PCRX
Pacira BioSciences, Inc.
$25.54
Platform & Compounding FCF
65%
Two-stage FCF DCF
Moderate
·
Conviction
Undervalued
Trading 32.4% below fair value
You pay
$25.54
Bear
$28.29
Fair
$37.80
Bull
$46.77
Bear
$28.29
+10.8%
5% stage 1 growth, 11% discount
Fair
$37.80
+48.0%
8% stage 1 growth, 11% discount
Bull
$46.77
+83.1%
11% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (8% base case)
Terminal Value % of EV
38%
Implied Market Multiple
13.0x
Market is pricing in (growth)
3.2%
vs 8.5% 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 $32.00 from 36 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $37.80 per share.
Warnings
Stock-based employee pay equals 817% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $32.00 (from 36 analysts). Our estimate is 26% 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