• If you are wondering whether BioMarin Pharmaceutical's current share price lines up with its underlying worth, this article will walk you through what the numbers say and how to interpret them.
• The stock closed at US$59.66 most recently, with returns of 3.6% over the last 7 days, 1.2% over 30 days, 0.4% year to date, and a 6.1% decline over 1 year, alongside larger declines of 45.1% over 3 years and 29.8% over 5 years.
• Recent attention on BioMarin has focused on its rare disease drug portfolio and ongoing regulatory and pipeline developments. These often shape how investors think about long term revenue potential and risk, and this context helps explain why sentiment and pricing can shift even when there is limited short term company specific news driving headlines.
• Our valuation framework currently gives BioMarin a valuation score of 3 out of 6. Next we will look at how different valuation methods arrive at that view, before finishing with a way to assess value that goes beyond the usual ratios and models.

Approach 1: BioMarin Pharmaceutical Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and discounting them back to a single present value figure.

For BioMarin Pharmaceutical, the model uses last twelve months free cash flow of about $797.9 million and a 2 Stage Free Cash Flow to Equity approach. Analysts provide explicit forecasts for several years, and Simply Wall St then extrapolates beyond that to extend the cash flow path. Under this framework, projected free cash flow in 2030 is $960 million, with intermediate annual projections between 2026 and 2035 ranging from about $971 million to $1,043.2 million before discounting.

After discounting those cash flows back to today, the DCF model arrives at an estimated intrinsic value of about $110.94 per share, compared with the recent share price of $59.66. That gap implies the shares are around 46.2% below the DCF estimate of value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests BioMarin Pharmaceutical is undervalued by 46.2%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Approach 2: BioMarin Pharmaceutical Price vs Earnings

For profitable companies, the P/E ratio is a useful way to relate what you pay for the stock to the earnings it is currently generating. It helps you see how many dollars investors are paying today for each dollar of earnings.

What counts as a "normal" or "fair" P/E depends on how the market views a company’s growth potential and risk. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth or higher risk usually point to a lower P/E.

BioMarin Pharmaceutical currently trades on a P/E of 22.02x. That sits close to the Biotechs industry average P/E of 22.02x and above the peer group average of 20.06x. Simply Wall St also calculates a proprietary Fair Ratio of 23.10x, which reflects factors such as BioMarin’s earnings profile, industry, profit margins, market cap and company specific risks.

The Fair Ratio is more tailored than a simple comparison with peers or the broad industry, because it adjusts for company level characteristics rather than assuming all Biotechs should trade on the same multiple. Comparing BioMarin’s actual P/E of 22.02x with the Fair Ratio of 23.10x suggests the shares are trading at a modest discount to that customised benchmark.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your BioMarin Pharmaceutical Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St you can use Narratives, which let you turn your view of BioMarin Pharmaceutical into a clear story that links assumptions about future revenue, earnings and margins to a financial forecast, a Fair Value, and a simple comparison with today’s price on the Community page. This page is used by millions of investors, updates automatically when new news or earnings arrive, and can differ widely between investors. For example, one BioMarin Narrative may point to a higher Fair Value of about US$122.0 and another to a lower Fair Value of about US$60.00, reflecting two very different but transparent stories about the same company.

Do you think there's more to the story for BioMarin Pharmaceutical? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.