Intrinsic value of AxoGen, Inc. - AXGN

Previous Close

$19.61

  Intrinsic Value

$0.89

stock screener

  Rating & Target

str. sell

-95%

Previous close

$19.61

 
Intrinsic value

$0.89

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of AXGN 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 0.8

 

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, %
  38.10
  34.79
  31.81
  29.13
  26.72
  24.55
  22.59
  20.83
  19.25
  17.82
  16.54
  15.39
  14.35
  13.41
  12.57
  11.81
  11.13
  10.52
  9.97
  9.47
  9.02
  8.62
  8.26
  7.93
  7.64
  7.38
  7.14
  6.92
  6.73
  6.56
Revenue, $m
  116
  156
  206
  266
  337
  420
  515
  622
  742
  874
  1,019
  1,176
  1,344
  1,524
  1,716
  1,919
  2,133
  2,357
  2,592
  2,837
  3,093
  3,360
  3,638
  3,926
  4,226
  4,538
  4,862
  5,199
  5,549
  5,912
Variable operating expenses, $m
  131
  176
  232
  299
  379
  472
  578
  699
  833
  981
  1,143
  1,318
  1,507
  1,710
  1,925
  2,152
  2,392
  2,643
  2,907
  3,182
  3,469
  3,768
  4,080
  4,403
  4,740
  5,089
  5,452
  5,830
  6,223
  6,631
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
  131
  176
  232
  299
  379
  472
  578
  699
  833
  981
  1,143
  1,318
  1,507
  1,710
  1,925
  2,152
  2,392
  2,643
  2,907
  3,182
  3,469
  3,768
  4,080
  4,403
  4,740
  5,089
  5,452
  5,830
  6,223
  6,631
Operating income, $m
  -15
  -20
  -26
  -33
  -42
  -52
  -63
  -76
  -91
  -107
  -124
  -143
  -163
  -185
  -208
  -233
  -259
  -286
  -315
  -345
  -376
  -408
  -442
  -477
  -513
  -551
  -591
  -631
  -674
  -718
EBITDA, $m
  -13
  -18
  -23
  -30
  -38
  -47
  -58
  -70
  -83
  -98
  -114
  -132
  -151
  -171
  -193
  -215
  -239
  -265
  -291
  -319
  -347
  -377
  -408
  -441
  -475
  -510
  -546
  -584
  -623
  -664
Interest expense (income), $m
  0
  0
  0
  1
  2
  3
  4
  5
  6
  8
  9
  11
  13
  16
  18
  21
  24
  26
  30
  33
  36
  40
  43
  47
  51
  55
  60
  64
  69
  74
  79
Earnings before tax, $m
  -15
  -20
  -27
  -35
  -44
  -55
  -68
  -83
  -99
  -116
  -135
  -156
  -179
  -203
  -229
  -257
  -285
  -316
  -348
  -381
  -415
  -452
  -489
  -528
  -569
  -611
  -655
  -700
  -748
  -797
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
  -15
  -20
  -27
  -35
  -44
  -55
  -68
  -83
  -99
  -116
  -135
  -156
  -179
  -203
  -229
  -257
  -285
  -316
  -348
  -381
  -415
  -452
  -489
  -528
  -569
  -611
  -655
  -700
  -748
  -797

