VIR
Vir Biotechnology, Inc.
$10.61
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Overvalued
Trading 97.3% above fair value
You pay
$10.61
Bear
$2.95
Fair
$5.38
Bull
$7.33
Bear
$2.95
-72.2%
18% rev growth, 21% terminal margin
Fair
$5.38
-49.3%
30% rev growth, 28% terminal margin
Bull
$7.33
-30.9%
35% rev growth, 32% terminal margin
Adjust Assumptions
30.0%
28.0%
12.0%
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
69%
Implied Market Multiple
22.1x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (12 analysts)
$23.50
Divergence from AlphaVal
77%
Summary
Projecting 30% revenue growth with FCF margins expanding from 0% to 28% over 10 years, discounted at 12%, the base-case value is $5.38 per share.
Warnings
Stock-based employee pay is 72% 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 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 83% 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 $23.50 (from 12 analysts). Our estimate is 77% 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