Carlsmed, Inc.

AI-generated fair value estimate for this company.

Method: 10-year explicit FCF DCF with path-to-profitability ramp: $76M FY2026E revenue base (midpoint of management's $74-78M guidance, +~51% YoY); revenue growth tapering 45%->18% in years 1-5 and 15%->8% in years 6-10 (reaching ~$465M by year 10); FCF margin ramping from -10% (year 1, still unprofitable) through breakeven in year 3 to +20% by year 10 (consistent with 76.8% gross margin and operating leverage as opex growth lags revenue growth); 12% discount rate (reflects post-IPO/pre-GAAP-profitability risk, below pure biotech/pre-revenue risk given $63.3M TTM revenue); 4% terminal growth; $67.31M net cash (cash & equivalents $46.2M plus other short-term investments, less $21.92M total debt); 27.30M shares outstanding.

Reasoning: Carlsmed has real, fast-growing commercial revenue (TTM $63.3M, +65% YoY) and very high 76.8% gross margins typical of a specialty medtech implant maker, but is still GAAP-unprofitable (FY2025 net loss $30.2M), so an explicit multi-year DCF that models the transition from cash burn to positive FCF as the business scales is more defensible than a stable-state multiple, while still carrying meaningful execution/reimbursement risk reflected in the discount rate.