Intrinsic value of Akebia Therapeutics - AKBA

Previous Close

$10.29

  Intrinsic Value

$0.68

stock screener

  Rating & Target

str. sell

-93%

Previous close

$10.29

 
Intrinsic value

$0.68

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of AKBA stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -100.00
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  2
  285
  440
  658
  955
  1,347
  1,852
  2,486
  3,264
  4,200
  5,305
  6,588
  8,054
  9,708
  11,550
  13,581
  15,798
  18,198
  20,777
  23,531
  26,456
  29,548
  32,803
  36,220
  39,797
  43,532
  47,428
  51,485
  55,706
  60,094
  64,656
Variable operating expenses, $m
 
  5,120
  7,911
  11,831
  17,166
  24,219
  33,295
  44,692
  58,684
  75,512
  95,377
  118,437
  144,801
  174,534
  207,661
  244,172
  284,031
  327,179
  373,549
  423,063
  475,649
  531,237
  589,769
  651,200
  715,504
  782,669
  852,706
  925,643
  1,001,529
  1,080,434
  1,162,445
Fixed operating expenses, $m
 
  114
  117
  120
  122
  125
  128
  130
  133
  136
  139
  142
  145
  149
  152
  155
  159
  162
  166
  169
  173
  177
  181
  185
  189
  193
  197
  202
  206
  211
  215
Total operating expenses, $m
  138
  5,234
  8,028
  11,951
  17,288
  24,344
  33,423
  44,822
  58,817
  75,648
  95,516
  118,579
  144,946
  174,683
  207,813
  244,327
  284,190
  327,341
  373,715
  423,232
  475,822
  531,414
  589,950
  651,385
  715,693
  782,862
  852,903
  925,845
  1,001,735
  1,080,645
  1,162,660
Operating income, $m
  -136
  -4,950
  -7,588
  -11,292
  -16,334
  -22,997
  -31,571
  -42,337
  -55,553
  -71,448
  -90,212
  -111,992
  -136,892
  -164,975
  -196,262
  -230,746
  -268,391
  -309,144
  -352,938
  -399,702
  -449,366
  -501,866
  -557,146
  -615,165
  -675,896
  -739,330
  -805,475
  -874,360
  -946,030
  -1,020,550
  -1,098,004
EBITDA, $m
  -136
  -4,950
  -7,587
  -11,291
  -16,332
  -22,994
  -31,568
  -42,333
  -55,547
  -71,441
  -90,203
  -111,981
  -136,879
  -164,958
  -196,243
  -230,723
  -268,365
  -309,113
  -352,902
  -399,662
  -449,321
  -501,816
  -557,090
  -615,103
  -675,828
  -739,256
  -805,395
  -874,272
  -945,935
  -1,020,448
  -1,097,895
Interest expense (income), $m
  0
  0
  2
  10
  21
  36
  57
  83
  116
  157
  206
  263
  330
  406
  492
  588
  694
  810
  935
  1,069
  1,212
  1,365
  1,526
  1,695
  1,873
  2,060
  2,254
  2,457
  2,669
  2,888
  3,117
Earnings before tax, $m
  -136
  -4,950
  -7,590
  -11,302
  -16,355
  -23,033
  -31,628
  -42,420
  -55,669
  -71,605
  -90,417
  -112,255
  -137,222
  -165,381
  -196,755
  -231,335
  -269,086
  -309,953
  -353,872
  -400,771
  -450,579
  -503,231
  -558,672
  -616,860
  -677,769
  -741,390
  -807,730
  -876,817
  -948,698
  -1,023,439
  -1,101,122
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -136
  -4,950
  -7,590
  -11,302
  -16,355
  -23,033
  -31,628
  -42,420
  -55,669
  -71,605
  -90,417
  -112,255
  -137,222
  -165,381
  -196,755
  -231,335
  -269,086
  -309,953
  -353,872
  -400,771
  -450,579
  -503,231
  -558,672
  -616,860
  -677,769
  -741,390
  -807,730
  -876,817
  -948,698
  -1,023,439
  -1,101,122

