Intrinsic value of Intercept Pharmaceuticals - ICPT

Previous Close

$60.64

  Intrinsic Value

$3.13

stock screener

  Rating & Target

str. sell

-95%

Previous close

$60.64

 
Intrinsic value

$3.13

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of ICPT 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 1.5

 

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, %
  733.33
  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
  25
  40
  62
  92
  134
  189
  260
  349
  458
  590
  745
  925
  1,131
  1,363
  1,622
  1,907
  2,219
  2,556
  2,918
  3,305
  3,716
  4,150
  4,607
  5,087
  5,589
  6,114
  6,661
  7,231
  7,824
  8,440
  9,081
Variable operating expenses, $m
 
  619
  957
  1,431
  2,076
  2,929
  4,026
  5,405
  7,096
  9,131
  11,534
  14,322
  17,510
  21,106
  25,112
  29,527
  34,347
  39,565
  45,172
  51,160
  57,519
  64,241
  71,319
  78,748
  86,524
  94,646
  103,116
  111,936
  121,113
  130,654
  140,572
Fixed operating expenses, $m
 
  196
  201
  206
  211
  216
  222
  227
  233
  239
  244
  251
  257
  263
  270
  277
  284
  291
  298
  305
  313
  321
  329
  337
  345
  354
  363
  372
  381
  391
  401
Total operating expenses, $m
  427
  815
  1,158
  1,637
  2,287
  3,145
  4,248
  5,632
  7,329
  9,370
  11,778
  14,573
  17,767
  21,369
  25,382
  29,804
  34,631
  39,856
  45,470
  51,465
  57,832
  64,562
  71,648
  79,085
  86,869
  95,000
  103,479
  112,308
  121,494
  131,045
  140,973
Operating income, $m
  -403
  -775
  -1,096
  -1,544
  -2,153
  -2,956
  -3,988
  -5,282
  -6,871
  -8,780
  -11,033
  -13,648
  -16,636
  -20,006
  -23,760
  -27,896
  -32,412
  -37,300
  -42,552
  -48,160
  -54,116
  -60,412
  -67,041
  -73,998
  -81,280
  -88,886
  -96,817
  -105,077
  -113,670
  -122,605
  -131,891
EBITDA, $m
  -399
  -772
  -1,090
  -1,536
  -2,141
  -2,940
  -3,966
  -5,253
  -6,832
  -8,731
  -10,971
  -13,570
  -16,541
  -19,891
  -23,623
  -27,736
  -32,225
  -37,085
  -42,307
  -47,883
  -53,804
  -60,063
  -66,654
  -73,571
  -80,811
  -88,373
  -96,258
  -104,469
  -113,013
  -121,896
  -131,129
Interest expense (income), $m
  0
  12
  0
  1
  3
  6
  9
  13
  19
  26
  34
  44
  55
  68
  83
  99
  117
  137
  158
  181
  205
  231
  259
  287
  318
  349
  382
  417
  453
  490
  529
Earnings before tax, $m
  -413
  -787
  -1,095
  -1,545
  -2,156
  -2,961
  -3,997
  -5,296
  -6,890
  -8,806
  -11,067
  -13,692
  -16,692
  -20,074
  -23,843
  -27,996
  -32,529
  -37,437
  -42,710
  -48,341
  -54,322
  -60,643
  -67,299
  -74,285
  -81,598
  -89,236
  -97,200
  -105,494
  -114,123
  -123,095
  -132,420
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
  -413
  -787
  -1,095
  -1,545
  -2,156
  -2,961
  -3,997
  -5,296
  -6,890
  -8,806
  -11,067
  -13,692
  -16,692
  -20,074
  -23,843
  -27,996
  -32,529
  -37,437
  -42,710
  -48,341
  -54,322
  -60,643
  -67,299
  -74,285
  -81,598
  -89,236
  -97,200
  -105,494
  -114,123
  -123,095
  -132,420

