Intrinsic value of Quotient - QTNT

Previous Close

$4.51

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$4.51

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of QTNT 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 2017), $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 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.79
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
  5.55
Revenue, $m
  22
  26
  30
  34
  39
  43
  49
  54
  60
  66
  72
  79
  85
  93
  100
  108
  116
  124
  132
  141
  151
  160
  170
  181
  192
  203
  215
  227
  240
  254
  268
Variable operating expenses, $m
 
  92
  107
  122
  138
  156
  175
  194
  215
  236
  259
  282
  307
  332
  359
  386
  415
  445
  476
  508
  541
  576
  612
  650
  689
  730
  772
  817
  863
  912
  962
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
  96
  92
  107
  122
  138
  156
  175
  194
  215
  236
  259
  282
  307
  332
  359
  386
  415
  445
  476
  508
  541
  576
  612
  650
  689
  730
  772
  817
  863
  912
  962
Operating income, $m
  -74
  -67
  -77
  -88
  -100
  -113
  -126
  -140
  -155
  -170
  -187
  -204
  -221
  -240
  -259
  -279
  -299
  -321
  -343
  -366
  -390
  -415
  -442
  -469
  -497
  -526
  -557
  -589
  -623
  -658
  -694
EBITDA, $m
  -65
  -56
  -65
  -74
  -84
  -95
  -106
  -118
  -131
  -144
  -157
  -172
  -186
  -202
  -218
  -235
  -252
  -270
  -289
  -309
  -329
  -350
  -372
  -395
  -419
  -444
  -470
  -497
  -525
  -554
  -585
Interest expense (income), $m
  2
  3
  2
  3
  3
  4
  4
  5
  6
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  21
  22
  23
  25
  26
  28
  29
  31
Earnings before tax, $m
  -85
  -70
  -79
  -91
  -103
  -116
  -130
  -145
  -161
  -177
  -194
  -212
  -230
  -249
  -269
  -290
  -312
  -334
  -358
  -382
  -407
  -434
  -461
  -489
  -519
  -550
  -582
  -616
  -651
  -687
  -725
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
  -85
  -70
  -79
  -91
  -103
  -116
  -130
  -145
  -161
  -177
  -194
  -212
  -230
  -249
  -269
  -290
  -312
  -334
  -358
  -382
  -407
  -434
  -461
  -489
  -519
  -550
  -582
  -616
  -651
  -687
  -725