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  260
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  300
  305
  472
  705
  1,023
  1,444
  1,985
  2,664
  3,498
  4,502
  5,686
  7,061
  8,632
  10,405
  12,380
  14,556
  16,932
  19,505
  22,269
  25,221
  28,356
  31,669
  35,159
  38,821
  42,654
  46,659
  50,834
  55,182
  59,706
  64,410
  69,299
Adjusted assets (=assets-cash), $m
  40
  305
  472
  705
  1,023
  1,444
  1,985
  2,664
  3,498
  4,502
  5,686
  7,061
  8,632
  10,405
  12,380
  14,556
  16,932
  19,505
  22,269
  25,221
  28,356
  31,669
  35,159
  38,821
  42,654
  46,659
  50,834
  55,182
  59,706
  64,410
  69,299
Revenue / Adjusted assets
  0.050
  0.934
  0.932
  0.933
  0.934
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
  0.933
Average production assets, $m
  2
  5
  7
  11
  16
  23
  31
  42
  55
  71
  90
  112
  137
  165
  196
  231
  269
  309
  353
  400
  450
  502
  558
  616
  677
  740
  806
  875
  947
  1,022
  1,099
Working capital, $m
  182
  -11
  -17
  -26
  -37
  -53
  -72
  -97
  -127
  -164
  -207
  -257
  -314
  -379
  -450
  -530
  -616
  -710
  -810
  -918
  -1,032
  -1,152
  -1,279
  -1,413
  -1,552
  -1,698
  -1,850
  -2,008
  -2,173
  -2,344
  -2,522
Total debt, $m
  0
  29
  179
  390
  676
  1,054
  1,541
  2,153
  2,903
  3,806
  4,872
  6,109
  7,524
  9,119
  10,896
  12,855
  14,994
  17,309
  19,797
  22,453
  25,275
  28,257
  31,398
  34,694
  38,144
  41,747
  45,505
  49,418
  53,490
  57,723
  62,124
Total liabilities, $m
  232
  275
  424
  635
  921
  1,299
  1,786
  2,398
  3,149
  4,051
  5,117
  6,355
  7,769
  9,364
  11,142
  13,101
  15,239
  17,554
  20,042
  22,699
  25,520
  28,503
  31,643
  34,939
  38,389
  41,993
  45,750
  49,664
  53,735
  57,969
  62,369
Total equity, $m
  68
  31
  47
  71
  102
  144
  198
  266
  350
  450
  569
  706
  863
  1,040
  1,238
  1,456
  1,693
  1,950
  2,227
  2,522
  2,836
  3,167
  3,516
  3,882
  4,265
  4,666
  5,083
  5,518
  5,971
  6,441
  6,930
Total liabilities and equity, $m
  300
  306
  471
  706
  1,023
  1,443
  1,984
  2,664
  3,499
  4,501
  5,686
  7,061
  8,632
  10,404
  12,380
  14,557
  16,932
  19,504
  22,269
  25,221
  28,356
  31,670
  35,159
  38,821
  42,654
  46,659
  50,833
  55,182
  59,706
  64,410
  69,299
Debt-to-equity ratio
  0.000
  0.970
  3.800
  5.520
  6.600
  7.300
  7.760
  8.080
  8.300
  8.460
  8.570
  8.650
  8.720
  8.760
  8.800
  8.830
  8.860
  8.870
  8.890
  8.900
  8.910
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.960
Adjusted equity ratio
  -4.800
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -136
  -4,950
  -7,590
  -11,302
  -16,355
  -23,033
  -31,628
  -42,420
  -55,669
  -71,605
  -90,417
  -112,255
  -137,222
  -165,381
  -196,755
  -231,335
  -269,086
  -309,953
  -353,872
  -400,771
  -450,579
  -503,231
  -558,672
  -616,860
  -677,769
  -741,390
  -807,730
  -876,817
  -948,698
  -1,023,439
  -1,101,122
Depreciation, amort., depletion, $m
  0
  0
  1
  1
  2
  2
  3
  4
  6
  7
  9
  11
  14
  17
  20
  23
  27
  31
  35
  40
  45
  50
  56
  62
  68
  74
  81
  88
  95
  102
  110
Funds from operations, $m
  245
  -4,950
  -7,589
  -11,301
  -16,353
  -23,031
  -31,625
  -42,416
  -55,664
  -71,598
  -90,408
  -112,244
  -137,209
  -165,364
  -196,735
