Intrinsic value of BioAmber - BIOA

Previous Close

$0.48

  Intrinsic Value

$0.35

stock screener

  Rating & Target

sell

-27%

  Value-price divergence*

0%

Previous close

$0.48

 
Intrinsic value

$0.35

 
Up/down potential

-27%

 
Rating

sell

 
Value-price divergence*

0%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BIOA 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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

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, %
  300.00
  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
  8
  13
  20
  30
  43
  61
  83
  112
  147
  189
  238
  296
  362
  436
  519
  610
  710
  818
  934
  1,058
  1,189
  1,328
  1,474
  1,628
  1,789
  1,957
  2,132
  2,314
  2,504
  2,701
  2,906
Variable operating expenses, $m
 
  262
  405
  606
  879
  1,240
  1,705
  2,289
  3,006
  3,867
  4,885
  6,066
  7,416
  8,939
  10,635
  12,505
  14,547
  16,756
  19,131
  21,667
  24,360
  27,207
  30,205
  33,351
  36,644
  40,084
  43,671
  47,406
  51,293
  55,334
  59,534
Fixed operating expenses, $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
Total operating expenses, $m
  38
  262
  405
  606
  879
  1,240
  1,705
  2,289
  3,006
  3,867
  4,885
  6,066
  7,416
  8,939
  10,635
  12,505
  14,547
  16,756
  19,131
  21,667
  24,360
  27,207
  30,205
  33,351
  36,644
  40,084
  43,671
  47,406
  51,293
  55,334
  59,534
Operating income, $m
  -30
  -250
  -385
  -576
  -836
  -1,180
  -1,622
  -2,177
  -2,859
  -3,679
  -4,646
  -5,770
  -7,054
  -8,502
  -10,116
  -11,895
  -13,836
  -15,938
  -18,197
  -20,609
  -23,171
  -25,879
  -28,730
  -31,723
  -34,856
  -38,128
  -41,539
  -45,092
  -48,789
  -52,633
  -56,628
EBITDA, $m
  -25
  -242
  -373
  -558
  -810
  -1,142
  -1,570
  -2,108
  -2,768
  -3,561
  -4,498
  -5,586
  -6,829
  -8,232
  -9,794
  -11,516
  -13,396
  -15,431
  -17,618
  -19,954
  -22,434
  -25,056
  -27,816
  -30,714
  -33,746
  -36,914
  -40,217
  -43,657
  -47,237
  -50,958
  -54,826
Interest expense (income), $m
  0
  2
  4
  7
  11
  17
  24
  34
  46
  61
  79
  100
  124
  152
  184
  219
  258
  301
  347
  396
  449
  505
  564
  626
  691
  760
  831
  906
  983
  1,064
  1,148
Earnings before tax, $m
  -28
  -251
  -389
  -583
  -847
  -1,197
  -1,646
  -2,211
  -2,905
  -3,739
  -4,725
  -5,870
  -7,178
  -8,655
  -10,300
  -12,114
  -14,095
  -16,239
  -18,544
  -21,005
  -23,620
  -26,384
  -29,294
  -32,349
  -35,547
  -38,887
  -42,371
  -45,998
  -49,773
  -53,697
  -57,776
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
  -22
  -251
  -389
  -583
  -847
  -1,197
  -1,646
  -2,211
  -2,905
  -3,739
  -4,725
  -5,870
  -7,178
  -8,655
  -10,300
  -12,114
  -14,095
  -16,239
  -18,544
  -21,005
  -23,620
  -26,384
  -29,294
  -32,349
  -35,547
  -38,887
  -42,371
  -45,998
  -49,773
  -53,697
  -57,776

