Is a the market expecting semiconductor capex to fall hard after the AI/HBM cycle? China/export restrictions? Margins coming down materially? Some structural risk to KLA’s process-control position? Or are my DCF assumptions simply too generous?
Would be especially interested to hear from anyone who follows semiconductor equipment.

OP, do yourself a favor and look up the Dividend Discount Model (DDM) and Discounted Cash Flow (DCF).
The direct answer to your question is that price is set by buyers and sellers.

I was thinking of doing a deeper dive into Walmart and building my next DCF on them. I’ll let you know what my numbers come to!

Quoting Damodaran definition of intrinsic value does not turn a speculative play into value investing.
​You claim Wix is hardly a growth company going forward, but any DCF model showing it as deeply undervalued relies heavily on aggressive future cash flow growth and margin expansion. If growth is slowing, its mature valuation requires a much larger margin of safety, especially once you account for heavy stock based compensation eating into real free cash flow.

If Warren is smart enough to look at a company and understand its value based off its cashflows without a DCF, then I applaud him, but I am simply not that smart.
Honestly, I relate more with Damodaran/Burry.
Burry for contrarian thinking, Damodaran for framework.
I'll stick with my DCF's and most everyone here should do the same.

Agree with you but it is said that Warren B never did a DCF

I agree with you there.
the market was pricing in Google's business being severely disrupted by AI.
Sadly i didn't invest (wish I did as my model indicated an attractive return) but the opposite is true today.
That doesn't mean Google cant generate stock price returns, but those returns will be outsized relative to what a conservative DCF would say its worth. Personally, I am just not comfortable buying when that's the case.

They operate under an **"Issuer-Paid Equity Research" model**, which is structurally very different from traditional, independent Wall Street analyst coverage (like Goldman Sachs, Morgan Stanley, or JPMorgan).
# The Receipts & Fine Print Disclosures
# 1. Litchfield Hills Research (August 19, 2026: $66 Price Target)
If you read the legal disclosure section at the bottom of Litchfield Hills' press release and report, they explicitly lay out their business relationship with Faraday Future:
* **Paid Distribution:** The disclosure explicitly states: *"Litchfield Hills Research...* ***has received compensation from the Company \[Faraday Future\] for distribution and investor-targeting services****."*
* **Not SEC/FINRA Registered:** The disclosure specifically notes that *Litchfield Hills Research is* ***not a U.S. broker-dealer registered with the SEC or a member of FINRA***.
# 2. Emerging Growth Research (July 29, 2026: $30 Price Target)
Emerging Growth Research operates on the exact same issuer-sponsored model.
* **Issuer-Paid PR Distribution:** Their "Flash Reports" are distributed via ACCESSNewswire / PR newswire services explicitly under company-sponsored press distribution channels.
* **Entity Type:** "Emerging Growth" is a brand marketing/investor awareness service that provides paid coverage for micro-caps and penny stocks to generate market visibility.
# How Issuer-Paid Research Works (The Playbook)
In traditional Wall Street research, investment banks cover large companies and distribute reports to institutional clients. In micro-cap finance, distressed companies pay specialized research boutiques to write "initiations" and "updates."
[THE ISSUER-PAID PROCESS]

1. THE CONTRACT:
The company (FFAI) pays a fee (typically $10,000 to $50,000/year) to a boutique firm.

2. THE "RESEARCH":
The boutique uses management's internal projections (e.g., "shipping 2,000 robots")
and plugs them into a Discounted Cash Flow (DCF) model to produce a massive price target ($30 to $66).

3. THE PR DROP:
The report is blast-issued via BusinessWire/AccessNewswire right alongside earnings
or reverse-splits so algorithms and retail news-scanners see "BUY RATING: $66 TARGET."

# Why the Price Targets Are Wildly Unrealistic
To understand why a **$66.00 price target** from Litchfield or a **$30.00 price target** from Emerging Growth is detached from financial reality, look at the math:
* **The Current Stock Price:** Trading around **\~$3.80–$4.50**.
* **The $66 Price Target:** Represents a **\~1,400%+ increase** from current levels.
* **How They Got $66:** Litchfield's model takes management's optimistic claim of selling 2,000 robots by year-end and multiplies it out into future years—**while completely ignoring the toxic convertible note dilution (Proposal 1)** that will continuously print millions of new shares and suppress equity value.
# Summary
When traditional analysts cover a stock, the report is paid for by institutional trading commissions.
When Litchfield Hills or Emerging Growth publish a $30 or $66 price target for FFAI, **Faraday Future is paying for that investor-targeting and distribution service**.
These press releases are published to **generate buying volume and social media chatter**, providing the exact liquidity needed for convertible noteholders to execute their debt conversions.