Why we don't show a single “fair value” for ALGM
Even the optimistic scenario of a conservative trailing-FCF model ($7.75) sits far below today's price — the market is paying for growth and durability beyond what this model structure captures. The honest lens is the question below: what growth does today's price actually require? The model scenarios are listed further down for reference.
What would today's price require?
$39.53 is justified only if free cash flow grows about +59.1% a year (fading to 2.5% long-run) at a 11.5% required return — faster than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 5.5%/yr | 12.5% | $4.63 |
| Base case | 8.5%/yr | 11.5% | $5.95 |
| Optimistic | 11.5%/yr | 10.5% | $7.75 |
Current Price
$39.53
Market-Implied Growth
+59.1%/yr
vs +9.7% 5Y actual
Base-Case Model Value
$5.95
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ALGM (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $85.2M · 0.19B shares · net debt $118.5M
Estimated Fair Value
$5.95
-84.9% vs $39.53
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 8.5%/yr FCF growth and 10-year horizon fixed. Green = above today's $39.53; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 9.5% | $7.06 | $7.46 | $7.92 | $8.45 | $9.07 |
| 10.5% | $6.16 | $6.47 | $6.81 | $7.20 | $7.65 |
| 11.5% | $5.45 | $5.69 | $5.95 | $6.25 | $6.58 |
| 12.5% | $4.87 | $5.06 | $5.27 | $5.50 | $5.75 |
| 13.5% | $4.39 | $4.54 | $4.71 | $4.89 | $5.09 |
