Intrinsic value of Galmed Pharmaceuticals Ltd. - GLMD

Previous Close

$8.50

  Intrinsic Value

$1.05

stock screener

  Rating & Target

str. sell

-88%

Previous close

$8.50

 
Intrinsic value

$1.05

 
Up/down potential

-88%

 
Rating

str. sell

We calculate the intrinsic value of GLMD 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 0.2

 

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
  3
  5
  7
  11
  15
  21
  28
  37
  47
  60
  74
  90
  109
  130
  153
  178
  204
  233
  264
  297
  332
  369
  407
  447
  489
  533
  578
  626
  675
  726
Variable operating expenses, $m
  40
  62
  92
  134
  189
  260
  349
  458
  590
  745
  925
  1,131
  1,363
  1,622
  1,907
  2,219
  2,556
  2,918
  3,305
  3,716
  4,150
  4,607
  5,087
  5,589
  6,114
  6,661
  7,231
  7,824
  8,440
  9,081
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
  40
  62
  92
  134
  189
  260
  349
  458
  590
  745
  925
  1,131
  1,363
  1,622
  1,907
  2,219
  2,556
  2,918
  3,305
  3,716
  4,150
  4,607
  5,087
  5,589
  6,114
  6,661
  7,231
  7,824
  8,440
  9,081
Operating income, $m
  -37
  -57
  -85
  -123
  -174
  -239
  -321
  -422
  -543
  -685
  -851
  -1,041
  -1,254
  -1,492
  -1,755
  -2,041
  -2,351
  -2,685
  -3,041
  -3,418
  -3,818
  -4,239
  -4,680
  -5,142
  -5,625
  -6,128
  -6,653
  -7,198
  -7,765
  -8,354
EBITDA, $m
  -37
  -57
  -85
  -123
  -174
  -239
  -320
  -421
  -541
  -683
  -849
  -1,038
  -1,251
  -1,488
  -1,750
  -2,035
  -2,344
  -2,677
  -3,031
  -3,408
  -3,807
  -4,226
  -4,666
  -5,127
  -5,608
  -6,110
  -6,633
  -7,176
  -7,742
  -8,330
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  2
  3
  3
  4
  5
  6
  8
  9
  11
  13
  15
  17
  19
  22
  24
  27
  30
  33
  36
  39
  42
  46
  49
Earnings before tax, $m
  -37
  -57
  -85
  -124
  -175
  -240
  -323
  -424
  -545
  -689
  -855
  -1,046
  -1,261
  -1,500
  -1,764
  -2,052
  -2,364
  -2,699
  -3,057
  -3,438
  -3,840
  -4,263
  -4,707
  -5,172
  -5,658
  -6,164
  -6,691
  -7,240
  -7,811
  -8,404
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
  -37
  -57
  -85
  -124
  -175
  -240
  -323
  -424
  -545
  -689
  -855
  -1,046
  -1,261
  -1,500
  -1,764
  -2,052
  -2,364
  -2,699
  -3,057
  -3,438
  -3,840
  -4,263
  -4,707
  -5,172
  -5,658
  -6,164
  -6,691
  -7,240
  -7,811
  -8,404

