Intrinsic value of Alliqua BioMedical - ALQA

Previous Close

$1.69

  Intrinsic Value

$0.00

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  Rating & Target

str. sell

-100%

Previous close

$1.69

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of ALQA 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, %
  30.40
  27.86
  25.57
  23.52
  21.66
  20.00
  18.50
  17.15
  15.93
  14.84
  13.86
  12.97
  12.17
  11.46
  10.81
  10.23
  9.71
  9.24
  8.81
  8.43
  8.09
  7.78
  7.50
  7.25
  7.03
  6.82
  6.64
  6.48
  6.33
  6.20
Revenue, $m
  26
  33
  41
  51
  62
  74
  88
  103
  119
  137
  155
  176
  197
  220
  243
  268
  294
  321
  350
  379
  410
  442
  475
  509
  545
  582
  621
  661
  703
  747
Variable operating expenses, $m
  90
  114
  143
  176
  213
  256
  302
  354
  410
  470
  533
  602
  675
  753
  834
  919
  1,009
  1,102
  1,199
  1,300
  1,405
  1,515
  1,628
  1,746
  1,869
  1,996
  2,129
  2,267
  2,410
  2,560
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
  90
  114
  143
  176
  213
  256
  302
  354
  410
  470
  533
  602
  675
  753
  834
  919
  1,009
  1,102
  1,199
  1,300
  1,405
  1,515
  1,628
  1,746
  1,869
  1,996
  2,129
  2,267
  2,410
  2,560
Operating income, $m
  -64
  -82
  -102
  -125
  -152
  -182
  -215
  -251
  -291
  -334
  -378
  -426
  -478
  -533
  -591
  -651
  -715
  -781
  -849
  -921
  -995
  -1,073
  -1,153
  -1,237
  -1,324
  -1,414
  -1,508
  -1,606
  -1,707
  -1,813
EBITDA, $m
  -58
  -75
  -94
  -116
  -141
  -169
  -200
  -234
  -272
  -312
  -355
  -401
  -450
  -502
  -556
  -613
  -673
  -735
  -799
  -867
  -937
  -1,010
  -1,086
  -1,164
  -1,246
  -1,331
  -1,420
  -1,511
  -1,607
  -1,707
Interest expense (income), $m
  2
  2
  3
  4
  6
  8
  9
  12
  14
  17
  20
  23
  26
  29
  33
  37
  41
  46
  50
  55
  60
  65
  71
  76
  82
  88
  94
  101
  108
  115
  122
Earnings before tax, $m
  -67
  -85
  -106
  -131
  -159
  -191
  -227
  -265
  -308
  -354
  -400
  -452
  -508
  -566
  -628
  -693
  -760
  -831
  -904
  -981
  -1,061
  -1,143
  -1,229
  -1,319
  -1,412
  -1,508
  -1,609
  -1,713
  -1,822
  -1,935
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
  -67
  -85
  -106
  -131
  -159
  -191
  -227
  -265
  -308
  -354
  -400
  -452
  -508
  -566
  -628
  -693
  -760
  -831
  -904
  -981
  -1,061
  -1,143
  -1,229
  -1,319
  -1,412
  -1,508
  -1,609
  -1,713
  -1,822
  -1,935

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
  42
  54
  67
  83
  101
  122
  144
  169
  196
  225
  256
  289
  325
  362
  401
  442
  485
  529
  576
  625
  675
  728
  782
  839
  898
  959
  1,023
  1,089
  1,158
  1,230
Adjusted assets (=assets-cash), $m
  42
  54
  67
  83
  101
  122
  144
  169
  196
  225
  256
  289
  325
  362
  401
  442
  485
  529
  576
  625
  675
  728
  782
  839
  898
  959
  1,023
  1,089
  1,158
  1,230
Revenue / Adjusted assets
  0.619
  0.611
  0.612
  0.614
  0.614
  0.607
  0.611
  0.609
  0.607
  0.609
  0.605
  0.609
  0.606
  0.608
  0.606
  0.606
  0.606
  0.607
  0.608
  0.606
  0.607
  0.607
  0.607
  0.607
  0.607
  0.607
  0.607
  0.607
  0.607
  0.607
Average production assets, $m
  22
  28
  36
  44
  54
  64
  76
  89
  103
  119
  135
  153
  171
  191
  212
  233
  256
  280
  304
  330
  357
  384
  413
  443
  474
  507
  540
  575
  612
  650
Working capital, $m
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -28
Total debt, $m
  16
  22
  29
  37
  47
  57
  69
  82
  96
  112
  128
  145
  164
  183
  204
  225
  248
  271
  296
  321
  347
  375
  404
  433
  464
  496
  530
  564
  601
  638
Total liabilities, $m
  22
  28
  35
  44
  53
  64
  76
  89
  103
  118
  134
  152
  170
  190
  210
  232
  254
  277
  302
  327
  354
  381
  410
  440
  471
  503
  536
  571
  607
  644
Total equity, $m
  20
  26
  32
  40
  48
  58
  69
  80
  93
  107
  122
  138
  154
  172
  191
  210
  231
  252
  274
  297
  321
  346
  372
  399
  427
  457
  487
  518
  551
  585
Total liabilities and equity, $m
  42
  54
  67
  84
  101
  122
  145
  169
  196
  225
  256
  290
  324
  362
  401
  442
  485
  529
  576
  624
  675
  727
  782
  839
  898
  960
  1,023
  1,089
  1,158
  1,229
Debt-to-equity ratio
  0.780
  0.850
  0.900
  0.940
  0.970
  0.990
  1.010
  1.020
  1.030
  1.040
  1.050
  1.050
  1.060
  1.060
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
Adjusted equity ratio
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476
  0.476

