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Regeneron Pharmaceuticals, Inc. (REGN) Intrinsic Value

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

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Regeneron Pharmaceuticals, Inc. (REGN)

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Intrinsic Value (DCF)

Current$741.92
→
Intrinsic$885.76
+19%
$592.70$885.76$1,468.62
Market implies 12% growth for 5 years
REGN shows 19% potential upside using 17% growth — reasonable if fundamentals hold.
At $742, the market prices in 12% annual cash flow growth — a moderate expectation aligned with historical trends (17%).
Range: Bear $593 → Bull $1469. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →13%15%17%19%
8%$1105$1201$1303$1411
10%$755$818$886$958
12%$570$616$666$719
14%$456$492$530$572

Bull Case

  • Bull case ($1469) offers 98% upside at 20% growth, 8% discount
  • 16% margin of safety vs. base case estimate
  • Market-implied growth (12%) ≤ historical CAGR (17%)

Bear Case

  • Bear case ($593) implies 20% downside at 13% growth, 12% discount
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5-Year Free Cash Flow Projection

Year 1$4.28B
Year 2$4.99B
Year 3$5.83B
Year 4$6.80B
Year 5$7.94B
Terminal$125.76B

📐 Model Inputs

Growth Rate16.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate9.5%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$3.66BTTM 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 REGN stock undervalued or overvalued?
🟡 FAIRLY VALUED

REGN trades at $741.92, within 10% of our $885.76 intrinsic value estimate. At 9.5% WACC and 16.7% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $584.79 (bear) to $1332.58 (bull).

What is REGN's intrinsic value?

Using a 5-year DCF model: Base FCF of $3.66B, projected at 16.7% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 9.5% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $216M net debt and dividing by 0.12B shares: Bear $584.79 | Base $885.76 | Bull $1332.58. Current price $741.92 implies +14% to base case.

How is REGN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 16.7% 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=9.5%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($102.17B).

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: 27.9x.