As of May 28, 2025, PPD Inc has a Discounted Cash Flow (DCF) derived fair value of $89.05 per share. With the current market price at $47.28, this represents a potential upside of 88.4%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $56.09 |
| DCF Fair Value (10-year) | $89.05 |
| Potential Upside (5-year) | 18.6% |
| Potential Upside (10-year) | 88.4% |
| Discount Rate (WACC) | 6.7% - 9.2% |
Revenue is projected to grow from $4682 million in 12-2020 to $11499 million by 12-2030, representing a compound annual growth rate of approximately 9.4%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2020 | 4682 | 16% |
| 12-2021 | 5915 | 26% |
| 12-2022 | 6244 | 6% |
| 12-2023 | 6734 | 8% |
| 12-2024 | 7362 | 9% |
| 12-2025 | 8176 | 11% |
| 12-2026 | 8772 | 7% |
| 12-2027 | 9386 | 7% |
| 12-2028 | 10043 | 7% |
| 12-2029 | 10746 | 7% |
| 12-2030 | 11499 | 7% |
Net profit margin is expected to improve from 4% in 12-2020 to 18% by 12-2030, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2020 | 169 | 4% |
| 12-2021 | 377 | 6% |
| 12-2022 | 562 | 9% |
| 12-2023 | 775 | 12% |
| 12-2024 | 1022 | 14% |
| 12-2025 | 1319 | 16% |
| 12-2026 | 1453 | 17% |
| 12-2027 | 1595 | 17% |
| 12-2028 | 1749 | 17% |
| 12-2029 | 1916 | 18% |
| 12-2030 | 2097 | 18% |
with a 5-year average of $120 million. Projected CapEx is expected to maintain at approximately 3% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2021 | 141 |
| 12-2022 | 162 |
| 12-2023 | 183 |
| 12-2024 | 207 |
| 12-2025 | 228 |
| 12-2026 | 247 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 123 |
| Days Inventory | 0 |
| Days Payables | 19 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 3M/2021 | 212 | 11 | 49 | 95 | 58 |
| 2022 | 1089 | 63 | 207 | 96 | 724 |
| 2023 | 1371 | 86 | 223 | 175 | 886 |
| 2024 | 1700 | 114 | 244 | 199 | 1142 |
| 2025 | 2091 | 147 | 271 | 262 | 1411 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 56.09 | 18.6% |
| 10-Year DCF (Growth) | 89.05 | 88.4% |
| 5-Year DCF (EBITDA) | 61.20 | 29.4% |
| 10-Year DCF (EBITDA) | 88.65 | 87.5% |
Is PPD Inc (PPD) a buy or a sell? PPD Inc is definitely a buy. Based on our DCF analysis, PPD Inc (PPD) appears to be significantly undervalued with upside potential of 88.4%. 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:
Investors should consider a strong buy at the current market price of $47.28.