Intrinsic value of Acorda Therapeutics, Inc. - ACOR

Previous Close

$2.70

  Intrinsic Value

$2.89

stock screener

  Rating & Target

hold

+7%

Previous close

$2.70

 
Intrinsic value

$2.89

 
Up/down potential

+7%

 
Rating

hold

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 0.1

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  480
  491
  504
  518
  534
  551
  570
  590
  612
  636
  661
  688
  716
  747
  779
  813
  849
  887
  928
  970
  1,015
  1,063
  1,113
  1,165
  1,221
  1,279
  1,341
  1,405
  1,473
  1,545
Variable operating expenses, $m
  637
  652
  669
  687
  708
  730
  755
  782
  811
  841
  868
  904
  941
  981
  1,023
  1,068
  1,116
  1,166
  1,219
  1,275
  1,334
  1,396
  1,462
  1,531
  1,604
  1,681
  1,762
  1,847
  1,936
  2,030
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
  637
  652
  669
  687
  708
  730
  755
  782
  811
  841
  868
  904
  941
  981
  1,023
  1,068
  1,116
  1,166
  1,219
  1,275
  1,334
  1,396
  1,462
  1,531
  1,604
  1,681
  1,762
  1,847
  1,936
  2,030
Operating income, $m
  -157
  -160
  -164
  -169
  -174
  -179
  -185
  -191
  -198
  -206
  -208
  -216
  -225
  -234
  -245
  -255
  -267
  -279
  -291
  -305
  -319
  -334
  -349
  -366
  -383
  -402
  -421
  -441
  -463
  -485
EBITDA, $m
  -137
  -140
  -144
  -148
  -152
  -157
  -163
  -168
  -175
  -181
  -189
  -196
  -204
  -213
  -222
  -232
  -242
  -253
  -265
  -277
  -290
  -303
  -317
  -333
  -348
  -365
  -383
  -401
  -420
  -441
Interest expense (income), $m
  6
  22
  23
  24
  25
  26
  28
  30
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
  65
  69
  73
  77
  82
  87
  92
  98
  103
  109
  116
Earnings before tax, $m
  -179
  -183
  -188
  -194
  -200
  -207
  -215
  -223
  -232
  -241
  -245
  -256
  -267
  -279
  -292
  -306
  -321
  -336
  -352
  -369
  -388
  -407
  -427
  -448
  -470
  -494
  -519
  -545
  -572
  -601
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
Net income, $m
  -179
  -183
  -188
  -194
  -200
  -207
  -215
  -223
  -232
  -241
  -245
  -256
  -267
  -279
  -292
  -306
  -321
  -336
  -352
  -369
  -388
  -407
  -427
  -448
  -470
  -494
  -519
  -545
  -572
  -601

