United Therapeutics (UTHR): Assessing Valuation After Expanding MannKind Partnership With New Pipeline Addition

If you’re weighing your next move on United Therapeutics (UTHR), the company just gave investors a reason to take notice. On August 24, United Therapeutics exercised its option to expand its license and collaboration agreement with MannKind Corporation. This means a new investigational molecule will be developed and pushed through United Therapeutics’ pipeline, signaling a continued commitment to innovative R&D and adding another potential revenue stream in the future.

This partnership update comes at a dynamic time for United Therapeutics. While the company’s five-year return stands out, showing long-term growth, recent months have introduced mixed signals. Shares are up 3% in the past month but down 15% over the past year. The company maintains positive revenue and net income growth on an annual basis, which hints at underlying operational strength even as the market readjusts expectations.

Is the recent partnership news enough to turn sentiment, or does the current share price already reflect the road ahead for United Therapeutics? Let’s dig deeper into the valuation picture.

Most Popular Narrative: 19.3% Undervalued

According to community narrative, United Therapeutics is viewed as significantly undervalued, with analysts projecting a fair value well above the current share price. This gap is driven by anticipated growth and operational strength over the next several years.

*The company's innovation wave pipeline, including studies in progressive fibrosis, next-generation delivery platforms (oral, implantable), and organ manufacturing (xenotransplant/3D printing), positions United Therapeutics to benefit from the expanding focus on personalized and regenerative medicine. This can create new revenue streams and margin expansion opportunities as these long-horizon technologies approach clinical milestones and eventual commercialization.*

Want to know what’s driving the bullish outlook? The secret sauce in this valuation is all about how future growth is modeled, with bold profit projections and shifting revenue streams at center stage. Curious which numbers are fueling that eye-catching price target? Uncover the analyst assumptions that could reshape your view of United Therapeutics’ real worth.

Result: Fair Value of $380.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts. However, clinical trial setbacks or increased competition in key product lines could quickly overturn the optimistic case for United Therapeutics' future growth. Find out about the key risks to this United Therapeutics narrative.

Another View: What Does Our DCF Model Reveal?

Looking at United Therapeutics through the lens of our DCF model offers a different perspective. While some see value based on analyst forecasts, the DCF suggests the market might be overlooking long-term cash flow potential. This approach could uncover hidden upside or expose optimistic assumptions.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out United Therapeutics for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own United Therapeutics Narrative

Do the numbers or outlooks here not quite match your view? It takes just a few minutes to explore the details, adjust your assumptions, and share your own perspective. Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding United Therapeutics.

Looking for More Smart Investment Opportunities?

If you are serious about staying ahead of the market, now’s the time to widen your scope. The Simply Wall Street Screener is packed with ideas that can help you act quickly and make confident moves. Don’t let potential winners slip through your fingers. Start scanning these standout opportunities below.

• Track down hidden bargains with strong fundamentals by using our screener highlighting undervalued stocks based on cash flows and spot stocks trading below their intrinsic value before others catch on.
• Jump on the momentum in artificial intelligence with a screener built for cutting-edge innovators. Find companies accelerating breakthroughs across tech with AI penny stocks.
• Lock in attractive income streams as you target stocks offering generous distributions, expertly filtered through our screener for dividend stocks with yields > 3%.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com