VCYT
Veracyte, Inc.
$45.03
Platform & Compounding FCF
85%
Two-stage FCF DCF
Mild
·
Conviction
Fair Value
Trading 1.4% below fair value
You pay
$45.03
Bear
$28.54
Fair
$45.66
Bull
$66.25
Bear
$28.54
-36.6%
11% stage 1 growth, 12% discount
Fair
$45.66
+1.4%
18% stage 1 growth, 12% discount
Bull
$66.25
+47.1%
24% stage 1 growth, 12% discount
Key Value Driver
FCF growth rate (18% base case)
Terminal Value % of EV
41%
Implied Market Multiple
34.3x
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 $45.25 from 20 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $45.66 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