Intrinsic value of Egalet - EGLT

Previous Close

$0.33

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.33

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of EGLT 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, %
  19.00
  17.60
  16.34
  15.21
  14.19
  13.27
  12.44
  11.70
  11.03
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.90
  5.81
  5.73
  5.66
Revenue, $m
  31
  37
  43
  49
  56
  63
  71
  80
  88
  98
  107
  117
  128
  139
  150
  162
  174
  187
  200
  214
  229
  243
  259
  275
  292
  310
  328
  347
  367
  388
Variable operating expenses, $m
  179
  211
  245
  282
  322
  365
  410
  458
  508
  561
  616
  674
  734
  797
  863
  931
  1,001
  1,075
  1,151
  1,230
  1,313
  1,399
  1,488
  1,581
  1,677
  1,778
  1,883
  1,993
  2,107
  2,226
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
  179
  211
  245
  282
  322
  365
  410
  458
  508
  561
  616
  674
  734
  797
  863
  931
  1,001
  1,075
  1,151
  1,230
  1,313
  1,399
  1,488
  1,581
  1,677
  1,778
  1,883
  1,993
  2,107
  2,226
Operating income, $m
  -148
  -174
  -203
  -233
  -266
  -301
  -339
  -378
  -420
  -464
  -509
  -557
  -607
  -658
  -712
  -769
  -827
  -888
  -951
  -1,016
  -1,084
  -1,155
  -1,229
  -1,305
  -1,385
  -1,469
  -1,555
  -1,646
  -1,740
  -1,838
EBITDA, $m
  -144
  -169
  -197
  -227
  -259
  -293
  -330
  -369
  -409
  -452
  -496
  -543
  -592
  -642
  -695
  -750
  -807
  -866
  -927
  -991
  -1,058
  -1,127
  -1,199
  -1,274
  -1,351
  -1,433
  -1,517
  -1,605
  -1,698
  -1,794
Interest expense (income), $m
  0
  19
  3
  6
  9
  12
  15
  18
  22
  26
  30
  34
  39
  44
  49
  54
  59
  64
  70
  76
  82
  89
  96
  103
  110
  117
  125
  133
  142
  151
  160
Earnings before tax, $m
  -167
  -178
  -208
  -242
  -278
  -316
  -357
  -401
  -446
  -494
  -543
  -596
  -650
  -707
  -766
  -828
  -891
  -958
  -1,027
  -1,099
  -1,173
  -1,251
  -1,331
  -1,415
  -1,503
  -1,594
  -1,689
  -1,788
  -1,891
  -1,999
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
  -167
  -178
  -208
  -242
  -278
  -316
  -357
  -401
  -446
  -494
  -543
  -596
  -650
  -707
  -766
  -828
  -891
  -958
  -1,027
  -1,099
  -1,173
  -1,251
  -1,331
  -1,415
  -1,503
  -1,594
  -1,689
  -1,788
  -1,891
  -1,999

