Is Jazz Pharmaceuticals (JAZZ) Pricing Misaligned With DCF And Sales-Based Valuation Signals?

Simply Wall St

Sun, February 15, 2026 at 7:08 PM GMT+9 4 min read

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If you are looking at Jazz Pharmaceuticals and wondering whether the current share price reflects its true worth, you are not alone.

The stock last closed at US$166.31, with a 24.1% return over the past year, while the year-to-date return of a 4.0% decline and a 1.8% decline over 30 days suggest the market has been adjusting its view recently.

Recent coverage has focused on Jazz Pharmaceuticals as part of broader discussions around specialty biopharma companies and how their drug portfolios and pipelines shape investor expectations. This wider context helps explain why the share price can show a mix of short-term softness alongside stronger 1-year and 3-year returns.

On our framework, Jazz Pharmaceuticals scores a 5 out of 6 valuation score. This sets up a closer look at how different methods like P/E, discounted cash flow, and peer comparisons line up, before finishing with an approach that can help you make even more sense of the valuation story.

Find out why Jazz Pharmaceuticals’s 24.1% return over the last year is lagging behind its peers.

Approach 1: Jazz Pharmaceuticals Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes the cash a business is expected to generate in the future, then discounts those amounts back to today to estimate what the whole company might be worth right now.

For Jazz Pharmaceuticals, the latest twelve month Free Cash Flow (FCF) is about $1.18b. Using a 2 Stage Free Cash Flow to Equity model, analysts have projected FCF out to 2030, with Simply Wall St extrapolating beyond the first few years of analyst estimates. By 2030, projected FCF is $2.13b, with interim annual projections between 2026 and 2035 ranging from about $1.42b to $2.72b before discounting. All figures are in $.

When those future cash flows are discounted back, the model arrives at an estimated intrinsic value of about $797.37 per share. Compared with the recent share price of US$166.31, the DCF output indicates the stock is 79.1% undervalued on this cash flow view.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Jazz Pharmaceuticals is undervalued by 79.1%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

JAZZ Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Jazz Pharmaceuticals.

Approach 2: Jazz Pharmaceuticals Price vs Sales

For companies where revenue is a key reference point, the P/S ratio can be a useful cross check on valuation because it links the share price directly to the sales the business is already generating. What investors are really weighing up is how growth potential and risk profile should influence the P/S level that feels “normal” for a given company.

Story Continues  

Jazz Pharmaceuticals currently trades on a P/S ratio of 2.43x. That sits slightly above the peer average of 2.31x and below the broader Pharmaceuticals industry average of 4.35x. Simply Wall St’s proprietary “Fair Ratio” for Jazz Pharmaceuticals is 7.23x, which is an estimate of what the P/S might be based on factors such as earnings growth, profit margin, industry, market cap and specific risks.

The Fair Ratio aims to be more tailored than a simple comparison with sector averages or a basket of peers, because it ties the multiple to the company’s own fundamentals rather than only to what others trade on. Comparing the current 2.43x P/S to the Fair Ratio of 7.23x suggests the shares are pricing in a lower multiple than that model would imply.

Result: UNDERVALUED

NasdaqGS:JAZZ P/S Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Jazz Pharmaceuticals Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. These let you attach your own story about Jazz Pharmaceuticals to the numbers by linking a view on its future revenue, earnings and margins to a forecast, a Fair Value, and a simple comparison with the current price. All of this is available within the Narratives section on Simply Wall St’s Community page where millions of investors share their views. As new information like earnings or Ziihera trial news comes in, those Narratives refresh and you can quickly see, for example, how one investor’s more cautious view lines up with a Fair Value closer to US$147 while another, more optimistic investor sees a path that supports a Fair Value nearer US$230. This gives you a clear sense of where your own expectations sit on that spectrum.

Do you think there’s more to the story for Jazz Pharmaceuticals? Head over to our Community to see what others are saying!

NasdaqGS:JAZZ 1-Year Stock Price Chart

_ This 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._

Companies discussed in this article include JAZZ.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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