Estimating The Intrinsic Value Of Bio-Techne Corporation (NASDAQ:TECH)\n\nSimply Wall St\n\nSun, Jul 27, 2025, 7:03 AM\n6 min read\n\nKey Insights\n- The projected fair value for Bio-Techne is US$61.27 based on 2 Stage Free Cash Flow to Equity\n- With US$58.78 share price, Bio-Techne appears to be trading close to its estimated fair value\n- Analyst price target for TECH is US$66.00, which is 7.7% above our fair value estimate\n\nToday we will run through one way of estimating the intrinsic value of Bio-Techne Corporation (NASDAQ:TECH) by taking the forecast future cash flows of the company and discounting them back to today's value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.\n\nWe would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.\n\nThe Method\n\nWe're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.\n\nA DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we discount the value of these future cash flows to their estimated value in today's dollars:\n\n10-year free cash flow (FCF) forecast\n\n| Year | Levered FCF ($, Millions) | Growth Rate Estimate Source | Present Value ($, Millions) Discounted @ 6.9% |\n|------|---------------------------|-----------------------------|---------------------------------------------|\n| 2026 | US$323.8m | Analyst x3 | US$303 |\n| 2027 | US$352.6m | Est @ 8.92% | US$309 |\n| 2028 | US$377.8m | Est @ 7.13% | US$309 |\n| 2029 | US$400.0m | Est @ 5.87% | US$306 |\n| 2030 | US$419.9m | Est @ 4.99% | US$301 |\n| 2031 | US$438.3m | Est @ 4.38% | US$293 |\n| 2032 | US$455.6m | Est @ 3.95% | US$285 |\n| 2033 | US$472.2m | Est @ 3.64% | US$277 |\n| 2034 | US$488.4m | Est @ 3.43% | US$268 |\n| 2035 | US$504.4m | Est @ 3.28% | US$259 |\n\n(\"Est\" = FCF growth rate estimated by Simply Wall St)\nPresent Value of 10-year Cash Flow (PVCF) = US$2.9b\n\nAfter calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 6.9%.\n\nTerminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = US$504m× (1 + 2.9%) ÷ (6.9%– 2.9%) = US$13b\nPresent Value of Terminal Value (PVTV)= TV / (1 + r)10= US$13b÷ ( 1 + 6.9%)10= US$6.7b\n\nThe total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$9.6b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$58.8, the company appears about fair value at a 4.1% discount to where the stock price trades currently. Remember though, that this is just an approximate valuation, and like any complex formula - garbage in, garbage out.\n\nNasdaqGS:TECH Discounted Cash Flow July 27th 2025\n\nImportant Assumptions\n\nThe calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Bio-Techne as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.9%, which is based on a levered beta of 0.918. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.\n\nSWOT Analysis for Bio-Techne\n\nStrength\n- Debt is not viewed as a risk.\n\nWeakness\n- Earnings declined over the past year.\n- Dividend is low compared to the top 25% of dividend payers in the Life Sciences market.\n\nOpportunity\n- Annual earnings are forecast to grow faster than the American market.\n- Current share price is below our estimate of fair value.\n\nThreat\n- Annual revenue is forecast to grow slower than the American market.\n\nMoving On:\n\nValuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. If a company grows at a different rate, or if its cost of equity or risk free rate changes sharply, the output can look very different. For Bio-Techne, we've put together three pertinent aspects you should explore:\n\n1. Risks: For instance, we've identified 2 warning signs for Bio-Techne that you should be aware of.\n2. Future Earnings: How does TECH's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.\n3. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!\n\nPS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGS every day. If you want to find the calculation for other stocks just search here.\n\nHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.\n\nThis 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.

Estimating The Intrinsic Value Of Bio-Techne Corporation (NASDAQ:TECH)

The article presents a discounted cash flow (DCF) analysis of Bio-Techne Corporation (NASDAQ:TECH), estimating its intrinsic value at $61.27 using a 2-stage growth model. The current share price of $58.78 is considered close to fair value, with an analyst target of $66.00 (7.7% above the estimated fair value). The analysis includes 10-year free cash flow projections, terminal value calculations, and assumptions about growth rates and discount rates.