Intrinsic value of Alimera Sciences - ALIM

Previous Close

$1.16

  Intrinsic Value

$0.09

stock screener

  Rating & Target

str. sell

-92%

Previous close

$1.16

 
Intrinsic value

$0.09

 
Up/down potential

-92%

 
Rating

str. sell

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

We calculate the intrinsic value of ALIM 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  54.55
  25.00
  23.00
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
Revenue, $m
  34
  43
  52
  63
  76
  89
  105
  121
  138
  157
  177
  199
  221
  245
  269
  295
  322
  350
  379
  409
  441
  474
  508
  543
  580
  618
  658
  699
  742
  787
  834
Variable operating expenses, $m
 
  24
  29
  35
  42
  50
  58
  68
  77
  88
  99
  111
  124
  137
  150
  165
  180
  196
  212
  229
  246
  265
  284
  304
  324
  346
  368
  391
  415
  440
  466
Fixed operating expenses, $m
 
  51
  53
  54
  55
  57
  58
  59
  61
  62
  64
  66
  67
  69
  71
  72
  74
  76
  78
  80
  82
  84
  86
  88
  90
  93
  95
  97
  100
  102
  105
Total operating expenses, $m
  65
  75
  82
  89
  97
  107
  116
  127
  138
  150
  163
  177
  191
  206
  221
  237
  254
  272
  290
  309
  328
  349
  370
  392
  414
  439
  463
  488
  515
  542
  571
Operating income, $m
  -30
  -33
  -29
  -26
  -22
  -17
  -12
  -6
  0
  7
  14
  22
  30
  39
  48
  58
  68
  78
  89
  101
  113
  125
  138
  151
  165
  180
  195
  211
  228
  245
  263
EBITDA, $m
  -27
  -29
  -25
  -20
  -15
  -9
  -3
  5
  12
  21
  30
  40
  50
  61
  72
  84
  96
  109
  123
  137
  151
  167
  183
  199
  216
  234
  253
  273
  293
  314
  337
Interest expense (income), $m
  4
  4
  4
  5
  7
  8
  10
  12
  14
  16
  18
  21
  23
  26
  29
  32
  35
  38
  42
  45
  49
  53
  57
  61
  66
  70
  75
  80
  85
  90
  96
Earnings before tax, $m
  -33
  -37
  -34
  -31
  -28
  -25
  -22
  -18
  -14
  -9
  -4
  1
  7
  13
  19
  26
  33
  40
  47
  55
  63
  72
  81
  90
  100
  110
  120
  131
  143
  155
  167
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2
  4
  5
  7
  9
  11
  13
  15
  17
  19
  22
  24
  27
  30
  33
  35
  39
  42
  45
Net income, $m
  -33
  -37
  -34
  -31
  -28
  -25
  -22
  -18
  -14
  -9
  -4
  1
  5
  9
  14
  19
  24
  29
  35
  40
  46
  53
  59
  66
  73
  80
  88
  96
  104
  113
  122

