AMPH
Amphastar Pharmaceuticals, Inc.
$18.72
Platform & Compounding FCF
85%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 25.4% below fair value
You pay
$18.72
Bear
$20.38
Fair
$25.11
Bull
$29.21
Bear
$20.38
+8.8%
3% stage 1 growth, 11% discount
Fair
$25.11
+34.1%
5% stage 1 growth, 11% discount
Bull
$29.21
+56.0%
7% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (5% base case)
Terminal Value % of EV
35%
Implied Market Multiple
11.9x
Market is pricing in (growth)
1.9%
vs 5.3% base
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 $20.50 from 12 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $25.11 per share.
Warnings
Wall Street's average price target is $20.50 (from 12 analysts). Our estimate is 28% 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