VCEL
Vericel Corporation
$34.73
High-Growth Software
80%
Revenue × Terminal Margin DCF
Mild
·
Conviction
Overvalued
Trading 11.3% above fair value
You pay
$34.73
Bear
$16.51
Fair
$31.20
Bull
$47.31
Bear
$16.51
-52.5%
11% rev growth, 17% terminal margin
Fair
$31.20
-10.2%
18% rev growth, 23% terminal margin
Bull
$47.31
+36.2%
24% rev growth, 26% terminal margin
Key Value Driver
Revenue growth (18%) × margin expansion to 23%
Terminal Value % of EV
61%
Implied Market Multiple
6.3x
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 $52.67 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $31.20 per share.
Warnings
Wall Street's average price target is $52.67 (from 14 analysts). Our estimate is 51% 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