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  16
  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
  161
  233
  360
  538
  780
  1,101
  1,513
  2,031
  2,667
  3,432
  4,335
  5,383
  6,581
  7,933
  9,438
  11,098
  12,909
  14,871
  16,978
  19,229
  21,619
  24,145
  26,805
  29,598
  32,520
  35,573
  38,756
  42,071
  45,520
  49,107
  52,834
Adjusted assets (=assets-cash), $m
  145
  233
  360
  538
  780
  1,101
  1,513
  2,031
  2,667
  3,432
  4,335
  5,383
  6,581
  7,933
  9,438
  11,098
  12,909
  14,871
  16,978
  19,229
  21,619
  24,145
  26,805
  29,598
  32,520
  35,573
  38,756
  42,071
  45,520
  49,107
  52,834
Revenue / Adjusted assets
  0.055
  0.056
  0.056
  0.056
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
Average production assets, $m
  128
  205
  316
  473
  687
  969
  1,332
  1,788
  2,347
  3,020
  3,815
  4,737
  5,792
  6,981
  8,306
  9,766
  11,360
  13,086
  14,941
  16,921
  19,024
  21,248
  23,589
  26,046
  28,618
  31,304
  34,105
  37,023
  40,058
  43,214
  46,494
Working capital, $m
  -14
  6
  10
  15
  21
  30
  42
  56
  73
  94
  119
  148
  181
  218
  260
  305
  355
  409
  467
  529
  595
  664
  737
  814
  894
  978
  1,066
  1,157
  1,252
  1,350
  1,453
Total debt, $m
  67
  110
  195
  314
  476
  690
  966
  1,313
  1,738
  2,250
  2,854
  3,555
  4,357
  5,261
  6,268
  7,378
  8,590
  9,902
  11,312
  12,818
  14,417
  16,107
  17,887
  19,755
  21,710
  23,752
  25,882
  28,100
  30,407
  32,806
  35,300
Total liabilities, $m
  113
  156
  241
  360
  522
  736
  1,012
  1,359
  1,784
  2,296
  2,900
  3,601
  4,403
  5,307
  6,314
  7,424
  8,636
  9,948
  11,358
  12,864
  14,463
  16,153
  17,933
  19,801
  21,756
  23,798
  25,928
  28,146
  30,453
  32,852
  35,346
Total equity, $m
  48
  77
  119
  178
  258
  364
  501
  672
  883
  1,136
  1,435
  1,782
  2,178
  2,626
  3,124
  3,673
  4,273
  4,922
  5,620
  6,365
  7,156
  7,992
  8,873
  9,797
  10,764
  11,775
  12,828
  13,926
  15,067
  16,254
  17,488
Total liabilities and equity, $m
  161
  233
  360
  538
  780
  1,100
  1,513
  2,031
  2,667
  3,432
  4,335
  5,383
  6,581
  7,933
  9,438
  11,097
  12,909
  14,870
  16,978
  19,229
  21,619
  24,145
  26,806
  29,598
  32,520
  35,573
  38,756
  42,072
  45,520
  49,106
  52,834
Debt-to-equity ratio
  1.396
  1.420
  1.630
  1.760
  1.840
  1.890
  1.930
  1.950
  1.970
  1.980
  1.990
  2.000
  2.000
  2.000
  2.010
  2.010
  2.010
  2.010
  2.010
  2.010
  2.010
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
  2.020
Adjusted equity ratio
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331
  0.331

