VCYT
Veracyte, Inc.
$58.35
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Overvalued
Trading 11.0% above fair value
You pay
$58.35
Bear
$31.37
Fair
$52.58
Bull
$79.03
Bear
$31.37
-46.2%
12% stage 1 growth, 12% discount
Fair
$52.58
-9.9%
20% stage 1 growth, 12% discount
Bull
$79.03
+35.4%
26% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (20% base case)
Terminal Value % of EV
42%
Implied Market Multiple
45.6x
Market is pricing in (growth)
22.1%
vs 20.0% 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 $57.83 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $52.58 per share.
Warnings
Stock-based employee pay equals 66% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
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