Intrinsic value of Fortress Biotech, Inc. - FBIO

Previous Close

$1.71

  Intrinsic Value

$0.19

stock screener

  Rating & Target

str. sell

-89%

Previous close

$1.71

 
Intrinsic value

$0.19

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of FBIO 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, %
  35.80
  32.72
  29.95
  27.45
  25.21
  23.19
  21.37
  19.73
  18.26
  16.93
  15.74
  14.67
  13.70
  12.83
  12.05
  11.34
  10.71
  10.14
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
  6.61
  6.45
Revenue, $m
  255
  339
  440
  561
  703
  866
  1,051
  1,258
  1,488
  1,739
  2,013
  2,308
  2,625
  2,961
  3,318
  3,694
  4,090
  4,504
  4,938
  5,390
  5,862
  6,352
  6,863
  7,393
  7,944
  8,517
  9,113
  9,731
  10,375
  11,044
Variable operating expenses, $m
  307
  406
  528
  673
  842
  1,037
  1,258
  1,506
  1,781
  2,082
  2,409
  2,762
  3,141
  3,544
  3,971
  4,421
  4,894
  5,390
  5,909
  6,450
  7,015
  7,602
  8,212
  8,847
  9,507
  10,192
  10,905
  11,645
  12,415
  13,216
Fixed operating expenses, $m
  64
  66
  67
  69
  70
  72
  73
  75
  77
  78
  80
  82
  84
  85
  87
  89
  91
  93
  95
  97
  99
  102
  104
  106
  109
  111
  113
  116
  118
  121
Total operating expenses, $m
  371
  472
  595
  742
  912
  1,109
  1,331
  1,581
  1,858
  2,160
  2,489
  2,844
  3,225
  3,629
  4,058
  4,510
  4,985
  5,483
  6,004
  6,547
  7,114
  7,704
  8,316
  8,953
  9,616
  10,303
  11,018
  11,761
  12,533
  13,337
Operating income, $m
  -116
  -133
  -155
  -180
  -209
  -243
  -281
  -323
  -370
  -421
  -476
  -536
  -600
  -668
  -740
  -816
  -896
  -979
  -1,066
  -1,158
  -1,252
  -1,351
  -1,454
  -1,560
  -1,671
  -1,786
  -1,906
  -2,030
  -2,159
  -2,293
EBITDA, $m
  -112
  -129
  -150
  -174
  -202
  -234
  -271
  -311
  -356
  -405
  -458
  -515
  -576
  -641
  -710
  -783
  -859
  -939
  -1,022
  -1,109
  -1,200
  -1,294
  -1,392
  -1,494
  -1,600
  -1,710
  -1,824
  -1,943
  -2,066
  -2,194
Interest expense (income), $m
  0
  8
  5
  12
  20
  29
  39
  52
  66
  82
  99
  118
  139
  162
  186
  211
  238
  267
  297
  329
  361
  396
  432
  469
  508
  548
  590
  634
  679
  726
  775
Earnings before tax, $m
  -124
  -139
  -167
  -200
  -238
  -283
  -333
  -389
  -452
  -521
  -594
  -675
  -761
  -853
  -951
  -1,054
  -1,163
  -1,276
  -1,395
  -1,519
  -1,648
  -1,783
  -1,923
  -2,068
  -2,219
  -2,376
  -2,539
  -2,709
  -2,885
  -3,068
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
  -124
  -139
  -167
  -200
  -238
  -283
  -333
  -389
  -452
  -521
  -594
  -675
  -761
  -853
  -951
  -1,054
  -1,163
  -1,276
  -1,395
  -1,519
  -1,648
  -1,783
  -1,923
  -2,068
  -2,219
  -2,376
  -2,539
  -2,709
  -2,885
  -3,068