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -22
  -251
  -389
  -583
  -847
  -1,197
  -1,646
  -2,211
  -2,905
  -3,739
  -4,725
  -5,870
  -7,178
  -8,655
  -10,300
  -12,114
  -14,095
  -16,239
  -18,544
  -21,005
  -23,620
  -26,384
  -29,294
  -32,349
  -35,547
  -38,887
  -42,371
  -45,998
  -49,773
  -53,697
  -57,776
Depreciation, amort., depletion, $m
  5
  8
  12
  18
  27
  38
  52
  69
  91
  117
  148
  184
  224
  271
  322
  379
  440
  507
  579
  656
  737
  824
  914
  1,010
  1,109
  1,213
  1,322
  1,435
  1,553
  1,675
  1,802
Funds from operations, $m
  -49
  -243
  -377
  -565
  -821
  -1,159
  -1,595
  -2,142
  -2,814
  -3,622
  -4,577
  -5,686
  -6,954
  -8,384
  -9,978
  -11,736
  -13,654
  -15,732
  -17,965
  -20,350
  -22,882
  -25,560
  -28,380
  -31,340
  -34,438
  -37,674
  -41,049
  -44,563
  -48,220
  -52,022
  -55,974
Change in working capital, $m
  -11
  2
  3
  5
  7
  9
  11
  14
  17
  21
  25
  29
  33
  37
  41
  46
  50
  54
  58
  62
  66
  69
  73
  77
  80
  84
  88
  91
  95
  99
  103
Cash from operations, $m
  -38
  -246
  -380
  -570
  -827
  -1,168
  -1,606
  -2,156
  -2,831
  -3,643
  -4,602
  -5,715
  -6,987
  -8,421
  -10,020
  -11,781
  -13,704
  -15,786
  -18,023
  -20,411
  -22,948
  -25,630
  -28,453
  -31,416
  -34,518
  -37,758
  -41,136
  -44,655
  -48,315
  -52,121
  -56,077
Maintenance CAPEX, $m
  0
  -5
  -8
  -12
  -18
  -27
  -38
  -52
  -69
  -91
  -117
  -148
  -184
  -224
  -271
  -322
  -379
  -440
  -507
  -579
  -656
  -737
  -824
  -914
  -1,010
  -1,109
  -1,213
  -1,322
  -1,435
  -1,553
  -1,675
New CAPEX, $m
  -1
  -77
  -112
  -157
  -213
  -282
  -363
  -456
  -560
  -673
  -795
  -922
  -1,054
  -1,189
  -1,325
  -1,460
  -1,594
  -1,726
  -1,855
  -1,980
  -2,103
  -2,223
  -2,341
  -2,457
  -2,572
  -2,686
  -2,801
  -2,917
  -3,035
  -3,156
  -3,280
Cash from investing activities, $m
  -1
  -82
  -120
  -169
  -231
  -309
  -401
  -508
  -629
  -764
  -912
  -1,070
  -1,238
  -1,413
  -1,596
  -1,782
  -1,973
  -2,166
  -2,362
  -2,559
  -2,759
  -2,960
  -3,165
  -3,371
  -3,582
  -3,795
  -4,014
  -4,239
  -4,470
  -4,709
  -4,955
Free cash flow, $m
  -39
  -327
  -500
  -739
  -1,059
  -1,476
  -2,006
  -2,663
  -3,460
  -4,407
  -5,514
  -6,785
  -8,225
  -9,835
  -11,615
  -13,564
  -15,677
  -17,952
  -20,385
  -22,971
  -25,707
  -28,590
  -31,618
  -34,788
  -38,100
  -41,554
  -45,151
  -48,894
  -52,785
  -56,830
  -61,032
Issuance/(repayment) of debt, $m
  12
  59
  85
  119
  162
  214
  276
  347
  425
  512
  604
  701
  802
  904
  1,007
  1,110
  1,212
  1,312
  1,410
  1,506
  1,599
  1,690
  1,780
  1,868
  1,955
  2,042
  2,130
  2,218
  2,307
  2,399
  2,494
Issuance/(repurchase) of shares, $m
  36
  280
  431
  642
  928
  1,303
  1,783
  2,383
  3,115
  3,993
  5,024
  6,216
  7,575
  9,102
  10,799
  12,663
  14,694
  16,888
  19,242
  21,750
  24,411
  27,220
  30,175
  33,273
  36,514
  39,898
  43,424
  47,096
  50,914
  54,884
  59,010
Cash from financing (excl. dividends), $m  
  47
  339
  516
  761
  1,090
  1,517
  2,059
  2,730
  3,540
  4,505
  5,628
  6,917
  8,377
  10,006
  11,806
  13,773
  15,906
  18,200
  20,652
  23,256
  26,010
  28,910
  31,955
  35,141
  38,469
  41,940
  45,554
  49,314
  53,221
  57,283
  61,504
Total cash flow (excl. dividends), $m
  9
  12
  16
  23
  31
  41
  52
  66
  81
  97
  114
  133
  152
  171
  191
  210
  229
  248
  267
  285
  303
  320
  337
  354
  370
  387
  403
  420
  437
  454
  472
Retained Cash Flow (-), $m
  -2
  -280
  -431
  -642
  -928
  -1,303
  -1,783
  -2,383
  -3,115
  -3,993
  -5,024
  -6,216
  -7,575
  -9,102
  -10,799
  -12,663
  -14,694
  -16,888
  -19,242
  -21,750
  -24,411
  -27,220
  -30,175
  -33,273
  -36,514
  -39,898
  -43,424
  -47,096
  -50,914
  -54,884
  -59,010
Prev. year cash balance distribution, $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
Cash flow adjustment, $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
Cash available for distribution, $m
 
  -269
  -415
  -620
  -897
  -1,262
  -1,730
  -2,317
  -3,035
  -3,896
  -4,910
  -6,084
  -7,423
  -8,931
  -10,608
  -12,453
  -14,465
  -16,640
  -18,975
  -21,465
  -24,108
  -26,900
  -29,838
  -32,920
  -36,144
  -39,511
  -43,021
  -46,676
  -50,478
  -54,430
  -58,538
Discount rate, %
 
