Intrinsic value of Coherus BioSciences - CHRS

Previous Close

$12.08

  Intrinsic Value

$0.11

stock screener

  Rating & Target

str. sell

-99%

Previous close

$12.08

 
Intrinsic value

$0.11

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of CHRS 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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
Variable operating expenses, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Fixed operating expenses, $m
  243
  249
  254
  260
  265
  271
  277
  283
  289
  296
  302
  309
  316
  323
  330
  337
  345
  352
  360
  368
  376
  384
  393
  401
  410
  419
  428
  438
  447
  457
Total operating expenses, $m
  244
  250
  255
  261
  266
  272
  278
  284
  290
  297
  303
  310
  317
  324
  331
  338
  346
  353
  361
  369
  377
  385
  394
  402
  411
  420
  429
  439
  448
  458
Operating income, $m
  -242
  -248
  -253
  -259
  -264
  -270
  -276
  -282
  -288
  -295
  -301
  -307
  -314
  -321
  -328
  -335
  -342
  -350
  -358
  -365
  -373
  -382
  -390
  -398
  -407
  -416
  -425
  -434
  -444
  -453
EBITDA, $m
  -240
  -245
  -251
  -256
  -262
  -267
  -273
  -279
  -285
  -291
  -298
  -304
  -311
  -318
  -325
  -332
  -339
  -346
  -353
  -361
  -369
  -377
  -385
  -393
  -402
  -410
  -419
  -428
  -437
  -447
Interest expense (income), $m
  7
  10
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
Earnings before tax, $m
  -252
  -249
  -255
  -261
  -266
  -272
  -278
  -285
  -291
  -297
  -304
  -311
  -318
  -325
  -332
  -339
  -347
  -355
  -363
  -371
  -380
  -388
  -397
  -406
  -415
  -424
  -434
  -444
  -454
  -464
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
  -252
  -249
  -255
  -261
  -266
  -272
  -278
  -285
  -291
  -297
  -304
  -311
  -318
  -325
  -332
  -339
  -347
  -355
  -363
  -371
  -380
  -388
  -397
  -406
  -415
  -424
  -434
  -444
  -454
  -464

