LGND
Ligand Pharmaceuticals Incorporated
$229.33
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 75.0% above fair value
You pay
$229.33
Bear
$93.42
Fair
$131.02
Bull
$171.96
Bear
$93.42
-59.3%
8% stage 1 growth, 11% discount
Fair
$131.02
-42.9%
14% stage 1 growth, 11% discount
Bull
$171.96
-25.0%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
88.2x
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 $267.75 from 17 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $131.02 per share.
Warnings
Wall Street's average price target is $267.75 (from 17 analysts). Our estimate is 68% 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