Intrinsic value of CTI BioPharma Corp. - CTIC

Previous Close

$0.96

  Intrinsic Value

$0.24

stock screener

  Rating & Target

str. sell

-75%

Previous close

$0.96

 
Intrinsic value

$0.24

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of CTIC 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 0.1

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  42
  64
  96
  139
  197
  271
  363
  477
  613
  775
  962
  1,176
  1,418
  1,687
  1,984
  2,308
  2,658
  3,035
  3,437
  3,864
  4,316
  4,791
  5,291
  5,813
  6,359
  6,928
  7,520
  8,137
  8,778
  9,444
Variable operating expenses, $m
  107
  165
  247
  359
  506
  695
  933
  1,225
  1,576
  1,991
  2,472
  3,023
  3,643
  4,335
  5,097
  5,929
  6,830
  7,797
  8,831
  9,929
  11,089
  12,311
  13,593
  14,935
  16,337
  17,799
  19,322
  20,906
  22,553
  24,265
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
  107
  165
  247
  359
  506
  695
  933
  1,225
  1,576
  1,991
  2,472
  3,023
  3,643
  4,335
  5,097
  5,929
  6,830
  7,797
  8,831
  9,929
  11,089
  12,311
  13,593
  14,935
  16,337
  17,799
  19,322
  20,906
  22,553
  24,265
Operating income, $m
  -65
  -101
  -151
  -219
  -309
  -425
  -570
  -748
  -963
  -1,216
  -1,510
  -1,846
  -2,225
  -2,648
  -3,113
  -3,621
  -4,171
  -4,763
  -5,394
  -6,064
  -6,773
  -7,519
  -8,303
  -9,122
  -9,979
  -10,872
  -11,802
  -12,769
  -13,775
  -14,821
EBITDA, $m
  -65
  -100
  -149
  -217
  -306
  -420
  -564
  -741
  -953
  -1,204
  -1,495
  -1,827
  -2,203
  -2,621
  -3,081
  -3,584
  -4,129
  -4,714
  -5,339
  -6,002
  -6,704
  -7,443
  -8,218
  -9,029
  -9,877
  -10,761
  -11,681
  -12,639
  -13,635
  -14,670
Interest expense (income), $m
  4
  1
  3
  5
  7
  11
  16
  23
  31
  40
  52
  66
  83
  101
  122
  146
  172
  200
  230
  263
  298
  335
  375
  416
  460
  505
  553
  602
  654
  708
  763
Earnings before tax, $m
  -67
  -104
  -156
  -226
  -320
  -441
  -593
  -779
  -1,003
  -1,269
  -1,576
  -1,929
  -2,327
  -2,770
  -3,259
  -3,793
  -4,371
  -4,993
  -5,657
  -6,363
  -7,109
  -7,894
  -8,719
  -9,582
  -10,484
  -11,424
  -12,404
  -13,423
  -14,483
  -15,584
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
  -104
  -156
  -226
  -320
  -441
  -593
  -779
  -1,003
  -1,269
  -1,576
  -1,929
  -2,327
  -2,770
  -3,259
  -3,793
  -4,371
  -4,993
  -5,657
  -6,363
  -7,109
  -7,894
  -8,719
  -9,582
  -10,484
  -11,424
  -12,404
  -13,423
  -14,483
  -15,584

