Intrinsic value of Acorda Therapeutics - ACOR

Previous Close

$17.68

  Intrinsic Value

$11.45

stock screener

  Rating & Target

sell

-35%

Previous close

$17.68

 
Intrinsic value

$11.45

 
Up/down potential

-35%

 
Rating

sell

We calculate the intrinsic value of ACOR 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 0001), $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 0.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
Revenue, $m
  647
  707
  771
  837
  906
  977
  1,051
  1,129
  1,209
  1,292
  1,379
  1,469
  1,563
  1,661
  1,762
  1,868
  1,978
  2,093
  2,214
  2,339
  2,470
  2,606
  2,749
  2,899
  3,055
  3,219
  3,390
  3,569
  3,756
  3,953
Variable operating expenses, $m
  661
  717
  775
  835
  898
  963
  1,031
  1,101
  1,174
  1,250
  1,258
  1,340
  1,425
  1,515
  1,607
  1,704
  1,804
  1,909
  2,019
  2,133
  2,253
  2,377
  2,508
  2,644
  2,786
  2,936
  3,092
  3,255
  3,426
  3,605
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
  661
  717
  775
  835
  898
  963
  1,031
  1,101
  1,174
  1,250
  1,258
  1,340
  1,425
  1,515
  1,607
  1,704
  1,804
  1,909
  2,019
  2,133
  2,253
  2,377
  2,508
  2,644
  2,786
  2,936
  3,092
  3,255
  3,426
  3,605
Operating income, $m
  -15
  -10
  -4
  2
  8
  14
  21
  28
  35
  42
  121
  129
  137
  146
  155
  164
  174
  184
  195
  206
  217
  229
  242
  255
  269
  283
  298
  314
  330
  348
EBITDA, $m
  74
  81
  88
  96
  104
  112
  120
  129
  139
  148
  158
  168
  179
  190
  202
  214
  227
  240
  254
  268
  283
  299
  315
  332
  350
  369
  388
  409
  430
  453
Interest expense (income), $m
  6
  19
  23
  26
  31
  35
  39
  44
  49
  54
  59
  64
  70
  76
  82
  88
  94
  101
  108
  116
  124
  132
  140
  149
  158
  168
  178
  188
  199
  211
  223
Earnings before tax, $m
  -34
  -32
  -30
  -29
  -27
  -25
  -23
  -21
  -19
  -17
  57
  59
  62
  64
  67
  70
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  110
  114
  119
  125
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
Net income, $m
  -34
  -32
  -30
  -29
  -27
  -25
  -23
  -21
  -19
  -17
  42
  43
  45
  47
  49
  51
  53
  55
  58
  60
  62
  65
  68
  71
  74
  77
  80
  84
  87
  91

