As of May 23, 2025, United Therapeutics Corp's estimated intrinsic value ranges from $256.52 to $498.65 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $498.65 | +61.5% |
| Discounted Cash Flow (5Y) | $452.10 | +46.4% |
| Dividend Discount Model (Multi-Stage) | $368.48 | +19.4% |
| Dividend Discount Model (Stable) | $368.04 | +19.2% |
| Earnings Power Value | $256.52 | -16.9% |
Is United Therapeutics Corp (UTHR) undervalued or overvalued?
With the current market price at $308.72, 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 United Therapeutics Corp'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 | 0.81 | 0.9 |
| Cost of equity | 7.6% | 9.9% |
| Cost of debt | 4.5% | 4.6% |
| Tax rate | 21.4% | 22.5% |
| Debt/Equity ratio | 0.02 | 0.02 |
| After-tax WACC | 7.5% | 9.8% |
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 | $452 | $18,694M | 74.1% |
| 10-Year Growth | $499 | $20,794M | 55.2% |
| 5-Year EBITDA | $485 | $20,160M | 75.9% |
| 10-Year EBITDA | $520 | $21,755M | 57.2% |
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 | $839M |
| Discount Rate (WACC) | 9.8% - 7.5% |
| Enterprise Value | $8,581M - $11,162M |
| Net Debt | $(1,700)M |
| Equity Value | $10,281M - $12,862M |
| Outstanding Shares | 45M |
| Fair Value | $228 - $285 |
| Selected Fair Value | $256.52 |
| Metric | Value |
|---|---|
| Market Capitalization | $13926M |
| Enterprise Value | $12226M |
| Trailing P/E | 11.50 |
| Forward P/E | 10.74 |
| Trailing EV/EBITDA | 10.65 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.02 |
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% | $149.59 |
| Discounted Cash Flow (5Y) | 25% | $113.03 |
| Dividend Discount Model (Multi-Stage) | 20% | $73.70 |
| Dividend Discount Model (Stable) | 15% | $55.21 |
| Earnings Power Value | 10% | $25.65 |
| Weighted Average | 100% | $417.17 |
Based on our comprehensive valuation analysis, United Therapeutics Corp's weighted average intrinsic value is $417.17, which is approximately 35.1% above the current market price of $308.72.
Key investment considerations:
Given these factors, we believe United Therapeutics Corp is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.