Intrinsic value of Achaogen, Inc. - AKAO

Previous Close

$0.18

  Intrinsic Value

$1.31

stock screener

  Rating & Target

str. buy

+648%

Previous close

$0.18

 
Intrinsic value

$1.31

 
Up/down potential

+648%

 
Rating

str. buy

We calculate the intrinsic value of AKAO 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 0.0

 

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, %
  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
  18
  27
  41
  59
  83
  114
  154
  202
  260
  328
  407
  498
  600
  714
  839
  976
  1,125
  1,284
  1,454
  1,635
  1,826
  2,027
  2,238
  2,459
  2,690
  2,931
  3,182
  3,442
  3,714
  3,996
Variable operating expenses, $m
  38
  57
  85
  122
  172
  236
  316
  414
  532
  672
  833
  1,018
  1,227
  1,460
  1,717
  1,997
  2,300
  2,627
  2,975
  3,344
  3,735
  4,147
  4,579
  5,031
  5,503
  5,996
  6,508
  7,042
  7,597
  8,173
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
  38
  57
  85
  122
  172
  236
  316
  414
  532
  672
  833
  1,018
  1,227
  1,460
  1,717
  1,997
  2,300
  2,627
  2,975
  3,344
  3,735
  4,147
  4,579
  5,031
  5,503
  5,996
  6,508
  7,042
  7,597
  8,173
Operating income, $m
  -20
  -30
  -44
  -63
  -89
  -121
  -162
  -212
  -273
  -344
  -426
  -520
  -627
  -746
  -878
  -1,021
  -1,176
  -1,343
  -1,521
  -1,710
  -1,909
  -2,120
  -2,340
  -2,572
  -2,813
  -3,065
  -3,327
  -3,600
  -3,883
  -4,178
EBITDA, $m
  -16
  -25
  -38
  -55
  -77
  -106
  -142
  -187
  -240
  -303
  -377
  -460
  -555
  -660
  -776
  -903
  -1,040
  -1,188
  -1,345
  -1,512
  -1,689
  -1,875
  -2,070
  -2,275
  -2,488
  -2,711
  -2,943
  -3,184
  -3,435
  -3,696
Interest expense (income), $m
  2
  3
  3
  8
  14
  23
  34
  48
  67
  89
  116
  148
  185
  227
  274
  327
  386
  449
  518
  593
  672
  756
  845
  938
  1,037
  1,140
  1,247
  1,359
  1,476
  1,597
  1,723
Earnings before tax, $m
  -23
  -33
  -52
  -77
  -111
  -155
  -210
  -279
  -362
  -460
  -573
  -705
  -854
  -1,021
  -1,205
  -1,406
  -1,625
  -1,861
  -2,113
  -2,381
  -2,665
  -2,965
  -3,279
  -3,608
  -3,953
  -4,312
  -4,686
  -5,075
  -5,480
  -5,901
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
  -23
  -33
  -52
  -77
  -111
  -155
  -210
  -279
  -362
  -460
  -573
  -705
  -854
  -1,021
  -1,205
  -1,406
  -1,625
  -1,861
  -2,113
  -2,381
  -2,665
  -2,965
  -3,279
  -3,608
  -3,953
  -4,312
  -4,686
  -5,075
  -5,480
  -5,901

