SLNO
Soleno Therapeutics, Inc.
$53.01
High-Growth Software
80%
Revenue × Terminal Margin DCF
Mild
·
Conviction
Overvalued
Trading 0.7% above fair value
You pay
$53.01
Bear
$25.95
Fair
$52.65
Bull
$73.57
Bear
$25.95
-51.1%
18% rev growth, 21% terminal margin
Fair
$52.65
-0.7%
30% rev growth, 28% terminal margin
Bull
$73.57
+38.8%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
59%
Implied Market Multiple
12.9x
Summary
Our base-case estimate uses a discounted cash flow model based on revenue growth and long-run free cash flow margins. We then blend that result with the average analyst price target of $76.50 from 13 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $52.65 per share.
Warnings
Stock-based employee pay is 24% of revenue — your ownership shrinks by about 2.0% each year as new shares are issued. Our estimate already accounts for this dilution.
Gross margin of 99% means each dollar of revenue is highly profitable. As the company grows, overhead costs should shrink as a share of revenue, boosting overall profits.
Wall Street's average price target is $76.50 (from 13 analysts). Our estimate is 39% below the consensus -- consider that gap carefully.
Key Risks
- Current FCF misleads — the model values future margins, not today's cash
- SBC dilution is the hidden tax: 2-4% annual share growth compounds fast
- Revenue deceleration is inevitable — the question is when and how steep