Intrinsic value of DarioHealth Corp. - DRIO

Previous Close

$0.51

  Intrinsic Value

$0.02

stock screener

  Rating & Target

str. sell

-96%

Previous close

$0.51

 
Intrinsic value

$0.02

 
Up/down potential

-96%

 
Rating

str. sell

We calculate the intrinsic value of DRIO 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 0.0

 

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, %
  36.70
  33.53
  30.68
  28.11
  25.80
  23.72
  21.85
  20.16
  18.65
  17.28
  16.05
  14.95
  13.95
  13.06
  12.25
  11.53
  10.87
  10.29
  9.76
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.28
  7.05
  6.84
  6.66
  6.49
Revenue, $m
  7
  9
  12
  15
  19
  24
  29
  35
  41
  48
  56
  65
  74
  83
  93
  104
  116
  127
  140
  153
  166
  181
  195
  210
  226
  243
  260
  278
  296
  315
Variable operating expenses, $m
  18
  24
  31
  40
  50
  61
  75
  90
  107
  125
  145
  167
  190
  215
  241
  269
  298
  329
  361
  394
  429
  466
  504
  543
  584
  626
  670
  716
  764
  814
Fixed operating expenses, $m
  7
  7
  7
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  9
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
Total operating expenses, $m
  25
  31
  38
  48
  58
  69
  83
  98
  116
  134
  154
  176
  199
  224
  251
  279
  308
  339
  372
  405
  440
  477
  516
  555
  596
  638
  683
  729
  777
  827
Operating income, $m
  -18
  -22
  -26
  -32
  -38
  -46
  -54
  -63
  -74
  -85
  -98
  -111
  -126
  -141
  -157
  -175
  -193
  -212
  -232
  -252
  -274
  -297
  -320
  -344
  -370
  -396
  -423
  -451
  -481
  -512
EBITDA, $m
  -18
  -21
  -26
  -31
  -37
  -45
  -53
  -62
  -72
  -84
  -96
  -109
  -123
  -138
  -154
  -171
  -189
  -207
  -227
  -247
  -268
  -290
  -313
  -337
  -362
  -387
  -414
  -442
  -471
  -500
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
Earnings before tax, $m
  -18
  -22
  -27
  -32
  -39
  -46
  -55
  -64
  -75
  -87
  -99
  -113
  -128
  -143
  -160
  -177
  -196
  -215
  -236
  -257
  -279
  -302
  -326
  -350
  -376
  -403
  -431
  -460
  -490
  -521
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
  -18
  -22
  -27
  -32
  -39
  -46
  -55
  -64
  -75
  -87
  -99
  -113
  -128
  -143
  -160
  -177
  -196
  -215
  -236
  -257
  -279
  -302
  -326
  -350
  -376
  -403
  -431
  -460
  -490
  -521

