XERS
Xeris Biopharma Holdings, Inc.
$6.19
High-Growth Software
80%
Revenue × Terminal Margin DCF
Strong
·
Conviction
Undervalued
Trading 61.7% below fair value
You pay
$6.19
Bear
$6.76
Fair
$16.14
Bull
$23.62
Bear
$6.76
+9.2%
18% rev growth, 21% terminal margin
Fair
$16.14
+160.8%
30% rev growth, 28% terminal margin
Bull
$23.62
+281.5%
35% rev growth, 32% terminal margin
Key Value Driver
Revenue growth (30%) × margin expansion to 28%
Terminal Value % of EV
65%
Implied Market Multiple
3.4x
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 $9.00 from 10 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $16.14 per share.
Warnings
Our estimate assumes profit margins grow from 10% to 28% over 10 years. If that improvement stalls, the company is worth considerably less.
Gross margin of 82% 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 $9.00 (from 10 analysts). Our estimate is 99% above 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