Intrinsic value of Immucell - ICCC

Previous Close

$6.37

  Intrinsic Value

$12.91

stock screener

  Rating & Target

str. buy

+103%

  Value-price divergence*

0%

Previous close

$6.37

 
Intrinsic value

$12.91

 
Up/down potential

+103%

 
Rating

str. buy

 
Value-price divergence*

0%

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

We calculate the intrinsic value of ICCC 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, %
  0.00
  33.30
  30.47
  27.92
  25.63
  23.57
  21.71
  20.04
  18.54
  17.18
  15.96
  14.87
  13.88
  12.99
  12.19
  11.47
  10.83
  10.24
  9.72
  9.25
  8.82
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
Revenue, $m
  10
  13
  17
  22
  28
  35
  42
  50
  60
  70
  81
  93
  106
  120
  135
  150
  167
  184
  201
  220
  239
  260
  281
  303
  325
  349
  373
  399
  425
  453
  482
Variable operating expenses, $m
 
  11
  14
  18
  22
  28
  34
  40
  48
  56
  65
  75
  85
  96
  108
  120
  133
  147
  161
  176
  192
  208
  225
  242
  260
  279
  299
  319
  340
  362
  385
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
  9
  11
  14
  18
  22
  28
  34
  40
  48
  56
  65
  75
  85
  96
  108
  120
  133
  147
  161
  176
  192
  208
  225
  242
  260
  279
  299
  319
  340
  362
  385
Operating income, $m
  1
  3
  3
  4
  6
  7
  8
  10
  12
  14
  16
  19
  21
  24
  27
  30
  33
  37
  40
  44
  48
  52
  56
  61
  65
  70
  75
  80
  85
  91
  96
EBITDA, $m
  2
  3
  3
  4
  6
  7
  8
  10
  12
  14
  16
  19
  21
  24
  27
  30
  33
  37
  40
  44
  48
  52
  56
  61
  65
  70
  75
  80
  85
  91
  96
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
Earnings before tax, $m
  1
  3
  3
  4
  5
  6
  8
  9
  11
  13
  15
  17
  20
  22
  25
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
  64
  69
  73
  78
  83
  88
Tax expense, $m
  0
  1
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  21
  22
  24
Net income, $m
  1
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  18
  20
  22
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  11
  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
  25
  19
  24
  31
  39
  48
  59
  71
  84
  98
  114
  131
  149
  168
  189
  210
  233
  257
  282
  308
  335
  364
  393
  424
  456
  489
  523
  559
  596
  634
  675
Adjusted assets (=assets-cash), $m
  14
  19
  24
  31
  39
  48
  59
  71
  84
  98
  114
  131
  149
  168
  189
  210
  233
  257
  282
  308
  335
  364
  393
  424
  456
  489
  523
  559
  596
  634
  675
Revenue / Adjusted assets
  0.714
  0.684
  0.708
  0.710
  0.718
  0.729
  0.712
  0.704
  0.714
  0.714
  0.711
  0.710
  0.711
  0.714
  0.714
  0.714
  0.717
  0.716
  0.713
  0.714
  0.713
  0.714
  0.715
  0.715
  0.713
  0.714
  0.713
  0.714
  0.713
  0.715
  0.714
Average production assets, $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
Working capital, $m
  12
  1
  2
  2
  3
  3
  4
  5
  6
  7
  8
  9
  11
  12
  13
  15
  17
  18
  20
  22
  24
  26
  28
  30
  33
  35
  37
  40
  43
  45
  48
Total debt, $m
  3
  5
  7
  9
  12
  15
  19
  23
  28
  33
  39
  45
  51
  58
  65
  73
  81
  90
  99
  108
  118
  128
  138
  149
  161
  172
  185
  197
  211
  224
  239
Total liabilities, $m
  5
  7
  9
  11
  14
  17
  21
  25
  30
  35
  41
  47
  53
  60
  67
  75
  83
  92
  101
  110
  120
  130
  140
  151
  163
  174
  187
  199
  213
  226
  241
Total equity, $m
  20
  12
  16
  20
  25
  31
  38
  45
  54
  63
  73
  84
  96
  108
  121
  135
  150
  165
  181
  198
  216
  234
  253
  272
  293
  314
  336
  359
  383
  408
  434
Total liabilities and equity, $m
  25
  19
  25
  31
  39
  48
  59
  70
  84
  98
  114
  131
  149
  168
  188
  210
  233
  257
  282
  308
  336
  364
  393
  423
  456
  488
  523
  558
  596
  634
  675
Debt-to-equity ratio
  0.150
  0.390
  0.430
  0.460
  0.480
  0.490
  0.500
  0.510
  0.520
  0.520
  0.530
  0.530
  0.530
  0.540
  0.540
  0.540
  0.540
  0.540
  0.540
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
Adjusted equity ratio
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  18
  20
  22
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
Depreciation, amort., depletion, $m
  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
Funds from operations, $m
  -2
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  18
  20
  22
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
Change in working capital, $m
  -2
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
Cash from operations, $m
  0
  2
  2
  3
  3
  4
  5
  6
  7
  8
  10
  11
  13
  15
  17
  19
  21
  23
  25
  28
  30
  33
  36
  38
  41
  44
  48
  51
  54
  58
  62
Maintenance CAPEX, $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
New CAPEX, $m
  -4
  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 from investing activities, $m
  -4
  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
Free cash flow, $m
  -4
  2
  2
  3
  3
  4
  5
  6
  7
  8
  10
  11
  13
  15
  17
  19
  21
  23
  25
  28
  30
  33
  36
  38
  41
  44
  48
  51
  54
  58
  62
Issuance/(repayment) of debt, $m
  0
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
Issuance/(repurchase) of shares, $m
  5
  1
  1
  1
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  8
  3
  3
  3
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
Total cash flow (excl. dividends), $m
  4
  4
  5
  6
  7
  9
  10
  11
  12
  14
  15
  17
  20
  22
  24
  26
  29
  32
  34
  37
  40
  43
  46
  49
  53
  56
  60
  64
  68
  72
  76
Retained Cash Flow (-), $m
  -9
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
Prev. year cash balance distribution, $m
 
