ALKS
Alkermes plc
$36.80
Platform & Compounding FCF
80%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 38.8% below fair value
You pay
$36.80
Bear
$47.79
Fair
$60.11
Bull
$71.87
Bear
$47.79
+29.9%
5% stage 1 growth, 11% discount
Fair
$60.11
+63.3%
9% stage 1 growth, 11% discount
Bull
$71.87
+95.3%
12% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (9% base case)
Terminal Value % of EV
38%
Implied Market Multiple
10.2x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $46.00 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $60.11 per share.
Warnings
Wall Street's average price target is $46.00 (from 28 analysts). Our estimate is 41% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions