Verrica Pharmaceuticals Inc.

VRCA

HealthcareBiotechnologyNASDAQ

$7.37

Market Cap: $78.50M

Verrica Pharmaceuticals Inc. (VRCA) Valuation Summary

Updated Apr 6, 2026 22:29

Model	Range	Fair Value	Upside
▸ Discounted Cash Flow
Revenue DCF 5Y	$4.23 – $29.25	$5.87	-1.8%
Revenue DCF 10Y	$1.49 – $72.41	$23.23	+288.4%
▸ Trading Multiples
EV/Revenue	$4.94 – $84.93	$15.58	+160.5%

Valuation History

DCF Analysis

Verrica Pharmaceuticals Inc. (VRCA) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$23.23

Market Price

$7.37

Upside / Downside

+215.2%

Verdict

Undervalued

Using a Revenue DCF model with operating margin convergence from -33.6% to a target of 13.3% over 5 years, discounted at a WACC of 8.8%, Verrica Pharmaceuticals Inc. (VRCA) has an intrinsic value of $23.23 per share (range: $1.49 – $72.41).

Key Assumptions

Current Operating Margin

-33.6%

Target Operating Margin

13.3%

WACC

8.8%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

3.6%

Target CapEx/Rev

13.8%

D&A/Revenue

9.2%

Tax Rate

21.0%

Operating margin fades linearly from the current level to the industry target over the 5-year projection. CapEx intensity fades from the historical average to a maintenance level (D&A × 1.5). Tax is only applied when operating income is positive (NOL shield).

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	25	-30.2%	-24.2%	-6	-6	2	(1)	-2	-3	-3
2027	45	82.6%	-14.8%	-7	-7	4	(3)	3	-8	-7
2028	93	104.2%	-5.4%	-5	-5	9	(6)	7	-10	-8
2029	158	70.8%	4.0%	6	5	15	(12)	10	-2	-2
2030	208	31.3%	13.3%	28	22	19	(18)	7	16	11
2031	263	26.5%	13.3%	35	28	24	(26)	8	18	11
2032	320	21.8%	13.3%	43	34	30	(35)	9	20	12
2033	375	17.1%	13.3%	50	39	35	(44)	8	22	11
2034	421	12.4%	13.3%	56	44	39	(54)	7	22	11
2035	454	7.7%	13.3%	61	48	42	(63)	5	22	10

Enterprise Value Bridge

Sum of PV(FCFF)46

Terminal Value (Gordon Growth at 3.0%)387

PV of Terminal Value173

Enterprise Value219

(–) Net Debt-29

Equity Value247

(÷) Shares Outstanding11

Fair Value per Share$23.23

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	7.3%	10.3%	13.3%	16.3%	19.3%
6.8%	$2	$20	$37	$55	$72
7.8%	$2	$15	$29	$42	$56
8.8%	$2	$12	$23	$34	$45
9.8%	$2	$10	$19	$28	$37
10.8%	$1	$9	$17	$24	$31

Current price: $7.37. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 15.0% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Verrica Pharmaceuticals Inc. (VRCA) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$5.87

Market Price

$7.37

Upside / Downside

-20.4%

Verdict

Overvalued

Key Assumptions

Current Operating Margin

-33.6%

Target Operating Margin

13.3%

WACC

8.8%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

3.6%

Target CapEx/Rev

13.8%

D&A/Revenue

9.2%

Tax Rate

21.0%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	25	-30.2%	-24.2%	-6	-6	2	(1)	-2	-3	-3
2027	45	82.6%	-14.8%	-7	-7	4	(3)	3	-9	-8
2028	93	104.2%	-5.4%	-5	-5	9	(9)	7	-13	-10
2029	158	70.8%	4.0%	6	5	15	(19)	10	-9	-7
2030	208	31.3%	13.3%	28	22	19	(29)	7	5	3

Enterprise Value Bridge

Sum of PV(FCFF)-25

Terminal Value (Gordon Growth at 3.0%)86

PV of Terminal Value59

Enterprise Value34

(–) Net Debt-29

Equity Value63

(÷) Shares Outstanding11

Fair Value per Share$5.87

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	7.3%	10.3%	13.3%	16.3%	19.3%
6.8%	$-1	$-0	$9	$19	$29
7.8%	$-1	$-0	$7	$15	$23
8.8%	$-1	$-0	$6	$12	$18
9.8%	$-1	$-0	$5	$10	$15
10.8%	$-1	$-0	$4	$9	$13

Current price: $7.37. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 15.0% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$15.58

Market Price

$7.37

Upside / Downside

+111.3%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Verrica Pharmaceuticals Inc. (VRCA) has a fair value of $15.58 based on 4 comparable companies in the Biotechnology industry.

