Discounted Cash Flow (DCF) Analysis Levered

Ligand Pharmaceuticals Incorporated (LGND)

$58.75

+0.44 (+0.75%)

All numbers are in Millions, Currency in USD

Stock DCF: 78.67 | 58.75 | undervalue

Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	251.45	120.28	186.42	277.13	196.24	207.18	218.73	230.92	243.79	257.38
Revenue (%)
Operating Cash Flow	194.06	-29.34	54.59	78.80	137.85	74.89	79.07	83.48	88.13	93.04
Operating Cash Flow (%)
Capital Expenditure	-11.89	-2.55	-4.46	-8.76	-17.92	-8.92	-9.42	-9.95	-10.50	-11.09
Capital Expenditure (%)
Free Cash Flow	182.17	-31.89	50.13	70.04	119.93	65.97	69.65	73.53	77.63	81.95

Weighted Average Cost Of Capital

Share price	$ 58.75
Beta	0.807
Diluted Shares Outstanding	16.87
Cost of Debt
Tax Rate	114.49
After-tax Cost of Debt	-0.60%
Risk-Free Rate
Market Risk Premium
Cost of Equity	7.965
Total Debt	87.75
Total Equity	991
Total Capital	1,078.74
Debt Weighting	8.13
Equity Weighting	91.87
Wacc

Build Up Free Cash Flow

Year A/P	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Actual	2023 Projected	2024 Projected	2025 Projected	2026 Projected	2027 Projected
Revenue	251.45	120.28	186.42	277.13	196.24	207.18	218.73	230.92	243.79	257.38
Operating Cash Flow	194.06	-29.34	54.59	78.80	137.85	74.89	79.07	83.48	88.13	93.04
Capital Expenditure	-11.89	-2.55	-4.46	-8.76	-17.92	-8.92	-9.42	-9.95	-10.50	-11.09
Free Cash Flow	182.17	-31.89	50.13	70.04	119.93	65.97	69.65	73.53	77.63	81.95
WACC
PV LFCF						61.50	60.53	59.57	58.63	57.70
SUM PV LFCF										297.92

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.27
Free cash flow (t + 1)	83.59
Terminal Value	1,586.20
Present Value of Terminal Value	1,116.78

Intrinsic Value

Enterprise Value	1,414.70
Net Debt	87.70
Equity Value	1,327
Shares Outstanding	16.87
Equity Value Per Share	78.67