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Merit Medical Systems, Inc. (MMSI) Intrinsic Value

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

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Merit Medical Systems, Inc. (MMSI)

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Intrinsic Value (DCF)

Current$80.35
→
Intrinsic$101.75
+27%
$67.03$101.75$167.63
Market implies 19% growth for 5 years
MMSI shows 27% potential upside using 25% growth — reasonable if fundamentals hold.
At $80, the market prices in continued high-teens cash flow growth (19%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $67 → Bull $168. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →21%23%25%27%
8%$127$138$149$161
10%$87$94$102$110
12%$64$70$76$82
14%$50$55$59$64

Bull Case

  • Bull case ($168) offers 109% upside at 30% growth, 9% discount
  • 21% margin of safety vs. base case estimate
  • Market-implied growth (19%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($67) implies 17% 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$228.44M
Year 2$285.56M
Year 3$356.95M
Year 4$446.18M
Year 5$557.73M
Terminal$8.21B

📐 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$182.76MTTM 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 MMSI stock undervalued or overvalued?
🟡 FAIRLY VALUED

MMSI trades at $80.35, within 10% of our $83.08 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 $52.07 (bear) to $128.75 (bull).

What is MMSI's intrinsic value?

Using a 5-year DCF model: Base FCF of $183M, 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 $418M net debt and dividing by 0.06B shares: Bear $52.07 | Base $83.08 | Bull $128.75. Current price $80.35 implies -11% to base case.

How is MMSI'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 ($5.35B).

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.