LGND
Ligand Pharmaceuticals Incorporated
$296.45
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 105.6% above fair value
You pay
$296.45
Bear
$102.79
Fair
$144.16
Bull
$189.21
Bear
$102.79
-65.3%
8% stage 1 growth, 11% discount
Fair
$144.16
-51.4%
14% stage 1 growth, 11% discount
Bull
$189.21
-36.2%
18% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
115.7x
Market is pricing in (growth)
32.5%
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 $320.33 from 18 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $144.16 per share.
Warnings
Wall Street's average price target is $320.33 (from 18 analysts). Our estimate is 73% 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