Intrinsic value of Juno Therapeutics - JUNO

Previous Close

$28.37

  Intrinsic Value

$1.97

stock screener

  Rating & Target

str. sell

-93%

  Value-price divergence*

0%

Previous close

$28.37

 
Intrinsic value

$1.97

 
Up/down potential

-93%

 
Rating

str. 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 JUNO 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 3.1

 

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, %
  338.89
  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
  79
  126
  195
  292
  424
  598
  822
  1,103
  1,449
  1,864
  2,354
  2,924
  3,574
  4,308
  5,126
  6,028
  7,011
  8,077
  9,221
  10,444
  11,742
  13,114
  14,559
  16,075
  17,663
  19,321
  21,049
  22,850
  24,723
  26,671
  28,696
Variable operating expenses, $m
 
  355
  536
  791
  1,137
  1,595
  2,185
  2,925
  3,834
  4,927
  6,217
  7,693
  9,405
  11,337
  13,488
  15,860
  18,449
  21,252
  24,263
  27,480
  30,895
  34,506
  38,308
  42,298
  46,475
  50,837
  55,386
  60,124
  65,053
  70,178
  75,505
Fixed operating expenses, $m
 
  220
  226
  232
  237
  243
  249
  256
  262
  269
  275
  282
  289
  296
  304
  311
  319
  327
  335
  344
  352
  361
  370
  379
  389
  399
  409
  419
  429
  440
  451
Total operating expenses, $m
  340
  575
  762
  1,023
  1,374
  1,838
  2,434
  3,181
  4,096
  5,196
  6,492
  7,975
  9,694
  11,633
  13,792
  16,171
  18,768
  21,579
  24,598
  27,824
  31,247
  34,867
  38,678
  42,677
  46,864
  51,236
  55,795
  60,543
  65,482
  70,618
  75,956
Operating income, $m
  -261
  -449
  -567
  -730
  -951
  -1,241
  -1,612
  -2,077
  -2,647
  -3,331
  -4,138
  -5,051
  -6,120
  -7,325
  -8,666
  -10,144
  -11,757
  -13,502
  -15,377
  -17,380
  -19,506
  -21,753
  -24,119
  -26,602
  -29,201
  -31,915
  -34,746
  -37,693
  -40,759
  -43,947
  -47,261
EBITDA, $m
  -247
  -417
  -530
  -686
  -897
  -1,174
  -1,528
  -1,973
  -2,516
  -3,170
  -3,939
  -4,832
  -5,852
  -7,002
  -8,282
  -9,692
  -11,231
  -12,897
  -14,686
  -16,597
  -18,626
  -20,770
  -23,028
  -25,397
  -27,877
  -30,467
  -33,168
  -35,980
  -38,906
  -41,948
  -45,110
Interest expense (income), $m
  0
  0
  6
  14
  26
  42
  63
  90
  124
  165
  215
  274
  343
  421
  509
  608
  716
  835
  963
  1,100
  1,247
  1,404
  1,569
  1,743
  1,925
  2,116
  2,315
  2,523
  2,740
  2,965
  3,200
Earnings before tax, $m
  -256
  -449
  -573
  -745
  -977
  -1,283
  -1,675
  -2,167
  -2,771
  -3,497
  -4,353
  -5,326
  -6,463
  -7,746
  -9,175
  -10,751
  -12,473
  -14,337
  -16,340
  -18,480
  -20,753
  -23,157
  -25,688
  -28,345
  -31,126
  -34,031
  -37,061
  -40,216
  -43,499
  -46,913
  -50,460
Tax expense, $m
  -10
  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
  -246
  -449
  -573
  -745
  -977
  -1,283
  -1,675
  -2,167
  -2,771
  -3,497
  -4,353
  -5,326
  -6,463
  -7,746
  -9,175
  -10,751
  -12,473
  -14,337
  -16,340
  -18,480
  -20,753
  -23,157
  -25,688
  -28,345
  -31,126
  -34,031
  -37,061
  -40,216
  -43,499
  -46,913
  -50,460