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  689
  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
  739
  80
  124
  185
  268
  378
  520
  698
  917
  1,180
  1,490
  1,850
  2,262
  2,727
  3,244
  3,815
  4,438
  5,112
  5,836
  6,610
  7,431
  8,300
  9,214
  10,174
  11,179
  12,228
  13,322
  14,462
  15,648
  16,880
  18,162
Adjusted assets (=assets-cash), $m
  50
  80
  124
  185
  268
  378
  520
  698
  917
  1,180
  1,490
  1,850
  2,262
  2,727
  3,244
  3,815
  4,438
  5,112
  5,836
  6,610
  7,431
  8,300
  9,214
  10,174
  11,179
  12,228
  13,322
  14,462
  15,648
  16,880
  18,162
Revenue / Adjusted assets
  0.500
  0.500
  0.500
  0.497
  0.500
  0.500
  0.500
  0.500
  0.499
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
Average production assets, $m
  11
  17
  26
  39
  56
  79
  109
  147
  193
  248
  313
  389
  475
  573
  681
  801
  932
  1,073
  1,226
  1,388
  1,561
  1,743
  1,935
  2,137
  2,348
  2,568
  2,798
  3,037
  3,286
  3,545
  3,814
Working capital, $m
  629
  -96
  -148
  -222
  -322
  -454
  -624
  -838
  -1,100
  -1,416
  -1,788
  -2,221
  -2,715
  -3,272
  -3,893
  -4,578
  -5,325
  -6,134
  -7,003
  -7,932
  -8,918
  -9,960
  -11,057
  -12,209
  -13,415
  -14,674
  -15,987
  -17,354
  -18,777
  -20,256
  -21,794
Total debt, $m
  341
  -11
  28
  83
  158
  258
  385
  545
  742
  979
  1,258
  1,582
  1,953
  2,371
  2,837
  3,350
  3,911
  4,518
  5,170
  5,866
  6,605
  7,387
  8,210
  9,074
  9,978
  10,922
  11,907
  12,933
  14,000
  15,109
  16,263
Total liabilities, $m
  424
  72
  111
  166
  241
  341
  468
  628
  825
  1,062
  1,341
  1,665
  2,036
  2,454
  2,920
  3,433
  3,994
  4,601
  5,253
  5,949
  6,688
  7,470
  8,293
  9,157
  10,061
  11,005
  11,990
  13,016
  14,083
  15,192
  16,346
Total equity, $m
  315
  8
  12
  18
  27
  38
  52
  70
  92
  118
  149
  185
  226
  273
  324
  381
  444
  511
  584
  661
  743
  830
  921
  1,017
  1,118
  1,223
  1,332
  1,446
  1,565
  1,688
  1,816
Total liabilities and equity, $m
  739
  80
  123
  184
  268
  379
  520
  698
  917
  1,180
  1,490
  1,850
  2,262
  2,727
  3,244
  3,814
  4,438
  5,112
  5,837
  6,610
  7,431
  8,300
  9,214
  10,174
  11,179
  12,228
  13,322
  14,462
  15,648
  16,880
  18,162
Debt-to-equity ratio
  1.083
  -1.380
  2.280
  4.510
  5.910
  6.810
  7.400
  7.810
  8.090
  8.300
  8.440
  8.550
  8.630
  8.700
  8.740
  8.780
  8.810
  8.840
  8.860
  8.870
  8.890
  8.900
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.950
Adjusted equity ratio
  -7.480
  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
  -413
  -787
  -1,095
  -1,545
  -2,156
  -2,961
  -3,997
  -5,296
  -6,890
  -8,806
  -11,067
  -13,692
  -16,692
  -20,074
  -23,843
  -27,996
  -32,529
  -37,437
  -42,710
  -48,341
  -54,322
  -60,643
  -67,299
  -74,285
  -81,598
  -89,236
  -97,200
  -105,494
  -114,123
  -123,095
  -132,420
Depreciation, amort., depletion, $m
  4
  3
  5
  8
  11
  16
  22
  29
  39
  50
  63
  78
  95
  115
  136
  160
  186
  215
  245
  278
  312
  349
  387
  427
  470
  514
  560
  607
  657
  709
  763
Funds from operations, $m
  -334
  -784
  -1,090
  -1,537
  -2,144
  -2,945
  -3,975
  -5,267
  -6,851
  -8,757
  -11,005
