Intrinsic value of Misonix - MSON

Previous Close

$9.80

  Intrinsic Value

$0.63

stock screener

  Rating & Target

str. sell

-94%

  Value-price divergence*

-163%

Previous close

$9.80

 
Intrinsic value

$0.63

 
Up/down potential

-94%

 
Rating

str. sell

 
Value-price divergence*

-163%

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

We calculate the intrinsic value of MSON 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 0.1

 

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, %
  4.55
  40.00
  36.50
  33.35
  30.52
  27.96
  25.67
  23.60
  21.74
  20.07
  18.56
  17.20
  15.98
  14.89
  13.90
  13.01
  12.21
  11.49
  10.84
  10.25
  9.73
  9.26
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
  7.04
  6.83
  6.65
Revenue, $m
  23
  32
  44
  59
  76
  98
  123
  152
  185
  222
  263
  309
  358
  411
  469
  530
  594
  663
  734
  810
  888
  971
  1,056
  1,146
  1,238
  1,335
  1,435
  1,539
  1,648
  1,760
  1,877
Variable operating expenses, $m
 
  35
  48
  63
  83
  106
  133
  164
  200
  240
  284
  333
  386
  444
  505
  571
  641
  714
  792
  873
  958
  1,047
  1,139
  1,235
  1,335
  1,439
  1,548
  1,660
  1,777
  1,898
  2,024
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
  29
  35
  48
  63
  83
  106
  133
  164
  200
  240
  284
  333
  386
  444
  505
  571
  641
  714
  792
  873
  958
  1,047
  1,139
  1,235
  1,335
  1,439
  1,548
  1,660
  1,777
  1,898
  2,024
Operating income, $m
  -6
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -15
  -18
  -21
  -24
  -28
  -32
  -37
  -41
  -47
  -52
  -58
  -63
  -70
  -76
  -83
  -90
  -97
  -105
  -112
  -121
  -129
  -138
  -147
EBITDA, $m
  -4
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -15
  -17
  -20
  -23
  -27
  -31
  -35
  -39
  -43
  -48
  -53
  -58
  -63
  -69
  -75
  -81
  -87
  -94
  -101
  -108
  -115
  -123
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  11
Earnings before tax, $m
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -13
  -15
  -19
  -22
  -26
  -30
  -34
  -39
  -44
  -50
  -55
  -61
  -68
  -74
  -81
  -88
  -96
  -104
  -112
  -120
  -129
  -138
  -148
  -158
Tax expense, $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
Net income, $m
  -1
  -3
  -4
  -5
  -6
  -8
  -10
  -13
  -15
  -19
  -22
  -26
  -30
  -34
  -39
  -44
  -50
  -55
  -61
  -68
  -74
  -81
  -88
  -96
  -104
  -112
  -120
  -129
  -138
  -148
  -158

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  9
  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
  28
  27
  36
  48
  63
  81
  102
  126
  153
  184
  218
  255
  296
  340
  387
  437
  491
  547
  606
  669
  734
  802
  872
  946
  1,023
  1,102
  1,185
  1,271
  1,361
  1,454
  1,550
Adjusted assets (=assets-cash), $m
  19
  27
  36
  48
  63
  81
  102
  126
  153
  184
  218
  255
  296
  340
  387
  437
  491
  547
  606
  669
  734
  802
  872
  946
  1,023
  1,102
  1,185
  1,271
  1,361
  1,454
  1,550
Revenue / Adjusted assets
  1.211
  1.185
  1.222
  1.229
  1.206
  1.210
  1.206
  1.206
  1.209
  1.207
  1.206
  1.212
  1.209
  1.209
  1.212
  1.213
  1.210
  1.212
  1.211
  1.211
  1.210
  1.211
  1.211
  1.211
  1.210
  1.211
  1.211
  1.211
  1.211
  1.210
  1.211
Average production assets, $m
  3
  4
  6
  8
  10
  13
  16
  20
  24
  29
  34
  40
  47
  53
  61
  69
  77
  86
  95
  105
  115
  126
  137
  149
  161
  174
  187
  200
  214
  229
  244
Working capital, $m
  16
  10
  13
  18
  23
  30
  37
  46
  56
  68
  80
  94
  109
  125
  142
  161
  181
  201
  223
  246
  270
  295
  321
  348
  376
  406
  436
  468
  501
  535
  571
Total debt, $m
  0
  2
  4
  6
  9
  13
  17
  22
  28
  35
  42
  50
  58
  68
  78
  88
  100
  111
  124
  137
  151
  165
  180
  196
  212
  229
  246
  264
  283
  303
  323
Total liabilities, $m
  3
  6
  8
  10
  13
  17
  21
  26
  32
  39
  46
  54
  62
  72
  82
  92
  104
  115
  128
  141
  155
  169
  184
  200
  216
  233
  250
  268
  287
  307
  327
Total equity, $m
  24
  21
  29
  38
  50
  64
  80
  99
  121
  145
  172
  201
  233
  268
  305
  345
  387
  432
  478
  528
  579
  632
  688
  746
  807
  870
  935
  1,003
  1,073
  1,147
  1,223
Total liabilities and equity, $m
  27
  27
  37
  48
  63
  81
  101
  125
  153
  184
  218
  255
  295
  340
  387
  437
  491
  547
  606
  669
  734
  801
  872
  946
  1,023
  1,103
  1,185
  1,271
  1,360
  1,454
  1,550
Debt-to-equity ratio
  0.000
  0.080
  0.130
  0.160
  0.190
  0.200
  0.220
  0.230
  0.230
  0.240
  0.240
  0.250
  0.250
  0.250
  0.250
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
  0.260
Adjusted equity ratio
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789
  0.789

