ALNY
Alnylam Pharmaceuticals, Inc.
$288.41
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Fair Value
Trading 18.0% below fair value
You pay
$288.41
Bear
$152.16
Fair
$351.87
Bull
$510.31
Bear
$152.16
-47.2%
18% rev growth, 21% terminal margin
Fair
$351.87
+22.0%
30% rev growth, 28% terminal margin
Bull
$510.31
+76.9%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
64%
Implied Market Multiple
9.9x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $438.50 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $351.87 per share.
Warnings
Our estimate assumes profit margins grow from 13% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 82% 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 $438.50 (from 52 analysts). Our estimate is 30% below 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