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
  70
  94
  124
  160
  203
  253
  310
  375
  447
  526
  613
  708
  809
  918
  1,033
  1,155
  1,284
  1,419
  1,560
  1,708
  1,862
  2,023
  2,190
  2,364
  2,544
  2,732
  2,927
  3,130
  3,340
  3,560
Adjusted assets (=assets-cash), $m
  70
  94
  124
  160
  203
  253
  310
  375
  447
  526
  613
  708
  809
  918
  1,033
  1,155
  1,284
  1,419
  1,560
  1,708
  1,862
  2,023
  2,190
  2,364
  2,544
  2,732
  2,927
  3,130
  3,340
  3,560
Revenue / Adjusted assets
  1.657
  1.660
  1.661
  1.663
  1.660
  1.660
  1.661
  1.659
  1.660
  1.662
  1.662
  1.661
  1.661
  1.660
  1.661
  1.661
  1.661
  1.661
  1.662
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
  1.661
Average production assets, $m
  8
  10
  14
  18
  23
  28
  34
  42
  50
  59
  68
  79
  90
  102
  115
  129
  143
  158
  174
  190
  207
  225
  244
  263
  283
  304
  326
  348
  372
  396
Working capital, $m
  21
  29
  38
  49
  62
  77
  94
  114
  136
  160
  186
  215
  246
  279
  314
  351
  390
  431
  474
  519
  566
  615
  666
  718
  773
  830
  890
  951
  1,015
  1,082
Total debt, $m
  5
  11
  19
  29
  40
  53
  67
  84
  103
  124
  146
  171
  197
  226
  256
  287
  321
  356
  393
  431
  471
  513
  556
  601
  648
  697
  748
  801
  855
  912
Total liabilities, $m
  18
  24
  32
  42
  53
  66
  81
  97
  116
  137
  159
  184
  210
  239
  269
  300
  334
  369
  406
  444
  484
  526
  569
  615
  662
  710
  761
  814
  869
  925
Total equity, $m
  52
  70
  92
  119
  150
  187
  229
  277
  331
  389
  454
  524
  599
  679
  765
  855
  950
  1,050
  1,155
  1,264
  1,378
  1,497
  1,621
  1,749
  1,883
  2,022
  2,166
  2,316
  2,472
  2,634
Total liabilities and equity, $m
  70
  94
  124
  161
  203
  253
  310
  374
  447
  526
  613
  708
  809
  918
  1,034
  1,155
  1,284
  1,419
  1,561
  1,708
  1,862
  2,023
  2,190
  2,364
  2,545
  2,732
  2,927
  3,130
  3,341
  3,559
Debt-to-equity ratio
  0.100
  0.160
  0.210
  0.240
  0.260
  0.280
  0.290
  0.300
  0.310
  0.320
  0.320
  0.330
  0.330
  0.330
  0.330
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.340
  0.350
  0.350
  0.350
  0.350
Adjusted equity ratio
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740
  0.740

