Discounted Cash Flow (DCF) Analysis Unlevered

Ligand Pharmaceuticals Incorporated (LGND)

$71.45

+1.40 (+2.00%)

All numbers are in Millions, Currency in USD

Stock DCF: 1,181.51 | 71.45 | undervalue

Operating Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	141.10	251.45	120.28	186.42	277.13	366.98	485.97	643.53	852.17	1,128.46
Revenue (%)
EBITDA	68.94	236.32	876.12	44.85	117.11	688.13	911.23	1,206.67	1,597.90	2,115.97
EBITDA (%)
EBIT	57.23	221.61	832.38	16.88	66.04	626.52	829.65	1,098.63	1,454.83	1,926.52
EBIT (%)
Depreciation	11.71	14.72	43.73	27.97	51.07	61.61	81.59	108.04	143.07	189.45
Depreciation (%)

Balance Sheet Data

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Total Cash	201.66	764.57	1,069.87	411.19	341.11	1,233.14	1,632.95	2,162.39	2,863.47	3,791.87
Total Cash (%)
Account Receivables	29.97	55.85	41.75	59.06	91.65	104.89	138.90	183.94	243.57	322.54
Account Receivables (%)
Inventories	4.37	7.12	7.30	26.49	27.33	26.47	35.05	46.42	61.47	81.40
Inventories (%)
Accounts Payable	2.26	4.18	2.42	3.78	5.06	6.70	8.88	11.75	15.57	20.61
Accounts Payable (%)
Capital Expenditure	-7.15	-11.89	-2.55	-4.46	-8.76	-12.82	-16.98	-22.49	-29.78	-39.43
Capital Expenditure (%)

Weighted Average Cost Of Capital

Share price	$ 71.45
Beta	0.975
Diluted Shares Outstanding	17.14
Cost of Debt
Tax Rate	-21.75
After-tax Cost of Debt	5.57%
Risk-Free Rate
Market Risk Premium
Cost of Equity	8.135
Total Debt	336.26
Total Equity	1,224.80
Total Capital	1,561.05
Debt Weighting	21.54
Equity Weighting	78.46
Wacc

Build Up Free Cash

Year A/P	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Actual	2022 Projected	2023 Projected	2024 Projected	2025 Projected	2026 Projected
Revenue	141.10	251.45	120.28	186.42	277.13	366.98	485.97	643.53	852.17	1,128.46
EBITDA	68.94	236.32	876.12	44.85	117.11	688.13	911.23	1,206.67	1,597.90	2,115.97
EBIT	57.23	221.61	832.38	16.88	66.04	626.52	829.65	1,098.63	1,454.83	1,926.52
Tax Rate	78.06%	17.31%	21.01%	71.67%	-21.75%	33.26%	33.26%	33.26%	33.26%	33.26%
EBIAT	12.56	183.24	657.54	4.78	80.40	418.14	553.70	733.22	970.95	1,285.75
Depreciation	11.71	14.72	43.73	27.97	51.07	61.61	81.59	108.04	143.07	189.45
Accounts Receivable	-	-25.88	14.10	-17.32	-32.58	-13.25	-34.01	-45.03	-59.64	-78.97
Inventories	-	-2.75	-0.17	-19.19	-0.84	0.85	-8.58	-11.37	-15.05	-19.93
Accounts Payable	-	1.92	-1.76	1.36	1.28	1.64	2.17	2.88	3.81	5.05
Capital Expenditure	-7.15	-11.89	-2.55	-4.46	-8.76	-12.82	-16.98	-22.49	-29.78	-39.43
UFCF	17.12	159.36	710.88	-6.85	90.57	456.17	577.89	765.25	1,013.36	1,341.91
WACC
PV UFCF						424.03	499.32	614.62	756.55	931.25
SUM PV UFCF										3,225.78

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	7.58
Free cash flow (t + 1)	1,368.75
Terminal Value	24,529.60
Present Value of Terminal Value	17,022.87

Intrinsic Value

Enterprise Value	20,248.65
Net Debt	-4.85
Equity Value	20,253.50
Shares Outstanding	17.14
Equity Value Per Share	1,181.51