  11
  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
 
  12
  2
  2
  2
  3
  3
  3
  4
  4
  5
  7
  8
  9
  11
  13
  14
  16
  18
  20
  22
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
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
 
  12
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  4
  3
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  1
  0
Current shareholders' claim on cash, %
  100
  92.2
  86.3
  81.8
  78.4
  76.0
  74.4
  73.5
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1
  73.1

ImmuCell Corporation develops, acquires, manufactures, and sells products that enhance animal health and productivity in the dairy and beef industries in the United States and internationally. The company offers First Defense, an orally delivered scours preventive product that provides bovine antibodies for newborn calves; Wipe Out Dairy Wipes, which consist of towelettes that are pre-moistened with a Nisin-based formulation to prepare the teat area of a cow in advance of milking; and California Mastitis Test that could be used for bulk tank and individual cow sample monitoring, as well as to determine which quarter of the udder is mastitic. It is also involved in the development of Mast Out, a Nisin-based intramammary treatment of subclinical mastitis in lactating dairy cows; and treatments that prevent E. coli K99 and bovine coronavirus, as well as calf scours caused by enteric pathogens. In addition, the company sells various product applications of its First Defense Technology, including a whey protein concentrate for the nutritional and feed supplement markets. ImmuCell Corporation sells its products to distributors and bovine veterinarians, as well as directly to producers. The company was founded in 1982 and is based in Portland, Maine.

FINANCIAL RATIOS  of  Immucell (ICCC)

Valuation Ratios
P/E Ratio 30.9
Price to Sales 3.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow -7.7
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 33.3%
Cap. Spend. - 3 Yr. Gr. Rate 32%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 15%
Total Debt to Equity 15%
Interest Coverage 0
Management Effectiveness
Return On Assets 5%
Ret/ On Assets - 3 Yr. Avg. 4.2%
Return On Total Capital 5.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.6%
Return On Equity 6.5%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 53.3%
EBITDA Margin 20%
EBITDA Margin - 3 Yr. Avg. 16.7%
Operating Margin 10%
Oper. Margin - 3 Yr. Avg. 10%
Pre-Tax Margin 10%
Pre-Tax Margin - 3 Yr. Avg. 10%
Net Profit Margin 10%
Net Profit Margin - 3 Yr. Avg. 6.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 16.7%
Payout Ratio 0%

ICCC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ICCC stock intrinsic value calculation we used $10 million for the last fiscal year's total revenue generated by Immucell. The default revenue input number comes from 2016 income statement of Immucell. 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 ICCC stock valuation model: a) initial revenue growth rate of 33.3% 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 ICCC is calculated based on our internal credit rating of Immucell, 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 Immucell.
    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 ICCC stock the variable cost ratio is equal to 80%.

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 ICCC 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 Immucell.

Corporate tax rate of 27% is the nominal tax rate for Immucell. 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 ICCC 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 ICCC are equal to 0%.

Life of production assets of 10 years is the average useful life of capital assets used in Immucell 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 ICCC is equal to 10%. 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 - $20 million for Immucell - 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 4.697 million for Immucell 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 Immucell at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ ImmuCell Closes $1,000,000 Equity Investment   [Jul-27-17 04:05PM  GlobeNewswire]
▶ ImmuCell Unveils New Website   [Jul-17-17 08:00AM  GlobeNewswire]
▶ ImmuCell Clarifies Number of Authorized Common Shares   [Jul-13-17 04:05PM  GlobeNewswire]
▶ ImmuCell Announces Preliminary 2016 Financial Results   [Feb-09-17 04:05PM  Marketwired]
▶ ImmuCell to Announce Preliminary 2016 Financial Results   [Feb-06-17 12:54PM  Marketwired]
▶ ImmuCell to Announce 2015 Financial Results   [Feb-04-16 08:00AM  Marketwired]
▶ ImmuCell Acquires Certain Assets From Minnesota Firm   [Jan-06-16 08:00AM  Marketwired]
▶ Here is What Hedge Funds Think About Evoke Pharma Inc (EVOK)   [Nov-28  02:10AM  at Insider Monkey]
▶ Hedge Funds Are Dumping ParkerVision, Inc. (PRKR)   [Nov-25  03:14AM  at Insider Monkey]
▶ 10-Q for ImmuCell Corp.   [Aug-15  08:10PM  at Company Spotlight]
▶ 10-Q for ImmuCell Corp.   [May-14  08:11PM  at Company Spotlight]
Stock chart of ICCC Financial statements of ICCC
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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