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  21
  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
  110
  104
  120
  137
  156
  176
  197
  219
  242
  266
  292
  318
  346
  375
  404
  435
  468
  501
  536
  572
  610
  649
  690
  732
  777
  823
  871
  921
  973
  1,028
  1,085
Adjusted assets (=assets-cash), $m
  89
  104
  120
  137
  156
  176
  197
  219
  242
  266
  292
  318
  346
  375
  404
  435
  468
  501
  536
  572
  610
  649
  690
  732
  777
  823
  871
  921
  973
  1,028
  1,085
Revenue / Adjusted assets
  0.247
  0.250
  0.250
  0.248
  0.250
  0.244
  0.249
  0.247
  0.248
  0.248
  0.247
  0.248
  0.246
  0.248
  0.248
  0.248
  0.248
  0.248
  0.246
  0.247
  0.248
  0.247
  0.246
  0.247
  0.247
  0.247
  0.247
  0.246
  0.247
  0.247
  0.247
Average production assets, $m
  61
  71
  82
  94
  107
  120
  135
  150
  166
  182
  200
  218
  237
  257
  277
  298
  320
  343
  367
  392
  418
  445
  473
  502
  532
  563
  596
  631
  667
  704
  743
Working capital, $m
  11
  -9
  -11
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -29
  -31
  -34
  -36
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -66
  -70
  -74
  -78
  -83
  -87
  -92
  -98
Total debt, $m
  101
  61
  75
  91
  107
  125
  144
  164
  185
  207
  230
  253
  278
  304
  331
  359
  388
  418
  449
  482
  516
  551
  588
  626
  666
  707
  751
  796
  843
  892
  943
Total liabilities, $m
  134
  94
  108
  124
  140
  158
  177
  197
  218
  240
  263
  286
  311
  337
  364
  392
  421
  451
  482
  515
  549
  584
  621
  659
  699
  740
  784
  829
  876
  925
  976
Total equity, $m
  -24
  10
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  35
  37
  40
  44
  47
  50
  54
  57
  61
  65
  69
  73
  78
  82
  87
  92
  97
  103
  108
Total liabilities and equity, $m
  110
  104
  120
  138
  156
  176
  197
  219
  242
  267
  292
  318
  346
  374
  404
  436
  468
  501
  536
  572
  610
  649
  690
  732
  777
  822
  871
  921
  973
  1,028
  1,084
Debt-to-equity ratio
  -4.208
  5.830
  6.250
  6.600
  6.890
  7.120
  7.320
  7.490
  7.640
  7.760
  7.870
  7.960
  8.050
  8.120
  8.180
  8.240
  8.290
  8.340
  8.380
  8.420
  8.460
  8.490
  8.520
  8.550
  8.580
  8.600
  8.620
  8.640
  8.660
  8.680
  8.700
Adjusted equity ratio
  -0.506
  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
  -85
  -70
  -79
  -91
  -103
  -116
  -130
  -145
  -161
  -177
  -194
  -212
  -230
  -249
  -269
  -290
  -312
  -334
  -358
  -382
  -407
  -434
  -461
  -489
  -519
  -550
  -582
  -616
  -651
  -687
  -725
Depreciation, amort., depletion, $m
  9
  10
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  35
  38
  41
  44
  47
  50
  54
  58
  61
  65
  69
  74
  78
  83
  88
  93
  98
  104
  109
Funds from operations, $m
  -48
  -60
  -67
  -77
  -87
  -99
  -111
  -123
  -136
  -150
  -165
  -180
  -195
  -212
  -229
  -246
  -265
  -284
  -304
  -324
  -346
  -368
  -391
  -416
  -441
  -467
  -494
  -523
  -553
  -584
  -616
Change in working capital, $m
  8
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Cash from operations, $m
  -56
  -58
  -65
  -75
  -86
  -97
  -109
  -121
  -134
  -148
  -162
  -177
  -193
  -209
  -226
  -244
  -262
  -281
  -301
  -321
  -342
  -365
  -388
  -412
  -437
  -463
  -490
  -518
  -548
  -579
  -611
Maintenance CAPEX, $m
  0
  -9
  -10
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -27
  -29
  -32
  -35
  -38
  -41
  -44
  -47
  -50
  -54
  -58
  -61
  -65
  -69
  -74
  -78
  -83
  -88
  -93
  -98
  -104
New CAPEX, $m
  -20
  -10
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -39
Cash from investing activities, $m
  -36
  -19
  -21
  -24
  -27
  -30
  -32
  -35
  -38
  -41
  -44
  -47
  -51
  -55
  -58
  -62
  -66
  -70
  -74
  -79
  -84
  -88
  -93
  -98
  -104
  -110
  -116
  -122
  -129
  -135
  -143
Free cash flow, $m
  -92
  -77
  -87
  -99
  -112
  -126
  -141
  -156
  -172
  -189
  -206
  -225
  -244
  -264
  -284
  -306
  -328
  -351
  -375
  -400
  -426
  -453
  -481
  -510
  -541
  -573
  -606
  -640
  -676
  -714
  -754
Issuance/(repayment) of debt, $m
  50
  -38
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
Issuance/(repurchase) of shares, $m
  17
  123
  81
  92
  105
  118
  132
  147
  163
  179
  196
  214
  233
  252
  272
  293
  315
  338
  361
  386
  411
  437
  465
  494
  523
  554
  587
  621
  656
  693
  731
Cash from financing (excl. dividends), $m  
  57
  85
  96
  108
  122
  136
  151
  167
  184
  201
  219
  238
  258
  278
  299
  321
  344
  368
  392
  419
  445
  472
  502
  532
  563
  595
  630
  666
  703
  742
  782
Total cash flow (excl. dividends), $m
  -39
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  28
  29
Retained Cash Flow (-), $m
  71
  -123
  -81
  -92
  -105
  -118
  -132
  -147
  -163
  -179
  -196
  -214
  -233
  -252
  -272
  -293
  -315
  -338
  -361
  -386
  -411
  -437
  -465
  -494
  -523
  -554
  -587
  -621
  -656
  -693
  -731
Prev. year cash balance distribution, $m
 
  19
  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
 
  -97
  -72
  -84
  -96
  -108
  -122
  -136
  -151
  -167
  -184
  -201
  -219
  -238
  -257
  -278
  -299
  -321
  -344
  -367
  -392
  -418
  -444
  -472
  -501
  -531
  -562
  -595
  -629
  -665
  -702
Discount rate, %
 
