As of June 21, 2025, Alexion Pharmaceuticals Inc's estimated intrinsic value ranges from $24.28 to $149.18 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $45.21 | -75.2% |
| Discounted Cash Flow (5Y) | $24.28 | -86.7% |
| Dividend Discount Model (Multi-Stage) | $42.53 | -76.7% |
| Dividend Discount Model (Stable) | $43.18 | -76.3% |
| Earnings Power Value | $149.18 | -18.3% |
Is Alexion Pharmaceuticals Inc (ALXN) undervalued or overvalued?
With the current market price at $182.50, 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 Alexion Pharmaceuticals 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 | 3.2% | 3.7% |
| Equity market risk premium | 4.2% | 5.2% |
| Adjusted beta | 0.72 | 1.12 |
| Cost of equity | 6.2% | 10.0% |
| Cost of debt | 4.0% | 4.5% |
| Tax rate | 10.6% | 18.7% |
| Debt/Equity ratio | 0.07 | 0.07 |
| After-tax WACC | 6.1% | 9.6% |
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 | $24 | $4,484M | 80.2% |
| 10-Year Growth | $45 | $9,125M | 68.7% |
| 5-Year EBITDA | $62 | $12,909M | 93.1% |
| 10-Year EBITDA | $77 | $16,252M | 82.4% |
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 | $2,391M |
| Discount Rate (WACC) | 9.6% - 6.1% |
| Enterprise Value | $24,838M - $39,507M |
| Net Debt | $(898)M |
| Equity Value | $25,736M - $40,405M |
| Outstanding Shares | 222M |
| Fair Value | $116 - $182 |
| Selected Fair Value | $149.18 |
| Metric | Value |
|---|---|
| Market Capitalization | $40456M |
| Enterprise Value | $39558M |
| Trailing P/E | 59.34 |
| Forward P/E | 70.30 |
| Trailing EV/EBITDA | 12.55 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.07 |
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% | $13.56 |
| Discounted Cash Flow (5Y) | 25% | $6.07 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.51 |
| Dividend Discount Model (Stable) | 15% | $6.48 |
| Earnings Power Value | 10% | $14.92 |
| Weighted Average | 100% | $49.53 |
Based on our comprehensive valuation analysis, Alexion Pharmaceuticals Inc's weighted average intrinsic value is $49.53, which is approximately 72.9% below the current market price of $182.50.
Key investment considerations:
Given these factors, we believe Alexion Pharmaceuticals Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.