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  733
  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
  1,349
  988
  1,526
  2,282
  3,311
  4,671
  6,421
  8,619
  11,317
  14,563
  18,394
  22,841
  27,926
  33,660
  40,048
  47,090
  54,777
  63,098
  72,041
  81,590
  91,731
  102,452
  113,740
  125,587
  137,989
  150,942
  164,449
  178,515
  193,150
  208,367
  224,184
Adjusted assets (=assets-cash), $m
  616
  988
  1,526
  2,282
  3,311
  4,671
  6,421
  8,619
  11,317
  14,563
  18,394
  22,841
  27,926
  33,660
  40,048
  47,090
  54,777
  63,098
  72,041
  81,590
  91,731
  102,452
  113,740
  125,587
  137,989
  150,942
  164,449
  178,515
  193,150
  208,367
  224,184
Revenue / Adjusted assets
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
Average production assets, $m
  126
  201
  310
  464
  673
  950
  1,306
  1,753
  2,302
  2,962
  3,741
  4,646
  5,680
  6,846
  8,146
  9,578
  11,141
  12,834
  14,653
  16,595
  18,657
  20,838
  23,134
  25,543
  28,066
  30,700
  33,448
  36,309
  39,285
  42,380
  45,597
Working capital, $m
  657
  -13
  -20
  -29
  -42
  -60
  -82
  -110
  -145
  -186
  -235
  -292
  -357
  -431
  -513
  -603
  -701
  -808
  -922
  -1,044
  -1,174
  -1,311
  -1,456
  -1,608
  -1,766
  -1,932
  -2,105
  -2,285
  -2,472
  -2,667
  -2,870
Total debt, $m
  13
  177
  413
  746
  1,199
  1,797
  2,567
  3,534
  4,722
  6,150
  7,835
  9,792
  12,029
  14,552
  17,363
  20,462
  23,844
  27,505
  31,440
  35,642
  40,104
  44,821
  49,788
  55,000
  60,457
  66,156
  72,099
  78,289
  84,728
  91,424
  98,383
Total liabilities, $m
  272
  435
  671
  1,004
  1,457
  2,055
  2,825
  3,792
  4,980
  6,408
  8,093
  10,050
  12,287
  14,810
  17,621
  20,720
  24,102
  27,763
  31,698
  35,900
  40,362
  45,079
  50,046
  55,258
  60,715
  66,414
  72,357
  78,547
  84,986
  91,682
  98,641
Total equity, $m
  1,078
  553
  854
  1,278
  1,854
  2,616
  3,596
  4,827
  6,338
  8,155
  10,301
  12,791
  15,638
  18,849
  22,427
  26,370
  30,675
  35,335
  40,343
  45,690
  51,370
  57,373
  63,694
  70,329
  77,274
  84,527
  92,091
  99,968
  108,164
  116,686
  125,543
Total liabilities and equity, $m
  1,350
  988
  1,525
  2,282
  3,311
  4,671
  6,421
  8,619
  11,318
  14,563
  18,394
  22,841
  27,925
  33,659
  40,048
  47,090
  54,777
  63,098
  72,041
  81,590
  91,732
  102,452
  113,740
  125,587
  137,989
  150,941
  164,448
  178,515
  193,150
  208,368
  224,184
Debt-to-equity ratio
  0.012
  0.320
  0.480
  0.580
  0.650
  0.690
  0.710
  0.730
  0.750
  0.750
  0.760
  0.770
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
  0.780
Adjusted equity ratio
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -246
  -449
  -573
  -745
  -977
  -1,283
  -1,675
  -2,167
  -2,771
  -3,497
  -4,353
  -5,326
  -6,463
  -7,746
  -9,175
  -10,751
  -12,473
  -14,337
  -16,340
  -18,480
  -20,753
  -23,157
  -25,688
  -28,345
  -31,126
  -34,031
  -37,061
  -40,216
  -43,499
  -46,913
  -50,460
Depreciation, amort., depletion, $m
  14
  32
  37
  44
  54
  67
  84
  105
  131
  162
  199
  219
  268
  323
  384
  452
  526
  605
  691
  783
  880
  983
  1,091
  1,205
  1,324
  1,448
  1,578
  1,713
  1,853
  1,999
  2,151
Funds from operations, $m
  -215
  -418
  -536
  -701
  -923
  -1,216
  -1,591
  -2,062
  -2,640
  -3,335
