Well, as several of my professors used to say, there are lies, damned lies, and statistics. My statistics professor obviously disagreed. Nonetheless, the concept is probably valid, and applies to financial models as well. Garbage in, garbage out, as they say – if you really want a stock to be undervalued, all you have to do is tweak the discount rate and assume a few basis points extra margin and revenue growth (things that nobody will really object to) and boom, there you go. Conversely, if you really want to convince yourself a stock is overvalued, discount their cash for repatriation and jack up the discount rate and be extra-conservative in modeling growth and margins, and pretty soon you get to an ugly target price.
Keep this in mind the next time you’re reading somebody who is calling a particular stock a screaming buy (or sell).