What is ENTA's DCF valuation?

Enanta Pharmaceuticals Inc (ENTA) DCF Valuation Analysis

Executive Summary

As of December 15, 2025, Enanta Pharmaceuticals Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $14.73, this represents a potential upside of -563.3%.

Key Metrics Value
DCF Fair Value (5-year) $0.00
DCF Fair Value (10-year) $0.00
Potential Upside (5-year) -574.9%
Potential Upside (10-year) -563.3%
Discount Rate (WACC) 6.4% - 9.9%

Financial Performance & Projections

Revenue Trends

Revenue is projected to grow from $65 million in 09-2025 to $89 million by 09-2035, representing a compound annual growth rate of approximately 3.2%.

Fiscal Year Revenue (USD millions) Growth
09-2025 65 3%
09-2026 69 5%
09-2027 70 2%
09-2028 72 3%
09-2029 77 6%
09-2030 80 4%
09-2031 81 2%
09-2032 84 4%
09-2033 86 2%
09-2034 88 2%
09-2035 89 2%

Profitability Projections

Net profit margin is expected to improve from -125% in 09-2025 to -125% by 09-2035, driven by operational efficiency and economies of scale.

Fiscal Year Net Profit (USD millions) Profit Margin
09-2025 (82) -125%
09-2026 (86) -125%
09-2027 (88) -125%
09-2028 (91) -125%
09-2029 (96) -125%
09-2030 (100) -125%
09-2031 (102) -125%
09-2032 (106) -125%
09-2033 (108) -125%
09-2034 (110) -125%
09-2035 (112) -125%

DCF Model Components

1. Capital Expenditures (CapEx)

with a 5-year average of $9 million. Projected CapEx is expected to maintain at approximately 12% of revenue.

2. Depreciation & Amortization

Depreciation is based on an average useful life of 5 years for capital assets.

Fiscal Year D&A (USD millions)
09-2026 10
09-2027 11
09-2028 11
09-2029 10
09-2030 9
09-2031 9

3. Working Capital Requirements

Net working capital is expected to increase gradually, with projected changes affecting free cash flow.

Components Average Days
Days Receivables 38
Days Inventory 0
Days Payables 0

4. Free Cash Flow Projections

Fiscal Year EBITDA Tax CapEx Change in NWC FCF
2026 (80) (2) 8 2 (89)
2027 (80) (2) 9 0 (87)
2028 (83) (2) 9 0 (91)
2029 (91) (2) 9 0 (99)
2030 (95) (2) 10 0 (103)

DCF Valuation Parameters

Key Assumptions

  • Discount Rate (WACC): WACC / Discount Rate (selected: 6.4% - 9.9%)
  • Long-Term Growth Rate: Long-term Growth Rate (selected: 3.0% - 5.0%)
  • Terminal EV/EBITDA Multiple: 14.6x (based on peer average)

Valuation Summary

Valuation Method Fair Price (USD) Potential Upside
5-Year DCF (Growth) 0.00 -574.9%
10-Year DCF (Growth) 0.00 -563.3%
5-Year DCF (EBITDA) 0.00 -100.0%
10-Year DCF (EBITDA) 0.00 -100.0%

Enterprise Value Breakdown

  • 5-Year Model: $(2,050)M
  • 10-Year Model: $(2,000)M

Investment Conclusion

Is Enanta Pharmaceuticals Inc (ENTA) a buy or a sell? Enanta Pharmaceuticals Inc is definitely a sell. Based on our DCF analysis, Enanta Pharmaceuticals Inc (ENTA) appears to be overvalued with upside potential of -563.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.

Key investment drivers include:

  • Steady revenue growth (3.2% CAGR)
  • Strong free cash flow generation

Investors should consider reducing exposure at the current market price of $14.73.