INVA
Innoviva, Inc.
$22.46
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 71.8% below fair value
You pay
$22.46
Bear
$50.78
Fair
$79.78
Bull
$112.83
Bear
$50.78
+126.1%
10% stage 1 growth, 11% discount
Fair
$79.78
+255.2%
16% stage 1 growth, 11% discount
Bull
$112.83
+402.3%
21% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (16% base case)
Terminal Value % of EV
43%
Implied Market Multiple
7.3x
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 $40.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $79.78 per share.
Warnings
Wall Street's average price target is $40.00 (from 10 analysts). Our estimate is 124% 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