  -13,614
  -16,596
  -19,960
  -23,706
  -27,835
  -32,343
  -37,222
  -42,465
  -48,064
  -54,010
  -60,295
  -66,912
  -73,858
  -81,128
  -88,722
  -96,640
  -104,886
  -113,466
  -122,386
  -131,658
Change in working capital, $m
  8
  -36
  -52
  -73
  -100
  -132
  -170
  -214
  -262
  -315
  -372
  -432
  -494
  -557
  -621
  -685
  -747
  -809
  -869
  -928
  -986
  -1,042
  -1,097
  -1,152
  -1,206
  -1,259
  -1,313
  -1,367
  -1,423
  -1,479
  -1,538
Cash from operations, $m
  -342
  -748
  -1,038
  -1,464
  -2,044
  -2,813
  -3,805
  -5,053
  -6,589
  -8,441
  -10,632
  -13,182
  -16,102
  -19,402
  -23,085
  -27,151
  -31,595
  -36,413
  -41,596
  -47,135
  -53,024
  -59,252
  -65,815
  -72,706
  -79,923
  -87,463
  -95,327
  -103,519
  -112,043
  -120,907
  -130,120
Maintenance CAPEX, $m
  0
  -2
  -3
  -5
  -8
  -11
  -16
  -22
  -29
  -39
  -50
  -63
  -78
  -95
  -115
  -136
  -160
  -186
  -215
  -245
  -278
  -312
  -349
  -387
  -427
  -470
  -514
  -560
  -607
  -657
  -709
New CAPEX, $m
  -5
  -6
  -9
  -13
  -18
  -23
  -30
  -37
  -46
  -55
  -65
  -76
  -86
  -98
  -109
  -120
  -131
  -142
  -152
  -162
  -173
  -182
  -192
  -202
  -211
  -220
  -230
  -239
  -249
  -259
  -269
Cash from investing activities, $m
  -60
  -8
  -12
  -18
  -26
  -34
  -46
  -59
  -75
  -94
  -115
  -139
  -164
  -193
  -224
  -256
  -291
  -328
  -367
  -407
  -451
  -494
  -541
  -589
  -638
  -690
  -744
  -799
  -856
  -916
  -978
Free cash flow, $m
  -402
  -756
  -1,050
  -1,482
  -2,069
  -2,847
  -3,850
  -5,112
  -6,664
  -8,535
  -10,747
  -13,320
  -16,266
  -19,595
  -23,308
  -27,407
  -31,886
  -36,741
  -41,963
  -47,543
  -53,474
  -59,747
  -66,356
  -73,295
  -80,561
  -88,153
  -96,070
  -104,318
  -112,899
  -121,823
  -131,098
Issuance/(repayment) of debt, $m
  448
  -352
  39
  55
  75
  99
  128
  160
  197
  237
  279
  324
  371
  418
  466
  513
  560
  607
  652
  696
  739
  782
  823
  864
  904
  944
  985
  1,026
  1,067
  1,110
  1,153
Issuance/(repurchase) of shares, $m
  5
  1,169
  1,100
  1,551
  2,164
  2,972
  4,011
  5,314
  6,912
  8,832
  11,098
  13,728
  16,733
  20,121
  23,894
  28,053
  32,591
  37,504
  42,783
  48,419
  54,404
  60,730
  67,391
  74,381
  81,698
  89,340
  97,309
  105,608
  114,241
  123,218
  132,548
Cash from financing (excl. dividends), $m  
  414
  817
  1,139
  1,606
  2,239
  3,071
  4,139
  5,474
  7,109
  9,069
  11,377
  14,052
  17,104
  20,539
  24,360
  28,566
  33,151
  38,111
  43,435
  49,115
  55,143
  61,512
  68,214
  75,245
  82,602
  90,284
  98,294
  106,634
  115,308
  124,328
  133,701
Total cash flow (excl. dividends), $m
  11
  61
  89
  124
  169
  224
  288
  362
  444
  534
  631
  732
  837
  944
  1,052
  1,159
  1,265
  1,370
  1,472
  1,572
  1,669
  1,765
  1,858
  1,950
  2,041
  2,132
  2,223
  2,316
  2,409
  2,505
  2,604
Retained Cash Flow (-), $m
  287
  -1,169
  -1,100
  -1,551
  -2,164
  -2,972
  -4,011
  -5,314
  -6,912
  -8,832
  -11,098
  -13,728
  -16,733
  -20,121
  -23,894
  -28,053
  -32,591
  -37,504
  -42,783
  -48,419
  -54,404
  -60,730
  -67,391
  -74,381
  -81,698
  -89,340
  -97,309
  -105,608
  -114,241
  -123,218
  -132,548
Prev. year cash balance distribution, $m
 
