APLS
Apellis Pharmaceuticals, Inc.
$41.03
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Overvalued
Trading 16.6% above fair value
You pay
$41.03
Bear
$19.47
Fair
$35.20
Bull
$51.17
Bear
$19.47
-52.6%
9% rev growth, 21% terminal margin
Fair
$35.20
-14.2%
15% rev growth, 28% terminal margin
Bull
$51.17
+24.7%
19% rev growth, 32% terminal margin
Adjust Assumptions
15.0%
28.0%
12.0%
Key Value Driver
Revenue growth (15%) × margin expansion to 28%
Terminal Value % of EV
61%
Implied Market Multiple
5.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (25 analysts)
$62.00
Divergence from AlphaVal
43%
Summary
Projecting 15% revenue growth with FCF margins expanding from 9% to 28% over 10 years, discounted at 12%, the base-case value is $35.20 per share.
Warnings
Our estimate assumes profit margins grow from 9% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 90% 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 $62.00 (from 25 analysts). Our estimate is 43% 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