FLGT - Fulgent Genetics: Valuation Varies Greatly Depending Upon How Long COVID Is Around

• With the COVID-19 pandemic, Fulgent Genetics is currently making most of its revenue from the sale of large-scale COVID-19 testing services.
• If the world faces new variants of the COVID-19, I assumed revenue of $927-$1,234 million. The implied share price is equal to $167-$455.
• The market estimates that when the pandemic is over, the company’s revenue will decline. In this case scenario, the implied stock price is equal to $98-$125.
• My DCF model includes a WACC of 10%, growth of 4%, and EV/FCF of 25x-35x.
• FLGT has a significant amount of cash in hand. If the company is about to see a decline in future sales, I don’t see why investors provided the company that amount of money.

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