As of May 23, 2025, ABIOMED Inc's estimated intrinsic value ranges from $61.08 to $248.66 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $248.66 | -34.7% |
| Discounted Cash Flow (5Y) | $138.42 | -63.7% |
| Dividend Discount Model (Multi-Stage) | $102.00 | -73.2% |
| Dividend Discount Model (Stable) | $121.77 | -68.0% |
| Earnings Power Value | $61.08 | -84.0% |
Is ABIOMED Inc (ABMD) undervalued or overvalued?
With the current market price at $381.02, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate ABIOMED Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.87 | 0.97 |
| Cost of equity | 7.9% | 10.3% |
| Cost of debt | 5.0% | 5.0% |
| Tax rate | 19.3% | 21.3% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 5.9% | 7.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $138 | $6,059M | 90.7% |
| 10-Year Growth | $249 | $11,030M | 84.5% |
| 5-Year EBITDA | $137 | $5,999M | 90.6% |
| 10-Year EBITDA | $229 | $10,147M | 83.2% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $167M |
| Discount Rate (WACC) | 7.1% - 5.9% |
| Enterprise Value | $2,341M - $2,803M |
| Net Debt | $(182)M |
| Equity Value | $2,523M - $2,986M |
| Outstanding Shares | 45M |
| Fair Value | $56 - $66 |
| Selected Fair Value | $61.08 |
| Metric | Value |
|---|---|
| Market Capitalization | $17181M |
| Enterprise Value | $16998M |
| Trailing P/E | 64.40 |
| Forward P/E | 94.04 |
| Trailing EV/EBITDA | 17.00 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.82 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $74.60 |
| Discounted Cash Flow (5Y) | 25% | $34.60 |
| Dividend Discount Model (Multi-Stage) | 20% | $20.40 |
| Dividend Discount Model (Stable) | 15% | $18.26 |
| Earnings Power Value | 10% | $6.11 |
| Weighted Average | 100% | $153.97 |
Based on our comprehensive valuation analysis, ABIOMED Inc's weighted average intrinsic value is $153.97, which is approximately 59.6% below the current market price of $381.02.
Key investment considerations:
Given these factors, we believe ABIOMED Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.