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -67
  -85
  -106
  -131
  -159
  -191
  -227
  -265
  -308
  -354
  -400
  -452
  -508
  -566
  -628
  -693
  -760
  -831
  -904
  -981
  -1,061
  -1,143
  -1,229
  -1,319
  -1,412
  -1,508
  -1,609
  -1,713
  -1,822
  -1,935
Depreciation, amort., depletion, $m
  6
  7
  8
  10
  11
  13
  15
  17
  19
  22
  22
  25
  28
  31
  35
  38
  42
  46
  50
  54
  58
  63
  68
  73
  78
  83
  89
  94
  100
  106
Funds from operations, $m
  -61
  -78
  -98
  -122
  -148
  -178
  -212
  -248
  -288
  -332
  -378
  -427
  -480
  -535
  -593
  -654
  -718
  -785
  -854
  -927
  -1,002
  -1,080
  -1,162
  -1,246
  -1,334
  -1,425
  -1,520
  -1,619
  -1,722
  -1,829
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
Cash from operations, $m
  -60
  -77
  -98
  -121
  -148
  -178
  -211
  -248
  -288
  -331
  -377
  -427
  -479
  -534
  -592
  -653
  -717
  -784
  -853
  -926
  -1,001
  -1,079
  -1,160
  -1,245
  -1,333
  -1,424
  -1,519
  -1,618
  -1,720
  -1,827
Maintenance CAPEX, $m
  -3
  -4
  -5
  -6
  -7
  -9
  -11
  -12
  -15
  -17
  -19
  -22
  -25
  -28
  -31
  -35
  -38
  -42
  -46
  -50
  -54
  -58
  -63
  -68
  -73
  -78
  -83
  -89
  -94
  -100
New CAPEX, $m
  -5
  -6
  -7
  -8
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
Cash from investing activities, $m
  -8
  -10
  -12
  -14
  -17
  -20
  -23
  -25
  -29
  -32
  -35
  -40
  -44
  -48
  -52
  -57
  -61
  -66
  -71
  -76
  -81
  -86
  -92
  -98
  -104
  -110
  -117
  -124
  -130
  -138
Free cash flow, $m
  -68
  -87
  -110
  -135
  -165
  -197
  -234
  -273
  -317
  -363
  -413
  -466
  -523
  -582
  -644
  -710
  -778
  -850
  -924
  -1,001
  -1,082
  -1,165
  -1,252
  -1,343
  -1,437
  -1,534
  -1,636
  -1,741
  -1,851
  -1,965
Issuance/(repayment) of debt, $m
  5
  6
  7
  8
  9
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  31
  32
  33
  35
  36
  38
Issuance/(repurchase) of shares, $m
  71
  90
  113
  139
  168
  201
  237
  277
  321
  367
  415
  468
  525
  584
  647
  712
  781
  852
  927
  1,004
  1,085
  1,168
  1,255
  1,346
  1,440
  1,538
  1,639
  1,745
  1,855
  1,969
Cash from financing (excl. dividends), $m  
  76
  96
  120
  147
  177
  212
  249
  290
  335
  382
  431
  485
  543
  603
  667
  733
  803
  875
  951
  1,029
  1,111
  1,196
  1,284
  1,376
  1,471
  1,570
  1,672
  1,780
  1,891
  2,007
Total cash flow (excl. dividends), $m
  8
  9
  10
  12
  13
  14
  15
  17
  18
  19
  18
  19
  20
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  34
  36
  37
  38
  40
  42
Retained Cash Flow (-), $m
  -71
  -90
  -113
  -139
  -168
  -201
  -237
  -277
  -321
  -367
  -415
  -468
  -525
  -584
  -647
  -712
  -781
  -852
  -927
  -1,004
  -1,085
  -1,168
  -1,255
  -1,346
  -1,440
  -1,538
  -1,639
  -1,745
  -1,855
  -1,969
Prev. year cash balance distribution, $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 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
  -63
  -81
  -102
  -127
  -155
  -187
  -222
  -261
  -303
  -348
  -397
  -449
  -504
  -563
  -624
  -688
  -756
  -826
  -899
  -976
  -1,055
  -1,138
  -1,224
  -1,313
  -1,406
  -1,502
  -1,602
  -1,706
  -1,815
  -1,928
Discount rate, %
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.42
  17.24
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
  28.09
  29.49
  30.97
  32.52
PV of cash for distribution, $m
  -59
  -69
  -80
  -90
  -98
  -105
  -110
  -112
  -112
  -110
  -105
  -98
  -90
  -81
  -71
  -60
  -51
  -41
  -33
  -26
  -19
  -14
  -10
  -7
  -5
  -3
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  13.4
  1.8
  0.2
  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
  0.0

