Arena Pharmaceuticals is a biopharmaceutical company focused on discovering, developing and commercializing drugs to address unmet medical needs. The company was founded in 1997 and is based in San Diego, California.
ARNA Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for Arena Pharmaceuticals Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that Arena Pharmaceuticals Inc ranked in the 86th percentile in terms of potential gain offered. Specifically, our DCF analysis implies the stock is trading below its fair value by an estimated 1326.67%. The most interesting components of our discounted cash flow analysis for Arena Pharmaceuticals Inc ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 107.01; that's higher than 93.96% of US stocks in the Healthcare sector that have positive free cash flow.
The business' balance sheet reveals debt to be 2% of the company's capital (with equity being the remaining amount). Approximately merely 8.06% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
ARNA's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 59.14% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
Want more companies with a valuation profile/forecast similar to that of Arena Pharmaceuticals Inc? See CRHM, STAA, INCY, PETQ, and INBP.