DCTH
Delcath Systems, Inc.
$16.06
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 64.8% above fair value
You pay
$16.67
Bear
$7.44
Fair
$10.11
Bull
$13.50
Bear
$7.44
-55.4%
12% stage 1 growth, 11% discount
Fair
$10.11
-39.3%
20% stage 1 growth, 11% discount
Bull
$13.50
-19.0%
26% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
46%
Implied Market Multiple
173.7x
Market is pricing in (growth)
38.0%
vs 20.0% 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 $25.33 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $10.11 per share.
Warnings
Stock-based employee pay equals 897% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $25.33 (from 11 analysts). Our estimate is 75% 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