LGND
Ligand Pharmaceuticals Incorporated
$297.28
Platform & Compounding FCF
80%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 225.6% above fair value
You pay
$297.28
Bear
$64.79
Fair
$91.31
Bull
$120.18
Bear
$64.79
-78.2%
8% stage 1 growth, 11% discount
Fair
$91.31
-69.3%
14% stage 1 growth, 11% discount
Bull
$120.18
-59.6%
18% stage 1 growth, 11% discount
Adjust Assumptions
14.1%
11.0%
3.0%
Key Value Driver
FCF growth rate (14% base case)
Terminal Value % of EV
42%
Implied Market Multiple
107.3x
Market is pricing in (growth)
31.4%
vs 14.1% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (18 analysts)
$339.43
Divergence from AlphaVal
73%
Summary
Using a two-stage FCF DCF with 14% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $91.31 per share.
Warnings
Wall Street's average price target is $339.43 (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