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Agilent Technologies, Inc. (A) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Agilent Technologies, Inc. (A)

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Intrinsic Value (DCF)

Current$144.83
→
Intrinsic$91.17
-37%
$60.46$91.17$149.52
Market implies 26% growth for 5 years
Current price reflects execution expectations above 15% growth — not unreasonable for quality businesses.
At $145, the market prices in continued strong cash flow growth (26%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $60 → Bull $150. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →11%13%15%17%
8%$111$121$132$143
10%$77$84$91$99
12%$58$63$69$75
14%$46$50$54$59

Bull Case

  • Bull case ($150) offers 3% upside at 18% growth, 9% discount
  • Conservative 15% growth assumption is achievable based on track record

Bear Case

  • Bear case ($60) implies 58% downside at 12% growth, 12% discount
  • Price reflects 26% growth expectations vs 15% historical — high bar to clear
  • Trading 37% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$1.32B
Year 2$1.52B
Year 3$1.74B
Year 4$2.00B
Year 5$2.29B
Terminal$33.68B

📐 Model Inputs

Growth Rate14.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$1.15BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is A stock undervalued or overvalued?
🔴 OVERVALUED

A trades at $144.83 vs. our DCF-derived intrinsic value of $91.17, implying -38% downside. Using a 10.0% WACC and 14.7% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($134.46) suggests limited upside.

What is A's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.15B, projected at 14.7% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $1.56B net debt and dividing by 0.28B shares: Bear $60.61 | Base $91.17 | Bull $134.46. Current price $144.83 implies -38% to base case.

How is A's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 14.7% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($27.46B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 23.8x.