Intrinsic value of Athenex, Inc. - ATNX

Previous Close

$17.94

  Intrinsic Value

$0.48

stock screener

  Rating & Target

str. sell

-97%

Previous close

$17.94

 
Intrinsic value

$0.48

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of ATNX 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 1.2

 

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, %
  43.00
  39.20
  35.78
  32.70
  29.93
  27.44
  25.19
  23.18
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
Revenue, $m
  127
  177
  241
  319
  415
  529
  662
  815
  989
  1,184
  1,400
  1,637
  1,895
  2,173
  2,470
  2,787
  3,123
  3,477
  3,849
  4,239
  4,647
  5,072
  5,516
  5,977
  6,457
  6,956
  7,475
  8,014
  8,574
  9,156
Variable operating expenses, $m
  170
  236
  320
  424
  551
  701
  878
  1,081
  1,311
  1,570
  1,855
  2,169
  2,510
  2,878
  3,272
  3,692
  4,136
  4,605
  5,098
  5,615
  6,155
  6,719
  7,306
  7,918
  8,553
  9,214
  9,901
  10,615
  11,357
  12,128
Fixed operating expenses, $m
  101
  103
  106
  108
  110
  113
  115
  118
  120
  123
  126
  129
  131
  134
  137
  140
  143
  146
  150
  153
  156
  160
  163
  167
  171
  174
  178
  182
  186
  190
Total operating expenses, $m
  271
  339
  426
  532
  661
  814
  993
  1,199
  1,431
  1,693
  1,981
  2,298
  2,641
  3,012
  3,409
  3,832
  4,279
  4,751
  5,248
  5,768
  6,311
  6,879
  7,469
  8,085
  8,724
  9,388
  10,079
  10,797
  11,543
  12,318
Operating income, $m
  -144
  -162
  -185
  -213
  -246
  -286
  -331
  -384
  -443
  -509
  -580
  -660
  -747
  -840
  -939
  -1,045
  -1,157
  -1,275
  -1,399
  -1,529
  -1,665
  -1,806
  -1,954
  -2,107
  -2,267
  -2,433
  -2,605
  -2,784
  -2,969
  -3,163
EBITDA, $m
  -140
  -157
  -179
  -205
  -236
  -273
  -316
  -365
  -420
  -482
  -550
  -624
  -705
  -792
  -885
  -984
  -1,089
  -1,200
  -1,315
  -1,437
  -1,564
  -1,696
  -1,834
  -1,977
  -2,126
  -2,281
  -2,442
  -2,609
  -2,783
  -2,963
Interest expense (income), $m
  0
  3
  6
  10
  15
  21
  28
  37
  47
  58
  72
  86
  103
  121
  140
  161
  183
  207
  233
  260
  288
  317
  348
  380
  414
  449
  485
  523
  562
  603
  645
Earnings before tax, $m
  -147
  -168
  -195
  -228
  -267
  -314
  -368
  -430
  -501
  -580
  -667
  -763
  -867
  -980
  -1,100
  -1,229
  -1,365
  -1,508
  -1,659
  -1,817
  -1,982
  -2,154
  -2,334
  -2,521
  -2,715
  -2,917
  -3,127
  -3,345
  -3,572
  -3,807
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
  -147
  -168
  -195
  -228
  -267
  -314
  -368
  -430
  -501
  -580
  -667
  -763
  -867
  -980
  -1,100
  -1,229
  -1,365
  -1,508
  -1,659
  -1,817
  -1,982
  -2,154
  -2,334
  -2,521
  -2,715
  -2,917
  -3,127
  -3,345
  -3,572
  -3,807

