Intrinsic value of Antares Pharma - ATRS

Previous Close

$3.30

  Intrinsic Value

$0.05

stock screener

  Rating & Target

str. sell

-98%

Previous close

$3.30

 
Intrinsic value

$0.05

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of ATRS 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 2017), $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 0.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.40
  4.46
  4.51
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
Revenue, $m
  57
  60
  63
  66
  69
  72
  75
  79
  82
  86
  90
  95
  99
  104
  109
  115
  120
  126
  132
  139
  146
  153
  160
  168
  177
  185
  195
  204
  214
  225
Variable operating expenses, $m
  84
  88
  92
  96
  101
  105
  110
  115
  121
  127
  132
  139
  145
  152
  160
  168
  176
  184
  194
  203
  213
  224
  235
  246
  258
  271
  285
  299
  314
  329
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
  84
  88
  92
  96
  101
  105
  110
  115
  121
  127
  132
  139
  145
  152
  160
  168
  176
  184
  194
  203
  213
  224
  235
  246
  258
  271
  285
  299
  314
  329
Operating income, $m
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -86
  -90
  -95
  -99
  -104
EBITDA, $m
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -72
  -75
  -79
  -83
  -87
  -92
  -96
Interest expense (income), $m
  0
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
Earnings before tax, $m
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -74
  -78
  -81
  -86
  -90
  -94
  -99
  -104
  -109
  -115
  -121
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
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -74
  -78
  -81
  -86
  -90
  -94
  -99
  -104
  -109
  -115
  -121

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
  62
  64
  67
  70
  74
  77
  81
  84
  88
  93
  97
  102
  107
  112
  117
  123
  129
  135
  142
  149
  156
  164
  172
  181
  189
  199
  209
  219
  230
  241
Adjusted assets (=assets-cash), $m
  62
  64
  67
  70
  74
  77
  81
  84
  88
  93
  97
  102
  107
  112
  117
  123
  129
  135
  142
  149
  156
  164
  172
  181
  189
  199
  209
  219
  230
  241
Revenue / Adjusted assets
  0.919
  0.938
  0.940
  0.943
  0.932
  0.935
  0.926
  0.940
  0.932
  0.925
  0.928
  0.931
  0.925
  0.929
  0.932
  0.935
  0.930
  0.933
  0.930
  0.933
  0.936
  0.933
  0.930
  0.928
  0.937
  0.930
  0.933
  0.932
  0.930
  0.934
Average production assets, $m
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  35
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  58
  61
  64
  67
  71
  74
  78
  82
Working capital, $m
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
Total debt, $m
  27
  29
  31
  34
  36
  38
  41
  43
  46
  49
  52
  55
  59
  62
  66
  70
  74
  79
  83
  88
  93
  99
  104
  110
  117
  123
  130
  137
  145
  153
Total liabilities, $m
  43
  45
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  74
  78
  82
  86
  90
  94
  99
  104
  109
  114
  120
  126
  132
  139
  146
  153
  160
  168
Total equity, $m
  19
  20
  20
  21
  22
  23
  24
  26
  27
  28
  29
  31
  32
  34
  36
  37
  39
  41
  43
  45
  47
  50
  52
  55
  57
  60
  63
  66
  70
  73
Total liabilities and equity, $m
  62
  65
  67
  70
  73
  77
  80
  85
  89
  93
  97
  102
  106
  112
  118
  123
  129
  135
  142
  149
  156
  164
  172
  181
  189
  199
  209
  219
  230
  241
Debt-to-equity ratio
  1.470
  1.510
  1.540
  1.570
  1.610
  1.640
  1.670
  1.690
  1.720
  1.750
  1.770
  1.800
  1.820
  1.840
  1.860
  1.880
  1.900
  1.920
  1.940
  1.960
  1.970
  1.990
  2.000
  2.020
  2.030
  2.040
  2.060
  2.070
  2.080
  2.090
Adjusted equity ratio
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303
  0.303

