Perrigo: Evaluating the Opportunity After Mixed Price Movements in 2025

If you are trying to figure out what to do with Perrigo stock right now, you are definitely not alone. There is a lot to consider, especially when a company is sitting at a crossroads between recent volatility and longer-term trends. Over the last week, Perrigo has edged up by 1.5%, hinting that investors may be warming up to its prospects again. However, over the last month, the story has been mixed with a modest drop of 2.6%. If you look at a three-year or five-year view, you see a steeper decline, with Perrigo down nearly 35% and 44% respectively. These numbers can certainly make anyone pause and wonder if the risk is worth the potential reward.

But here is the part that will really catch the attention of value-focused investors. When measured against six key indicators of undervaluation, Perrigo scores a perfect 6 out of 6. That means it appears undervalued by every major check, which is not something you see every day, especially for an established company. While there have been some ups and downs tied to broader market shifts and changes in the consumer healthcare sector, it seems the market may be viewing Perrigo with more skepticism than the numbers support.

So how do you separate genuine opportunity from a value trap? Let’s dig into the actual valuation methods used to judge Perrigo. Stay tuned, because by the end of this article, we will explore a smarter, more holistic way to think about value than just crunching metrics.

Why Perrigo is lagging behind its peers

Approach 1: Perrigo Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model is a valuation method that forecasts a company’s future cash flows and then discounts them back to their value today. This approach gives investors an idea of what the underlying business is truly worth, rather than relying solely on recent stock price movements.

Perrigo’s most recent reported Free Cash Flow was $272.8 million. Analysts expect this figure to grow each year, reaching an estimated $596.5 million in 2029. Although analyst projections only go out five years, extrapolations by Simply Wall St extend these forecasts for the next decade, with additional growth expected, although at a slower rate as time goes on.

Based on this “2 Stage Free Cash Flow to Equity” DCF model, Perrigo’s intrinsic value comes out to $93.18 per share. This suggests that the stock is currently trading at a 76.3% discount to its calculated fair value. In other words, Perrigo appears to be significantly undervalued according to this cash flow-based analysis.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Perrigo is undervalued by 76.3%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Perrigo Price vs Sales (P/S) Multiple

For companies like Perrigo, which may have volatile or negative earnings but maintain substantial revenues, the Price-to-Sales (P/S) ratio is often a preferred valuation tool. It gives investors a look at how the market values each dollar of the company’s sales. This makes it especially useful for firms undergoing transitions or margin pressures.

The “right” P/S ratio for a stock depends on several factors. Companies with higher growth prospects, lower risk, and stronger margins usually justify a higher multiple, while those facing uncertainty typically command lower ratios. Industry norms also matter, but no two businesses are identical.

Currently, Perrigo trades on a P/S ratio of 0.70x, which is well below both its peer average of 6.59x and the pharmaceuticals industry average of 4.99x. On the surface, this discount may catch the eye, but a deeper look is needed for a fair comparison.

This is where the Fair Ratio comes in, which is Simply Wall St’s customized benchmark. The Fair Ratio for Perrigo is 2.23x. It is calculated by factoring in growth outlook, profit margins, industry backdrop, company size, and risks. Unlike raw industry averages or peer groups, the Fair Ratio offers a tailored, apples-to-apples benchmark that reflects Perrigo’s unique story.

With Perrigo’s actual P/S ratio of 0.70x significantly below its Fair Ratio of 2.23x, the evidence points to the stock being undervalued on this metric too.

Result: UNDERVALUED

PS 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 Perrigo Narrative

Earlier, we mentioned there is an even better way to understand valuation. Let’s introduce you to Narratives. A Narrative is essentially your story or perspective on a company. It connects what you believe about Perrigo’s business, its future revenues, profit margins, and risks to a clear financial forecast and an estimated fair value.

Using Narratives, investors move beyond just numbers to see the bigger picture. You can consider why you think Perrigo will grow, what challenges might arise, and how all of this impacts what the stock should be worth. Narratives are available to everyone on Simply Wall St’s Community page, where millions of investors use them to compare their own fair value estimates and assumptions with the current market price.

This approach helps you make smarter buy or sell decisions because you can quickly see when your view of Perrigo’s fair value is higher or lower than its share price. You can update your Narrative any time new news or earnings come out, keeping your analysis fresh and relevant.

For example, some investors currently believe Perrigo’s fair value could be as high as $40.00 if trends in self-care products accelerate, while others see it as low as $27.00 due to risks like fierce competition and operational challenges.

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