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
  250
  347
  472
  626
  813
  1,036
  1,298
  1,598
  1,940
  2,322
  2,746
  3,211
  3,716
  4,260
  4,844
  5,465
  6,123
  6,817
  7,547
  8,312
  9,111
  9,945
  10,815
  11,720
  12,661
  13,640
  14,656
  15,713
  16,811
  17,953
Adjusted assets (=assets-cash), $m
  250
  347
  472
  626
  813
  1,036
  1,298
  1,598
  1,940
  2,322
  2,746
  3,211
  3,716
  4,260
  4,844
  5,465
  6,123
  6,817
  7,547
  8,312
  9,111
  9,945
  10,815
  11,720
  12,661
  13,640
  14,656
  15,713
  16,811
  17,953
Revenue / Adjusted assets
  0.508
  0.510
  0.511
  0.510
  0.510
  0.511
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
  0.510
Average production assets, $m
  49
  68
  93
  123
  160
  203
  255
  314
  381
  456
  539
  630
  730
  837
  951
  1,073
  1,202
  1,339
  1,482
  1,632
  1,789
  1,953
  2,124
  2,301
  2,486
  2,678
  2,878
  3,085
  3,301
  3,525
Working capital, $m
  18
  25
  34
  45
  59
  75
  94
  116
  140
  168
  199
  233
  269
  309
  351
  396
  443
  494
  547
  602
  660
  720
  783
  849
  917
  988
  1,061
  1,138
  1,217
  1,300
Total debt, $m
  86
  137
  202
  282
  380
  496
  632
  789
  966
  1,166
  1,387
  1,629
  1,892
  2,176
  2,480
  2,803
  3,146
  3,508
  3,888
  4,286
  4,703
  5,138
  5,591
  6,062
  6,552
  7,062
  7,592
  8,143
  8,715
  9,309
Total liabilities, $m
  130
  181
  246
  326
  424
  540
  676
  833
  1,011
  1,210
  1,431
  1,673
  1,936
  2,220
  2,524
  2,847
  3,190
  3,552
  3,932
  4,330
  4,747
  5,182
  5,635
  6,106
  6,596
  7,106
  7,636
  8,187
  8,759
  9,353
Total equity, $m
  120
  166
  226
  300
  390
  496
  622
  766
  929
  1,112
  1,315
  1,538
  1,780
  2,041
  2,320
  2,618
  2,933
  3,265
  3,615
  3,981
  4,364
  4,764
  5,180
  5,614
  6,065
  6,533
  7,020
  7,527
  8,053
  8,599
Total liabilities and equity, $m
  250
  347
  472
  626
  814
  1,036
  1,298
  1,599
  1,940
  2,322
  2,746
  3,211
  3,716
  4,261
  4,844
  5,465
  6,123
  6,817
  7,547
  8,311
  9,111
  9,946
  10,815
  11,720
  12,661
  13,639
  14,656
  15,714
  16,812
  17,952
Debt-to-equity ratio
  0.720
  0.820
  0.890
  0.940
  0.970
  1.000
  1.020
  1.030
  1.040
  1.050
  1.050
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
  1.080
Adjusted equity ratio
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -147
  -168
  -195
  -228
  -267
  -314
  -368
  -430
  -501
  -580
  -667
  -763
  -867
  -980
  -1,100
  -1,229
  -1,365
  -1,508
  -1,659
  -1,817
  -1,982
  -2,154
  -2,334
  -2,521
  -2,715
  -2,917
  -3,127
  -3,345
  -3,572
  -3,807
Depreciation, amort., depletion, $m
  4
  5
  6
  8
  10
  13
  15
  19
  23
  27
  30
  36
  41
  47
  54
  61
  68
  76
  84
  92
  101
  110
  120
  130
  140
  151
  163
  174
  186
  199
Funds from operations, $m
  -143
  -163
  -189
  -220
  -257
  -301
  -352
  -411
  -478
  -553
  -636
  -727
  -826
  -932
  -1,046
  -1,168
  -1,297
  -1,432
  -1,575
  -1,725
  -1,881
  -2,044
  -2,214
  -2,391
  -2,575
  -2,766
  -2,965
  -3,171
  -3,386
  -3,608
Change in working capital, $m
  5
  7
  9
  11
  14
  16
  19
  22
  25
  28
  31
  34
  37
  39
  42
  45
  48
  50
  53
  55
  58
  60
  63
  66
  68
  71
  74
  77
  80