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
  5
  8
  12
  17
  24
  32
  44
  57
  74
  93
  115
  141
  170
  202
  238
  277
  319
  364
  412
  464
  518
  575
  635
  698
  763
  831
  902
  976
  1,053
  1,133
Adjusted assets (=assets-cash), $m
  5
  8
  12
  17
  24
  32
  44
  57
  74
  93
  115
  141
  170
  202
  238
  277
  319
  364
  412
  464
  518
  575
  635
  698
  763
  831
  902
  976
  1,053
  1,133
Revenue / Adjusted assets
  0.600
  0.625
  0.583
  0.647
  0.625
  0.656
  0.636
  0.649
  0.635
  0.645
  0.643
  0.638
  0.641
  0.644
  0.643
  0.643
  0.639
  0.640
  0.641
  0.640
  0.641
  0.642
  0.641
  0.640
  0.641
  0.641
  0.641
  0.641
  0.641
  0.641
Average production assets, $m
  1
  1
  1
  2
  3
  4
  5
  6
  8
  10
  13
  15
  19
  22
  26
  30
  35
  40
  45
  51
  57
  63
  70
  76
  84
  91
  99
  107
  115
  124
Working capital, $m
  -4
  -6
  -9
  -13
  -19
  -26
  -35
  -46
  -59
  -74
  -92
  -113
  -136
  -161
  -190
  -221
  -254
  -290
  -329
  -370
  -413
  -459
  -506
  -556
  -608
  -663
  -720
  -779
  -840
  -904
Total debt, $m
  2
  4
  7
  12
  18
  25
  35
  47
  61
  78
  98
  120
  145
  173
  204
  238
  274
  313
  355
  400
  447
  496
  548
  603
  660
  719
  781
  845
  912
  981
Total liabilities, $m
  4
  7
  10
  15
  20
  28
  38
  50
  64
  81
  100
  123
  148
  176
  207
  240
  277
  316
  358
  403
  450
  499
  551
  606
  662
  722
  783
  848
  914
  984
Total equity, $m
  1
  1
  2
  2
  3
  4
  6
  8
  10
  12
  15
  19
  22
  27
  31
  37
  42
  48
  54
  61
  68
  76
  84
  92
  101
  110
  119
  129
  139
  150
Total liabilities and equity, $m
  5
  8
  12
  17
  23
  32
  44
  58
  74
  93
  115
  142
  170
  203
  238
  277
  319
  364
  412
  464
  518
  575
  635
  698
  763
  832
  902
  977
  1,053
  1,134
Debt-to-equity ratio
  2.470
  3.920
  4.800
  5.350
  5.710
  5.940
  6.110
  6.220
  6.300
  6.360
  6.400
  6.430
  6.460
  6.470
  6.490
  6.500
  6.510
  6.520
  6.530
  6.530
  6.540
  6.540
  6.540
  6.550
  6.550
  6.550
  6.550
  6.550
  6.560
  6.560
Adjusted equity ratio
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132
  0.132

