Value
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 6.3 |
| P/S | 5.2 |
| EV/EBITDA | 3.6 |
| Fwd P/E | 7.2 |
| PEG | 4.3 |
| Analyst target | 5.0 |
- ▸Forward P/E: 17.5x
- ▸PEG: 2.22
UTHR · Why this verdict
Why United Therapeutics (UTHR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
United Therapeutics generates 41% net margins and scores 10 out of 10 on both gross and operating margin dimensions, placing it among the most profitable drug manufacturers in its specialty pharmaceutical peer group. Quality breakdown | Net margins should remain above 35% over the next 12 months as the pulmonary arterial hypertension franchise continues to generate premium pricing. | →Stable |
| CounterFree cash flow is only 44% of net income, significantly below what 41% margins would imply, suggesting large capital expenditure requirements or one-time items are consuming cash that the income statement shows as profit. | ||
Tyvaso DPI and Nebulized Tyvaso together represent approximately 59% of total revenue, and Accredo and CVS Specialty are the primary distribution customers, creating significant revenue dependency on a small number of products and channels. Bear case | Tyvaso revenue share should decline below 50% over the next 12 months as the pipeline diversifies, reducing single-product dependency. | →Stable |
| CounterHigh product concentration around a market-leading rare disease therapy is a known risk that is partly offset by the difficulty competitors face in gaining FDA approval for competing pulmonary arterial hypertension products. | ||
United Therapeutics missed earnings estimates in 3 of the last 4 quarters, including a 15% miss in the most recent quarter, indicating that analyst models have been too optimistic about near-term revenue or cost trends. Earnings | The company should beat consensus estimates in at least 2 of the next 4 quarters as estimates are reset to realistic levels. | →Stable |
| CounterThe single beat quarter showed a 14% positive surprise, suggesting the business can outperform when Tyvaso demand exceeds expectations, and the overall average surprise of -2.7% is not catastrophically negative. | ||
Analysts set a consensus price target implying 21% upside from the current $549.57, and the stock is pulling back from overbought levels with an RSI of 32, which could represent a re-entry opportunity if the fundamental story stabilizes. Sentiment breakdown | The price should recover above $578 within 12 months, approaching the analyst consensus target, as earnings trajectory stabilizes. | →Stable |
| CounterWith 4 highly concentrated risk flags from the 10-K risk factor analysis and declining revenue at -2% year-over-year, the analyst target may be too optimistic if the Tyvaso franchise faces any reimbursement or competitive pressure. | ||
United Therapeutics generates 41% net margins and scores 10 out of 10 on both gross and operating margin dimensions, placing it among the most profitable drug manufacturers in its specialty pharmaceutical peer group.
→StableQuality breakdown
- Expectation
- Net margins should remain above 35% over the next 12 months as the pulmonary arterial hypertension franchise continues to generate premium pricing.
CounterFree cash flow is only 44% of net income, significantly below what 41% margins would imply, suggesting large capital expenditure requirements or one-time items are consuming cash that the income statement shows as profit.
Tyvaso DPI and Nebulized Tyvaso together represent approximately 59% of total revenue, and Accredo and CVS Specialty are the primary distribution customers, creating significant revenue dependency on a small number of products and channels.
→StableBear case
- Expectation
- Tyvaso revenue share should decline below 50% over the next 12 months as the pipeline diversifies, reducing single-product dependency.
CounterHigh product concentration around a market-leading rare disease therapy is a known risk that is partly offset by the difficulty competitors face in gaining FDA approval for competing pulmonary arterial hypertension products.
United Therapeutics missed earnings estimates in 3 of the last 4 quarters, including a 15% miss in the most recent quarter, indicating that analyst models have been too optimistic about near-term revenue or cost trends.
→StableEarnings
- Expectation
- The company should beat consensus estimates in at least 2 of the next 4 quarters as estimates are reset to realistic levels.
CounterThe single beat quarter showed a 14% positive surprise, suggesting the business can outperform when Tyvaso demand exceeds expectations, and the overall average surprise of -2.7% is not catastrophically negative.
Analysts set a consensus price target implying 21% upside from the current $549.57, and the stock is pulling back from overbought levels with an RSI of 32, which could represent a re-entry opportunity if the fundamental story stabilizes.
→StableSentiment breakdown
- Expectation
- The price should recover above $578 within 12 months, approaching the analyst consensus target, as earnings trajectory stabilizes.
CounterWith 4 highly concentrated risk flags from the 10-K risk factor analysis and declining revenue at -2% year-over-year, the analyst target may be too optimistic if the Tyvaso franchise faces any reimbursement or competitive pressure.
TrendMatrix Research · core thesis
Engine thesis — one sentence
United Therapeutics generates 41% net margins and ranks best-in-class on margins among specialty pharmaceutical peers, but severe product concentration where Tyvaso DPI and Nebulized Tyvaso together account for 59% of revenue, combined with 3 earnings misses in 4 quarters, makes the current risk profile unfavorable for new positions.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.8 |
| ROA | 8.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 8.2 |
| FCF quality | 3.5 |
| Moat | 6.2 |
| Rule of 40 | 3.0 |
| Piotroski F | 6.7 |
- ▸Strong margins: 41%
- ▸Earnings quality RED FLAG: 44% FCF/NI
- ▸Rule of 40: 16 (fail)
Growth
1.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.1 |
| EPS growth | 0.0 |
- ▸Declining revenue: -2%
Momentum
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 2.6 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.2 |
| Analyst rating | 7.2 |
| Price target | 7.6 |
- ▸LLM news sentiment: +0.64 (n=4)
Insider
3.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 2.0 |
| insider conviction | 2.0 |
| holder change | 5.1 |
- ▸Heavy insider selling — $459,396,499 (1.947% of mkt cap)
Peer rank
4.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.1 |
| quality rank | 8.5 |
| growth rank | 2.6 |
- ▸Best-in-class margins
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.0 |
| 52w position | 8.2 |
| gap | 5.0 |
Risk (lower is worse)
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.2 |
| days to cover | 6.2 |
| volatility | 6.7 |
| put call | 0.0 |
| implied vol | 4.7 |
| beta | 9.5 |
| news risk | 5.5 |
- ▸Elevated put/call: 2.09
- ▸Concentration risks: 4 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 1.2 |
| news activity | 8.0 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:7.0>=5.5
- 8K:CLEAN
- EARNINGS_PROXIMITY:24d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.8<1.5@spot
- INSIDER:1.95%=EXTREME
Warning (0)
none
Reward-to-Risk
0.82
Upside
+4.1%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Sentiment at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:0.8<1.5@spot, INSIDER:1.95%=EXTREME) reinforce the read. Current asymmetry R:R is 0.82 — supplementary context, not the trigger for this path.
The strongest dimensions are Sentiment at 7.6, Quality at 7.3, and Momentum at 7.0; the weakest are Growth at 1.1, Insider at 3.0, and Technical at 3.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 0.82 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Best In Class Pharma Margins
Trip ifNet margin falls below 30% in any of the next 4 reported quarters.
- P2Product Concentration Tyvaso
Trip ifTyvaso product revenue concentration rises above 65% in any reported period.
- P3Earnings Miss Trajectory
Trip ifEPS surprise falls below -10% in at least 2 of the next 4 quarters.
- P4Analyst Upside With Caution
Trip ifPrice drops below $524, more than 4.5% below the current $549.57.