The stock needs $8.4 billion of free cash in fiscal 2028 at a 40 times multiple. I model $6.4 billion. Integration and share count already did the easy growth.
Key points
- $8.4 billion of fiscal 2028 free cash is what a 40 times multiple needs to hold $406.
- $6.4 billion is my fiscal 2028 free cash, 39% of $16.4 billion revenue.
- 845 million diluted shares and $1.8 billion of stock compensation keep the per-share math tight.
The call
The price requires fiscal 2028 free cash near $8.4 billion if the multiple stays 40 times enterprise value. That is 56% above fiscal 2026 cash of $4.11 billion after two large deals already in the numbers.
I model $16.4 billion of fiscal 2028 revenue and $6.4 billion of cash. That is 16% growth after the CyberArk year annualizes, not 25%. GAAP gross margin already fell to 67.6% in the last two quarters. The multiple should compress, not stretch.
Revenue and free cash flow ($ billions)- Revenue
- Free cash flow
- Your forecast
SEC filings through FY26; Grok estimates for FY27-28E. As of Oct 8, 2026.
Valuation
| Item | Figure |
|---|
| Fiscal 2028 revenue (yours) | $16.4 billion |
| Fiscal 2028 free cash (39% margin) | $6.40 billion |
| Multiple on that cash | 38 times |
| Plus net cash | $6.1 billion |
| Diluted shares | 850 million |
| 12-month target | $293 |
Thirty-eight times next-next-year cash is still rich for a 16% grower with 67% GAAP gross margin. Asymmetry is poor: a 20% miss on cash takes the stock toward $230; beating needs both 20% growth and a 50 times multiple.
GAAP gross margin vs FCF marginCompany facts, quarters ending Oct 2024 to Jul 2026.
Risks
- Platform deals and AI firewalls could keep bookings above 20% and reset the multiple higher.
- Adjusted cash-flow margin could hold 38% even as GAAP gross margin stays 68%.
- Further buybacks could cut the share count faster than issuance from deals and awards.
What would change my mind
Fiscal 2027 remaining performance obligations above $26 billion with GAAP gross margin back above 72%.