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
  175
  233
  302
  385
  483
  594
  722
  864
  1,022
  1,195
  1,383
  1,585
  1,803
  2,034
  2,279
  2,537
  2,809
  3,094
  3,391
  3,702
  4,026
  4,363
  4,713
  5,078
  5,456
  5,850
  6,259
  6,684
  7,126
  7,585
Adjusted assets (=assets-cash), $m
  175
  233
  302
  385
  483
  594
  722
  864
  1,022
  1,195
  1,383
  1,585
  1,803
  2,034
  2,279
  2,537
  2,809
  3,094
  3,391
  3,702
  4,026
  4,363
  4,713
  5,078
  5,456
  5,850
  6,259
  6,684
  7,126
  7,585
Revenue / Adjusted assets
  1.457
  1.455
  1.457
  1.457
  1.455
  1.458
  1.456
  1.456
  1.456
  1.455
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
  1.456
Average production assets, $m
  35
  47
  61
  77
  97
  119
  145
  174
  205
  240
  278
  319
  362
  409
  458
  510
  564
  622
  681
  744
  809
  877
  947
  1,020
  1,096
  1,175
  1,258
  1,343
  1,432
  1,524
Working capital, $m
  -57
  -75
  -98
  -125
  -156
  -192
  -233
  -279
  -330
  -386
  -447
  -512
  -583
  -657
  -737
  -820
  -908
  -1,000
  -1,096
  -1,197
  -1,301
  -1,410
  -1,523
  -1,641
  -1,764
  -1,891
  -2,023
  -2,160
  -2,303
  -2,452
Total debt, $m
  44
  96
  159
  234
  321
  422
  536
  664
  806
  962
  1,131
  1,314
  1,509
  1,717
  1,938
  2,170
  2,415
  2,671
  2,939
  3,219
  3,510
  3,813
  4,129
  4,457
  4,797
  5,151
  5,519
  5,902
  6,300
  6,713
Total liabilities, $m
  158
  209
  272
  347
  434
  535
  649
  778
  919
  1,075
  1,244
  1,427
  1,622
  1,830
  2,051
  2,284
  2,528
  2,784
  3,052
  3,332
  3,623
  3,927
  4,242
  4,570
  4,911
  5,265
  5,633
  6,015
  6,413
  6,827
Total equity, $m
  18
  23
  30
  39
  48
  59
  72
  86
  102
  119
  138
  159
  180
  203
  228
  254
  281
  309
  339
  370
  403
  436
  471
  508
  546
  585
  626
  668
  713
  759
Total liabilities and equity, $m
  176
  232
  302
  386
  482
  594
  721
  864
  1,021
  1,194
  1,382
  1,586
  1,802
  2,033
  2,279
  2,538
  2,809
  3,093
  3,391
  3,702
  4,026
  4,363
  4,713
  5,078
  5,457
  5,850
  6,259
  6,683
  7,126
  7,586
Debt-to-equity ratio
  2.540
  4.130
  5.250
  6.060
  6.650
  7.090
  7.430
  7.690
  7.890
  8.050
  8.180
  8.290
  8.370
  8.440
  8.500
  8.550
  8.600
  8.630
  8.670
  8.690
  8.720
  8.740
  8.760
  8.780
  8.790
  8.810
  8.820
  8.830
  8.840
  8.850
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
  -124
  -139
  -167
  -200
  -238
  -283
  -333
  -389
  -452
  -521
  -594
  -675
  -761
  -853
  -951
  -1,054
  -1,163
  -1,276
  -1,395
  -1,519
  -1,648
  -1,783
  -1,923
  -2,068
  -2,219
  -2,376
  -2,539
  -2,709
  -2,885
  -3,068
Depreciation, amort., depletion, $m
  3
  4
  5
  6
  7
  9
  10
  12
  14
  17
  18
  21
  24
  27
  30
  33
  37
  40
  44
  48
  53
  57
  61
  66
  71
  76
  82
  87
  93
  99
Funds from operations, $m
  -121
  -135
  -162
  -194
  -231
  -274
  -322
  -377
  -438
  -504
  -576
  -654
  -738
  -827
  -921
  -1,021
  -1,126
  -1,236
  -1,351
  -1,471
  -1,596
  -1,726
  -1,861
  -2,002
  -2,148
  -2,300
  -2,458
  -2,622
  -2,792
  -2,969
Change in working capital, $m
  -15
  -19
  -23
  -27
  -31