  -4,155
  -5,106
  -6,195
  -7,423
  -8,791
  -10,300
  -11,947
  -13,731
  -15,649
  -17,697
  -19,873
  -22,174
  -24,597
  -27,140
  -29,802
  -32,583
  -35,483
  -38,504
  -41,646
  -44,914
  -48,310
Change in working capital, $m
  -25
  -5
  -7
  -10
  -13
  -17
  -22
  -28
  -35
  -42
  -49
  -57
  -65
  -73
  -82
  -90
  -98
  -107
  -114
  -122
  -130
  -137
  -144
  -152
  -159
  -166
  -173
  -180
  -187
  -195
  -202
Cash from operations, $m
  -190
  -413
  -529
  -691
  -910
  -1,198
  -1,569
  -2,034
  -2,606
  -3,293
  -4,106
  -5,050
  -6,130
  -7,349
  -8,709
  -10,210
  -11,849
  -13,625
  -15,535
  -17,575
  -19,743
  -22,037
  -24,452
  -26,988
  -29,643
  -32,417
  -35,310
  -38,324
  -41,459
  -44,719
  -48,107
Maintenance CAPEX, $m
  0
  -6
  -9
  -15
  -22
  -32
  -45
  -62
  -83
  -109
  -140
  -176
  -219
  -268
  -323
  -384
  -452
  -526
  -605
  -691
  -783
  -880
  -983
  -1,091
  -1,205
  -1,324
  -1,448
  -1,578
  -1,713
  -1,853
  -1,999
New CAPEX, $m
  -56
  -75
  -109
  -154
  -209
  -277
  -356
  -447
  -549
  -660
  -779
  -905
  -1,034
  -1,166
  -1,299
  -1,432
  -1,563
  -1,693
  -1,819
  -1,942
  -2,063
  -2,180
  -2,296
  -2,410
  -2,522
  -2,635
  -2,747
  -2,861
  -2,977
  -3,095
  -3,217
Cash from investing activities, $m
  89
  -81
  -118
  -169
  -231
  -309
  -401
  -509
  -632
  -769
  -919
  -1,081
  -1,253
  -1,434
  -1,622
  -1,816
  -2,015
  -2,219
  -2,424
  -2,633
  -2,846
  -3,060
  -3,279
  -3,501
  -3,727
  -3,959
  -4,195
  -4,439
  -4,690
  -4,948
  -5,216
Free cash flow, $m
  -101
  -494
  -648
  -859
  -1,141
  -1,507
  -1,970
  -2,543
  -3,237
  -4,062
  -5,025
  -6,131
  -7,383
  -8,783
  -10,332
  -12,026
  -13,864
  -15,843
  -17,959
  -20,209
  -22,589
  -25,097
  -27,731
  -30,489
  -33,371
  -36,376
  -39,506
  -42,762
  -46,148
  -49,667
  -53,323
Issuance/(repayment) of debt, $m
  0
  164
  237
  333
  453
  598
  770
  967
  1,187
  1,428
  1,686
  1,957
  2,237
  2,523
  2,811
  3,098
  3,382
  3,661
  3,935
  4,202
  4,462
  4,717
  4,967
  5,213
  5,457
  5,699
  5,943
  6,189
  6,439
  6,696
  6,959
Issuance/(repurchase) of shares, $m
  42
  657
  874
  1,168
  1,553
  2,044
  2,655
  3,398
  4,282
  5,314
  6,499
  7,816
  9,310
  10,957
  12,753
  14,695
  16,777
  18,997
  21,348
  23,828
  26,432
  29,160
  32,009
  34,979
  38,071
  41,285
  44,625
  48,093
  51,695
  55,434
  59,318
Cash from financing (excl. dividends), $m  
  37
  821
  1,111
  1,501
  2,006
  2,642
  3,425
  4,365
  5,469
  6,742
  8,185
  9,773
  11,547
  13,480
  15,564
  17,793
  20,159
  22,658
  25,283
  28,030
  30,894
  33,877
  36,976
  40,192
  43,528
  46,984
  50,568
  54,282
  58,134
  62,130
  66,277
Total cash flow (excl. dividends), $m
  -65
  327
  463
  641
  865
  1,136
  1,456
  1,822
  2,232
  2,680
  3,160
  3,642
  4,164
  4,696
  5,232
  5,767
  6,296
  6,815
  7,324
  7,821
  8,306
  8,780
  9,245
  9,703
  10,157
  10,609
  11,062
  11,520
  11,986
  12,463
  12,954
Retained Cash Flow (-), $m
  64
  -657
  -874
  -1,168
  -1,553
  -2,044
  -2,655
  -3,398
  -4,282
  -5,314
  -6,499
  -7,816
  -9,310
  -10,957
  -12,753
  -14,695
  -16,777
  -18,997
  -21,348
  -23,828
  -26,432
  -29,160
  -32,009
  -34,979
  -38,071
  -41,285
  -44,625
  -48,093
  -51,695
  -55,434
  -59,318
Prev. year cash balance distribution, $m
 
