Is Biogen Inc (BIIB) overvalued?
On Equity Rank's model estimate, BIIB trades close to its fair value (7% above it). Biogen Inc (BIIB) last closed at $248.35; the multi-method model fair value is $232.17.
| Price | Model fair value | Price vs model |
|---|---|---|
| $248.35 | $232.17 | 7% above |
What the answer rests on
- 3 of 9 valuation methods put BIIB's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, BIIB's free cash flow would need to grow about -4.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 21.5% a year.
- BIIB trades at 110.2 times its last year's earnings, against a median of 27.2 for 14 profitable Drug Manufacturer companies.
- Over the past year the price sat below the model fair value on 79% of trading days. The gap ranged from 21% below to 13% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BIIB's fair value · What prices assume · Other companies