  -36
  -41
  -46
  -51
  -56
  -61
  -66
  -70
  -75
  -79
  -84
  -88
  -92
  -96
  -100
  -105
  -109
  -113
  -118
  -122
  -127
  -132
  -137
  -143
  -149
Cash from operations, $m
  -106
  -116
  -139
  -167
  -199
  -238
  -281
  -331
  -387
  -448
  -515
  -589
  -668
  -752
  -842
  -938
  -1,038
  -1,144
  -1,255
  -1,370
  -1,491
  -1,617
  -1,748
  -1,884
  -2,026
  -2,173
  -2,325
  -2,484
  -2,649
  -2,820
Maintenance CAPEX, $m
  -2
  -2
  -3
  -4
  -5
  -6
  -8
  -9
  -11
  -13
  -16
  -18
  -21
  -24
  -27
  -30
  -33
  -37
  -40
  -44
  -48
  -53
  -57
  -61
  -66
  -71
  -76
  -82
  -87
  -93
New CAPEX, $m
  -9
  -12
  -14
  -17
  -20
  -22
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -46
  -49
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
Cash from investing activities, $m
  -11
  -14
  -17
  -21
  -25
  -28
  -34
  -38
  -43
  -48
  -54
  -59
  -65
  -70
  -76
  -82
  -88
  -94
  -100
  -106
  -113
  -121
  -127
  -134
  -142
  -150
  -158
  -167
  -176
  -185
Free cash flow, $m
  -117
  -130
  -156
  -187
  -224
  -266
  -315
  -369
  -430
  -496
  -569
  -647
  -732
  -822
  -918
  -1,019
  -1,126
  -1,238
  -1,355
  -1,477
  -1,604
  -1,737
  -1,875
  -2,019
  -2,168
  -2,323
  -2,484
  -2,651
  -2,825
  -3,006
Issuance/(repayment) of debt, $m
  -22
  52
  63
  75
  87
  101
  114
  128
  142
  156
  169
  182
  195
  208
  220
  233
  245
  256
  268
  280
  291
  303
  315
  328
  341
  354
  368
  383
  398
  414
Issuance/(repurchase) of shares, $m
  192
  145
  174
  208
  248
  294
  346
  404
  468
  538
  613
  695
  783
  877
  976
  1,080
  1,190
  1,305
  1,425
  1,550
  1,681
  1,816
  1,958
  2,105
  2,257
  2,416
  2,580
  2,751
  2,929
  3,114
Cash from financing (excl. dividends), $m  
  170
  197
  237
  283
  335
  395
  460
  532
  610
  694
  782
  877
  978
  1,085
  1,196
  1,313
  1,435
  1,561
  1,693
  1,830
  1,972
  2,119
  2,273
  2,433
  2,598
  2,770
  2,948
  3,134
  3,327
  3,528
Total cash flow (excl. dividends), $m
  54
  66
  80
  95
  111
  128
  145
  163
  180
  197
  213
  230
  247
  263
  278
  293
  308
  323
  338
  353
  368
  383
  398
  414
  430
  447
  464
  483
  502
  522
Retained Cash Flow (-), $m
  -192
  -145
  -174
  -208
  -248
  -294
  -346
  -404
  -468
  -538
  -613
  -695
  -783
  -877
  -976
  -1,080
  -1,190
  -1,305
  -1,425
  -1,550
  -1,681
  -1,816
  -1,958
  -2,105
  -2,257
  -2,416
  -2,580
  -2,751
  -2,929
  -3,114
Prev. year cash balance distribution, $m
  103
  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
  -35
  -79
  -94
  -113
  -137
  -166
  -200
  -241
  -288
  -340
  -400
  -465
  -537
  -614
  -697
  -787
  -881
  -981
  -1,087
  -1,197
  -1,313
  -1,434
  -1,560
  -1,691
  -1,827
  -1,969
  -2,116
  -2,269
  -2,427
  -2,592
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
  -34
  -72
  -81
  -93
  -106
  -120
  -135
  -151
  -165
  -178
  -190
  -198
  -204
  -206
  -205
  -200
  -192
  -181
  -167
  -152
  -136
  -119
  -102
  -86
  -71
  -57
  -45
  -35
  -26
  -20
Current shareholders' claim on cash, %
  50.0
  9.1
  1.8
  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

