Is Vericel’s Recent Pullback a Chance or a Warning for Investors in 2025?

• If you are wondering whether Vericel is a beaten down opportunity or a value trap at today’s price, you are exactly the kind of investor this breakdown is for.
• The stock is down around 10% over the last week, roughly flat over the past month, and still sitting on a steep YTD and 1 year decline despite being up strongly over 3 and 5 years. This makes the current setup look very different depending on your time horizon.
• Much of the recent share price action has been shaped by shifting sentiment around the regenerative medicine space and how investors are pricing in Vericel’s commercial traction and competitive position. Broader volatility in high growth healthcare names has also added noise, making it harder to tell whether the latest pullback is a warning sign or a chance to buy quality at a discount.
• Right now Vericel only scores 1/6 on our valuation checks, which suggests the stock screens as expensive on most traditional measures. Those headline numbers do not always tell the whole story, so we will walk through the key valuation approaches next and finish with a more holistic way to judge what the market is really pricing in.

Vericel scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Vericel Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model estimates what a business is worth by projecting its future cash flows and discounting them back into today’s dollars. For Vericel, this 2 stage Free Cash Flow to Equity model starts with last twelve month free cash flow of roughly $16.7 million, then applies analyst forecasts and longer term growth assumptions supplied and extrapolated by Simply Wall St.

The projections anticipate free cash flow rising steadily, with estimated free cash flow of about $67.2 million in 2035, all expressed in $. These future cash flows are discounted back to today to arrive at an intrinsic value estimate of around $24.36 per share. Compared with the current share price, the model implies Vericel is about 48.7% overvalued.

Result: OVERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Vericel may be overvalued by 48.7%. Discover 906 undervalued stocks or create your own screener to find better value opportunities.

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

Approach 2: Vericel Price vs Earnings

For profitable companies like Vericel, the price to earnings, or PE, ratio is a useful way to gauge how much investors are willing to pay today for each dollar of current earnings. A higher PE can be justified when the market expects stronger, more reliable growth, while slower or riskier growth usually deserves a lower, more conservative multiple.

Vericel currently trades on a PE of about 140.1x, which is far above both the broader Biotechs industry average of roughly 19.1x and the peer group average near 56.9x. On those simple comparisons, the stock looks very expensive. However, these benchmarks do not fully reflect Vericel’s specific growth profile, margins, scale, and risk characteristics.

That is where Simply Wall St’s Fair Ratio comes in. This proprietary measure estimates what a “normal” PE should be for Vericel, given its earnings growth outlook, profitability, industry, market cap and company specific risks. For Vericel, the Fair Ratio is 26.1x, which is a much more tailored benchmark than a blunt industry or peer comparison. With the current 140.1x PE sitting far above this Fair Ratio, the shares screen as significantly overvalued on a multiples basis.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Vericel Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple way to connect your view of Vericel’s story to a concrete financial forecast and a Fair Value that you can compare to today’s price.

A Narrative on Simply Wall St is your story behind the numbers, where you set assumptions for future revenue, earnings and margins and the platform turns that into a forward-looking valuation that clearly shows whether Vericel looks undervalued or overvalued versus the market price.

Because Narratives live inside the Simply Wall St Community, they are easy to create, compare and refine, and they update dynamically as new information such as earnings results, guidance changes or major news flows into the platform.

For example, one Vericel Narrative might lean bullish, expecting revenue to compound in the mid 20s with margins above 16% and a Fair Value around the current consensus target near $53.88. In contrast, a more cautious Narrative could anchor closer to the low analyst target of $45 with slower growth and lower margins. This gives you two clear, numbers backed perspectives on when it might make sense to buy, hold or sell.

Do you think there's more to the story for Vericel? 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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