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
  66
  101
  152
  220
  310
  427
  573
  752
  968
  1,222
  1,518
  1,856
  2,237
  2,661
  3,129
  3,640
  4,193
  4,787
  5,421
  6,095
  6,807
  7,558
  8,345
  9,169
  10,029
  10,927
  11,862
  12,834
  13,845
  14,896
Adjusted assets (=assets-cash), $m
  66
  101
  152
  220
  310
  427
  573
  752
  968
  1,222
  1,518
  1,856
  2,237
  2,661
  3,129
  3,640
  4,193
  4,787
  5,421
  6,095
  6,807
  7,558
  8,345
  9,169
  10,029
  10,927
  11,862
  12,834
  13,845
  14,896
Revenue / Adjusted assets
  0.636
  0.634
  0.632
  0.632
  0.635
  0.635
  0.634
  0.634
  0.633
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
  0.634
Average production assets, $m
  3
  5
  8
  11
  16
  22
  29
  38
  49
  62
  77
  94
  113
  135
  159
  185
  213
  243
  275
  309
  345
  383
  423
  465
  509
  554
  602
  651
  702
  756
Working capital, $m
  -4
  -7
  -10
  -15
  -21
  -29
  -39
  -51
  -66
  -83
  -103
  -126
  -152
  -181
  -212
  -247
  -284
  -325
  -368
  -413
  -462
  -513
  -566
  -622
  -680
  -741
  -805
  -871
  -939
  -1,011
Total debt, $m
  30
  53
  85
  129
  187
  262
  355
  471
  609
  772
  962
  1,179
  1,424
  1,696
  1,997
  2,324
  2,679
  3,061
  3,468
  3,901
  4,358
  4,840
  5,345
  5,874
  6,427
  7,003
  7,603
  8,227
  8,876
  9,551
Total liabilities, $m
  42
  65
  97
  141
  199
  274
  368
  483
  621
  785
  974
  1,191
  1,436
  1,708
  2,009
  2,337
  2,692
  3,073
  3,480
  3,913
  4,370
  4,852
  5,357
  5,886
  6,439
  7,015
  7,615
  8,239
  8,889
  9,563
Total equity, $m
  23
  36
  54
  79
  111
  153
  205
  269
  346
  438
  543
  664
  801
  953
  1,120
  1,303
  1,501
  1,714
  1,941
  2,182
  2,437
  2,706
  2,987
  3,282
  3,591
  3,912
  4,246
  4,595
  4,957
  5,333
Total liabilities and equity, $m
  65
  101
  151
  220
  310
  427
  573
  752
  967
  1,223
  1,517
  1,855
  2,237
  2,661
  3,129
  3,640
  4,193
  4,787
  5,421
  6,095
  6,807
  7,558
  8,344
  9,168
  10,030
  10,927
  11,861
  12,834
  13,846
  14,896
Debt-to-equity ratio
  1.270
  1.460
  1.570
  1.640
  1.680
  1.710
  1.730
  1.750
  1.760
  1.770
  1.770
  1.770
  1.780
  1.780
  1.780
  1.780
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
  1.790
Adjusted equity ratio
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -67
  -104
  -156
  -226
  -320
  -441
  -593
  -779
  -1,003
  -1,269
  -1,576
  -1,929
  -2,327
  -2,770
  -3,259
  -3,793
  -4,371
  -4,993
  -5,657
  -6,363
  -7,109
  -7,894
  -8,719
  -9,582
  -10,484
  -11,424
  -12,404
  -13,423
  -14,483
  -15,584
Depreciation, amort., depletion, $m
  1
  1
  2
  2
  3
  5
  6
  8
  10
  13
  15
  19
  23
  27
  32
  37
  43
  49
  55
  62
  69
  77
  85
  93
  102
  111
  120
  130
  140
  151
Funds from operations, $m
  -66
  -102
  -154
  -224
  -317
  -436
  -587
  -771
  -993
  -1,256
  -1,561
  -1,910
  -2,304
  -2,743
  -3,227
  -3,756
  -4,329
  -4,944
  -5,602
  -6,301
  -7,039
  -7,817
  -8,634
  -9,489
  -10,382
  -11,313
  -12,283
  -13,293
  -14,342
  -15,433
Change in working capital, $m
  -2
  -2
  -3
  -5
  -6
  -8
  -10
  -12
  -15
  -17
  -20
  -23
  -26
  -29
  -32
  -35
  -38
  -40
  -43
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -63
  -66
  -69
  -71
Cash from operations, $m
  -64
  -100
  -150
  -219
  -311
  -428
  -577
  -759
  -979
  -1,239
  -1,541
  -1,887
  -2,278
  -2,714
  -3,195
  -3,721
  -4,291
  -4,904
  -5,559
  -6,255
  -6,991
  -7,767
  -8,581
  -9,433
  -10,324
  -11,253
  -12,220
  -13,227
  -14,274
  -15,362
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -2
  -3
  -4
  -6
  -8
  -10
  -12
  -15
  -19
  -23
  -27
  -32
  -37
  -43
  -49
  -55
  -62
  -69
  -77
  -85
  -93
  -102
  -111
  -120
  -130
  -140
New CAPEX, $m
  -1
  -2
  -3
  -3
  -5
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -19
  -22
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -47
  -49
  -51
  -53
Cash from investing activities, $m
  -1
  -3
  -4
  -5
  -7
  -9
  -11
  -15
  -19
  -23
  -27
  -32
  -38
  -45
  -51
  -58
  -65
  -73
  -81
  -89
  -98
  -107
  -117
  -127
  -137
  -148
  -158
  -169
  -181
  -193
Free cash flow, $m
  -66
  -102
  -154
  -224
  -317
  -437
  -588
  -774
  -997
  -1,261
  -1,568
  -1,920
  -2,316
  -2,758
  -3,246
  -3,779
  -4,356
  -4,977
  -5,640
  -6,344
  -7,089
  -7,874
  -8,697
  -9,560
  -10,460
  -11,400
  -12,378
  -13,396
  -14,455
  -15,555
Issuance/(repayment) of debt, $m
  16
  23
  32
  44
  58
  75
  94
  115
  138
  163
  190
  217
  245
  273
  300
  328
  355
  381
  407
  433
  457
  482
  505
  529
  553
  576
  600
  624
  649
  675
Issuance/(repurchase) of shares, $m
  75
  116
  174
  251
  352
  482
  645
  843
  1,081
  1,360
  1,682
  2,050
  2,463
  2,922
  3,426
  3,976
  4,569
  5,206
  5,884
  6,604
  7,364
  8,163
  9,001
  9,877
  10,792
  11,746
  12,738
  13,771
  14,845
  15,960
Cash from financing (excl. dividends), $m  
  91
  139
  206
  295
  410
  557
  739
  958
  1,219
  1,523
  1,872
  2,267
  2,708
  3,195
  3,726
  4,304
  4,924
  5,587
  6,291
  7,037
  7,821
  8,645
  9,506
  10,406
  11,345
  12,322
  13,338
  14,395
  15,494
  16,635
Total cash flow (excl. dividends), $m
  25
  37
  52
  70
  93
  120
  150
  184
  222
  262
  304
  347
  391
  436
  481
  525
  568
  610
  652
  692
  732
  770
  809
  846
  884
  922
  960
  999
  1,039
  1,080
Retained Cash Flow (-), $m
  -75
  -116
  -174
  -251
  -352
  -482
  -645
  -843
  -1,081
  -1,360
  -1,682
  -2,050
  -2,463
  -2,922
  -3,426
  -3,976
  -4,569
  -5,206
  -5,884
  -6,604
  -7,364
  -8,163
  -9,001
  -9,877
  -10,792
  -11,746
  -12,738
  -13,771
  -14,845
  -15,960
Prev. year cash balance distribution, $m
  44
  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
  -6
  -79
  -122
  -180
  -259
  -363
  -495
  -659
  -859
  -1,098
  -1,379
  -1,703
  -2,072
  -2,486
  -2,946
  -3,451
  -4,001
  -4,595
  -5,232
  -5,912
  -6,632
  -7,392
  -8,192
  -9,031
  -9,908
  -10,824
  -11,778
  -12,772
  -13,806
  -14,881
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
  -6
  -73
  -106
  -149
  -201
  -263
  -334
  -412
  -493
  -576
  -655
  -727
  -788
  -835
  -865
  -877
  -871
  -846
  -806
  -751
  -686
  -613
  -537
  -460
  -385
  -316
  -253
  -198
  -151
  -112
Current shareholders' claim on cash, %
  15.6
  2.5
  0.4
  0.1
  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