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
  75
  116
  174
  252
  356
  489
  656
  862
  1,109
  1,401
  1,740
  2,127
  2,564
  3,050
  3,587
  4,172
  4,806
  5,487
  6,214
  6,987
  7,803
  8,663
  9,565
  10,510
  11,497
  12,525
  13,597
  14,711
  15,870
  17,075
Adjusted assets (=assets-cash), $m
  75
  116
  174
  252
  356
  489
  656
  862
  1,109
  1,401
  1,740
  2,127
  2,564
  3,050
  3,587
  4,172
  4,806
  5,487
  6,214
  6,987
  7,803
  8,663
  9,565
  10,510
  11,497
  12,525
  13,597
  14,711
  15,870
  17,075
Revenue / Adjusted assets
  0.240
  0.233
  0.236
  0.234
  0.233
  0.233
  0.235
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
  0.234
Average production assets, $m
  14
  22
  33
  48
  68
  94
  126
  166
  213
  269
  334
  409
  493
  586
  689
  802
  923
  1,054
  1,194
  1,342
  1,499
  1,664
  1,838
  2,019
  2,209
  2,406
  2,612
  2,826
  3,049
  3,280
Working capital, $m
  -33
  -51
  -76
  -110
  -155
  -214
  -287
  -377
  -485
  -612
  -760
  -929
  -1,120
  -1,333
  -1,567
  -1,823
  -2,100
  -2,397
  -2,715
  -3,052
  -3,409
  -3,785
  -4,179
  -4,592
  -5,023
  -5,472
  -5,940
  -6,427
  -6,933
  -7,460
Total debt, $m
  27
  64
  116
  186
  280
  400
  550
  735
  958
  1,220
  1,525
  1,874
  2,267
  2,705
  3,187
  3,714
  4,285
  4,898
  5,552
  6,247
  6,982
  7,756
  8,568
  9,418
  10,306
  11,232
  12,196
  13,200
  14,243
  15,327
Total liabilities, $m
  68
  105
  156
  227
  320
  440
  591
  776
  998
  1,261
  1,566
  1,914
  2,307
  2,745
  3,228
  3,755
  4,325
  4,938
  5,593
  6,288
  7,023
  7,797
  8,609
  9,459
  10,347
  11,273
  12,237
  13,240
  14,283
  15,368
Total equity, $m
  8
  12
  17
  25
  36
  49
  66
  86
  111
  140
  174
  213
  256
  305
  359
  417
  481
  549
  621
  699
  780
  866
  957
  1,051
  1,150
  1,253
  1,360
  1,471
  1,587
  1,708
Total liabilities and equity, $m
  76
  117
  173
  252
  356
  489
  657
  862
  1,109
  1,401
  1,740
  2,127
  2,563
  3,050
  3,587
  4,172
  4,806
  5,487
  6,214
  6,987
  7,803
  8,663
  9,566
  10,510
  11,497
  12,526
  13,597
  14,711
  15,870
  17,076
Debt-to-equity ratio
  3.600
  5.500
  6.660
  7.390
  7.860
  8.170
  8.380
  8.530
  8.630
  8.710
  8.770
  8.810
  8.840
  8.870
  8.890
  8.900
  8.920
  8.930
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.980
Adjusted equity ratio
  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
  -23
  -33
  -52
  -77
  -111
  -155
  -210
  -279
  -362
  -460
  -573
  -705
  -854
  -1,021
  -1,205
  -1,406
  -1,625
  -1,861
  -2,113
  -2,381
  -2,665
  -2,965
  -3,279
  -3,608
  -3,953
  -4,312
  -4,686
  -5,075
  -5,480
  -5,901
Depreciation, amort., depletion, $m
  4
  5
  6
  9
  12
  15
  20
  26
  33
  41
  49
  60
  72
  86
  101
  118
  136
  155
  176
  197
  220
  245
  270
  297
  325
  354
  384
  416
  448
  482
Funds from operations, $m
  -19
  -28
  -45
  -69
  -100
  -140
  -190
  -253
  -329
  -419
  -524
  -645
  -782
  -934
  -1,104
  -1,289
  -1,490
  -1,706
  -1,938
  -2,184
  -2,445
  -2,720
  -3,009
  -3,311
  -3,628
  -3,958
  -4,302
  -4,660
  -5,032
  -5,419
Change in working capital, $m
  -12
  -18
  -25
  -34
  -45
  -58
  -73
  -90
  -108
  -127
  -148
  -169
  -191
  -213
  -234
  -256
  -277
  -298
  -318
  -337
  -357
  -376
  -394
  -413
  -431
  -449
  -468
  -487
  -506
  -526
Cash from operations, $m
  -7
  -11
  -20
  -34
  -54
  -81
  -117
  -163
  -221
  -292
  -376
  -476
  -591
  -722
  -869
  -1,033
  -1,213
  -1,408
  -1,620
  -1,846
  -2,088
  -2,344
  -2,614
  -2,899
  -3,197
  -3,508
  -3,834
  -4,173
  -4,526
  -4,893
Maintenance CAPEX, $m
  -1
  -2
  -3
  -5
  -7
  -10
  -14
  -19
  -24
  -31
  -40
  -49
  -60
  -72
  -86
  -101
  -118
  -136
  -155
  -176
  -197
  -220
  -245
  -270
  -297
  -325
  -354
  -384
  -416
  -448
New CAPEX, $m
  -5
  -8
  -11
  -15
  -20
  -26
  -32
  -39
  -47
  -56
  -65
  -74
  -84
  -93
  -103
  -112
  -122
  -131
  -140
  -148
  -157
  -165
  -173
  -181
  -190
  -198
  -206
  -214
  -223
  -231
Cash from investing activities, $m
  -6
  -10
  -14
  -20
  -27
  -36
  -46
  -58
  -71
  -87
  -105
  -123
  -144
  -165
  -189
  -213
  -240
  -267
  -295
  -324
  -354
  -385
  -418
  -451
  -487
  -523
  -560
  -598
  -639
  -679
Free cash flow, $m
  -13
  -21
  -35
  -54
  -81
  -117
  -163
  -221
  -293
  -379
  -481
  -599
  -735
  -888
  -1,058
  -1,247
  -1,452
  -1,675
  -1,915
  -2,170
  -2,442
  -2,730
  -3,033
  -3,350
  -3,683
  -4,031
  -4,393
  -4,771
  -5,164
  -5,572
Issuance/(repayment) of debt, $m
  5
  37
  52
  71
  93
  120
  151
  185
  222
  263
  305
  349
  393
  438
  483
  527
  570
  613
  655
  695
  735
  774
  812
  850
  888
  926
  964
  1,003
  1,043
  1,084
Issuance/(repurchase) of shares, $m
  46
  37
  58
  85
  121
  168
  227
  300
  387
  489
  607
  744
  898
  1,069
  1,258
  1,465
  1,689
  1,929
  2,186
  2,459
  2,747
  3,051
  3,369
  3,703
  4,051
  4,415
  4,793
  5,187
  5,596
  6,022
Cash from financing (excl. dividends), $m  
  51
  74
  110
  156
  214
  288
  378
  485
  609
  752
  912
  1,093
  1,291
  1,507
  1,741
  1,992
  2,259
  2,542
  2,841
  3,154
  3,482
  3,825
  4,181
  4,553
  4,939
  5,341
  5,757
  6,190
  6,639
  7,106
Total cash flow (excl. dividends), $m
  37
  54
  75
  101
  133
  171
  215
  263
  316
  373
  431
  493
  556
  619
  683
  745
  807
  867
  926
  983
  1,039
  1,095
  1,149
  1,202
  1,256
  1,310
  1,364
  1,419
  1,475
  1,534
Retained Cash Flow (-), $m
  -46
  -37
  -58
  -85
  -121
  -168
  -227
  -300
  -387
  -489
  -607
  -744
  -898
  -1,069
  -1,258
  -1,465
  -1,689
  -1,929
  -2,186
  -2,459
  -2,747
  -3,051
  -3,369
  -3,703
  -4,051
  -4,415
  -4,793
  -5,187
  -5,596
  -6,022
Prev. year cash balance distribution, $m
  138
  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
  129
  16
  17
  16
  12
  3
  -13
  -36
  -70
  -116
  -176
  -251
  -342
  -450
  -576
  -720
  -882
  -1,062
  -1,260
  -1,475
  -1,707
  -1,956
  -2,220
  -2,500
  -2,795
  -3,105
  -3,429
  -3,768
  -4,121
  -4,488
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
  124
  15
  15
  13
  9
  2
  -9
  -23
  -40
  -61
  -84
  -107
  -130
  -151
  -169
  -183
  -192
  -196
  -194
  -187
  -177
  -162
  -146
  -127
  -109
  -91
  -74
  -58
  -45
  -34
Current shareholders' claim on cash, %
  50.0
  6.2
  0.8
  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

