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Halozyme Therapeutics, Inc. (HALO) Intrinsic Value

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

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Halozyme Therapeutics, Inc. (HALO)

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Intrinsic Value (DCF)

Current$71.82
→
Intrinsic$117.15
+63%
$76.33$117.15$194.59
Market implies 13% growth for 5 years
DCF analysis suggests HALO could have 63% upside at 25% growth — verify assumptions match your view.
At $72, the market prices in 13% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $76 → Bull $195. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$147$159$173$187
10%$99$108$117$127
12%$73$80$86$94
14%$57$62$67$73

Bull Case

  • Bull case ($195) offers 171% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (13%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($76) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$585.46M
Year 2$731.83M
Year 3$914.78M
Year 4$1.14B
Year 5$1.43B
Terminal$21.03B

📐 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$468.37MTTM 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 HALO stock undervalued or overvalued?
🟢 UNDERVALUED

HALO trades at $71.82 vs. our DCF-derived intrinsic value of $95.20, implying +30% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of HALO's future cash flows. The bear case ($58.75) still suggests upside, providing margin of safety.

What is HALO's intrinsic value?

Using a 5-year DCF model: Base FCF of $468M, 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 $1.39B net debt and dividing by 0.13B shares: Bear $58.75 | Base $95.20 | Bull $148.89. Current price $71.82 implies +30% to base case.

How is HALO'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 ($13.71B).

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.