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
  51
  52
  54
  55
  57
  59
  61
  63
  65
  68
  70
  73
  76
  80
  83
  87
  90
  95
  99
  103
  108
  113
  119
  124
  130
  136
  143
  150
  157
  165
Adjusted assets (=assets-cash), $m
  51
  52
  54
  55
  57
  59
  61
  63
  65
  68
  70
  73
  76
  80
  83
  87
  90
  95
  99
  103
  108
  113
  119
  124
  130
  136
  143
  150
  157
  165
Revenue / Adjusted assets
  0.039
  0.038
  0.037
  0.036
  0.035
  0.034
  0.033
  0.032
  0.031
  0.029
  0.029
  0.027
  0.026
  0.025
  0.036
  0.034
  0.033
  0.032
  0.030
  0.029
  0.028
  0.035
  0.034
  0.032
  0.031
  0.029
  0.028
  0.033
  0.032
  0.030
Average production assets, $m
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  35
Working capital, $m
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
Total debt, $m
  17
  18
  19
  21
  22
  24
  25
  27
  30
  32
  34
  37
  40
  42
  46
  49
  52
  56
  60
  64
  68
  73
  78
  83
  88
  94
  99
  106
  112
  119
Total liabilities, $m
  46
  47
  48
  50
  51
  53
  55
  57
  59
  61
  63
  66
  69
  72
  75
  78
  81
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  141
  148
Total equity, $m
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
Total liabilities and equity, $m
  51
  52
  53
  56
  57
  59
  61
  63
  66
  68
  70
  73
  77
  80
  83
  87
  90
  94
  99
  103
  108
  113
  119
  124
  130
  137
  143
  150
  157
  164
Debt-to-equity ratio
  3.300
  3.430
  3.570
  3.720
  3.870
  4.030
  4.200
  4.360
  4.530
  4.690
  4.860
  5.020
  5.180
  5.330
  5.480
  5.630
  5.780
  5.910
  6.050
  6.180
  6.300
  6.420
  6.540
  6.650
  6.760
  6.860
  6.960
  7.050
  7.140
  7.230
Adjusted equity ratio
  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
  -252
  -249
  -255
  -261
  -266
  -272
  -278
  -285
  -291
  -297
  -304
  -311
  -318
  -325
  -332
  -339
  -347
  -355
  -363
  -371
  -380
  -388
  -397
  -406
  -415
  -424
  -434
  -444
  -454
  -464
Depreciation, amort., depletion, $m
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
Funds from operations, $m
  -250
  -247
  -252
  -258
  -264
  -269
  -275
  -282
  -288
  -294
  -301
  -308
  -314
  -321
  -329
  -336
  -343
  -351
  -359
  -367
  -375
  -383
  -392
  -401
  -410
  -419
  -428
  -437
  -447
  -457
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  -249
  -247
  -252
  -258
  -263
  -269
  -275
  -281
  -288
  -294
  -300
  -307
  -314
  -321
  -328
  -335
  -343
  -350
  -358
  -366
  -374
  -383
  -391
  -400
  -409
  -418
  -427
  -436
  -446
  -456
Maintenance CAPEX, $m
  -3
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
New CAPEX, $m
  3
  0
  0
  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
  -2
  -2
Cash from investing activities, $m
  0
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -8
  -9
Free cash flow, $m
  -249
  -249
  -255
  -260
  -266
  -272
  -278
  -284
  -291
  -297
  -304
  -311
  -318
  -325
  -332
  -340
  -347
  -355
  -363
  -371
  -380
  -388
  -397
  -406
  -415
  -424
  -434
  -444
  -454
  -464
Issuance/(repayment) of debt, $m
  -85
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
Issuance/(repurchase) of shares, $m
  324
  249
  255
  261
  267
  273
  279
  285
  291
  298
  304
  311
  318
  325
  332
  340
  348
  355
  363
  372
  380
  389
  397
  406
  416
  425
  435
  444
  455
  465
Cash from financing (excl. dividends), $m  
  239
  250
  256
  262
  269
  275
  281
  287
  293
  300
  306
  314
  321
  328
  335
  343
  351
  359
  367
  376
  384
  394
  402
  411
  421
  431
  441
  450
  462
  472
Total cash flow (excl. dividends), $m
  -11
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  8
Retained Cash Flow (-), $m
  -324
  -249
  -255
  -261
  -267
  -273
  -279
  -285
  -291
  -298
  -304
  -311
  -318
  -325
  -332
  -340
  -348
  -355
  -363
  -372
  -380
  -389
  -397
  -406
  -416
  -425
  -435
  -444
  -455
  -465
Prev. year cash balance distribution, $m
  99
  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
  -235
  -248
  -253
  -259
  -265
  -270
  -276
  -282
  -289
  -295
  -301
  -308
  -315
  -322
  -329
  -336
  -344
  -351
  -359
  -367
  -375
  -384
  -392
  -401
  -410
  -419
  -428
  -438
  -447
  -457
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
  -226
  -227
  -220
  -213
  -205
  -196
  -187
  -176
  -166
  -155
  -143
  -131
  -120
  -108
  -97
  -85
  -75
  -65
  -55
  -47
  -39
  -32
  -26
  -20
  -16
  -12
  -9
  -7
  -5
  -3
Current shareholders' claim on cash, %
  50.0
  8.5
  1.5
  0.2
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
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Coherus BioSciences, Inc. is a late-stage clinical biologics platform company. The Company is engaged in the business of developing and commercializing biosimilar products. The Company's business is organized around therapeutic franchises, including Oncology biosimilar candidates pegfilgrastim (Neulasta) and bevacizumab (Avastin); Immunology (Anti-TNF) biosimilar candidates etanercept (Enbrel) and adalimumab (Humira); Ophthalmology biosimilar candidate ranibizumab (Lucentis), and Multiple sclerosis small molecule therapeutic candidate, CHS-131. The Company's product candidate pipeline includes CHS-1701, CHS-5217, CHS-0214, CHS-1420 and CHS-3351. Its CHS-1701 is a Granulocyte colony-stimulating factor (G-CSF) product candidate. Its Bevacizumab is a recombinant humanized monoclonal antibody that blocks angiogenesis by inhibiting vascular endothelial growth factor A (VEGF-A). Its Etanercept (Enbrel) is the reference product for CHS-0214.

