MeritValue

LIGAND PHARMACEUTICALS INC

LGNDdata completeness 88%17 fiscal years on file
The thesis, from the filings

LIGAND PHARMACEUTICALS INC earns about 8% on invested capital, below its ~9% cost of capital, but has diluted owners by 18% over 5 years — no moat visible in the numbers. The estimate methods put fair value between $26.63 and $43.05 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$241.5M1$196.2M2$131.3M3$167.1M3$268.1M3
Net income$57.1M4−$33.4M5$52.2M6−$4.03M6$124.5M6
Operating cash flow$78.8M7$137.9M8$49.6M9$97M9$49.4M9
Capital expenditure$8.76M10$17.9M11$3.52M12$1.82M12$452,00012
Free cash flow (derived)$70M7$119.9M8$46.1M9$95.2M9$48.9M9
Total debt—————
Cash & equivalents$19.5M13$45M14$23M15$72.3M16$174.9M16
Diluted shares17.2M16.9M17.8M18.3M20.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$501.24
your share of equity
Profit it earned you last year
$61.33
Free cash flow it threw off
$24.1
Debt you’d be carrying
—

10 shares is a claim on $501.24 of net worth that earned you $61.33 and generated $24.1 of cash last year.

iii. Is this a good business?
Moat signal · return on invested capital
8% avg · 5y
FY21 11%FY22 3%FY23 8%FY24 0%FY25 15%

It earned about 8% on invested capital against a ~9% cost of capital — below the cost of funding. The numbers show no moat.

seeing a moat in the numbers →
Management signal · capital allocation
+18% shares · 5y

Share count is up 18% over 5 years — owners have been diluted. Worth asking what they got for it.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0

The 3 estimate methods that apply put fair value between $26.63 and $43.05 a share. They rest on different assumptions, so where they diverge is the story; the Graham Number is a stricter floor, not a target.

DCF · Growth Exit 10Y
$40.46
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears10
  • fcfGrowth0.0%
  • fcfBase$48.9M
DCF · Growth Exit 5Y
$43.05
assumptions (10)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • terminalGrowth2.5%
  • projectionYears5
  • fcfGrowth0.0%
  • fcfBase$48.9M
Earnings Power Value
$26.63
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$52.2M
  • growthAssumed0.0%
Graham Number
$83.15
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

v. The price question — last, on purpose
Is today’s price fair?
See live price ↗
Type a price. The ledger answers.
Or set your own belief
FCF growth, next 5 years0.0%
Discount rate (WACC)8.93%
Terminal growth2.5%
At your growth, a share is worth $43.05
The three cases
Bear0.0%$43.05
Base0.0%$43.05
Bull5.0%$51.39

Bear/base/bull growth = 0% / filed history / history + 5pp. Type a price to see the return each case implies.

Default growth 0.0%= this company’s own filed history (median-to-median FCF CAGR, clamped 0–20%). Your adjustments are recorded anonymously. They become the “what do owners actually believe” dataset.

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0000886163-24-000009 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0000886163-25-000012 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0000886163-26-000006 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0000886163-24-000009 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0000886163-25-000012 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0000886163-26-000006 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0000886163-24-000009 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0000886163-25-000012 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0000886163-26-000006 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0000886163-24-000009 (PaymentsToAcquirePropertyPlantAndEquipment)
  11. 10-K · period ending 2022-12-31 · accession 0000886163-25-000012 (PaymentsToAcquirePropertyPlantAndEquipment)
  12. 10-K · period ending 2023-12-31 · accession 0000886163-26-000006 (PaymentsToAcquirePropertyPlantAndEquipment)
  13. 10-K · period ending 2021-12-31 · accession 0000886163-23-000007 (CashAndCashEquivalentsAtCarryingValue)
  14. 10-K · period ending 2022-12-31 · accession 0000886163-24-000009 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2023-12-31 · accession 0000886163-25-000012 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2024-12-31 · accession 0000886163-26-000006 (CashAndCashEquivalentsAtCarryingValue)