Achaogen, Inc. is a late-stage biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of antibacterial treatments against multi-drug resistant (MDR) gram-negative infections. The Company is involved in researching and developing plazomicin, its lead product candidate, for the treatment of serious bacterial infections, including complicated urinary tract infection (cUTI), blood stream infections and other infections due to MDR Enterobacteriaceae, including carbapenem-resistant Enterobacteriaceae (CRE). Plazomicin is an intravenous aminoglycoside antibiotic. The Company has developed plazomicin by chemically modifying sisomicin, a naturally occurring aminoglycoside, in order to overcome common aminoglycoside resistance mechanisms. The Company has a portfolio of small molecule and antibody programs. The Company's Early Development programs include C-Scape and LpxC.

FINANCIAL RATIOS  of  Achaogen, Inc. (AKAO)

Valuation Ratios
P/E Ratio -0.1
Price to Sales 0.1
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow -0.1
Price to Free Cash Flow -0.1
Growth Rates
Sales Growth Rate 61.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 37
Current Ratio 0
LT Debt to Equity 19.6%
Total Debt to Equity 23.4%
Interest Coverage -35
Management Effectiveness
Return On Assets -59.7%
Ret/ On Assets - 3 Yr. Avg. -47.7%
Return On Total Capital -74.7%
Ret/ On T. Cap. - 3 Yr. Avg. -56.2%
Return On Equity -94.7%
Return On Equity - 3 Yr. Avg. -66.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -164.3%
EBITDA Margin - 3 Yr. Avg. -122.7%
Operating Margin -116.7%
Oper. Margin - 3 Yr. Avg. -106.8%
Pre-Tax Margin -169%
Pre-Tax Margin - 3 Yr. Avg. -124.3%
Net Profit Margin -169%
Net Profit Margin - 3 Yr. Avg. -124.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AKAO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AKAO stock intrinsic value calculation we used $11 million for the last fiscal year's total revenue generated by Achaogen, Inc.. The default revenue input number comes from 0001 income statement of Achaogen, 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 AKAO 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 AKAO is calculated based on our internal credit rating of Achaogen, 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 Achaogen, 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 AKAO stock the variable cost ratio is equal to 218.2%.

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 AKAO 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 12.1% for Achaogen, Inc..

Corporate tax rate of 27% is the nominal tax rate for Achaogen, 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 AKAO 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 AKAO are equal to 82.1%.

Life of production assets of 6.8 years is the average useful life of capital assets used in Achaogen, 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 AKAO is equal to -186.7%. 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 - $121.962 million for Achaogen, 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 48.198 million for Achaogen, 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 Achaogen, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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