Key Takeaways
- Quality: United Therapeutics scores 95/100 on an 86.1% gross margin, a 41.6% net margin and a current ratio of 5.73, though trailing free cash flow of $557 million is less than half of implied net income.
- Growth: a five-year revenue CAGR of 18.0% contrasts with a 1.9% revenue decline over the trailing twelve months, leaving the Growth score at 58/100 while the Tyvaso IPF application awaits an FDA decision reported for late April 2027.
- Opportunity: a P/E of 19.40 and EV/EBITDA of 12.02 look reasonable, but a 2.4% free-cash-flow yield and a price in the upper end of the two-year range hold Opportunity to 47/100.
United Therapeutics, the biotech best known for its treprostinil-based lung disease treatments including Tyvaso, closed at $541.89 after posting the largest one-day gain on the StreetBriefs watchlist. That leaves the shares about 8% below their two-year high of $588.38. Behind the move is a business with an 86.1% gross margin, a 41.6% net profit margin and a current ratio of 5.73. This United Therapeutics stock analysis, based on Yahoo Finance data as of October 1, 2026, explains why the scoring model rates the stock a Buy while flagging a dip in revenue and free cash flow that trails reported earnings.
What Is Happening With the Stock Price
According to published reports, the shares jumped more than 12% on September 30 after the FDA accepted the company’s supplemental application for nebulized Tyvaso to treat idiopathic pulmonary fibrosis (IPF), supported by the Phase 3 TETON-1 and TETON-2 studies. The FDA’s decision date is reported for late April 2027, and approval is not guaranteed. Earlier in September, the company announced an accelerated share repurchase of about $477.6 million that completes its $2.0 billion buyback authorization.
At $541.89, the stock sits in the upper end of its two-year range of $281.16 to $588.38, roughly 93% above the low. Sentiment has turned clearly positive, which also means a good deal of optimism may already be reflected in the price.
Quality: Is This a Financially Sound Business?
Quality scores 95/100, one of the strongest readings the model produces. Profitability is exceptional: gross margin is 86.1%, operating margin 42.2% and net profit margin 41.6%, with earnings per share of $27.93. A net margin almost level with the operating margin is unusual; the data does not break it out, but it most plausibly reflects interest and investment income on the company’s cash holdings offsetting part of the tax bill.
The balance sheet is a clear strength. A current ratio of 5.73 and quick ratio of 4.89 point to ample liquidity. The data feed does not report a debt-to-equity figure, but an EV/Revenue multiple of 5.70 – below the roughly 7.4 times revenue implied by the $23.24 billion market capitalization alone – indicates more cash than debt. Return on equity of 19.3% and return on assets of 11.6% are achieved without heavy reliance on leverage.
The weak spot in this United Therapeutics stock analysis is cash conversion. Free cash flow over the trailing twelve months was $557 million, less than half of the roughly $1.3 billion in net income implied by a 41.6% margin on $3.2 billion of revenue. The data does not show why – heavier capital spending or working-capital swings are possible explanations – but it is worth monitoring.
Growth: Does This Company Have Real Upside?
Growth scores 58/100. The long-term record is strong, with a five-year revenue CAGR of 18.0%, but revenue slipped 1.9% over the trailing twelve months to $3.2 billion. Earnings still grew 13.4% over the same period, and an 86.1% gross margin leaves plenty of room for new revenue to reach the bottom line. On the model’s Rule of 40 test, which adds blended revenue growth to free-cash-flow margin, United Therapeutics comes in around 24, short of the 40 benchmark because of the recent revenue dip and modest free cash flow.
The IPF filing is the clearest potential growth driver, but any revenue from it depends on an approval decision not expected before late April 2027.
Opportunity: Is Now a Good Time to Enter?
Opportunity scores 47/100, the weakest of the three pillars. A P/E of 19.40 and EV/EBITDA of 12.02 are reasonable for a business with these margins, and with earnings growing 13.4%, the P/E-to-growth ratio of roughly 1.45 earns some credit in the model. Against that, the 2.4% free-cash-flow yield is thin and price-to-book stands at 3.61. Price position also works against the score: after the rally, the shares sit in the upper end of their two-year range, so the contrarian entry case is weaker than it was when the stock traded lower. The completed buyback returns cash to shareholders but does not change that valuation math.
United Therapeutics Stock Analysis: The Bottom Line
This United Therapeutics stock analysis ends with a model signal of Buy and a Recommendation Score of 67/100, driven by Quality (95/100), with Growth (58/100) and Opportunity (47/100) clearing the model’s minimums. The bull case: exceptional margins, a cash-rich balance sheet, 18.0% five-year revenue growth, a P/E of 19.40 and a pipeline catalyst in IPF. The bear case: revenue down 1.9% over the trailing twelve months, free cash flow of $557 million that lags earnings, a 2.4% free-cash-flow yield and a share price near the top of its two-year range after a sharp one-day move.
The Buy label reflects StreetBriefs’ quantitative scoring model (Quality, Growth, Opportunity) – a data-driven signal for further research, not a personalized recommendation to transact. Regulatory outcomes are uncertain: a delay or rejection of the IPF application could reverse part of the recent gain.
Financial Metrics Summary
| Metric | Value |
|---|---|
| Price & Valuation | |
| Current Price | $541.89 |
| 2-Year Low | $281.16 |
| 2-Year High | $588.38 |
| Market Cap | $23.24B |
| P/E Ratio | 19.40 |
| EV / Revenue | 5.70 |
| Our Scores | |
| Quality Score | 95 / 100 |
| Growth Score | 58 / 100 |
| Opportunity Score | 47 / 100 |
| Profitability | |
| Earnings Per Share | $27.93 |
| Return on Assets | 11.6% |
| Return on Equity | 19.3% |
| Net Profit Margin | 41.6% |
| Gross Margin | 86.1% |
| Operating Margin | 42.2% |
| Growth | |
| Revenue Growth (5Y CAGR) | 18.0% |
| Revenue Growth (TTM) | -1.9% |
| Earnings Growth (TTM) | 13.4% |
| Balance Sheet | |
| Current Ratio | 5.73 |
| Quick Ratio | 4.89 |
| Income & Dividends | |
| Payout Ratio | 0.0% |
Data as of October 01, 2026
Our Three-Pillar Assessment
| Quality |
95/100 |
| Growth |
58/100 |
| Opportunity |
47/100 |
Quality measures business fundamentals: profitability, cash flow discipline, and balance sheet strength.
Growth captures revenue momentum, gross margin scalability, and the Rule of 40 efficiency test.
Opportunity signals entry timing: current valuation versus history and price position in the 2-year range.
Current price: $541.89 trading 8% below its 2-year high of $588.38.
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This analysis is done using financial data from Yahoo Finance.
Always conduct your own due diligence and consult a qualified financial advisor before making investment decisions.