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
  84
  99
  115
  132
  151
  171
  193
  215
  239
  264
  290
  317
  346
  375
  406
  438
  471
  506
  542
  579
  618
  658
  700
  744
  789
  837
  886
  938
  991
  1,047
Adjusted assets (=assets-cash), $m
  84
  99
  115
  132
  151
  171
  193
  215
  239
  264
  290
  317
  346
  375
  406
  438
  471
  506
  542
  579
  618
  658
  700
  744
  789
  837
  886
  938
  991
  1,047
Revenue / Adjusted assets
  0.369
  0.374
  0.374
  0.371
  0.371
  0.368
  0.368
  0.372
  0.368
  0.371
  0.369
  0.369
  0.370
  0.371
  0.369
  0.370
  0.369
  0.370
  0.369
  0.370
  0.371
  0.369
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.371
Average production assets, $m
  18
  21
  25
  28
  32
  37
  41
  46
  51
  57
  62
  68
  74
  80
  87
  94
  101
  108
  116
  124
  132
  141
  150
  159
  169
  179
  190
  201
  212
  224
Working capital, $m
  -38
  -44
  -51
  -59
  -68
  -77
  -86
  -96
  -107
  -118
  -129
  -142
  -154
  -168
  -181
  -196
  -210
  -226
  -242
  -259
  -276
  -294
  -313
  -332
  -352
  -374
  -396
  -419
  -443
  -468
Total debt, $m
  17
  31
  45
  61
  78
  96
  115
  136
  157
  179
  203
  227
  253
  279
  307
  336
  366
  397
  429
  463
  498
  534
  572
  611
  652
  695
  739
  786
  834
  884
Total liabilities, $m
  76
  89
  104
  119
  136
  154
  173
  194
  215
  237
  261
  285
  311
  338
  365
  394
  424
  455
  487
  521
  556
  592
  630
  669
  710
  753
  797
  844
  892
  943
Total equity, $m
  8
  10
  12
  13
  15
  17
  19
  22
  24
  26
  29
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  66
  70
  74
  79
  84
  89
  94
  99
  105
Total liabilities and equity, $m
  84
  99
  116
  132
  151
  171
  192
  216
  239
  263
  290
  317
  346
  376
  406
  438
  471
  506
  541
  579
  618
  658
  700
  743
  789
  837
  886
  938
  991
  1,048
Debt-to-equity ratio
  2.080
  3.110
  3.940
  4.610
  5.150
  5.600
  5.980
  6.300
  6.570
  6.790
  6.990
  7.170
  7.320
  7.450
  7.570
  7.670
  7.770
  7.850
  7.930
  8.000
  8.060
  8.120
  8.170
  8.220
  8.260
  8.300
  8.340
  8.380
  8.410
  8.440
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
  -167
  -178
  -208
  -242
  -278
  -316
  -357
  -401
  -446
  -494
  -543
  -596
  -650
  -707
  -766
  -828
  -891
  -958
  -1,027
  -1,099
  -1,173
  -1,251
  -1,331
  -1,415
  -1,503
  -1,594
  -1,689
  -1,788
  -1,891
  -1,999
Depreciation, amort., depletion, $m
  4
  5
  6
  6
  7
  8
  9
  10
  11
  12
  12
  14
  15
  16
  17
  19
  20
  22
  23
  25
  26
  28
  30
  32
  34
  36
  38
  40
  42
  45
Funds from operations, $m
  -163
  -173
  -203
  -236
  -271
  -308
  -348
  -391
  -435
  -482
  -531
  -582
  -635
  -691
  -749
  -809
  -871
  -936
  -1,004
  -1,074
  -1,147
  -1,222
  -1,301
  -1,383
  -1,469
  -1,558
  -1,651
  -1,747
  -1,848
  -1,954
Change in working capital, $m
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
Cash from operations, $m
  -157
  -166
  -196
  -228
  -262
  -299
  -339
  -381
  -425
  -471
  -519
  -570
  -623
  -678
  -735
  -795
  -856
  -921
  -988
  -1,057
  -1,129
  -1,204
  -1,283
  -1,364
  -1,449
  -1,537
  -1,629
  -1,724
  -1,824
  -1,929
Maintenance CAPEX, $m
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
New CAPEX, $m
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
Cash from investing activities, $m
  -6
  -7
  -7
  -9
  -10
  -10
  -12
  -13
  -14
  -15
  -17
  -18
  -20
  -21
  -23
  -24
  -26
  -27
  -30
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -54
Free cash flow, $m
  -163
  -173
  -203
  -236
  -272
  -310
  -351
  -394
  -439
  -486
  -536
  -588
  -642
  -699
  -758
  -819
  -882
  -948
  -1,017
  -1,088
  -1,162
  -1,240
  -1,320
  -1,403
  -1,490
  -1,581
  -1,675
  -1,773
  -1,876
  -1,983
Issuance/(repayment) of debt, $m
  -82
  13
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  50
Issuance/(repurchase) of shares, $m
  264
  179
  210
  244
  280
  318
  359
  403
  448
  496
  546
  598
  653
  710
  769
  831
  895
  961
  1,030
  1,102
  1,177
  1,255
  1,336
  1,420
  1,507
  1,598
  1,694
  1,793
  1,896
  2,004
Cash from financing (excl. dividends), $m  
  182
  192
  225
  260
  297
  336
  378
  423
  469
  518
  569
  623
  679
  737
  797
  860
  925
  992
  1,062
  1,136
  1,212
  1,291
  1,374
  1,459
  1,548
  1,641
  1,738
  1,839
  1,944
  2,054
Total cash flow (excl. dividends), $m
  19
  20
  21
  23
  25
  26
  28
  29
  31
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  48
  49
  51
  54
  56
  58
  60
  63
  66
  69
  72
Retained Cash Flow (-), $m
  -264
  -179
  -210
  -244
  -280
  -318
  -359
  -403
  -448
  -496
  -546
  -598
  -653
  -710
  -769
  -831
  -895
  -961
  -1,030
  -1,102
  -1,177
  -1,255
  -1,336
  -1,420
  -1,507
  -1,598
  -1,694
  -1,793
  -1,896
  -2,004
Prev. year cash balance distribution, $m
  48
  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
  -197
  -159
  -189
  -221
  -255
  -292
  -332
  -373
  -418
  -464
  -513
  -564
  -617
  -672
  -730
  -790
  -852
  -917
  -985
  -1,055
  -1,128
  -1,203
  -1,282
  -1,364
  -1,449
  -1,538
  -1,631
  -1,727
  -1,828
  -1,933
Discount rate, %
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
  -185
  -140
  -153
  -165
  -174
  -181
  -185
  -185
  -183
  -178
  -169
  -159
  -147
  -133
  -119
  -104
  -89
  -75
  -62
  -50
  -40
  -31
  -23
  -17
  -12
  -9
  -6
  -4
  -3
  -2
Current shareholders' claim on cash, %
  50.0
  2.2
  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
  0.0