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  31
  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
  70
  49
  60
  73
  87
  103
  120
  139
  159
  180
  203
  228
  253
  280
  309
  338
  369
  401
  435
  470
  506
  543
  582
  623
  665
  709
  755
  802
  851
  903
  957
Adjusted assets (=assets-cash), $m
  39
  49
  60
  73
  87
  103
  120
  139
  159
  180
  203
  228
  253
  280
  309
  338
  369
  401
  435
  470
  506
  543
  582
  623
  665
  709
  755
  802
  851
  903
  957
Revenue / Adjusted assets
  0.872
  0.878
  0.867
  0.863
  0.874
  0.864
  0.875
  0.871
  0.868
  0.872
  0.872
  0.873
  0.874
  0.875
  0.871
  0.873
  0.873
  0.873
  0.871
  0.870
  0.872
  0.873
  0.873
  0.872
  0.872
  0.872
  0.872
  0.872
  0.872
  0.872
  0.871
Average production assets, $m
  24
  30
  37
  45
  53
  63
  74
  85
  98
  111
  125
  140
  156
  173
  190
  208
  227
  247
  268
  289
  311
  334
  358
  383
  409
  436
  465
  494
  524
  556
  589
Working capital, $m
  38
  9
  11
  13
  16
  18
  22
  25
  29
  32
  37
  41
  46
  50
  55
  61
  66
  72
  78
  84
  91
  98
  105
  112
  119
  127
  136
  144
  153
  162
  172
Total debt, $m
  34
  34
  44
  55
  68
  82
  98
  115
  133
  152
  173
  195
  218
  242
  268
  294
  322
  351
  381
  413
  445
  479
  514
  551
  589
  628
  669
  712
  756
  803
  851
Total liabilities, $m
  45
  44
  54
  65
  78
  92
  108
  125
  143
  162
  183
  205
  228
  252
  278
  304
  332
  361
  391
  423
  455
  489
  524
  561
  599
  638
  679
  722
  766
  813
  861
Total equity, $m
  26
  5
  6
  7
  9
  10
  12
  14
  16
  18
  20
  23
  25
  28
  31
  34
  37
  40
  43
  47
  51
  54
  58
  62
  67
  71
  75
  80
  85
  90
  96
Total liabilities and equity, $m
  71
  49
  60
  72
  87
  102
  120
  139
  159
  180
  203
  228
  253
  280
  309
  338
  369
  401
  434
  470
  506
  543
  582
  623
  666
  709
  754
  802
  851
  903
  957
Debt-to-equity ratio
  1.308
  6.950
  7.330
  7.620
  7.850
  8.030
  8.170
  8.280
  8.370
  8.450
  8.510
  8.560
  8.610
  8.640
  8.680
  8.700
  8.730
  8.750
  8.770
  8.790
  8.800
  8.820
  8.830
  8.840
  8.850
  8.860
  8.870
  8.880
  8.880
  8.890
  8.900
Adjusted equity ratio
  -0.128
  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
  -33
  -37
  -34
  -31
  -28
  -25
  -22
  -18
  -14
  -9
  -4
  1
  5
  9
  14
  19
  24
  29
  35
  40
  46
  53
  59
  66
  73
  80
  88
  96
  104
  113
  122
Depreciation, amort., depletion, $m
  3
  4
  5
  6
  7
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  26
  28
  31
  33
  36
  39
  42
  45
  48
  51
  55
  58
  62
  66
  69
  74
Funds from operations, $m
  -25
  -33
  -29
  -26
  -22
  -17
  -12
  -7
  -1
  5
  12
  19
  25
  31
  38
  45
  52
  60
  68
  76
  85
  94
  104
  114
  124
  135
  146
  158
  170
  183
  196
Change in working capital, $m
  0
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
Cash from operations, $m
  -25
  -35
  -31
  -28
  -24
  -20
  -16
  -10
  -5
  1
  8
  14
  20
  26
  33
  40
  47
  54
  62
  70
  79
  88
  97
  106
  116
  127
  138
  149
  161
  173
  186
Maintenance CAPEX, $m
  0
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -11
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -28
  -31
  -33
  -36
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -62
  -66
  -69
New CAPEX, $m
  0
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
Cash from investing activities, $m
  0
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -23
  -25
  -28
  -31
  -34
  -37
  -39
  -42
  -45
  -48
  -52
  -54
  -58
  -62
  -66
  -70
  -74
  -78
  -83
  -87
  -92
  -98
  -102
Free cash flow, $m
  -25
  -44
  -42
  -40
  -39
  -37
  -34
  -31
  -28
  -24
  -20
  -16
  -13
  -10
  -6
  -2
  2
  6
  11
  15
  20
  26
  31
  37
  43
  49
  55
  62
  69
  76
  84
Issuance/(repayment) of debt, $m
  0
  0
  10
  11
  13
  14
  16
  17
  18
  19
  21
  22
  23
  24
  25
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  39
  41
  43
  44
  46
  48
Issuance/(repurchase) of shares, $m
  27
  46
  35
  32
  30
  27
  23
  20
  16
  11
  6
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  25
  46
  45
  43
  43
  41
  39
  37
  34
  30
  27
  23
  23
  24
  25
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  39
  41
  43
  44
  46
  48
Total cash flow (excl. dividends), $m
  0
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  10
  14
  19
  24
  29
  35
  41
  47
  53
  59
  66
  73
  81
  88
  96
  105
  113
  122
  132
Retained Cash Flow (-), $m
  0
  -46
  -35
  -32
  -30
  -27
  -23
  -20
  -16
  -11
  -6
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
Prev. year cash balance distribution, $m
 
