TGTX
TG Therapeutics, Inc.
$54.00
High-Growth Software
80%
Revenue × Terminal Margin DCF
Moderate
·
Conviction
Overvalued
Trading 17.0% above fair value
You pay
$54.00
Bear
$17.43
Fair
$46.15
Bull
$69.26
Bear
$17.43
-67.7%
18% rev growth, 21% terminal margin
Fair
$46.15
-14.5%
30% rev growth, 28% terminal margin
Bull
$69.26
+28.3%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
69%
Implied Market Multiple
13.6x
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 $46.15 per share.
Warnings
Our estimate assumes profit margins grow from 0% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 84% 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 50% 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