  83
Cash from operations, $m
  -149
  -171
  -198
  -231
  -270
  -317
  -371
  -433
  -503
  -581
  -667
  -761
  -862
  -972
  -1,089
  -1,213
  -1,344
  -1,483
  -1,628
  -1,780
  -1,939
  -2,105
  -2,277
  -2,457
  -2,643
  -2,837
  -3,038
  -3,248
  -3,465
  -3,691
Maintenance CAPEX, $m
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -18
  -22
  -26
  -30
  -36
  -41
  -47
  -54
  -61
  -68
  -76
  -84
  -92
  -101
  -110
  -120
  -130
  -140
  -151
  -163
  -174
  -186
New CAPEX, $m
  -15
  -19
  -24
  -30
  -37
  -44
  -51
  -59
  -67
  -75
  -83
  -91
  -99
  -107
  -115
  -122
  -129
  -136
  -143
  -150
  -157
  -164
  -171
  -178
  -185
  -192
  -200
  -207
  -216
  -224
Cash from investing activities, $m
  -17
  -22
  -28
  -35
  -44
  -53
  -62
  -73
  -85
  -97
  -109
  -121
  -135
  -148
  -162
  -176
  -190
  -204
  -219
  -234
  -249
  -265
  -281
  -298
  -315
  -332
  -351
  -370
  -390
  -410
Free cash flow, $m
  -165
  -192
  -226
  -266
  -314
  -370
  -434
  -507
  -588
  -678
  -776
  -882
  -997
  -1,120
  -1,250
  -1,389
  -1,534
  -1,687
  -1,847
  -2,014
  -2,188
  -2,369
  -2,558
  -2,754
  -2,958
  -3,170
  -3,389
  -3,618
  -3,855
  -4,102
Issuance/(repayment) of debt, $m
  39
  51
  65
  80
  98
  116
  136
  157
  178
  199
  221
  242
  263
  284
  304
  324
  343
  362
  380
  398
  417
  435
  453
  471
  490
  510
  530
  551
  572
  595
Issuance/(repurchase) of shares, $m
  183
  215
  255
  302
  357
  420
  493
  574
  665
  763
  870
  985
  1,109
  1,241
  1,380
  1,526
  1,680
  1,840
  2,008
  2,183
  2,365
  2,554
  2,751
  2,955
  3,166
  3,386
  3,614
  3,852
  4,098
  4,354
Cash from financing (excl. dividends), $m  
  222
  266
  320
  382
  455
  536
  629
  731
  843
  962
  1,091
  1,227
  1,372
  1,525
  1,684
  1,850
  2,023
  2,202
  2,388
  2,581
  2,782
  2,989
  3,204
  3,426
  3,656
  3,896
  4,144
  4,403
  4,670
  4,949
Total cash flow (excl. dividends), $m
  57
  74
  93
  116
  140
  167
  195
  224
  254
  285
  315
  345
  375
  404
  433
  461
  488
  515
  542
  568
  594
  619
  645
  672
  699
  726
  755
  784
  815
  847
Retained Cash Flow (-), $m
  -183
  -215
  -255
  -302
  -357
  -420
  -493
  -574
  -665
  -763
  -870
  -985
  -1,109
  -1,241
  -1,380
  -1,526
  -1,680
  -1,840
  -2,008
  -2,183
  -2,365
  -2,554
  -2,751
  -2,955
  -3,166
  -3,386
  -3,614
  -3,852
  -4,098
  -4,354
Prev. year cash balance distribution, $m
  56
  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
  -70
  -142
  -161
  -186
  -217
  -254
  -298
  -350
  -410
  -478
  -555
  -640
  -734
  -836
  -947
  -1,065
  -1,191
  -1,325
  -1,467
  -1,615
  -1,771
  -1,935
  -2,105
  -2,283
  -2,468
  -2,660
  -2,860
  -3,067
  -3,283
  -3,507
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
  -67
  -130
  -140
  -153
  -168
  -184
  -201
  -219
  -236
  -251
  -264
  -273
  -279
  -281
  -278
  -271
  -259
  -244
  -226
  -205
  -183
  -161
  -138
  -116
  -96
  -78
  -61
  -47
  -36
  -26
Current shareholders' claim on cash, %
  79.8
  66.0
  56.1
  48.5
  42.7
  37.9
  34.0
  30.7
  27.9
  25.5
  23.4
  21.5
  19.8
  18.4
  17.0
  15.8
  14.7
  13.7
  12.8
  12.0
  11.2
  10.5
  9.8
  9.2
  8.7
  8.1
  7.6
  7.2
  6.8
  6.4