  733
  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
 
  402
  -411
  -527
  -688
  -908
  -1,200
  -1,576
  -2,050
  -2,634
  -3,339
  -4,174
  -5,146
  -6,260
  -7,521
  -8,928
  -10,482
  -12,181
  -14,024
  -16,007
  -18,127
  -20,380
  -22,764
  -25,276
  -27,914
  -30,676
  -33,563
  -36,573
  -39,709
  -42,971
  -46,364
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
 
  386
  -376
  -458
  -567
  -704
  -871
  -1,065
  -1,281
  -1,513
  -1,750
  -1,982
  -2,196
  -2,380
  -2,525
  -2,621
  -2,664
  -2,650
  -2,583
  -2,465
  -2,303
  -2,108
  -1,889
  -1,657
  -1,422
  -1,193
  -979
  -785
  -614
  -469
  -349
Current shareholders' claim on cash, %
  100
  60.0
  38.7
  26.2
  18.4
  13.2
  9.8
  7.3
  5.6
  4.3
  3.4
  2.7
  2.1
  1.7
  1.4
  1.1
  0.9
  0.8
  0.6
  0.5
  0.4
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

Juno Therapeutics, Inc., a biopharmaceutical company, engages in developing cell-based cancer immunotherapies. The company develops cell-based cancer immunotherapies based on its chimeric antigen receptor and T cell receptor technologies to genetically engineer T cells to recognize and kill cancer cells. Its clinical stage CD19 product candidates include JCAR015 that is in Phase II clinical trials for adult patients with relapsed/refractory B cell acute lymphoblastic leukemia (r/r ALL); JCAR017, which is in Phase I/II trials for pediatric patients with r/r ALL; and JCAR014 that is in Phase I/II trials to treat various B cell malignancies in patients relapsed or refractory to standard therapies. The company’s additional product candidates comprise CD22, a cell surface protein expressed on B lymphocytes; CD171, a cell-surface adhesion molecule to treat neuroblastoma; MUC-16, a protein for treating ovarian cancers; IL-12, a cytokine to overcome the inhibitory effects; ROR-1, a protein for the treatment of non-small cell lung, triple negative breast, pancreatic, and prostate cancers; and WT-1, an intracellular protein that is in Phase I/II clinical trials to treat adult myeloid leukemia and non-small cell lung, breast, pancreatic, ovarian, and colorectal cancers. Juno Therapeutics, Inc. has collaboration agreements with Celgene Corporation, Editas Medicine, Inc., Fate Therapeutics, Inc., MedImmune Limited, and Memorial Sloan Kettering Cancer Center. The company was formerly known as FC Therapeutics, Inc. and changed its name to Juno Therapeutics, Inc. in October 2013. Juno Therapeutics, Inc. was founded in 2013 and is headquartered in Seattle, Washington.

FINANCIAL RATIOS  of  Juno Therapeutics (JUNO)

Valuation Ratios
P/E Ratio -11.9
Price to Sales 37.1
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow -15.4
Price to Free Cash Flow -11.9
Growth Rates
Sales Growth Rate 338.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 1.2%
Total Debt to Equity 1.2%
Interest Coverage 0
Management Effectiveness
Return On Assets -17.6%
Ret/ On Assets - 3 Yr. Avg. -44.7%
Return On Total Capital -21.6%
Ret/ On T. Cap. - 3 Yr. Avg. -56.1%
Return On Equity -22.2%
Return On Equity - 3 Yr. Avg. -56.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -306.3%
EBITDA Margin - 3 Yr. Avg. -539.1%
Operating Margin -330.4%
Oper. Margin - 3 Yr. Avg. -562%
Pre-Tax Margin -324.1%
Pre-Tax Margin - 3 Yr. Avg. -556.2%
Net Profit Margin -311.4%
Net Profit Margin - 3 Yr. Avg. -546.4%
Effective Tax Rate 3.9%
Eff/ Tax Rate - 3 Yr. Avg. 1.7%
Payout Ratio 0%