  -231,312
  -269,059
  -309,922
  -353,837
  -400,731
  -450,534
  -503,181
  -558,616
  -616,799
  -677,702
  -741,316
  -807,649
  -876,730
  -948,604
  -1,023,337
  -1,101,012
Change in working capital, $m
  187
  -4
  -6
  -9
  -12
  -15
  -20
  -25
  -30
  -37
  -43
  -50
  -57
  -64
  -72
  -79
  -86
  -94
  -101
  -107
  -114
  -121
  -127
  -133
  -139
  -146
  -152
  -158
  -165
  -171
  -178
Cash from operations, $m
  58
  -4,945
  -7,583
  -11,293
  -16,341
  -23,016
  -31,605
  -42,391
  -55,633
  -71,561
  -90,365
  -112,194
  -137,151
  -165,300
  -196,663
  -231,232
  -268,972
  -309,829
  -353,736
  -400,623
  -450,420
  -503,060
  -558,489
  -616,666
  -677,562
  -741,170
  -807,497
  -876,571
  -948,439
  -1,023,165
  -1,100,834
Maintenance CAPEX, $m
  0
  0
  0
  -1
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -14
  -17
  -20
  -23
  -27
  -31
  -35
  -40
  -45
  -50
  -56
  -62
  -68
  -74
  -81
  -88
  -95
  -102
New CAPEX, $m
  -3
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -13
  -16
  -19
  -22
  -25
  -28
  -31
  -35
  -38
  -41
  -44
  -47
  -50
  -53
  -55
  -58
  -61
  -64
  -66
  -69
  -72
  -75
  -78
Cash from investing activities, $m
  13
  -2
  -3
  -5
  -6
  -9
  -11
  -14
  -17
  -22
  -26
  -31
  -36
  -42
  -48
  -55
  -61
  -68
  -75
  -82
  -90
  -98
  -105
  -114
  -123
  -132
  -140
  -150
  -160
  -170
  -180
Free cash flow, $m
  71
  -4,947
  -7,586
  -11,297
  -16,348
  -23,024
  -31,616
  -42,405
  -55,651
  -71,583
  -90,391
  -112,225
  -137,187
  -165,342
  -196,711
  -231,287
  -269,033
  -309,897
  -353,811
  -400,706
  -450,509
  -503,158
  -558,595
  -616,779
  -677,685
  -741,301
  -807,637
  -876,721
  -948,598
  -1,023,335
  -1,101,013
Issuance/(repayment) of debt, $m
  0
  29
  150
  210
  286
  378
  487
  611
  751
  903
  1,066
  1,237
  1,414
  1,595
  1,777
  1,959
  2,139
  2,315
  2,488
  2,657
  2,821
  2,982
  3,140
  3,296
  3,450
  3,604
  3,758
  3,913
  4,072
  4,233
  4,400
Issuance/(repurchase) of shares, $m
  67
  5,035
  7,606
  11,326
  16,386
  23,075
  31,682
  42,488
  55,753
  71,705
  90,536
  112,393
  137,379
  165,558
  196,952
  231,552
  269,323
  310,211
  354,149
  401,066
  450,892
  503,562
  559,021
  617,227
  678,153
  741,790
  808,147
  877,252
  949,151
  1,023,909
  1,101,610
Cash from financing (excl. dividends), $m  
  67
  5,064
  7,756
  11,536
  16,672
  23,453
  32,169
  43,099
  56,504
  72,608
  91,602
  113,630
  138,793
  167,153
  198,729
  233,511
  271,462
  312,526
  356,637
  403,723
  453,713
  506,544
  562,161
  620,523
  681,603
  745,394
  811,905
  881,165
  953,223
  1,028,142
  1,106,010
Total cash flow (excl. dividends), $m
  138
  118
  170
  239
  325
  430
  553
  694
  853
  1,025
  1,210
  1,405
  1,606
  1,812
  2,019
  2,225
  2,429
  2,629
  2,825
  3,017
  3,204
  3,387
  3,567
  3,743
  3,918
  4,093
  4,268
  4,444
  4,624
  4,808
  4,997
Retained Cash Flow (-), $m
  63
  -5,035
  -7,606
  -11,326
  -16,386
  -23,075
  -31,682
  -42,488
  -55,753
  -71,705
  -90,536
  -112,393
  -137,379
  -165,558
  -196,952
  -231,552
  -269,323
  -310,211
  -354,149
  -401,066
  -450,892
  -503,562
  -559,021
  -617,227
  -678,153
  -741,790
  -808,147
  -877,252
  -949,151
  -1,023,909
  -1,101,610
Prev. year cash balance distribution, $m
 