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
  8
  11
  14
  18
  23
  29
  35
  42
  50
  58
  67
  77
  88
  100
  112
  125
  139
  153
  168
  183
  200
  216
  234
  252
  271
  291
  312
  333
  355
  378
Adjusted assets (=assets-cash), $m
  8
  11
  14
  18
  23
  29
  35
  42
  50
  58
  67
  77
  88
  100
  112
  125
  139
  153
  168
  183
  200
  216
  234
  252
  271
  291
  312
  333
  355
  378
Revenue / Adjusted assets
  0.875
  0.818
  0.857
  0.833
  0.826
  0.828
  0.829
  0.833
  0.820
  0.828
  0.836
  0.844
  0.841
  0.830
  0.830
  0.832
  0.835
  0.830
  0.833
  0.836
  0.830
  0.838
  0.833
  0.833
  0.834
  0.835
  0.833
  0.835
  0.834
  0.833
Average production assets, $m
  1
  2
  2
  3
  3
  4
  5
  6
  7
  9
  10
  11
  13
  15
  17
  18
  20
  23
  25
  27
  29
  32
  35
  37
  40
  43
  46
  49
  52
  56
Working capital, $m
  -1
  -2
  -2
  -3
  -4
  -4
  -5
  -7
  -8
  -9
  -11
  -12
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -29
  -31
  -34
  -37
  -40
  -43
  -46
  -49
  -52
  -56
  -60
Total debt, $m
  1
  2
  4
  6
  9
  11
  14
  18
  22
  26
  31
  36
  41
  47
  53
  60
  67
  74
  81
  89
  97
  106
  115
  124
  133
  143
  154
  164
  176
  187
Total liabilities, $m
  4
  6
  7
  9
  12
  14
  17
  21
  25
  29
  34
  39
  44
  50
  56
  63
  70
  77
  84
  92
  100
  109
  118
  127
  136
  146
  157
  167
  179
  190
Total equity, $m
  4
  5
  7
  9
  11
  14
  17
  21
  25
  29
  34
  39
  44
  50
  56
  62
  69
  76
  83
  91
  99
  108
  116
  125
  135
  145
  155
  165
  176
  188
Total liabilities and equity, $m
  8
  11
  14
  18
  23
  28
  34
  42
  50
  58
  68
  78
  88
  100
  112
  125
  139
  153
  167
  183
  199
  217
  234
  252
  271
  291
  312
  332
  355
  378
Debt-to-equity ratio
  0.270
  0.460
  0.590
  0.680
  0.750
  0.800
  0.840
  0.870
  0.890
  0.910
  0.920
  0.930
  0.940
  0.950
  0.960
  0.960
  0.970
  0.970
  0.980
  0.980
  0.980
  0.980
  0.990
  0.990
  0.990
  0.990
  0.990
  0.990
  0.990
  1.000
Adjusted equity ratio
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497
  0.497

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -18
  -22
  -27
  -32
  -39
  -46
  -55
  -64
  -75
  -87
  -99
  -113
  -128
  -143
  -160
  -177
  -196
  -215
  -236
  -257
  -279
  -302
  -326
  -350
  -376
  -403
  -431
  -460
  -490
  -521
Depreciation, amort., depletion, $m
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
Funds from operations, $m
  -18
  -21
  -26
  -31
  -38
  -45
  -54
  -63
  -73
  -85
  -97
  -111
  -125
  -140
  -157
  -174
  -192
  -211
  -231
  -251
  -273
  -295
  -319
  -343
  -368
  -394
  -422
  -450
  -479
  -510
Change in working capital, $m
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
Cash from operations, $m
  -17
  -21
  -25
  -31
  -37
  -44
  -53
  -62
  -72
  -83
  -96
  -109
  -123
  -139
  -155
  -172
  -190
  -209
  -228
  -249
  -270
  -293
  -316
  -340
  -365
  -391
  -418
  -447
  -476
  -506
Maintenance CAPEX, $m
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -10
New CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
Cash from investing activities, $m
  0
  0
  0
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
Free cash flow, $m
  -18
  -22
  -26
  -32
  -38
  -46
  -54
  -64
  -74
  -86
  -99
  -112
  -127
  -143
  -159
  -177
  -195
  -215
  -235
  -256
  -278
  -301
  -325
  -350
  -375
  -402
  -430
  -459
  -489
  -520
Issuance/(repayment) of debt, $m
  1
  1
  2
  2
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
Issuance/(repurchase) of shares, $m
  19
  23
  28
  34
  41
  49
  58
  68
  79
  91
  104
  118
  133
  149
  166
  184
  203
  222
  243
  265
  287
  310
  334
  360
  386
  413
  441
  470
  501
  533
Cash from financing (excl. dividends), $m  
  20
  24
  30
  36
  43
  52
  61
  72
  83
  95
  109
  123
  138
  155
  172
  190
  210
  229
  251
  273
  295
  319
  343
  369
  396
  423
  451
  481
  512
  545
Total cash flow (excl. dividends), $m
  2
  3
  4
  4
  5
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
Retained Cash Flow (-), $m
  -19
  -23
  -28
  -34
  -41
  -49
  -58
  -68
  -79
  -91
  -104
  -118
  -133
  -149
  -166
  -184
  -203
  -222
  -243
  -265
  -287
  -310
  -334
  -360
  -386
  -413
  -441
  -470
  -501
  -533
Prev. year cash balance distribution, $m
  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
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
  -16
  -20
  -25
  -30
  -36
  -43
  -51
  -60
  -71
  -82
  -94
  -107
  -122
  -137
  -153
  -170
  -189
  -208
  -228
  -248
  -270
  -293
  -316
  -341
  -366
  -392
  -420
  -448
  -478
  -509
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
  -15
  -19
  -21
  -25
  -28
  -31
  -35
  -38
  -41
  -43
  -45
  -46
  -46
  -46
  -45
  -43
  -41
  -38
  -35
  -32
  -28
  -24
  -21
  -17
  -14
  -11
  -9
  -7
  -5
  -4
Current shareholders' claim on cash, %
  42.2
  19.0
  9.0
  4.5
  2.3
  1.2
  0.6
  0.3
  0.2
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DarioHealth Corp, formerly Labstyle Innovations Corp, is a digital health (mHealth) company. The Company is engaged in developing and commercializing a technology providing consumers with laboratory-testing capabilities using smart phones and other mobile devices. The Company's product, Dario, also known as Dario Smart Diabetes Management Solution, is a mobile, real-time, cloud-based, diabetes management solution based on a software application combined with a pocket-sized, blood glucose monitoring device, Dario Smart Meter. The Dario product is a digital diabetes management solution utilizing its technology delivered through a software application available for iPhone or Android and cloud-based data services with a blood glucose monitoring system device. Dario allows users to record, analyze, transmit and store various data points, such as glucose level, insulin and carbohydrate intake. It markets the Dario Smart Diabetes Management Solution in the Netherlands and New Zealand.