CTI BioPharma Corp. (CTI) is a biopharmaceutical company focused on the acquisition, development and commercialization of targeted therapies covering a spectrum of blood-related cancers to patients and healthcare providers. The Company is primarily focused on commercializing PIXUVRI in select countries in the European Union, for multiply relapsed or refractory aggressive B-cell non-Hodgkin lymphoma (NHL). It is also engaged in evaluating pacritinib for the treatment of adult patients with myelofibrosis. Its earlier stage product candidate, tosedostat, is an oral, once-daily aminopeptidase inhibitor that has demonstrated responses in patients with acute myeloid leukemia (AML). It also evaluates its pipeline candidate paclitaxel poliglumex (Opaxio), which targets solid tumors. It is evaluating Opaxio through cooperative group sponsored trials and investigator-sponsored trials (ISTs), such as the ongoing maintenance therapy trial in patients with ovarian cancer.

FINANCIAL RATIOS  of  CTI BioPharma Corp. (CTIC)

Valuation Ratios
P/E Ratio -0.5
Price to Sales 0.5
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow -0.4
Price to Free Cash Flow -0.4
Growth Rates
Sales Growth Rate 256.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 84.6%
Total Debt to Equity 146.2%
Interest Coverage -12
Management Effectiveness
Return On Assets -46.2%
Ret/ On Assets - 3 Yr. Avg. -81.1%
Return On Total Capital -74.3%
Ret/ On T. Cap. - 3 Yr. Avg. -125.3%
Return On Equity -160%
Return On Equity - 3 Yr. Avg. -209%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 98.2%
Gross Margin - 3 Yr. Avg. 94.7%
EBITDA Margin -84.2%
EBITDA Margin - 3 Yr. Avg. -324.5%
Operating Margin -87.7%
Oper. Margin - 3 Yr. Avg. -320.8%
Pre-Tax Margin -93%
Pre-Tax Margin - 3 Yr. Avg. -335.3%
Net Profit Margin -91.2%
Net Profit Margin - 3 Yr. Avg. -330%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CTIC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTIC stock intrinsic value calculation we used $26 million for the last fiscal year's total revenue generated by CTI BioPharma Corp.. The default revenue input number comes from 0001 income statement of CTI BioPharma Corp.. 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 CTIC stock valuation model: a) initial revenue growth rate of 60% 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 CTIC is calculated based on our internal credit rating of CTI BioPharma Corp., 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 CTI BioPharma Corp..
    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 CTIC stock the variable cost ratio is equal to 257.7%.

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 CTIC 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 8.6% for CTI BioPharma Corp..

Corporate tax rate of 27% is the nominal tax rate for CTI BioPharma Corp.. 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 CTIC 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 CTIC are equal to 8%.

Life of production assets of 3.5 years is the average useful life of capital assets used in CTI BioPharma Corp. 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 CTIC is equal to -10.7%. 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 - $58.694 million for CTI BioPharma Corp. - 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 57.985 million for CTI BioPharma Corp. 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 CTI BioPharma Corp. at the current share price and the inputted number of shares is $0.1 billion.

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