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  -3
  -4
  -5
  -6
  -8
  -10
  -13
  -15
  -19
  -22
  -26
  -30
  -34
  -39
  -44
  -50
  -55
  -61
  -68
  -74
  -81
  -88
  -96
  -104
  -112
  -120
  -129
  -138
  -148
  -158
Depreciation, amort., depletion, $m
  2
  1
  1
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  21
  23
  24
Funds from operations, $m
  -2
  -2
  -3
  -4
  -5
  -7
  -8
  -11
  -13
  -16
  -18
  -22
  -25
  -29
  -33
  -37
  -42
  -47
  -52
  -57
  -63
  -69
  -75
  -81
  -88
  -95
  -102
  -109
  -117
  -125
  -133
Change in working capital, $m
  -2
  3
  4
  4
  5
  7
  8
  9
  10
  11
  13
  14
  15
  16
  17
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
Cash from operations, $m
  0
  -5
  -6
  -8
  -11
  -13
  -16
  -19
  -23
  -27
  -31
  -35
  -40
  -45
  -50
  -56
  -62
  -68
  -74
  -80
  -87
  -94
  -101
  -108
  -116
  -124
  -132
  -141
  -150
  -159
  -169
Maintenance CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -19
  -20
  -21
  -23
New CAPEX, $m
  0
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
Cash from investing activities, $m
  0
  -1
  -2
  -3
  -3
  -4
  -4
  -6
  -6
  -7
  -8
  -9
  -10
  -12
  -12
  -14
  -15
  -17
  -18
  -20
  -21
  -23
  -24
  -26
  -27
  -29
  -30
  -33
  -34
  -36
  -38
Free cash flow, $m
  0
  -6
  -8
  -11
  -14
  -17
  -21
  -25
  -29
  -34
  -39
  -45
  -51
  -57
  -63
  -70
  -77
  -84
  -92
  -99
  -108
  -116
  -125
  -134
  -143
  -153
  -163
  -173
  -184
  -195
  -207
Issuance/(repayment) of debt, $m
  0
  2
  2
  3
  3
  4
  4
  5
  6
  6
  7
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  20
Issuance/(repurchase) of shares, $m
  0
  9
  11
  14
  18
  22
  27
  32
  37
  43
  49
  55
  62
  69
  76
  84
  92
  100
  108
  117
  126
  135
  144
  154
  164
  175
  186
  197
  209
  221
  234
Cash from financing (excl. dividends), $m  
  0
  11
  13
  17
  21
  26
  31
  37
  43
  49
  56
  63
  71
  78
  86
  95
  103
  112
  121
  130
  140
  149
  159
  170
  180
  192
  203
  215
  228
  241
  254
Total cash flow (excl. dividends), $m
  -1
  4
  5
  6
  7
  9
  10
  12
  14
  15
  17
  18
  20
  22
  23
  25
  26
  28
  29
  30
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  47
Retained Cash Flow (-), $m
  0
  -9
  -11
  -14
  -18
  -22
  -27
  -32
  -37
  -43
  -49
  -55
  -62
  -69
  -76
  -84
  -92
  -100
  -108
  -117
  -126
  -135
  -144
  -154
  -164
  -175
  -186
  -197
  -209
  -221
  -234
Prev. year cash balance distribution, $m
 