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -74
  -78
  -81
  -86
  -90
  -94
  -99
  -104
  -109
  -115
  -121
Depreciation, amort., depletion, $m
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
Funds from operations, $m
  -27
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -88
  -92
  -97
  -102
  -107
  -113
Change in working capital, $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
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -88
  -93
  -98
  -103
  -108
  -113
Maintenance CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
Cash from investing activities, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -9
  -10
  -11
  -11
  -12
Free cash flow, $m
  -31
  -32
  -33
  -35
  -37
  -39
  -40
  -42
  -45
  -47
  -49
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -88
  -93
  -98
  -103
  -108
  -113
  -119
  -125
Issuance/(repayment) of debt, $m
  3
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
Issuance/(repurchase) of shares, $m
  30
  32
  33
  35
  37
  39
  40
  42
  45
  47
  49
  51
  54
  57
  59
  62
  66
  69
  72
  76
  80
  84
  88
  92
  97
  102
  107
  113
  118
  124
Cash from financing (excl. dividends), $m  
  33
  34
  35
  37
  39
  41
  43
  45
  48
  50
  52
  54
  57
  61
  63
  66
  70
  73
  77
  81
  85
  89
  94
  98
  103
  109
  114
  120
  126
  132
Total cash flow (excl. dividends), $m
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Retained Cash Flow (-), $m
  -30
  -32
  -33
  -35
  -37
  -39
  -40
  -42
  -45
  -47
  -49
  -51
  -54
  -57
  -59
  -62
  -66
  -69
  -72
  -76
  -80
  -84
  -88
  -92
  -97
  -102
  -107
  -113
  -118
  -124
Prev. year cash balance distribution, $m
  16
  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
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
Cash available for distribution, $m
  -12
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -68
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
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
  -12
  -27
  -27
  -27
  -27
  -26
  -26
  -25
  -24
  -23
  -22
  -21
  -19
  -18
  -16
  -15
  -13
  -12
  -10
  -9
  -8
  -7
  -5
  -4
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  85.8
  73.2
  62.5
  53.3
  45.5
  38.8
  33.0
  28.2
  24.0
  20.4
  17.4
  14.8
  12.6
  10.7
  9.1
  7.8
  6.6
  5.6
  4.8
  4.1
  3.4
  2.9
  2.5
  2.1
  1.8
  1.5
  1.3
  1.1
  0.9
  0.8

Antares Pharma, Inc. (Antares) is a specialty pharmaceutical company that focuses on developing and commercializing self-administered parenteral pharmaceutical products and technologies. The Company develops and manufactures pressure-assisted injector devices, with and without needles, which allow patients to self-inject drugs. The Company's subcutaneous injection technology platforms include VIBEX disposable pressure-assisted auto injectors, Vision reusable needle-free injectors and disposable multi-use pen injectors. The Company operates through drug delivery segment, which includes self-administered parenteral pharmaceutical products and technologies. The Company has developed OTREXUP (methotrexate) injection, which is a single dose, disposable auto injector.

FINANCIAL RATIOS  of  Antares Pharma (ATRS)

Valuation Ratios
P/E Ratio -21.3
Price to Sales 9.8
Price to Book 11.4
Price to Tangible Book
Price to Cash Flow -34.1
Price to Free Cash Flow -25.6
Growth Rates
Sales Growth Rate 13%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.6%
Cap. Spend. - 3 Yr. Gr. Rate 10.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -31.8%
Ret/ On Assets - 3 Yr. Avg. -34.5%
Return On Total Capital -42.9%
Ret/ On T. Cap. - 3 Yr. Avg. -48.1%
Return On Equity -42.9%
Return On Equity - 3 Yr. Avg. -48.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 44.2%
Gross Margin - 3 Yr. Avg. 52.1%
EBITDA Margin -42.3%
EBITDA Margin - 3 Yr. Avg. -69.1%
Operating Margin -46.2%
Oper. Margin - 3 Yr. Avg. -73.1%
Pre-Tax Margin -46.2%
Pre-Tax Margin - 3 Yr. Avg. -73.1%
Net Profit Margin -46.2%
Net Profit Margin - 3 Yr. Avg. -73.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -1.7%
Payout Ratio 0%

ATRS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATRS stock intrinsic value calculation we used $55 million for the last fiscal year's total revenue generated by Antares Pharma. The default revenue input number comes from 2017 income statement of Antares Pharma. 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 ATRS stock valuation model: a) initial revenue growth rate of 4.4% 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 4.3%, whose default value for ATRS is calculated based on our internal credit rating of Antares Pharma, 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 Antares Pharma.
    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 ATRS stock the variable cost ratio is equal to 146.7%.

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 ATRS 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 11.4% for Antares Pharma.

Corporate tax rate of 27% is the nominal tax rate for Antares Pharma. 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 ATRS stock is equal to 6.4%.

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 ATRS are equal to 36.4%.

Life of production assets of 10 years is the average useful life of capital assets used in Antares Pharma 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 ATRS is equal to 6.1%. 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 - $34 million for Antares Pharma - 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 156 million for Antares Pharma 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 Antares Pharma at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

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▶ Antares Pharma: 1Q Earnings Snapshot   [May-08-18 08:33AM  Associated Press]
▶ Antares Pharma Provides XYOSTED Regulatory Update   [Apr-05-18 07:00AM  GlobeNewswire]
▶ ATRS: Xyosted Regulatory Update   [Mar-27-18 11:00AM  Zacks Small Cap Research]
▶ ATRS: Multiple New Launches Fire Up 2018   [Mar-26-18 12:00PM  Zacks Small Cap Research]
▶ Antares Pharma reports 4Q loss   [07:23AM  Associated Press]
▶ Antares Pharma Provides XYOSTED Regulatory Update   [Jan-16-18 07:00AM  GlobeNewswire]
▶ Antares Pharma Provides XYOSTED Regulatory Update   [Dec-21-17 04:01PM  GlobeNewswire]
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