SPRY
ARS Pharmaceuticals, Inc.
$4.04
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 50.0% below fair value
You pay
$4.04
Bear
$3.93
Fair
$8.09
Bull
$11.43
Bear
$3.93
-2.7%
18% rev growth, 17% terminal margin
Fair
$8.09
+100.1%
30% rev growth, 23% terminal margin
Bull
$11.43
+182.9%
35% rev growth, 26% terminal margin
Adjust Assumptions
30.0%
23.0%
12.0%
Key Value Driver
Revenue growth (30%) × margin expansion to 23%
Terminal Value % of EV
69%
Implied Market Multiple
3.0x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (10 analysts)
$15.00
Divergence from AlphaVal
46%
Summary
Projecting 30% revenue growth with FCF margins expanding from 0% to 23% over 10 years, discounted at 12%, the base-case value is $8.09 per share.
Warnings
Stock-based employee pay is 26% of revenue — your ownership shrinks by about 2.0% each year as new shares are issued. Our estimate already accounts for this dilution.
Our estimate assumes profit margins grow from 0% to 23% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 76% 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 $15.00 (from 10 analysts). Our estimate is 46% below the consensus -- consider that gap carefully.
This stock is 69% below its 52-week high, with weak or declining earnings. That combination often signals real trouble, even though the valuation below is based on other fundamentals.
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