United Therapeutics Corporation (UTHR) Intrinsic Value

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

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United Therapeutics Corporation (UTHR)

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Intrinsic Value (DCF)

Current$471.99
Intrinsic$816.19
+73%
$564.89$816.19$1,292.97
Market implies 10% growth for 5 years
DCF analysis suggests UTHR could have 73% upside at 25% growth — verify assumptions match your view.
At $472, the market prices in 10% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $565 → Bull $1293. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$998$1076$1159$1247
10%$706$760$816$876
12%$545$585$627$672
14%$444$475$508$543

Bull Case

  • Bull case ($1293) offers 174% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (10%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($565) 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$1.35B
Year 2$1.69B
Year 3$2.11B
Year 4$2.64B
Year 5$3.30B
Terminal$48.52B

📐 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$1.08BTTM 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.

Frequently Asked Questions

Is UTHR stock undervalued or overvalued?
🟢 UNDERVALUED

UTHR trades at $471.99 vs. our DCF-derived intrinsic value of $681.07, implying +35% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of UTHR's future cash flows. The bear case ($456.62) still suggests upside, providing margin of safety.

What is UTHR's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.08B, 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 $-1.40B net debt and dividing by 0.05B shares: Bear $456.62 | Base $681.07 | Bull $1011.58. Current price $471.99 implies +35% to base case.

How is UTHR'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 ($31.63B).

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.