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
 
  -246
  -345
  -462
  -596
  -739
  -883
  -1,018
  -1,135
  -1,223
  -1,276
  -1,289
  -1,263
  -1,199
  -1,105
  -987
  -855
  -719
  -586
  -463
  -354
  -262
  -188
  -130
  -87
  -56
  -35
  -21
  -12
  -7
  -4
Current shareholders' claim on cash, %
  100
  10.7
  1.2
  0.1
  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

BioAmber Inc., an industrial biotechnology company, produces and sells bio-succinic acid to various chemical market customers in the United States. Its proprietary technology platform combines industrial biotechnology and chemical catalysis to convert renewable feedstocks into chemicals that are replacements for petroleum-derived chemicals. The company’s bio-succinic acid is used in various applications, including plasticizers, polyurethanes, personal care products, resins and coatings, de-icing and coolant solutions, fine chemicals, lubricants, and food additives, as well as anti-freeze solutions, coolants solvents, water treatment chemicals, laundry tablets and bath salts, artificial leather products, and foams made with recycled polyethylene terephthalate. Its product pipeline also includes bio-succinic acid derivatives, such as 1, 4 butanediol and tetrahydrofuran used in elastomers, engineering plastics, shoe soles, spandex, and solvents; succinic acid based polyesters for use in automotive interiors, fibers and non-wovens, food packaging, plastic bags and cups, and organic composite boards; and C6 building block chemicals comprising adipic acid, caprolactam, and hexamethylenediamine used in carpets, engineering plastics, textiles and fibers, films, and polyurethanes. The company sells its products directly to customers, as well as through distributors. It has strategic relationships with various companies, including PTTMCC Biochem Company Limited. The company was formerly known as DNP Green Technology, Inc. and changed its name to BioAmber Inc. in September 2010. BioAmber Inc. is headquartered in Montreal, Canada.

FINANCIAL RATIOS  of  BioAmber (BIOA)

Valuation Ratios
P/E Ratio -0.7
Price to Sales 1.8
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -0.4
Price to Free Cash Flow -0.4
Growth Rates
Sales Growth Rate 300%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -98.4%
Cap. Spend. - 3 Yr. Gr. Rate -40.1%
Financial Strength
Quick Ratio 0
Current Ratio 0.2
LT Debt to Equity 60.4%
Total Debt to Equity 139.6%
Interest Coverage 0
Management Effectiveness
Return On Assets -14.5%
Ret/ On Assets - 3 Yr. Avg. -24.8%
Return On Total Capital -22%
Ret/ On T. Cap. - 3 Yr. Avg. -37.3%
Return On Equity -46.8%
Return On Equity - 3 Yr. Avg. -65.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin -62.5%
Gross Margin - 3 Yr. Avg. -104.2%
EBITDA Margin -287.5%
EBITDA Margin - 3 Yr. Avg. -1545.8%
Operating Margin -375%
Oper. Margin - 3 Yr. Avg. -1358.3%
Pre-Tax Margin -350%
Pre-Tax Margin - 3 Yr. Avg. -1583.3%
Net Profit Margin -275%
Net Profit Margin - 3 Yr. Avg. -1475%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BIOA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BIOA stock intrinsic value calculation we used $8 million for the last fiscal year's total revenue generated by BioAmber. The default revenue input number comes from 2016 income statement of BioAmber. 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 BIOA 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 9.3%, whose default value for BIOA is calculated based on our internal credit rating of BioAmber, 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 BioAmber.
    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 BIOA stock the variable cost ratio is equal to 2050%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BIOA 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 3.5% for BioAmber.

Corporate tax rate of 27% is the nominal tax rate for BioAmber. 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 BIOA stock is equal to 0%.

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 BIOA are equal to 1600%.

Life of production assets of 25.8 years is the average useful life of capital assets used in BioAmber 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 BIOA is equal to 50%. 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 - $48 million for BioAmber - 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 33.419 million for BioAmber 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 BioAmber at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ BioAmber reports 2Q loss   [Aug-04-17 02:34AM  Associated Press]
▶ BioAmber posts 1Q profit   [May-09-17 05:30PM  Associated Press]
▶ BioAmber Announces CFO Transition   [04:16PM  PR Newswire]
Stock chart of BIOA Financial statements of BIOA
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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