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  1,136
  1,243
  1,355
  1,471
  1,592
  1,717
  1,848
  1,984
  2,125
  2,271
  2,423
  2,582
  2,747
  2,918
  3,097
  3,283
  3,477
  3,679
  3,890
  4,110
  4,341
  4,581
  4,832
  5,095
  5,369
  5,657
  5,957
  6,272
  6,602
  6,947
Adjusted assets (=assets-cash), $m
  1,136
  1,243
  1,355
  1,471
  1,592
  1,717
  1,848
  1,984
  2,125
  2,271
  2,423
  2,582
  2,747
  2,918
  3,097
  3,283
  3,477
  3,679
  3,890
  4,110
  4,341
  4,581
  4,832
  5,095
  5,369
  5,657
  5,957
  6,272
  6,602
  6,947
Revenue / Adjusted assets
  0.570
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
  0.569
Average production assets, $m
  517
  566
  617
  670
  725
  782
  841
  903
  967
  1,034
  1,103
  1,175
  1,250
  1,328
  1,410
  1,494
  1,583
  1,675
  1,771
  1,871
  1,976
  2,085
  2,200
  2,319
  2,444
  2,575
  2,712
  2,855
  3,005
  3,162
Working capital, $m
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -56
  -59
Total debt, $m
  402
  472
  545
  621
  700
  783
  868
  957
  1,049
  1,145
  1,245
  1,349
  1,457
  1,569
  1,686
  1,808
  1,935
  2,068
  2,206
  2,350
  2,501
  2,658
  2,823
  2,995
  3,175
  3,363
  3,560
  3,766
  3,982
  4,208
Total liabilities, $m
  744
  814
  887
  963
  1,043
  1,125
  1,210
  1,299
  1,392
  1,488
  1,587
  1,691
  1,799
  1,911
  2,028
  2,150
  2,277
  2,410
  2,548
  2,692
  2,843
  3,000
  3,165
  3,337
  3,517
  3,705
  3,902
  4,108
  4,324
  4,550
Total equity, $m
  392
  429
  467
  507
  549
  592
  638
  684
  733
  784
  836
  891
  948
  1,007
  1,068
  1,133
  1,200
  1,269
  1,342
  1,418
  1,497
  1,580
  1,667
  1,758
  1,852
  1,951
  2,055
  2,164
  2,278
  2,397
Total liabilities and equity, $m
  1,136
  1,243
  1,354
  1,470
  1,592
  1,717
  1,848
  1,983
  2,125
  2,272
  2,423
  2,582
  2,747
  2,918
  3,096
  3,283
  3,477
  3,679
  3,890
  4,110
  4,340
  4,580
  4,832
  5,095
  5,369
  5,656
  5,957
  6,272
  6,602
  6,947
Debt-to-equity ratio
  1.030
  1.100
  1.170
  1.220
  1.280
  1.320
  1.360
  1.400
  1.430
  1.460
  1.490
  1.510
  1.540
  1.560
  1.580
  1.600
  1.610
  1.630
  1.640
  1.660
  1.670
  1.680
  1.690
  1.700
  1.710
  1.720
  1.730
  1.740
  1.750
  1.760
Adjusted equity ratio
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -34
  -32
  -30
  -29
  -27
  -25
  -23
  -21
  -19
  -17
  42
  43
  45
  47
  49
  51
  53
  55
  58
  60
  62
  65
  68
  71
  74
  77
  80
  84
  87
  91
Depreciation, amort., depletion, $m
  89
  91
  92
  94
  96
  98
  100
  102
  104
  106
  37
  39
  42
  44
  47
  50
  53
  56
  59
  62
  66
  70
  73
  77
  81
  86
  90
  95
  100
  105
Funds from operations, $m
  55
  59
  62
  65
  69
  73
  77
  81
  85
  89
  78
  83
  87
  91
  96
  101
  106
  111
  117
  122
  128
  135
  141
  148
  155
  163
  170
  179
  187
  196
Change in working capital, $m
  -1
  -1
  -1
  -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
  56
  59
  63
  66
  70
  74
  78
  82
  86
  91
  80
  84
  88
  93
  97
  102
  107
  113
  118
  124
  130
  137
  143
  150
  157
  165
  173
  181
  190
  199
Maintenance CAPEX, $m
  -16
  -17
  -19
  -21
  -22
  -24
  -26
  -28
  -30
  -32
  -34
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -66
  -70
  -73
  -77
  -81
  -86
  -90
  -95
  -100
New CAPEX, $m
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -85
  -88
  -92
  -96
  -100
  -105
  -109
  -114
  -120
  -125
  -131
  -137
  -143
  -150
  -157
Cash from investing activities, $m
  -63
  -66
  -70
  -74
  -77
  -81
  -85
  -90
  -94
  -99
  -103
  -109
  -114
  -120
  -125
  -132
  -138
  -145
  -152
  -159
  -167
  -175
  -184
  -193
  -202
  -212
  -223
  -233
  -245
  -257
Free cash flow, $m
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -8
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
Issuance/(repayment) of debt, $m
  67
  70
  73
  76
  79
  82
  86
  89
  92
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  151
  157
  164
  172
  180
  188
  197
  206
  216
  226
Issuance/(repurchase) of shares, $m
  69
  69
  69
  69
  69
  68
  68
  68
  68
  67
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  27
  28
Cash from financing (excl. dividends), $m  
  136
  139
  142
  145
  148
  150
  154
  157
  160
  163
  111
  115
  120
  124
  130
  135
  141
  147
  153
  160
  168
  175
  183
  192
  201
  210
  221
  231
  243
  254
Total cash flow (excl. dividends), $m
  129
  133
  135
  138
  140
  143
  146
  149
  152
  155
  87
  90
  94
  98
  102
  106
  110
  115
  120
  125
  131
  137
  143
  149
  156
  163
  171
  179
  187
  196
Retained Cash Flow (-), $m
  -69
  -69
  -69
  -69
  -69
  -68
  -68
  -68
  -68
  -67
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -70
  -73
  -76
  -79
  -83
  -87
  -91
  -95
  -99
  -104
  -109
  -114
  -119
Prev. year cash balance distribution, $m
  164
  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
  224
  64
  66
  69
  72
  75
  78
  81
  84
  88
  34
  35
  37
  38
  40
  42
  43
  45
  47
  49
  51
  54
  56
  59
  61
  64
  67
  70
  74
  77
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
  215
  58
  58
  57
  56
  54
  53
  51
  48
  46
  16
  15
  14
  13
  12
  11
  9
  8
  7
  6
  5
  4
  4
  3
  2
  2
  1
  1
  1
  1
Current shareholders' claim on cash, %
  89.2
  80.4
  73.0
  66.9
  61.7
  57.2
  53.4
  50.1
  47.1
  44.6
  44.2
  43.8
  43.5
  43.1
  42.8
  42.5
  42.1
  41.8
  41.5
  41.2
  40.9
  40.6
  40.3
  40.0
  39.7
  39.4
  39.1
  38.8
  38.5
  38.2

