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Penumbra, Inc. (PEN) Intrinsic Value

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

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Penumbra, Inc. (PEN)

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Intrinsic Value (DCF)

Current$350.49
→
Intrinsic$112.39
-68%
$77.40$112.39$178.81
Current price reflects execution expectations above 20% growth — not unreasonable for quality businesses.
Range: Bear $77 → Bull $179. Current price implies expectations above the base case, closer to bull expectations.
Current price reflects assumptions at the upper end of our valuation range (bull case: $179).
Discount ↓Growth →16%18%20%22%
8%$136$148$159$172
10%$97$104$112$121
12%$75$80$86$93
14%$61$65$70$75

Bull Case

  • Bull case ($179) with 24% growth, 9% discount rate

Bear Case

  • Bear case ($77) implies 78% downside at 16% growth, 12% discount
  • Trading 68% above base case — execution must exceed assumptions to justify
  • Price exceeds bull case ($179) — requires exceptional execution
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5-Year Free Cash Flow Projection

Year 1$176.76M
Year 2$212.11M
Year 3$254.53M
Year 4$305.44M
Year 5$366.53M
Terminal$5.39B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$147.30MTTM 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 PEN stock undervalued or overvalued?
🔴 OVERVALUED

PEN trades at $350.49 vs. our DCF-derived intrinsic value of $112.39, implying -65% downside. Using a 10.0% WACC and 20.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($168.03) suggests limited upside.

What is PEN's intrinsic value?

Using a 5-year DCF model: Base FCF of $147M, projected at 20.0% 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 $-101M net debt and dividing by 0.04B shares: Bear $74.60 | Base $112.39 | Bull $168.03. Current price $350.49 implies -65% to base case.

How is PEN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% 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 ($4.31B).

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.