Alliqua BioMedical, Inc. is a provider of advanced wound care solutions. The Company's businesses include advanced wound care and contract manufacturing. The Company operates through its subsidiaries, such as AquaMed Technologies, Inc. and Choice Therapeutics, Inc. The Company is engaged in developing a suite of advanced wound care solutions that will enable surgeons, clinicians and wound care practitioners to address the challenges in chronic and acute wounds. The Company utilizes hydrogel technology through which hydrogels are manufactured by introducing a hydrophilic polymer into water to create a feed mix. The Company's commercial wound care portfolio consists of over four product categories, such as Human Biologics; Antimicrobial Protection; Exudate Management and Contract Manufacturing. Human Biologics include BIOVANCE and Extracellular Matrix (ECM). Under Antimicrobial Protection, the Company offers SilverSeal.

FINANCIAL RATIOS  of  Alliqua BioMedical (ALQA)

Valuation Ratios
P/E Ratio -0.2
Price to Sales 0.3
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow -0.3
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate 50%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 37.5%
Interest Coverage -16
Management Effectiveness
Return On Assets -35.9%
Ret/ On Assets - 3 Yr. Avg. -61.4%
Return On Total Capital -51.9%
Ret/ On T. Cap. - 3 Yr. Avg. -82.3%
Return On Equity -66.7%
Return On Equity - 3 Yr. Avg. -90.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 55.6%
Gross Margin - 3 Yr. Avg. 41.9%
EBITDA Margin -150%
EBITDA Margin - 3 Yr. Avg. -279.4%
Operating Margin -177.8%
Oper. Margin - 3 Yr. Avg. -309.3%
Pre-Tax Margin -183.3%
Pre-Tax Margin - 3 Yr. Avg. -308.3%
Net Profit Margin -155.6%
Net Profit Margin - 3 Yr. Avg. -290.7%
Effective Tax Rate 3%
Eff/ Tax Rate - 3 Yr. Avg. 3.3%
Payout Ratio 0%

ALQA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALQA stock intrinsic value calculation we used $19.565 million for the last fiscal year's total revenue generated by Alliqua BioMedical. The default revenue input number comes from 0001 income statement of Alliqua BioMedical. 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 ALQA stock valuation model: a) initial revenue growth rate of 30.4% 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 7.9%, whose default value for ALQA is calculated based on our internal credit rating of Alliqua BioMedical, 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 Alliqua BioMedical.
    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 ALQA stock the variable cost ratio is equal to 355%.

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 ALQA 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 20.3% for Alliqua BioMedical.

Corporate tax rate of 27% is the nominal tax rate for Alliqua BioMedical. 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 ALQA 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 ALQA are equal to 87%.

Life of production assets of 6.1 years is the average useful life of capital assets used in Alliqua BioMedical 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 ALQA is equal to -3.7%. 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 - $15.667 million for Alliqua BioMedical - 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 5.005 million for Alliqua BioMedical 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 Alliqua BioMedical at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Should You Buy Alliqua BioMedical Inc (NASDAQ:ALQA) At $1.84?   [Mar-22-18 10:38AM  Simply Wall St.]
▶ Alliqua reports 3Q loss   [Nov-09-17 07:55AM  Associated Press]
▶ Alliqua, Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ Is It Time To Buy Alliqua BioMedical Inc (ALQA)?   [Oct-17-17 07:31PM  Simply Wall St.]
▶ [$$] The Add-On Deal Roundup: Sept. 5   [06:25PM  The Wall Street Journal]
▶ Alliqua reports 2Q loss   [Aug-10-17 11:54PM  Associated Press]
▶ Alliqua reports 1Q loss   [May-09-17 08:55AM  Associated Press]
▶ Hedge Funds Arent Crazy About A. M. Castle & Co (CASL) Anymore   [Dec-20-16 02:26PM  at Insider Monkey]

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