  689
  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
 
  -419
  -1,011
  -1,427
  -1,994
  -2,748
  -3,723
  -4,952
  -6,468
  -8,298
  -10,468
  -12,996
  -15,896
  -19,177
  -22,843
  -26,894
  -31,326
  -36,134
  -41,311
  -46,847
  -52,734
  -58,965
  -65,533
  -72,431
  -79,657
  -87,208
  -95,086
  -103,292
  -111,832
  -120,713
  -129,945
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
 
  -402
  -925
  -1,242
  -1,642
  -2,130
  -2,702
  -3,345
  -4,042
  -4,767
  -5,488
  -6,171
  -6,783
  -7,291
  -7,669
  -7,895
  -7,961
  -7,862
  -7,608
  -7,213
  -6,701
  -6,099
  -5,437
  -4,747
  -4,057
  -3,393
  -2,774
  -2,217
  -1,730
  -1,318
  -978
Current shareholders' claim on cash, %
  100
  50.0
  1.7
  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

Intercept Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is focused on the development and commercialization of therapeutics to treat non-viral, progressive liver diseases. The Company's product candidates have the potential to treat orphan and more prevalent diseases for which there are limited therapeutic solutions. The Company's product candidate, obeticholic acid (OCA), is a bile acid analog, a chemical substance that has a structure based on a naturally occurring human bile acid that selectively binds to and activates the farnesoid X receptor (FXR). In addition to OCA, it is developing other bile acid analog compounds targeting FXR and a second dedicated bile acid receptor called TGR5, which is a target of interest for the treatment of type 2 diabetes and other gastrointestinal indications. The Company is also developing other products INT-767 for the treatment of fibrosis and INT-777 for the treatment of type 2 diabetes.

FINANCIAL RATIOS  of  Intercept Pharmaceuticals (ICPT)

Valuation Ratios
P/E Ratio -3.6
Price to Sales 60.2
Price to Book 4.8
Price to Tangible Book
Price to Cash Flow -4.4
Price to Free Cash Flow -4.3
Growth Rates
Sales Growth Rate 733.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.7%
Cap. Spend. - 3 Yr. Gr. Rate 20.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 108.3%
Total Debt to Equity 108.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -59.2%
Ret/ On Assets - 3 Yr. Avg. -83%
Return On Total Capital -65.7%
Ret/ On T. Cap. - 3 Yr. Avg. -100.3%
Return On Equity -90.1%
Return On Equity - 3 Yr. Avg. -108.4%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -1636%
EBITDA Margin - 3 Yr. Avg. -7750.9%
Operating Margin -1608%
Oper. Margin - 3 Yr. Avg. -4963.8%
Pre-Tax Margin -1652%
Pre-Tax Margin - 3 Yr. Avg. -7778.4%
Net Profit Margin -1652%
Net Profit Margin - 3 Yr. Avg. -7778.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ICPT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ICPT stock intrinsic value calculation we used $25 million for the last fiscal year's total revenue generated by Intercept Pharmaceuticals. The default revenue input number comes from 2016 income statement of Intercept Pharmaceuticals. 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 ICPT 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 ICPT is calculated based on our internal credit rating of Intercept Pharmaceuticals, 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 Intercept Pharmaceuticals.
    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 ICPT stock the variable cost ratio is equal to 1548%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $191 million in the base year in the intrinsic value calculation for ICPT 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 Intercept Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Intercept Pharmaceuticals. 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 ICPT 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 ICPT are equal to 42%.

Life of production assets of 2.6 years is the average useful life of capital assets used in Intercept Pharmaceuticals 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 ICPT is equal to -240%. 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 - $315 million for Intercept Pharmaceuticals - 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 25.131 million for Intercept Pharmaceuticals 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 Intercept Pharmaceuticals at the current share price and the inputted number of shares is $1.5 billion.

RELATED COMPANIES Price Int.Val. Rating
ENTA Enanta Pharmac 48.20 45.86  hold
FGEN FibroGen 43.70 0.49  str.sell
LLY Eli Lilly 86.71 98.13  hold

COMPANY NEWS

▶ Intercept to Present at Upcoming Conference   [Dec-07-17 04:05PM  GlobeNewswire]
▶ 7 Life Science Stocks to Buy Today   [03:03PM  InvestorPlace]
▶ Intercept reports 3Q loss   [07:19AM  Associated Press]
Financial statements of ICPT
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.