As of May 25, 2025, BioDelivery Sciences International Inc's estimated intrinsic value ranges from $3.96 to $12.40 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $12.40 | +121.8% |
| Discounted Cash Flow (5Y) | $6.52 | +16.6% |
| Dividend Discount Model (Multi-Stage) | $5.71 | +2.2% |
| Dividend Discount Model (Stable) | $11.22 | +100.7% |
| Earnings Power Value | $3.96 | -29.2% |
Is BioDelivery Sciences International Inc (BDSI) undervalued or overvalued?
With the current market price at $5.59, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate BioDelivery Sciences International 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 | 0.8 | 0.91 |
| Cost of equity | 6.5% | 9.0% |
| Cost of debt | 4.5% | 11.7% |
| Tax rate | 27.0% | 27.0% |
| Debt/Equity ratio | 0.11 | 0.11 |
| After-tax WACC | 6.2% | 8.9% |
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 | $7 | $588M | 75.8% |
| 10-Year Growth | $12 | $1,169M | 65.2% |
| 5-Year EBITDA | $7 | $641M | 77.8% |
| 10-Year EBITDA | $11 | $1,002M | 59.3% |
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 | $25M |
| Discount Rate (WACC) | 8.9% - 6.2% |
| Enterprise Value | $276M - $395M |
| Net Debt | $(56)M |
| Equity Value | $331M - $451M |
| Outstanding Shares | 99M |
| Fair Value | $3 - $5 |
| Selected Fair Value | $3.96 |
| Metric | Value |
|---|---|
| Market Capitalization | $552M |
| Enterprise Value | $497M |
| Trailing P/E | 6.51 |
| Forward P/E | 19.86 |
| Trailing EV/EBITDA | 7.80 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.11 |
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% | $3.72 |
| Discounted Cash Flow (5Y) | 25% | $1.63 |
| Dividend Discount Model (Multi-Stage) | 20% | $1.14 |
| Dividend Discount Model (Stable) | 15% | $1.68 |
| Earnings Power Value | 10% | $0.40 |
| Weighted Average | 100% | $8.57 |
Based on our comprehensive valuation analysis, BioDelivery Sciences International Inc's weighted average intrinsic value is $8.57, which is approximately 53.3% above the current market price of $5.59.
Key investment considerations:
Given these factors, we believe BioDelivery Sciences International Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.