Egalet Corporation is a specialty pharmaceutical company. The Company is engaged in developing, manufacturing and commercializing treatments for pain and other conditions. The Company's products include OXAYDO and SPRIX Nasal Spray. The Company is developing two late-stage product candidates, ARYMO ER and Egalet-002 using Guardian Technology. The Company's product SPRIX Nasal Spray, which contains ketorolac tromethamine is a non-steroidal anti-inflammatory drug (NSAID) indicated in adult patients for the short-term management of moderate to moderately severe pain that requires analgesia at the opioid level. The Company's product OXAYDO is an approved immediate-release (IR) oxycodone product formulated to deter abuse through snorting. The Company's product candidate, ARYMO ER is an abuse-deterrent (AD), extended-release (ER), oral morphine formulation. The Company's product candidate, Egalet-002, is an abuse-deterrent, extended-release, oral oxycodone formulation.

FINANCIAL RATIOS  of  Egalet (EGLT)

Valuation Ratios
P/E Ratio -0.1
Price to Sales 0.5
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow -0.1
Price to Free Cash Flow -0.1
Growth Rates
Sales Growth Rate -26.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75%
Cap. Spend. - 3 Yr. Gr. Rate 28.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 1680%
Total Debt to Equity 1680%
Interest Coverage 0
Management Effectiveness
Return On Assets -63.4%
Ret/ On Assets - 3 Yr. Avg. -73.1%
Return On Total Capital -77.8%
Ret/ On T. Cap. - 3 Yr. Avg. -102.6%
Return On Equity -193.6%
Return On Equity - 3 Yr. Avg. -177.9%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 76.5%
Gross Margin - 3 Yr. Avg. 54.5%
EBITDA Margin -517.6%
EBITDA Margin - 3 Yr. Avg. -953.7%
Operating Margin -476.5%
Oper. Margin - 3 Yr. Avg. -850.9%
Pre-Tax Margin -541.2%
Pre-Tax Margin - 3 Yr. Avg. -982.6%
Net Profit Margin -535.3%
Net Profit Margin - 3 Yr. Avg. -979.2%
Effective Tax Rate 1.1%
Eff/ Tax Rate - 3 Yr. Avg. 0.9%
Payout Ratio 0%

EGLT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EGLT stock intrinsic value calculation we used $26.136 million for the last fiscal year's total revenue generated by Egalet. The default revenue input number comes from 0001 income statement of Egalet. 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 EGLT stock valuation model: a) initial revenue growth rate of 19% 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 6.5%, whose default value for EGLT is calculated based on our internal credit rating of Egalet, 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 Egalet.
    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 EGLT stock the variable cost ratio is equal to 576.9%.

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 EGLT 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 19.2% for Egalet.

Corporate tax rate of 27% is the nominal tax rate for Egalet. 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 EGLT 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 EGLT are equal to 57.9%.

Life of production assets of 3.7 years is the average useful life of capital assets used in Egalet 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 EGLT is equal to -120.7%. 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 - $-39.375 million for Egalet - 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 56.772 million for Egalet 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 Egalet at the current share price and the inputted number of shares is $0.0 billion.

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