Athenex, Inc. is an oncology pharmaceutical company focused on the development and commercialization of therapies for cancer diseases and supportive therapies. The Company's technology platform is organized into three categories, including Oral Absorption Platform, Src Kinase Inhibitors and Symptom Therapeutics. The Company offers Oraxol, an oral formulation of paclitaxel; Orateacan, an oral formulation of Irinotecan; Oradoxel, an oral formulation of Docetaxel, and an oral formulation of Topotecan for the treatment of various types of cancers. Its Src Kinase Inhibitors include KX-01 (KX2-391) and KX-02 (KX2-361) oncology drug candidates. The Company's Symptom Therapeutics include CQ-01, which is used for the treatment of burn pruritus and scars; CQ-R1, which is used for the treatment of an irradiation-induced dermatitis, and an intranasal Granisetron used for the treatment of chemotherapy-induced nausea/vomiting.

FINANCIAL RATIOS  of  Athenex, Inc. (ATNX)

Valuation Ratios
P/E Ratio -11.3
Price to Sales 47.2
Price to Book 29.2
Price to Tangible Book
Price to Cash Flow -20.6
Price to Free Cash Flow -19.1
Growth Rates
Sales Growth Rate 50%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 33.3%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 21
Current Ratio 0
LT Debt to Equity 91.2%
Total Debt to Equity 97.1%
Interest Coverage 0
Management Effectiveness
Return On Assets -77.9%
Ret/ On Assets - 3 Yr. Avg. -81.1%
Return On Total Capital -104.1%
Ret/ On T. Cap. - 3 Yr. Avg. -103.7%
Return On Equity -133.3%
Return On Equity - 3 Yr. Avg. -114.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 4.8%
Gross Margin - 3 Yr. Avg. 37.3%
EBITDA Margin -409.5%
EBITDA Margin - 3 Yr. Avg. -855.6%
Operating Margin -404.8%
Oper. Margin - 3 Yr. Avg. -856.3%
Pre-Tax Margin -419%
Pre-Tax Margin - 3 Yr. Avg. -861.1%
Net Profit Margin -419%
Net Profit Margin - 3 Yr. Avg. -861.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ATNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATNX stock intrinsic value calculation we used $89 million for the last fiscal year's total revenue generated by Athenex, Inc.. The default revenue input number comes from 0001 income statement of Athenex, 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 ATNX stock valuation model: a) initial revenue growth rate of 43% 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 ATNX is calculated based on our internal credit rating of Athenex, 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 Athenex, 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 ATNX stock the variable cost ratio is equal to 133.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $99 million in the base year in the intrinsic value calculation for ATNX 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 7.4% for Athenex, Inc..

Corporate tax rate of 27% is the nominal tax rate for Athenex, 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 ATNX 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 ATNX are equal to 38.5%.

Life of production assets of 17.7 years is the average useful life of capital assets used in Athenex, 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 ATNX is equal to 14.2%. 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 - $139.355 million for Athenex, 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 67.024 million for Athenex, 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 Athenex, Inc. at the current share price and the inputted number of shares is $1.2 billion.

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