  9
  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
 
  4
  -6
  -8
  -11
  -13
  -16
  -20
  -23
  -28
  -32
  -37
  -42
  -47
  -53
  -59
  -66
  -72
  -79
  -86
  -94
  -102
  -110
  -118
  -127
  -136
  -145
  -155
  -165
  -176
  -186
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
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -16
  -17
  -17
  -18
  -18
  -18
  -17
  -17
  -16
  -15
  -13
  -12
  -11
  -9
  -8
  -6
  -5
  -4
  -3
  -3
  -2
  -1
Current shareholders' claim on cash, %
  100
  86.0
  74.7
  65.4
  57.8
  51.4
  46.0
  41.4
  37.5
  34.1
  31.2
  28.6
  26.3
  24.3
  22.5
  20.9
  19.5
  18.2
  17.0
  15.9
  14.9
  14.0
  13.1
  12.4
  11.6
  11.0
  10.4
  9.8
  9.2
  8.7
  8.3

Misonix, Inc., together with its subsidiaries, designs, develops, manufactures, and markets therapeutic ultrasonic medical devices in the United States and internationally. The company offers BoneScalpel, an ultrasonic bone cutting system for surgical procedures involving the precise cutting of bone while sparing soft tissue; SonaStar, a surgical aspirator that is used to emulsify and remove soft and hard tumors; and SonicOne, an ultrasonic cleansing and debridement system, which provides tissue specific debridement and cleansing of wounds and burns for the removal of devitalized tissue and fibrin deposits while sparing viable cells. Its products are used in various applications, such as spine, neuro, orthopedic, cosmetic, and laparoscopic surgeries, as well as in wound debridement, and other surgical and medical applications. The company sells its products through sales representatives and distributors. Misonix, Inc. was founded in 1959 and is based in Farmingdale, New York.

FINANCIAL RATIOS  of  Misonix (MSON)

Valuation Ratios
P/E Ratio -76.5
Price to Sales 3.3
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate 4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
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 -3.7%
Ret/ On Assets - 3 Yr. Avg. 9.3%
Return On Total Capital -4.2%
Ret/ On T. Cap. - 3 Yr. Avg. 10.8%
Return On Equity -4.2%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 69.6%
Gross Margin - 3 Yr. Avg. 67.5%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 10%
Operating Margin -26.1%
Oper. Margin - 3 Yr. Avg. -17.6%
Pre-Tax Margin -8.7%
Pre-Tax Margin - 3 Yr. Avg. 3.6%
Net Profit Margin -4.3%
Net Profit Margin - 3 Yr. Avg. 9.6%
Effective Tax Rate 50%
Eff/ Tax Rate - 3 Yr. Avg. -5.6%
Payout Ratio 0%

MSON stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MSON stock intrinsic value calculation we used $23 million for the last fiscal year's total revenue generated by Misonix. The default revenue input number comes from 2016 income statement of Misonix. 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 MSON stock valuation model: a) initial revenue growth rate of 40% 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 MSON is calculated based on our internal credit rating of Misonix, 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 Misonix.
    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 MSON stock the variable cost ratio is equal to 108.7%.

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 MSON 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 Misonix.

Corporate tax rate of 27% is the nominal tax rate for Misonix. 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 MSON 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 MSON are equal to 13%.

Life of production assets of 10 years is the average useful life of capital assets used in Misonix 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 MSON is equal to 30.4%. 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 - $24 million for Misonix - 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 8.746 million for Misonix 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 Misonix at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ ETFs with exposure to Misonix, Inc. : July 12, 2017   [Jul-12-17 02:48PM  Capital Cube]
▶ ETFs with exposure to Misonix, Inc. : May 19, 2017   [May-19-17 02:01PM  Capital Cube]
▶ ETFs with exposure to Misonix, Inc. : May 8, 2017   [May-08-17 04:57PM  Capital Cube]
▶ Misonix reports 3Q loss   [May-02-17 06:02PM  Associated Press]
▶ ETFs with exposure to Misonix, Inc. : April 5, 2017   [Apr-05-17 05:07PM  Capital Cube]
▶ Misonix reports 2Q loss   [04:44PM  Associated Press]
▶ Long Island Medical Device Firm Discloses FCPA Probe   [Sep-29-16 12:19PM  at The Wall Street Journal]
Stock chart of MSON Financial statements of MSON
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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