Acorda Therapeutics, Inc. is a biopharmaceutical company. The Company focuses on developing therapies that restore function and improve the lives of people with neurological disorders. As of December 31, 2016, the Company marketed three United States Food and Drug Administration (FDA)-approved therapies, including Ampyra (dalfampridine) Extended Release Tablets, 10 milligram (mg), a treatment to improve walking in patients with multiple sclerosis (MS). The Company also markets Zanaflex Capsules and tablets, FDA-approved as short-acting drugs for the management of spasticity, and Qutenza, an FDA-approved dermal patch for the management of neuropathic pain associated with post-herpetic neuralgia, also known as post-shingles pain. The Company has a pipeline of neurological therapies addressing a range of disorders, including Parkinson's disease, migraine and MS. The Company's product candidate, CVT-301, is a self-administered inhaled formulation of levodopa.

FINANCIAL RATIOS  of  Acorda Therapeutics (ACOR)

Valuation Ratios
P/E Ratio -23.1
Price to Sales 1.6
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 23.1
Price to Free Cash Flow 28.8
Growth Rates
Sales Growth Rate 5.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 159
Current Ratio 0
LT Debt to Equity 48.8%
Total Debt to Equity 48.9%
Interest Coverage -6
Management Effectiveness
Return On Assets -2.4%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital -3.7%
Ret/ On T. Cap. - 3 Yr. Avg. 0.1%
Return On Equity -5.5%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 79%
Gross Margin - 3 Yr. Avg. 80.1%
EBITDA Margin -2.7%
EBITDA Margin - 3 Yr. Avg. 5.3%
Operating Margin -6.9%
Oper. Margin - 3 Yr. Avg. 3%
Pre-Tax Margin -8.1%
Pre-Tax Margin - 3 Yr. Avg. 0.9%
Net Profit Margin -6.7%
Net Profit Margin - 3 Yr. Avg. -0%
Effective Tax Rate 14.3%
Eff/ Tax Rate - 3 Yr. Avg. 30.7%
Payout Ratio 0%

ACOR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ACOR stock intrinsic value calculation we used $588.287 million for the last fiscal year's total revenue generated by Acorda Therapeutics. The default revenue input number comes from 0001 income statement of Acorda 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 ACOR stock valuation model: a) initial revenue growth rate of 9.9% 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 ACOR is calculated based on our internal credit rating of Acorda 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 Acorda 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 ACOR stock the variable cost ratio is equal to 103.4%.

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 ACOR 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 5.6% for Acorda Therapeutics.

Corporate tax rate of 27% is the nominal tax rate for Acorda 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 ACOR 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 ACOR are equal to 80%.

Life of production assets of 39 years is the average useful life of capital assets used in Acorda 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 ACOR is equal to -1.5%. 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 - $519.987 million for Acorda 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 47.066 million for Acorda 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 Acorda Therapeutics at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ Qualcomm and Tailored Brands rise; Kroger stumbles   [Sep-13-18 04:28PM  Associated Press]
▶ Acorda Announces Management Transitions   [07:00AM  Business Wire]
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▶ Collaborations Help Alkermes Flip to Profitability   [Jul-27-18 11:53AM  Motley Fool]
▶ Acorda: 1Q Earnings Snapshot   [May-02-18 06:14AM  Associated Press]
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▶ Blowback against Shkreli was healthy, says pharma expert   [Mar-09-18 03:11PM  CNBC Videos]
▶ Acorda to Present at Cowen Health Care Conference   [Mar-06-18 07:00AM  Business Wire]
▶ Acorda reports 4Q loss   [10:29AM  Associated Press]
▶ Acorda Fourth Quarter/Year End 2017 Update   [Feb-02-18 07:00AM  Business Wire]
▶ This Biotech Stock Rocketed 15% On Rumors Biogen Could Buy It   [Jan-19-18 04:53PM  Investor's Business Daily]

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