  173
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  9
  14
  22
  33
  48
  67
  93
  124
  163
  210
  265
  329
  403
  485
  578
  679
  790
  910
  1,039
  1,177
  1,323
  1,477
  1,640
  1,811
  1,990
  2,177
  2,371
  2,574
  2,785
  3,005
Cash available for distribution, $m
 
  -4,745
  -7,436
  -11,087
  -16,061
  -22,646
  -31,129
  -41,794
  -54,900
  -70,680
  -89,325
  -110,987
  -135,773
  -163,746
  -194,934
  -229,328
  -266,894
  -307,581
  -351,323
  -398,049
  -447,688
  -500,175
  -555,454
  -613,483
  -674,235
  -737,697
  -803,880
  -872,808
  -944,527
  -1,019,101
  -1,096,613
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  -4,549
  -6,808
  -9,648
  -13,225
  -17,553
  -22,592
  -28,235
  -34,314
  -40,602
  -46,830
  -52,706
  -57,939
  -62,259
  -65,443
  -67,327
  -67,824
  -66,925
  -64,700
  -61,288
  -56,887
  -51,735
  -46,088
  -40,208
  -34,340
  -28,697
  -23,453
  -18,733
  -14,613
  -11,124
  -8,257
Current shareholders' claim on cash, %
  100
  50.0
  0.8
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Akebia Therapeutics, Inc. is a biopharmaceutical company. The Company focuses on the development and commercialization of therapeutics based on hypoxia-inducible factor (HIF) biology. The Company's lead product candidate, vadadustat, is indicated for the treatment of anemia in chronic kidney disease (CKD). It is involved in developing vadadustat as an oral therapy. The Company's vadadustat is a HIF-prolyl-hydroxylase (HIF-PH) inhibitor in Phase III development for the treatment of anemia of CKD. In addition to vadadustat, the Company is engaged in developing a HIF-based portfolio of product candidates that target serious diseases of unmet need. Its portfolio includes product candidates developed internally, such as AKB-6899, as well as in-licensed product candidates, including AKB-5169. AKB-5169 is a preclinical compound in development as an oral treatment for inflammatory bowel disease (IBD).

FINANCIAL RATIOS  of  Akebia Therapeutics (AKBA)

Valuation Ratios
P/E Ratio -2.9
Price to Sales 198.7
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 6.9
Price to Free Cash Flow 7.2
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -61.4%
Ret/ On Assets - 3 Yr. Avg. -53.4%
Return On Total Capital -136.7%
Ret/ On T. Cap. - 3 Yr. Avg. -81.1%
Return On Equity -136.7%
Return On Equity - 3 Yr. Avg. -81.1%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -6800%
EBITDA Margin - 3 Yr. Avg. -2266.7%
Operating Margin -6800%
Oper. Margin - 3 Yr. Avg. -2266.7%
Pre-Tax Margin -6800%
Pre-Tax Margin - 3 Yr. Avg. -2266.7%
Net Profit Margin -6800%
Net Profit Margin - 3 Yr. Avg. -2266.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AKBA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AKBA stock intrinsic value calculation we used $178 million for the last fiscal year's total revenue generated by Akebia Therapeutics. The default revenue input number comes from 2016 income statement of Akebia Therapeutics. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our AKBA stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for AKBA is calculated based on our internal credit rating of Akebia Therapeutics, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Akebia Therapeutics.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of AKBA stock the variable cost ratio is equal to 1797.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $112 million in the base year in the intrinsic value calculation for AKBA stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Akebia Therapeutics.

Corporate tax rate of 27% is the nominal tax rate for Akebia Therapeutics. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the AKBA stock is equal to 5%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for AKBA are equal to 1.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Akebia Therapeutics operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for AKBA is equal to -3.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $119 million for Akebia Therapeutics - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 44 million for Akebia Therapeutics is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Akebia Therapeutics at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

▶ WeissLaw LLP Investigates Keryx Biopharmaceuticals Inc.   [Jun-29-18 07:12PM  PR Newswire]
▶ Akebia Therapeutics: 1Q Earnings Snapshot   [May-09-18 05:16PM  Associated Press]
▶ Akebia Therapeutics posts 4Q profit   [Mar-12-18 04:29PM  Associated Press]
▶ GlycoMimetics (GLYC) Jumps: Stock Rises 11.9%   [Nov-28-17 08:36AM  Zacks]
▶ Newly public Cincinnati firm names new CFO   [Nov-14-17 12:25PM  American City Business Journals]
▶ Akebia Therapeutics reports 3Q loss   [Nov-08-17 05:33PM  Associated Press]
▶ Akebia Therapeutics reports 2Q loss   [Aug-08-17 11:04PM  Associated Press]
▶ Akebia Announces Pricing of Public Offering of Common Stock   [Jun-28-17 10:46PM  Business Wire]
▶ Akebia Prevails in Two Additional European Patent Disputes   [Jun-05-17 08:00AM  Business Wire]
▶ Four Stocks Moving On Both News And The Charts   [May-17-17 06:59PM  Forbes]
▶ Why Akebia Therapeutics Stock Is Skyrocketing Today   [May-16-17 12:02PM  Motley Fool]
▶ Biotech Movers: Akebia, Editas, Novavax   [09:34AM  TheStreet.com]
▶ Akebia Therapeutics reports 1Q loss   [May-09-17 06:28PM  Associated Press]
▶ Why Akebia Therapeutics Shares Soared 33.4% Today   [Apr-26-17 05:45PM  Motley Fool]
▶ Akebia expands anemia drug pact with Japanese firm, lifting shares   [Apr-25-17 07:00PM  American City Business Journals]
Financial statements of AKBA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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