u/HatedMoats

A detailed DCF model, using assumptions of strong but decelerating revenue growth (from 20.5% down to 4.5% over 10 years) and expanding GAAP EBIT margins (from 15% to 22.5%), yields an intrinsic value of ~$160 per share. The current market price of $104.27 is significantly below the calculated intrinsic value, providing a 35% margin of safety. This discrepancy suggests the market is overly pessimistic about NOW's long-term cash generation potential. The company is undervalued due to its entrenched position within customer workflows (high switching costs) and potential for continued platform expansion, which are not fully reflected in its current stock price. An investment at the current price offers approximately 53.5% upside. The thesis could be invalidated by AI-driven disruption leading to pricing pressure or seat compression, weaker-than-expected net expansion rates, failure to achieve projected operating leverage, and the model's inherent sensitivity to discount rate and terminal growth assumptions.

NFLX Q2 revenue +13.4%, operating margin 33.4%, 325M members, 2026 revenue guide ~$51.2B with 31.5% margin and ~$3B ad revenue. The sell-off reset expectations; current price near author's DCF base case of $88.50 offers asymmetric upside if ad monetization and margin expansion continue. Mildly undervalued quality compounder; not a deep-value buy, but a reasonable entry with defined lower add zones at $65 and $53. Engagement/viewing hours stagnating, pricing power fading, rising content/live-rights costs, reduced disclosure hides deterioration, YouTube/TikTok competition for attention.

Author’s DCF yields base-case intrinsic value of $260 vs. $155 market price; even bear case ($141) provides limited downside at current levels. Deep value opportunity exists if SAP executes cloud conversion and margin expansion; current price discounts a bear scenario, offering asymmetric upside. Buy SAP at ~$155 with 40% upside to base case; catalyst is continued cloud backlog conversion and margin improvement. Cloud cannibalization depresses revenue growth, margins fail to expand beyond 28-30%, or currency headwinds persist; terminal value sensitivity is high.

A detailed DCF model under base-case assumptions yields an intrinsic value of $263.79 per share versus a recent market price of ~$187. This implies a ~29% margin of safety, as the market is discounting CRM due to near-term SaaS sector woes, underestimating its future margin expansion and cash generation. The stock is undervalued based on the author's analysis of its growth, operating leverage, and cost of capital. Failure to achieve modeled margin expansion (bear case EBIT margin of 24%), higher cost of capital (9.0% WACC), slower terminal growth (1.5%), or prolonged sector downturn.