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.65
  23.79
  24.98
  26.23
  27.54
  28.91
  30.36
  31.88
  33.47
  35.14
  36.90
  38.75
  40.68
  42.72
  44.85
  47.10
  49.45
  51.92
  54.52
  57.25
  60.11
  63.11
  66.27
PV of cash for distribution, $m
 
  -83
  -53
  -51
  -48
  -44
  -40
  -35
  -30
  -24
  -20
  -16
  -12
  -9
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  5.7
  0.7
  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

Quotient Limited is a diagnostics company. The Company focuses on blood grouping and donor disease screening, which is referred to as transfusion diagnostics. It is engaged in developing, manufacturing and commercializing conventional reagent products used for blood grouping within the global transfusion diagnostics market. It is engaged in developing MosaiQ, which is its technology platform. The Company develops, manufactures and commercializes the products, including antisera products, reagent red blood cells, whole blood controls and ancillary products. Its antisera products contain antibodies used to identify blood group antigens. Its antisera products are monoclonal antibodies manufactured from master cell lines it owns. Its reagent red blood cells products are composed of human red blood cells formulated to enable the identification of blood group antibodies. The Company develops, manufactures and sells conventional reagent products to original equipment manufacturers (OEMs).

FINANCIAL RATIOS  of  Quotient (QTNT)

Valuation Ratios
P/E Ratio -1.6
Price to Sales 6.1
Price to Book -5.6
Price to Tangible Book
Price to Cash Flow -2.4
Price to Free Cash Flow -1.8
Growth Rates
Sales Growth Rate 15.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -31%
Cap. Spend. - 3 Yr. Gr. Rate 23.4%
Financial Strength
Quick Ratio 11
Current Ratio 0
LT Debt to Equity -412.5%
Total Debt to Equity -420.8%
Interest Coverage -42
Management Effectiveness
Return On Assets -72.2%
Ret/ On Assets - 3 Yr. Avg. -69.9%
Return On Total Capital -98.3%
Ret/ On T. Cap. - 3 Yr. Avg. -134.4%
Return On Equity -739.1%
Return On Equity - 3 Yr. Avg. 1014.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 49.1%
EBITDA Margin -336.4%
EBITDA Margin - 3 Yr. Avg. -266.7%
Operating Margin -336.4%
Oper. Margin - 3 Yr. Avg. -253.6%
Pre-Tax Margin -386.4%
Pre-Tax Margin - 3 Yr. Avg. -297.7%
Net Profit Margin -386.4%
Net Profit Margin - 3 Yr. Avg. -297.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

QTNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QTNT stock intrinsic value calculation we used $22 million for the last fiscal year's total revenue generated by Quotient. The default revenue input number comes from 2017 income statement of Quotient. 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 QTNT stock valuation model: a) initial revenue growth rate of 16.7% 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 16.1%, whose default value for QTNT is calculated based on our internal credit rating of Quotient, 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 Quotient.
    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 QTNT stock the variable cost ratio is equal to 359.1%.

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 QTNT 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 Quotient.

Corporate tax rate of 27% is the nominal tax rate for Quotient. 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 QTNT 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 QTNT are equal to 277.3%.

Life of production assets of 6.8 years is the average useful life of capital assets used in Quotient 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 QTNT is equal to -36.4%. 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 Quotient - 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 37.667 million for Quotient 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 Quotient at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ ETFs with exposure to Quotient Ltd. : December 7, 2017   [Dec-07-17 02:28PM  Capital Cube]
▶ Is Quotient Limited (QTNT) Overpaying Its CEO?   [Nov-17-17 12:14PM  Simply Wall St.]
▶ ETFs with exposure to Quotient Ltd. : November 6, 2017   [Nov-06-17 12:23PM  Capital Cube]
▶ Quotient reports 2Q loss   [Oct-30-17 05:29PM  Associated Press]
▶ Are Quotient Limiteds (QTNT) Interest Costs Too High?   [Oct-25-17 08:29PM  Simply Wall St.]
▶ ETFs with exposure to Quotient Ltd. : October 18, 2017   [Oct-18-17 09:57AM  Capital Cube]
▶ ETFs with exposure to Quotient Ltd. : October 2, 2017   [Oct-02-17 11:03AM  Capital Cube]
▶ Quotient reports 1Q loss   [Aug-07-17 10:46PM  Associated Press]
▶ Quotient reports 4Q loss   [May-22-17 04:25PM  Associated Press]
▶ Quotient reports 3Q loss   [Feb-06-17 05:22PM  Associated Press]
▶ Quotient Limited Announces CFO Transition   [Nov-02-16 04:15PM  GlobeNewswire]
Financial statements of QTNT
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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