FINANCIAL RATIOS  of  Coherus BioSciences (CHRS)

Valuation Ratios
P/E Ratio -4.4
Price to Sales 2.9
Price to Book 26.4
Price to Tangible Book
Price to Cash Flow -2.2
Price to Free Cash Flow -2.1
Growth Rates
Sales Growth Rate 533.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.7%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 476.2%
Total Debt to Equity 476.2%
Interest Coverage -17
Management Effectiveness
Return On Assets -61.5%
Ret/ On Assets - 3 Yr. Avg. -82.6%
Return On Total Capital -220.9%
Ret/ On T. Cap. - 3 Yr. Avg. -517.3%
Return On Equity -1693.3%
Return On Equity - 3 Yr. Avg. -1040.2%
Asset Turnover 1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -62.1%
EBITDA Margin - 3 Yr. Avg. -359.8%
Operating Margin -61.1%
Oper. Margin - 3 Yr. Avg. -333.6%
Pre-Tax Margin -67.4%
Pre-Tax Margin - 3 Yr. Avg. -364.9%
Net Profit Margin -66.8%
Net Profit Margin - 3 Yr. Avg. -363.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CHRS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CHRS stock intrinsic value calculation we used $1.556 million for the last fiscal year's total revenue generated by Coherus BioSciences. The default revenue input number comes from 0001 income statement of Coherus BioSciences. 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 CHRS stock valuation model: a) initial revenue growth rate of 2% 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 CHRS is calculated based on our internal credit rating of Coherus BioSciences, 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 Coherus BioSciences.
    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 CHRS stock the variable cost ratio is equal to 50%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $238 million in the base year in the intrinsic value calculation for CHRS 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 9.5% for Coherus BioSciences.

Corporate tax rate of 27% is the nominal tax rate for Coherus BioSciences. 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 CHRS 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 CHRS are equal to 677.7%.

Life of production assets of 4.5 years is the average useful life of capital assets used in Coherus BioSciences 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 CHRS is equal to -494.5%. 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 - $31.824 million for Coherus BioSciences - 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 67.111 million for Coherus BioSciences 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 Coherus BioSciences at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ Coherus BioSciences: 3Q Earnings Snapshot   [05:02PM  Associated Press]
▶ U.S. FDA Approves UDENYCA (pegfilgrastim-cbqv)   [Nov-02-18 01:41PM  GlobeNewswire]
▶ Here's Why Coherus BioSciences Fell 18.1% in September   [Oct-11-18 03:02PM  Motley Fool]
▶ Amgen's Neulasta Has a New Competitor in Europe   [Sep-26-18 12:32PM  GuruFocus.com]
▶ Coherus BioSciences: 2Q Earnings Snapshot   [Aug-08-18 06:14PM  Associated Press]
▶ Here's Why Coherus Biosciences Rose Over 21% Today   [Jul-18-18 12:14PM  Motley Fool]
▶ Coherus Prices Public Offering of Common Stock   [May-22-18 07:38PM  GlobeNewswire]
▶ Coherus Announces Proposed Public Offering of Common Stock   [May-21-18 04:15PM  GlobeNewswire]
▶ Coherus BioSciences: 1Q Earnings Snapshot   [May-10-18 05:14PM  Associated Press]
▶ Coherus BioSciences reports 4Q loss   [05:03AM  Associated Press]
▶ Winners & losers from JP Morgan Healthcare Conference   [Jan-16-18 07:36PM  CNBC Videos]
▶ Trade of the Day: Coherus Biosciences Inc (CHRS)   [Nov-17-17 09:12AM  InvestorPlace]
▶ Coherus BioSciences reports 3Q loss   [Nov-06-17 04:35PM  Associated Press]
▶ 3 Stocks With McDonald's-Like Return Potential   [Sep-11-17 09:02PM  Motley Fool]
▶ AbbVie Scores 2 Wins: 1 Threatens Regeneron   [Sep-07-17 07:30PM  Motley Fool]
▶ Coherus Bio Jumps on Private Placement   [Aug-21-17 12:39PM  24/7 Wall St.]

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