ACAD
Acadia Pharmaceuticals Inc.
$19.78
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 55.9% below fair value
You pay
$19.78
Bear
$24.67
Fair
$44.83
Bull
$67.42
Bear
$24.67
+24.7%
12% rev growth, 21% terminal margin
Fair
$44.83
+126.6%
19% rev growth, 28% terminal margin
Bull
$67.42
+240.8%
25% rev growth, 32% terminal margin
Adjust Assumptions
19.0%
28.0%
12.0%
Key Value Driver
Revenue growth (19%) × margin expansion to 28%
Terminal Value % of EV
62%
Implied Market Multiple
2.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (37 analysts)
$32.32
Divergence from AlphaVal
39%
Summary
Projecting 19% revenue growth with FCF margins expanding from 10% to 28% over 10 years, discounted at 12%, the base-case value is $44.83 per share.
Warnings
Our estimate assumes profit margins grow from 10% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 92% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $32.32 (from 37 analysts). Our estimate is 39% above the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep