ALNY
Alnylam Pharmaceuticals, Inc.
$297.45
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Fair Value
Trading 16.1% below fair value
You pay
$297.45
Bear
$153.25
Fair
$354.38
Bull
$513.95
Bear
$153.25
-48.5%
18% rev growth, 21% terminal margin
Fair
$354.38
+19.1%
30% rev growth, 28% terminal margin
Bull
$513.95
+72.8%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
64%
Implied Market Multiple
10.3x
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 $445.67 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $354.38 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 $445.67 (from 52 analysts). Our estimate is 32% 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