EV/Revenue Valuation — Biotechnology

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Verrica Pharmaceuticals Inc.VRCA	79	1.4x	2.0x
Q32 Bio Inc.QTTB	69	0.7x	18.2x
SAB Biotherapeutics, Inc.SABS	37	24.6x	97.7x
Evaxion Biotech A/SEVAX	24	1.0x	1.5x
Plus Therapeutics, Inc.PSTV	8	0.0x	0.0x
Industry Median		0.9x	9.8x
(*) Revenue		36	25
= Enterprise Value		30	244
(-) Net Debt		-29	-29
Equity Value		59	273
(/) Outstanding shares		11	11
Fair Price		$6	$26

Selected Fair Value (avg of trailing + forward)

$15.58

+111.3%

Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.

Model

Range

Fair Value

Upside

▸ Discounted Cash Flow

Revenue DCF 5Y

$4.23 – $29.25

$5.87

-1.8%

Revenue DCF 10Y

$1.49 – $72.41

$23.23

+288.4%

▸ Trading Multiples

EV/Revenue

$4.94 – $84.93

$15.58

+160.5%

DCF Analysis

Verrica Pharmaceuticals Inc. (VRCA) Revenue DCF (5Y)

REVENUE DCF FAIR VALUE

$23.23

Market Price

$7.37

Upside / Downside

+215.2%

Verdict

Undervalued

Key Assumptions

Current Operating Margin

-33.6%

Target Operating Margin

13.3%

WACC

8.8%

Terminal Growth Rate

3.0%

Historical CapEx/Rev

3.6%

Target CapEx/Rev

13.8%

D&A/Revenue

9.2%

Tax Rate

21.0%

Margin Convergence Projection

USD in millions. Mid-year discounting convention.

Year	Revenue	Growth	Op Margin	Op Income	NOPAT	D&A	CapEx	ΔNWC	FCFF	PV(FCFF)
2026	25	-30.2%	-24.2%	-6	-6	2	(1)	-2	-3	-3
2027	45	82.6%	-14.8%	-7	-7	4	(3)	3	-8	-7
2028	93	104.2%	-5.4%	-5	-5	9	(6)	7	-10	-8
2029	158	70.8%	4.0%	6	5	15	(12)	10	-2	-2
2030	208	31.3%	13.3%	28	22	19	(18)	7	16	11
2031	263	26.5%	13.3%	35	28	24	(26)	8	18	11
2032	320	21.8%	13.3%	43	34	30	(35)	9	20	12
2033	375	17.1%	13.3%	50	39	35	(44)	8	22	11
2034	421	12.4%	13.3%	56	44	39	(54)	7	22	11
2035	454	7.7%	13.3%	61	48	42	(63)	5	22	10

Enterprise Value Bridge

Sum of PV(FCFF)46

Terminal Value (Gordon Growth at 3.0%)387

PV of Terminal Value173

Enterprise Value219

(–) Net Debt-29

Equity Value247

(÷) Shares Outstanding11

Fair Value per Share$23.23

Sensitivity Analysis — WACC × Target Operating Margin

WACC \ Target Op. Margin	7.3%	10.3%	13.3%	16.3%	19.3%
6.8%	$2	$20	$37	$55	$72
7.8%	$2	$15	$29	$42	$56
8.8%	$2	$12	$23	$34	$45
9.8%	$2	$10	$19	$28	$37
10.8%	$1	$9	$17	$24	$31

Current price: $7.37. Green = undervalued, Red = overvalued.

Working Capital Assumption

Net Working Capital is modeled at 15.0% of revenue (historical average of receivables + inventory − payables). Changes in NWC (ΔNWC) are computed year-over-year and subtracted from free cash flow.

Trading Multiples

Fair Value

$15.58

Market Price

$7.37

Upside / Downside

+111.3%

Verdict

Undervalued

Using the industry peer median EV/Revenue multiple (trailing + forward), Verrica Pharmaceuticals Inc. (VRCA) has a fair value of $15.58 based on 4 comparable companies in the Biotechnology industry.

EV/Revenue Valuation — Biotechnology

USD in millions except Fair Price. Subject company highlighted.

	Mkt Cap ($M)	Trailing EV/Revenue	Forward EV/Revenue
Verrica Pharmaceuticals Inc.VRCA	79	1.4x	2.0x
Q32 Bio Inc.QTTB	69	0.7x	18.2x
SAB Biotherapeutics, Inc.SABS	37	24.6x	97.7x
Evaxion Biotech A/SEVAX	24	1.0x	1.5x
Plus Therapeutics, Inc.PSTV	8	0.0x	0.0x
Industry Median		0.9x	9.8x
(*) Revenue		36	25
= Enterprise Value		30	244
(-) Net Debt		-29	-29
Equity Value		59	273
(/) Outstanding shares		11	11
Fair Price		$6	$26

Selected Fair Value (avg of trailing + forward)

$15.58

+111.3%