Is Regeneron a Potential Bargain After 43% Drop and Strong 2025 Cash Flow Prospects?

Thinking about what to do with your Regeneron Pharmaceuticals shares? Or maybe you are wondering if now is the right time to jump in? You are not alone. Regeneron is the kind of company that often lands on “watch lists” for investors interested in both growth potential and solid value. While the past year has not exactly been a smooth ride, with the stock closing at $569.17 and down 42.7% over the past 12 months, it is fast becoming a case of “wait and see” for many market watchers. Even in the shorter term, Regeneron has slipped slightly with a -0.1% move in the last week and -1.0% over the past month. But before you write off its prospects, it is worth noting that not all declines signal trouble. Sometimes they open doors, especially when market sentiment or shifting sector expectations are also at play.

What is especially interesting is how Regeneron stands up under the microscope of valuation. Across six classic valuation checks, the company scores a perfect 6 out of 6. This means it looks undervalued every single way you measure it. This is not just a random statistic; it is a signal that things may not be as bleak as the recent price charts suggest, particularly if long-term fundamentals hold up.

So, how do those six approaches to valuation stack up for Regeneron, and what can they really tell us? Let’s dig into the numbers, but also keep in mind that sometimes, there is an even better way to judge value. We will get to that at the end of this article.

Why Regeneron Pharmaceuticals is lagging behind its peers

Approach 1: Regeneron Pharmaceuticals Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a tool that estimates a company's true value by projecting its expected future cash flows and discounting them back to today. Essentially, it helps investors figure out what those future cash streams are worth in present dollars, making it a cornerstone of deep value investing.

For Regeneron Pharmaceuticals, the latest figures reveal a healthy Free Cash Flow (FCF) of $3.40 billion. Analyst estimates predict continued growth, with projections reaching $6.07 billion by 2029. It is worth noting that while analysts provide forecasts up to five years out, figures beyond that leading up to 2035 are careful extrapolations and not direct analyst consensus.

According to the DCF model, Regeneron's intrinsic value lands at $1,515.57 per share, which is a dramatic 62.4% higher than its current price of $569.17. This signals that the market may not be fully recognizing the company's ability to generate substantial long-term cash flow.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Regeneron Pharmaceuticals.

Our Discounted Cash Flow (DCF) analysis suggests Regeneron Pharmaceuticals is undervalued by 62.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Regeneron Pharmaceuticals Price vs Earnings

For established, profitable companies like Regeneron Pharmaceuticals, the Price-to-Earnings (PE) ratio is often the most reliable metric to gauge valuation. The PE ratio essentially shows how much investors are willing to pay for each dollar of a company's earnings, which is especially meaningful when those earnings are consistent and substantial.

It is important to remember that what qualifies as a “fair” PE ratio does not exist in a vacuum. Market expectations around growth and risk play a huge role. Generally, higher growth and lower risk translate to a higher fair PE, while slower growth or higher risk pulls it lower.

Currently, Regeneron trades at a PE of 13.2x. That is noticeably below its peers, whose average sits at 22.4x, and even further below the industry average of 16.6x. At first glance, this discount would suggest the stock is undervalued compared to these broader groups.

To really zero in on fair value, it is helpful to look past simplistic averages. That is where the Simply Wall St "Fair Ratio" comes in, estimating a suitable PE multiple of 24.3x for Regeneron. This metric incorporates more than just peer or industry trends. It factors in vital company details such as earnings growth, industry positioning, profit margins, overall risk, and market capitalization. Because of this detail, the Fair Ratio often gives a clearer, more specific signal for an individual company’s true value.

With Regeneron’s actual PE (13.2x) well below its Fair Ratio (24.3x), the signal is strong. The stock appears significantly undervalued from this angle as well.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Regeneron Pharmaceuticals Narrative

Earlier, we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives, a new, smarter approach to investing that goes beyond the numbers. A Narrative is simply your story behind a company, where you bring together your unique perspective (why you believe Regeneron will outperform or underperform), your forecast for its future revenue, earnings and profit margins, and what you determine is its “fair value.”

Rather than relying only on traditional models, Narratives directly link Regeneron's business outlook with a clear, dynamic financial forecast and your own opinion of value. Narratives are easy to use and accessible right on Simply Wall St’s Community page, empowering millions of investors like you to decide whether to buy, hold, or sell by comparing their Fair Value to the actual share price.

The best part? Narratives update automatically when new news or earnings data becomes available, so your view stays current. For example, some investors see Regeneron's global pipeline growth and expect a Fair Value as high as $890 per share, while others focus on competition risks and set their target closer to $543. Narratives make it simple to see, compare and act on these different viewpoints as the story evolves.

Do you think there's more to the story for Regeneron Pharmaceuticals? Create your own Narrative to let the Community know!

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.

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