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Advanced Energy Industries, Inc. (AEIS) Intrinsic Value

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

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Advanced Energy Industries, Inc. (AEIS)

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Intrinsic Value (DCF)

Current$257.29
→
Intrinsic$58.55
-77%
$40.32$58.55$93.16
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
Range: Bear $40 → Bull $93. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $93).
Discount ↓Growth →16%18%20%22%
8%$71$77$83$90
10%$50$54$59$63
12%$39$42$45$48
14%$32$34$36$39

Bull Case

  • Bull case ($93) with 24% growth, 9% discount rate

Bear Case

  • Bear case ($40) implies 84% downside at 16% growth, 12% discount
  • Trading 77% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($93) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$88.75M
Year 2$106.50M
Year 3$127.80M
Year 4$153.36M
Year 5$184.03M
Terminal$2.71B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$73.96MTTM 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 AEIS stock undervalued or overvalued?
🔴 OVERVALUED

AEIS trades at $257.29 vs. our DCF-derived intrinsic value of $58.55, implying -75% downside. Using a 10.0% WACC and 20.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($87.55) suggests limited upside.

What is AEIS's intrinsic value?

Using a 5-year DCF model: Base FCF of $74M, projected at 20.0% 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 $-50M net debt and dividing by 0.04B shares: Bear $38.86 | Base $58.55 | Bull $87.55. Current price $257.29 implies -75% to base case.

How is AEIS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% 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 ($2.17B).

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: 29.3x.