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
  1,014
  1,037
  1,064
  1,093
  1,127
  1,163
  1,203
  1,245
  1,292
  1,341
  1,394
  1,451
  1,511
  1,575
  1,643
  1,715
  1,791
  1,872
  1,957
  2,047
  2,142
  2,242
  2,347
  2,458
  2,575
  2,699
  2,828
  2,965
  3,108
  3,260
Adjusted assets (=assets-cash), $m
  1,014
  1,037
  1,064
  1,093
  1,127
  1,163
  1,203
  1,245
  1,292
  1,341
  1,394
  1,451
  1,511
  1,575
  1,643
  1,715
  1,791
  1,872
  1,957
  2,047
  2,142
  2,242
  2,347
  2,458
  2,575
  2,699
  2,828
  2,965
  3,108
  3,260
Revenue / Adjusted assets
  0.473
  0.473
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
  0.474
Average production assets, $m
  414
  423
  434
  446
  460
  475
  491
  508
  527
  547
  569
  592
  617
  643
  671
  700
  731
  764
  799
  835
  874
  915
  958
  1,003
  1,051
  1,101
  1,154
  1,210
  1,269
  1,330
Working capital, $m
  -59
  -60
  -62
  -63
  -65
  -67
  -70
  -72
  -75
  -78
  -81
  -84
  -87
  -91
  -95
  -99
  -104
  -108
  -113
  -118
  -124
  -130
  -136
  -142
  -149
  -156
  -164
  -171
  -180
  -188
Total debt, $m
  358
  374
  393
  413
  436
  461
  489
  519
  550
  585
  621
  661
  702
  747
  794
  843
  896
  952
  1,011
  1,073
  1,139
  1,208
  1,281
  1,358
  1,439
  1,524
  1,614
  1,708
  1,808
  1,912
Total liabilities, $m
  701
  718
  736
  757
  780
  805
  832
  862
  894
  928
  965
  1,004
  1,046
  1,090
  1,137
  1,187
  1,240
  1,295
  1,354
  1,416
  1,482
  1,551
  1,624
  1,701
  1,782
  1,868
  1,957
  2,052
  2,151
  2,256
Total equity, $m
  312
  319
  328
  337
  347
  358
  370
  384
  398
  413
  429
  447
  465
  485
  506
  528
  552
  577
  603
  630
  660
  690
  723
  757
  793
  831
  871
  913
  957
  1,004
Total liabilities and equity, $m
  1,013
  1,037
  1,064
  1,094
  1,127
  1,163
  1,202
  1,246
  1,292
  1,341
  1,394
  1,451
  1,511
  1,575
  1,643
  1,715
  1,792
  1,872
  1,957
  2,046
  2,142
  2,241
  2,347
  2,458
  2,575
  2,699
  2,828
  2,965
  3,108
  3,260
Debt-to-equity ratio
  1.150
  1.170
  1.200
  1.230
  1.260
  1.290
  1.320
  1.350
  1.380
  1.420
  1.450
  1.480
  1.510
  1.540
  1.570
  1.600
  1.620
  1.650
  1.680
  1.700
  1.730
  1.750
  1.770
  1.790
  1.810
  1.830
  1.850
  1.870
  1.890
  1.900
Adjusted equity ratio
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -179
  -183
  -188
  -194
  -200
  -207
  -215
  -223
  -232
  -241
  -245
  -256
  -267
  -279
  -292
  -306
  -321
  -336
  -352
  -369
  -388
  -407
  -427
  -448
  -470
  -494
  -519
  -545
  -572
  -601
Depreciation, amort., depletion, $m
  20
  20
  21
  21
  21
  22
  22
  23
  24
  24
  19
  20
  21
  21
  22
  23
  24
  25
  27
  28
  29
  30
  32
  33
  35
  37
  38
  40
  42
  44
Funds from operations, $m
  -159
  -163
  -168
  -173
  -179
  -185
  -192
  -200
  -208
  -217
  -226
  -236
  -247
  -258
  -270
  -283
  -296
  -311
  -326
  -342
  -358
  -376
  -395
  -415
  -435
  -457
  -480
  -504
  -530
  -557
Change in working capital, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
Cash from operations, $m
  -158
  -162
  -166
  -171
  -177
  -183
  -190
  -197
  -205
  -214
  -223
  -233
  -243
  -254
  -266
  -279
  -292
  -306
  -321
  -336
  -353
  -370
  -389
  -408
  -428
  -450
  -473
  -496
  -521
  -548
Maintenance CAPEX, $m
  -14
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
New CAPEX, $m
  -8
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
Cash from investing activities, $m
  -22
  -24
  -25
  -26
  -29
  -30
  -32
  -33
  -36
  -38
  -40
  -42
  -45
  -47
  -49
  -51
  -54
  -57
  -60
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -104
Free cash flow, $m
  -180
  -185
  -191
  -198
  -205
  -213
  -222
  -231
  -241
  -252
  -263
  -275
  -287
  -301
  -315
  -330
  -346
  -363
  -381
  -400
  -419
  -440
  -462
  -485
  -510
  -535
  -562
  -591
  -620
  -652
Issuance/(repayment) of debt, $m
  14
  16
  18
  21
  23
  25
  27
  30
  32
  34
  37
  39
  42
  44
  47
  50
  53
  56
  59
  62
  66
  69
  73
  77
  81
  85
  90
  94
  99
  105
Issuance/(repurchase) of shares, $m
  185
  191
  197
  203
  210
  218
  227
  236
  246
  256
  261
  273
  286
  299
  313
  328
  344
  361
  378
  397
  417
  437
  459
  482
  506
  532
  559
  587
  616
  647
Cash from financing (excl. dividends), $m  
  199
  207
  215
  224
  233
  243
  254
  266
  278
  290
  298
  312
  328
  343
  360
  378
  397
  417
  437
  459
  483
  506
  532
  559
  587
  617
  649
  681
  715
  752
Total cash flow (excl. dividends), $m
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  35
  38
  40
  42
  45
  48
  51
  53
  56
  60
  63
  66
  70
  74
  78
  82
  86
  91
  95
  100
Retained Cash Flow (-), $m
  -185
  -191
  -197
  -203
  -210
  -218
  -227
  -236
  -246
  -256
  -261
  -273
  -286
  -299
  -313
  -328
  -344
  -361
  -378
  -397
  -417
  -437
  -459
  -482
  -506
  -532
  -559
  -587
  -616
  -647
Prev. year cash balance distribution, $m
  306
  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
  141
  -169
  -173
  -177
  -182
  -188
  -194
  -201
  -209
  -217
  -226
  -236
  -246
  -257
  -268
  -281
  -294
  -307
  -322
  -337
  -354
  -371
  -389
  -408
  -429
  -450
  -472
  -496
  -521
  -547
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
  135
  -155
  -150
  -146
  -141
  -137
  -131
  -126
  -120
  -114
  -107
  -101
  -93
  -86
  -79
  -71
  -64
  -57
  -50
  -43
  -37
  -31
  -26
  -21
  -17
  -13
  -10
  -8
  -6
  -4
Current shareholders' claim on cash, %
  53.7
  28.7
  15.3
  8.1
  4.3
  2.3
  1.2
  0.6
  0.3
  0.2
  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

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, Inc. (ACOR)

Valuation Ratios
P/E Ratio -3.5
Price to Sales 0.2
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 3.5
Price to Free Cash Flow 4.4
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 $471 million for the last fiscal year's total revenue generated by Acorda Therapeutics, Inc.. The default revenue input number comes from 0001 income statement of Acorda Therapeutics, Inc.. 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 2% 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, Inc., 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, Inc..
    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 132.7%.

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 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 6.4% for Acorda Therapeutics, Inc..

Corporate tax rate of 27% is the nominal tax rate for Acorda Therapeutics, Inc.. 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 86.1%.

Life of production assets of 66.4 years is the average useful life of capital assets used in Acorda Therapeutics, Inc. 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 -12.2%. 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 - $611.983 million for Acorda Therapeutics, Inc. - 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 47.634 million for Acorda Therapeutics, Inc. 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, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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