Is United Therapeutics Still a Hidden Gem After 34.9% Share Price Surge in 2025?

• Wondering if United Therapeutics might be a hidden gem or already fully priced? You are not alone, and the real answer lies deeper than just the current share price.
• The stock has delivered a robust 34.9% gain year-to-date and climbed an impressive 31.2% over the past 12 months. This signals strong momentum and growing investor confidence.
• Recent headlines highlight the company’s expanding efforts in pulmonary arterial hypertension treatments and the successful advancement of its organ manufacturing initiatives. These developments have fueled optimism among analysts and may help explain United Therapeutics’ continued price strength.
• When we evaluate its valuation, United Therapeutics scores a solid 5 out of 6 on our undervaluation checks, which suggests there could still be worthwhile upside. Next, let’s unpack the nuts and bolts of different valuation approaches. Keep an eye out for a smarter perspective toward the end of the article that could change how you think about value altogether.

United Therapeutics delivered 31.2% returns over the last year. See how this stacks up to the rest of the Biotechs industry.

Approach 1: United Therapeutics Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company’s current value by projecting its future cash flows and discounting them back to today. This method helps investors understand what a business is really worth based on how much cash it is expected to generate.

For United Therapeutics, the most recent trailing twelve months Free Cash Flow stands at $1.22 Billion. Analyst estimates project this to grow steadily over time, with cash flow expected to reach around $2.03 Billion by the end of 2029. After 2029, further projections rely on growth rates estimated by Simply Wall St, continuing to push Free Cash Flow higher through 2035.

All these future cash flows are discounted back to the present, resulting in an estimated intrinsic value of $1,342.08 per share. Compared with the current share price, the DCF model suggests United Therapeutics is currently 63.8% undervalued. This significant discount indicates that the stock’s price has not yet fully reflected its potential based on projected cash generation.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests United Therapeutics is undervalued by 63.8%. Track this in your watchlist or portfolio, or discover 920 more undervalued stocks based on cash flows.

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

Approach 2: United Therapeutics Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely used valuation metric, particularly when evaluating profitable companies like United Therapeutics. This ratio shows how much investors are willing to pay per dollar of earnings, providing a snapshot of market expectations for growth and risk.

Growth expectations and risk play a big role in what is considered a “normal” or “fair” PE ratio. Companies with faster expected earnings growth or lower perceived risks tend to trade at higher PE multiples. In contrast, slower-growth or higher-risk companies usually command lower ratios.

United Therapeutics currently trades on a PE ratio of 16.5x. For context, the average PE ratio across the Biotechs industry is 19.1x, and the peer group average sits at 21.7x. On the surface, United Therapeutics appears to be trading at a noticeable discount to both industry and peer averages.

However, Simply Wall St also calculates a “Fair Ratio.” This proprietary metric reflects what PE multiple would be appropriate when accounting for United Therapeutics’ specific growth prospects, risks, profit margins, industry, and market capitalization. Unlike peer or industry averages, which can be distorted by outliers or may not reflect a company’s unique situation, the Fair Ratio offers a more meaningful benchmark.

United Therapeutics’ Fair Ratio is 25.3x. Given its current PE of 16.5x, the stock trades well below what would be considered fair based on all relevant factors. This signals the stock is undervalued by this approach and could present attractive upside if the market reevaluates its prospects.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your United Therapeutics Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, an approach that connects the story you believe about a company with the numbers behind it. A Narrative is your personal perspective on United Therapeutics, tied directly to your assumptions about its future revenue, earnings, and margins. It is how you bring a company's outlook to life and then translate that into a fair value estimate that shapes your buy or sell decisions.

Accessible on Simply Wall St’s Community page, Narratives empower investors of any level to anchor every investment decision in both conviction and numbers, alongside millions of fellow investors. You can use Narratives to clearly compare a stock’s Fair Value, according to your view, to the current Price, making your choices more transparent and decisive. As new information arises, such as earnings releases or major clinical milestones, Narratives automatically update so they always reflect the freshest outlook.

For example, with United Therapeutics, one investor may see strong clinical trial data and a record share buyback as the key to sustained rapid growth, leading to a bullish Fair Value near the high end of $575.00. Another might focus on rising R&D costs and competition to justify a more cautious estimate closer to $320.81.

Do you think there's more to the story for United Therapeutics? 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.

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