Fortress Biotech, Inc., formerly Coronado Biosciences, Inc., is a biopharmaceutical company. The Company is involved in the development of immunotherapy agents for the treatment of autoimmune diseases and cancer. Its sole product candidate is CNDO-109. The Company is also focused on acquiring, developing and commercializing pharmaceutical and biotechnology products. The Company's product, CNDO-109, is a lysate (disrupted Closteroviridae (CTV)-1 cells, cell membrane fragments, cell proteins and other cellular components) that activates donor Natural Killer (NK) cells. CTV-1 is a leukemic cell line re-classified as a T-cell acute lymphocytic leukemia (ALL). The Company holds the license to develop and commercialize CNDO-109 to activate NK cells for the treatment of cancer-related and other conditions, and a non-exclusive license to certain clinical data solely for use in the Investigational new drug (IND) for CNDO-109. The Company is conducting the Phase I clinical studies of CNDO-109.

FINANCIAL RATIOS  of  Fortress Biotech, Inc. (FBIO)

Valuation Ratios
P/E Ratio -1.5
Price to Sales 5.2
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow -1.8
Price to Free Cash Flow -1.5
Growth Rates
Sales Growth Rate 1500%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 450%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 46
Current Ratio 0
LT Debt to Equity 68.4%
Total Debt to Equity 73.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -37.9%
Ret/ On Assets - 3 Yr. Avg. -34.7%
Return On Total Capital -75.3%
Ret/ On T. Cap. - 3 Yr. Avg. -52%
Return On Equity -115.8%
Return On Equity - 3 Yr. Avg. -72.4%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 100%
Gross Margin - 3 Yr. Avg. 33.3%
EBITDA Margin -437.5%
EBITDA Margin - 3 Yr. Avg. -1945.8%
Operating Margin -412.5%
Oper. Margin - 3 Yr. Avg. -1804.2%
Pre-Tax Margin -443.8%
Pre-Tax Margin - 3 Yr. Avg. -1947.9%
Net Profit Margin -343.8%
Net Profit Margin - 3 Yr. Avg. -1714.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

FBIO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FBIO stock intrinsic value calculation we used $188 million for the last fiscal year's total revenue generated by Fortress Biotech, Inc.. The default revenue input number comes from 0001 income statement of Fortress Biotech, 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 FBIO stock valuation model: a) initial revenue growth rate of 35.8% 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 FBIO is calculated based on our internal credit rating of Fortress Biotech, 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 Fortress Biotech, 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 FBIO stock the variable cost ratio is equal to 120.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $63 million in the base year in the intrinsic value calculation for FBIO 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 12.3% for Fortress Biotech, Inc..

Corporate tax rate of 27% is the nominal tax rate for Fortress Biotech, 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 FBIO 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 FBIO are equal to 13.8%.

Life of production assets of 15.4 years is the average useful life of capital assets used in Fortress Biotech, 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 FBIO is equal to -22.2%. 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 - $52.573 million for Fortress Biotech, 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 56.678 million for Fortress Biotech, 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 Fortress Biotech, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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