JUNO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JUNO stock intrinsic value calculation we used $79 million for the last fiscal year's total revenue generated by Juno Therapeutics. The default revenue input number comes from 2016 income statement of Juno 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 JUNO 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 JUNO is calculated based on our internal credit rating of Juno 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 Juno 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 JUNO stock the variable cost ratio is equal to 291.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $215 million in the base year in the intrinsic value calculation for JUNO 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 Juno Therapeutics.

Corporate tax rate of 27% is the nominal tax rate for Juno 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 JUNO 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 JUNO are equal to 158.9%.

Life of production assets of 21.2 years is the average useful life of capital assets used in Juno 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 JUNO 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 - $1078 million for Juno 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 108.653 million for Juno 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 Juno Therapeutics at the current share price and the inputted number of shares is $3.1 billion.

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COMPANY NEWS

▶ When an investigation of a biotech really isnt   [01:30PM  American City Business Journals]
▶ Juno Therapeutics Tops Sales Views, But Losses Widen And Miss   [05:13PM  Investor's Business Daily]
▶ [$$] Juno's Top Holder Sells $216 Million in Stock   [Jul-25-17 07:31AM  Barrons.com]
▶ Can Bellicum Pharmaceuticals Stock Bounce Back?   [Jul-14-17 02:41PM  Motley Fool]
▶ [$$] 3 Drug Stocks That Can Ride Novartis' Coattails   [Jul-13-17 04:49PM  Barrons.com]
▶ Novartis Grabs Key FDA Panel Approval Of Experimental Cancer Drug   [Jul-12-17 05:08PM  Investor's Business Daily]
▶ Novartis Faces Key FDA Panel On Cancer Drug; Why Kite Could Be The Winner   [Jul-06-17 04:25PM  Investor's Business Daily]
▶ The Cure For Cancer? Look At Your Blood   [Jun-30-17 01:10PM  Investor's Business Daily]
▶ Bluebird Bio: Too Much Good News?   [10:40AM  Barrons.com]
▶ Biotech Stocks Showing Signs of Resurgence   [Jun-26-17 08:30AM  PR Newswire]
▶ [$$] Cancer treatment: scaling up a vein-to-vein solution   [Jun-12-17 01:16PM  Financial Times]
▶ Juno Therapeutics: To Sell, Or Not To SellGood Question   [Jun-08-17 10:13AM  Barrons.com]
▶ Stocks to watch during ASCO   [Jun-02-17 12:49PM  CNBC Videos]
▶ A New Era of Cancer Research as ASCO Kicks Off   [Jun-01-17 07:20AM  24/7 Wall St.]
▶ Insiders Love Bioverativ, Juno Therapeutics and More   [May-31-17 01:11PM  TheStreet.com]
▶ Vetr Upgrades Juno To Buy Amid Volatile May   [May-22-17 04:48PM  Benzinga]
▶ 3 Growth Stocks You Haven't Thought Of   [04:23PM  Motley Fool]
▶ Vetr Urges Buy On Juno After Earnings   [May-08-17 05:09PM  Benzinga]
▶ KITE Plunges, Take Sector With It   [01:29PM  Investopedia]
▶ Celgene Corporation: The Bear Case From a Bull   [May-02-17 08:04AM  Motley Fool]
▶ Final Trade: SQ, JUNO & more   [Apr-25-17 05:58PM  CNBC Videos]
▶ Celgene research leader Dr. Rupert Vessey joins Juno board   [Apr-24-17 05:00PM  American City Business Journals]
▶ Cancer drug company snags Genenexer as R&D chief, plans Bay Area office   [Apr-17-17 05:10PM  American City Business Journals]
▶ Juno names new head of research and development, plans Bay Area office   [04:15PM  American City Business Journals]
▶ Why Juno Therapeutics Stock Slumped in March   [Apr-08-17 09:43AM  Motley Fool]
▶ The First CAR-T Drugs Have Left the Gate   [Apr-06-17 04:20PM  Motley Fool]
Stock chart of JUNO Financial statements of JUNO
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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