FINANCIAL RATIOS  of  DarioHealth Corp. (DRIO)

Valuation Ratios
P/E Ratio -0.3
Price to Sales 1
Price to Book -0.4
Price to Tangible Book
Price to Cash Flow -0.4
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate 200%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -244.4%
Ret/ On Assets - 3 Yr. Avg. -263.6%
Return On Total Capital 314.3%
Ret/ On T. Cap. - 3 Yr. Avg. 771.4%
Return On Equity 244.4%
Return On Equity - 3 Yr. Avg. 321.5%
Asset Turnover 0.7
Profitability Ratios
Gross Margin -33.3%
Gross Margin - 3 Yr. Avg. -44.4%
EBITDA Margin -366.7%
EBITDA Margin - 3 Yr. Avg. -355.6%
Operating Margin -366.7%
Oper. Margin - 3 Yr. Avg. -388.9%
Pre-Tax Margin -366.7%
Pre-Tax Margin - 3 Yr. Avg. -355.6%
Net Profit Margin -366.7%
Net Profit Margin - 3 Yr. Avg. -355.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DRIO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DRIO stock intrinsic value calculation we used $5 million for the last fiscal year's total revenue generated by DarioHealth Corp.. The default revenue input number comes from 0001 income statement of DarioHealth 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 DRIO stock valuation model: a) initial revenue growth rate of 36.7% 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 DRIO is calculated based on our internal credit rating of DarioHealth 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 DarioHealth 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 DRIO stock the variable cost ratio is equal to 260%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7 million in the base year in the intrinsic value calculation for DRIO 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 5.4% for DarioHealth Corp..

Corporate tax rate of 27% is the nominal tax rate for DarioHealth 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 DRIO 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 DRIO are equal to 17.7%.

Life of production assets of 4.5 years is the average useful life of capital assets used in DarioHealth 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 DRIO is equal to -18.9%. 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 - $3.941 million for DarioHealth 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 36.556 million for DarioHealth 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 DarioHealth Corp. at the current share price and the inputted number of shares is $0.0 billion.

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