CDNA
CareDx, Inc
$28.51
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 137.4% above fair value
You pay
$28.51
Bear
$9.37
Fair
$12.01
Bull
$14.90
Bear
$9.37
-67.1%
9% stage 1 growth, 12% discount
Fair
$12.01
-57.9%
15% stage 1 growth, 12% discount
Bull
$14.90
-47.7%
19% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (15% base case)
Terminal Value % of EV
38%
Implied Market Multiple
132.6x
Market is pricing in (growth)
36.7%
vs 14.6% 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 $28.00 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $12.01 per share.
Warnings
Wall Street's average price target is $28.00 (from 13 analysts). Our estimate is 71% below 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