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -15
  -20
  -27
  -35
  -44
  -55
  -68
  -83
  -99
  -116
  -135
  -156
  -179
  -203
  -229
  -257
  -285
  -316
  -348
  -381
  -415
  -452
  -489
  -528
  -569
  -611
  -655
  -700
  -748
  -797
Depreciation, amort., depletion, $m
  2
  2
  3
  3
  4
  5
  6
  7
  8
  9
  9
  11
  12
  14
  16
  18
  20
  22
  24
  26
  28
  31
  33
  36
  39
  42
  45
  48
  51
  54
Funds from operations, $m
  -13
  -18
  -24
  -32
  -40
  -51
  -63
  -76
  -91
  -108
  -126
  -145
  -167
  -189
  -213
  -239
  -266
  -294
  -324
  -355
  -387
  -421
  -456
  -492
  -530
  -569
  -610
  -653
  -697
  -743
Change in working capital, $m
  6
  7
  9
  11
  13
  15
  17
  20
  22
  24
  26
  29
  31
  33
  35
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
Cash from operations, $m
  -19
  -25
  -33
  -43
  -54
  -66
  -80
  -96
  -113
  -132
  -152
  -174
  -198
  -222
  -249
  -276
  -305
  -335
  -367
  -400
  -434
  -469
  -506
  -545
  -585
  -626
  -669
  -714
  -761
  -809
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -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
New CAPEX, $m
  -2
  -3
  -3
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -23
  -24
Cash from investing activities, $m
  -3
  -4
  -4
  -6
  -7
  -9
  -10
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -27
  -30
  -32
  -35
  -38
  -40
  -43
  -46
  -50
  -52
  -56
  -60
  -64
  -68
  -71
  -75
Free cash flow, $m
  -22
  -29
  -38
  -49
  -61
  -75
  -90
  -108
  -127
  -148
  -170
  -194
  -220
  -247
  -275
  -305
  -337
  -370
  -404
  -440
  -477
  -516
  -556
  -598
  -641
  -686
  -733
  -781
  -832
  -885
Issuance/(repayment) of debt, $m
  5
  6
  8
  9
  11
  13
  15
  17
  19
  21
  23
  25
  26
  28
  30
  32
  33
  35
  37
  38
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
Issuance/(repurchase) of shares, $m
  29
  38
  49
  62
  76
  92
  110
  130
  152
  175
  200
  226
  254
  284
  315
  347
  381
  416
  452
  490
  530
  570
  613
  657
  702
  750
  799
  850
  904
  959
Cash from financing (excl. dividends), $m  
  34
  44
  57
  71
  87
  105
  125
  147
  171
  196
  223
  251
  280
  312
  345
  379
  414
  451
  489
  528
  570
  612
  656
  702
  749
  799
  850
  903
  959
  1,016
Total cash flow (excl. dividends), $m
  12
  15
  19
  22
  26
  31
  35
  40
  44
  49
  52
  57
  61
  65
  69
  73
  77
  81
  85
  89
  92
  96
  100
  104
  108
  113
  117
  122
  126
  131
Retained Cash Flow (-), $m
  -29
  -38
  -49
  -62
  -76
  -92
  -110
  -130
  -152
  -175
  -200
  -226
  -254
  -284
  -315
  -347
  -381
  -416
  -452
  -490
  -530
  -570
  -613
  -657
  -702
  -750
  -799
  -850
  -904
  -959
Prev. year cash balance distribution, $m
  110
  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
  93
  -23
  -30
  -39
  -50
  -62
  -75
  -91
  -108
  -127
  -147
  -169
  -193
  -219
  -245
  -274
  -303
  -335
  -367
  -401
  -437
  -474
  -512
  -552
  -594
  -637
  -682
  -729
  -777
  -828
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
  89
  -21
  -26
  -32
  -38
  -45
  -51
  -57
  -62
  -66
  -70
  -72
  -73
  -73
  -72
  -70
  -66
  -62
  -57
  -51
  -45
  -39
  -34
  -28
  -23
  -19
  -15
  -11
  -8
  -6
Current shareholders' claim on cash, %
  87.0
  76.1
  67.0
  59.4
  52.8
  47.3
  42.4
  38.2
  34.6
  31.4
  28.6
  26.1
  23.8
  21.9
  20.1
  18.5
  17.0
  15.7
  14.5
  13.4
  12.4
  11.5
  10.6
  9.9
  9.2
  8.5
  7.9
  7.3
  6.8
  6.4

AxoGen, Inc. operates as a medical technology company. It offers a portfolio of nerve repair solutions for various surgical peripheral nerve repair needs. The company’s surgical nerve repair solutions include Avance Nerve Graft, an off-the-shelf human nerve allograft for bridging nerve discontinuities without the comorbidities associated with another surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect injured peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. It also offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device, as well as provides AxoTouch two point discriminator, a tool used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals through a direct sales force and independent distributors. It markets its products in the United States, the United Kingdom, Israel, Canada, Greece, Chile, Switzerland, Austria, and Spain. AxoGen, Inc. is headquartered in Alachua, Florida.

FINANCIAL RATIOS  of  AxoGen, Inc. (AXGN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AXGN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AXGN stock intrinsic value calculation we used $84 million for the last fiscal year's total revenue generated by AxoGen, Inc.. The default revenue input number comes from 0001 income statement of AxoGen, 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 AXGN stock valuation model: a) initial revenue growth rate of 38.1% 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 AXGN is calculated based on our internal credit rating of AxoGen, 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 AxoGen, 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 AXGN stock the variable cost ratio is equal to 113.1%.

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 AXGN 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 9.2% for AxoGen, Inc..

Corporate tax rate of 27% is the nominal tax rate for AxoGen, 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 AXGN 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 AXGN are equal to 6.7%.

Life of production assets of 7.3 years is the average useful life of capital assets used in AxoGen, 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 AXGN is equal to 18.3%. 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 - $146.982 million for AxoGen, 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 38.945 million for AxoGen, 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 AxoGen, Inc. at the current share price and the inputted number of shares is $0.8 billion.

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