  31
  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
 
  -13
  -31
  -29
  -26
  -22
  -19
  -14
  -10
  -5
  0
  4
  7
  12
  16
  21
  26
  32
  37
  43
  49
  56
  62
  69
  76
  84
  92
  100
  108
  117
  127
Discount rate, %
 
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
 
  -12
  -28
  -24
  -20
  -16
  -12
  -8
  -5
  -2
  0
  2
  2
  3
  3
  4
  4
  4
  3
  3
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  15.1
  5.5
  2.4
  1.2
  0.7
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
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Alimera Sciences, Inc. (Alimera) is a pharmaceutical company. The Company is engaged in the research, development and commercialization of prescription ophthalmic pharmaceuticals. The Company operates through two segments: U.S. and International. The Company focuses on diseases affecting the back of the eye or retina. The Company's product is ILUVIEN, which is developed to treat diabetic macular edema (DME). DME is a disease of the retina that affects individuals with diabetes and can lead to severe vision loss and blindness. In the United States, ILUVIEN is indicated for the treatment of DME in patients who have been treated with a course of corticosteroids and did not have a rise in intraocular pressure (IOP). In the European Economic Area (EEA) countries, ILUVIEN is indicated for the treatment of vision impairment associated with DME considered insufficiently responsive to available therapies.

FINANCIAL RATIOS  of  Alimera Sciences (ALIM)

Valuation Ratios
P/E Ratio -2.3
Price to Sales 2.2
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow -3
Price to Free Cash Flow -3
Growth Rates
Sales Growth Rate 54.5%
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 130.8%
Total Debt to Equity 130.8%
Interest Coverage -7
Management Effectiveness
Return On Assets -41.4%
Ret/ On Assets - 3 Yr. Avg. -42%
Return On Total Capital -55.5%
Ret/ On T. Cap. - 3 Yr. Avg. -62%
Return On Equity -126.9%
Return On Equity - 3 Yr. Avg. -122.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 94.1%
Gross Margin - 3 Yr. Avg. 92.4%
EBITDA Margin -76.5%
EBITDA Margin - 3 Yr. Avg. -203.5%
Operating Margin -91.2%
Oper. Margin - 3 Yr. Avg. -231.1%
Pre-Tax Margin -97.1%
Pre-Tax Margin - 3 Yr. Avg. -229.3%
Net Profit Margin -97.1%
Net Profit Margin - 3 Yr. Avg. -229.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ALIM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALIM stock intrinsic value calculation we used $34 million for the last fiscal year's total revenue generated by Alimera Sciences. The default revenue input number comes from 2016 income statement of Alimera Sciences. 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 ALIM stock valuation model: a) initial revenue growth rate of 25% 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 6.2%, whose default value for ALIM is calculated based on our internal credit rating of Alimera Sciences, 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 Alimera Sciences.
    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 ALIM stock the variable cost ratio is equal to 55.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $50 million in the base year in the intrinsic value calculation for ALIM 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 11.9% for Alimera Sciences.

Corporate tax rate of 27% is the nominal tax rate for Alimera Sciences. 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 ALIM 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 ALIM are equal to 70.6%.

Life of production assets of 8 years is the average useful life of capital assets used in Alimera Sciences 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 ALIM is equal to 20.6%. 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 - $26 million for Alimera Sciences - 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 69.15 million for Alimera Sciences 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 Alimera Sciences at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ ALIMERA SCIENCES INC to Host Earnings Call   [Nov-02-17 07:20AM  ACCESSWIRE]
▶ Alimera Sciences reports 3Q loss   [05:46AM  Associated Press]
▶ Alimera Sciences reports 2Q loss   [Aug-04-17 01:08AM  Associated Press]
▶ Alimera Sciences reports 1Q loss   [May-08-17 06:11PM  Associated Press]
▶ Alimera Sciences reports 4Q loss   [05:03AM  Associated Press]
▶ Is Alimera Sciences Inc (ALIM) A Good Stock To Buy?   [Dec-18-16 11:35AM  at Insider Monkey]
Financial statements of ALIM
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