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ACADIA Pharmaceuticals Inc. (ACAD) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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ACADIA Pharmaceuticals Inc. (ACAD)

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Intrinsic Value (DCF)

Current$26.53
→
Intrinsic$35.00
+32%
$24.34$35.00$55.22
Market implies 17% growth for 5 years
DCF analysis suggests ACAD could have 32% upside at 25% growth — verify assumptions match your view.
At $27, the market prices in continued high-teens cash flow growth (17%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $24 → Bull $55. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$43$46$50$53
10%$30$33$35$38
12%$24$25$27$29
14%$19$21$22$23

Bull Case

  • Bull case ($55) offers 108% upside at 30% growth, 9% discount
  • 24% margin of safety vs. base case estimate
  • Market-implied growth (17%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($24) implies 8% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$196.50M
Year 2$245.62M
Year 3$307.02M
Year 4$383.78M
Year 5$479.72M
Terminal$7.06B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$157.20MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ACAD stock undervalued or overvalued?
🟡 FAIRLY VALUED

ACAD trades at $26.53, within 10% of our $29.27 intrinsic value estimate. At 10.0% WACC and 25.0% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $19.75 (bear) to $43.29 (bull).

What is ACAD's intrinsic value?

Using a 5-year DCF model: Base FCF of $157M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-268M net debt and dividing by 0.17B shares: Bear $19.75 | Base $29.27 | Bull $43.29. Current price $26.53 implies +13% to base case.

How is ACAD's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($4.60B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.