INVA
Innoviva, Inc.
$21.81
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 67.6% below fair value
You pay
$21.81
Bear
$45.36
Fair
$67.30
Bull
$91.19
Bear
$45.36
+108.0%
8% stage 1 growth, 11% discount
Fair
$67.30
+208.6%
14% stage 1 growth, 11% discount
Bull
$91.19
+318.1%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
7.4x
Market is pricing in (growth)
-4.9%
vs 14.1% 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 $37.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $67.30 per share.
Warnings
Wall Street's average price target is $37.00 (from 10 analysts). Our estimate is 102% 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