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -37
  -57
  -85
  -124
  -175
  -240
  -323
  -424
  -545
  -689
  -855
  -1,046
  -1,261
  -1,500
  -1,764
  -2,052
  -2,364
  -2,699
  -3,057
  -3,438
  -3,840
  -4,263
  -4,707
  -5,172
  -5,658
  -6,164
  -6,691
  -7,240
  -7,811
  -8,404
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  1
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  13
  14
  15
  17
  18
  20
  21
  23
  25
Funds from operations, $m
  -37
  -57
  -85
  -123
  -174
  -240
  -322
  -422
  -544
  -687
  -853
  -1,043
  -1,257
  -1,496
  -1,759
  -2,046
  -2,357
  -2,691
  -3,048
  -3,427
  -3,828
  -4,250
  -4,693
  -5,157
  -5,641
  -6,146
  -6,672
  -7,219
  -7,788
  -8,379
Change in working capital, $m
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -13
  -15
  -18
  -20
  -23
  -26
  -28
  -31
  -34
  -36
  -38
  -41
  -43
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -61
  -64
Cash from operations, $m
  -35
  -55
  -82
  -119
  -169
  -232
  -313
  -412
  -531
  -671
  -835
  -1,022
  -1,234
  -1,470
  -1,731
  -2,015
  -2,324
  -2,655
  -3,010
  -3,387
  -3,785
  -4,205
  -4,645
  -5,107
  -5,589
  -6,091
  -6,615
  -7,160
  -7,726
  -8,315
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -13
  -14
  -15
  -17
  -18
  -20
  -21
  -23
New CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
Cash from investing activities, $m
  0
  0
  0
  -1
  -1
  -2
  -2
  -2
  -3
  -4
  -4
  -6
  -6
  -8
  -8
  -9
  -11
  -12
  -13
  -15
  -16
  -17
  -20
  -21
  -22
  -24
  -26
  -28
  -29
  -32
Free cash flow, $m
  -35
  -55
  -83
  -120
  -170
  -234
  -315
  -414
  -534
  -675
  -839
  -1,028
  -1,240
  -1,477
  -1,739
  -2,025
  -2,334
  -2,667
  -3,023
  -3,401
  -3,801
  -4,222
  -4,664
  -5,127
  -5,611
  -6,115
  -6,641
  -7,188
  -7,756
  -8,347
Issuance/(repayment) of debt, $m
  2
  2
  3
  5
  6
  8
  10
  12
  14
  17
  20
  22
  25
  28
  31
  34
  37
  39
  42
  45
  47
  50
  52
  54
  57
  59
  62
  64
  67
  69
Issuance/(repurchase) of shares, $m
  37
  57
  86
  124
  176
  241
  324
  425
  547
  691
  858
  1,049
  1,265
  1,505
  1,769
  2,057
  2,370
  2,705
  3,064
  3,444
  3,847
  4,270
  4,715
  5,180
  5,666
  6,173
  6,701
  7,250
  7,821
  8,414
Cash from financing (excl. dividends), $m  
  39
  59
  89
  129
  182
  249
  334
  437
  561
  708
  878
  1,071
  1,290
  1,533
  1,800
  2,091
  2,407
  2,744
  3,106
  3,489
  3,894
  4,320
  4,767
  5,234
  5,723
  6,232
  6,763
  7,314
  7,888
  8,483
Total cash flow (excl. dividends), $m
  4
  5
  7
  9
  12
  15
  19
  23
  28
  33
  38
  44
  50
  55
  61
  66
  72
  77
  83
  88
  93
  98
  102
  107
  112
  117
  122
  126
  132
  137
Retained Cash Flow (-), $m
  -37
  -57
  -86
  -124
  -176
  -241
  -324
  -425
  -547
  -691
  -858
  -1,049
  -1,265
  -1,505
  -1,769
  -2,057
  -2,370
  -2,705
  -3,064
  -3,444
  -3,847
  -4,270
  -4,715
  -5,180
  -5,666
  -6,173
  -6,701
  -7,250
  -7,821
  -8,414
Prev. year cash balance distribution, $m
  87
  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
  54
  -53
  -79
  -116
  -164
  -226
  -305
  -402
  -519
  -658
  -820
  -1,005
  -1,215
  -1,449
  -1,708
  -1,991
  -2,298
  -2,628
  -2,981
  -3,357
  -3,754
  -4,173
  -4,612
  -5,073
  -5,554
  -6,056
  -6,579
  -7,123
  -7,689
  -8,277
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
  51
  -48
  -69
  -95
  -127
  -164
  -206
  -251
  -298
  -345
  -389
  -429
  -462
  -487
  -501
  -506
  -500
  -484
  -459
  -427
  -388
  -346
  -302
  -258
  -216
  -177
  -141
  -110
  -84
  -62
Current shareholders' claim on cash, %
  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
  0.0

Galmed Pharmaceuticals Ltd. is a clinical-stage biopharmaceutical company. The Company focuses on the development and commercialization of once-daily, oral therapy for the treatment of liver diseases and cholesterol gallstones utilizing its synthetic fatty-acid/bile-acid conjugate (FABAC), called aramchol. Its product candidate, aramchol, is a disease modifying treatment for fatty liver disorders, including Non-Alcoholic Steato-hepatitis (NASH). The Company's Aramchol is a conjugate of cholic acid and arachidic acid, which is a member of synthetic Fatty-Acid/Bile-Acid Conjugates (FABACs). FABACs are composed of endogenic compounds. Aramchol affects liver fat metabolism and has been shown in a Phase IIa clinical study to reduce liver fat content, as well as improve metabolic parameters associated with Nonalcoholic steatohepatitis (NASH). Aramchol is in Phase IIb clinical trials.

FINANCIAL RATIOS  of  Galmed Pharmaceuticals Ltd. (GLMD)

Valuation Ratios
P/E Ratio -6.1
Price to Sales 0
Price to Book 9.4
Price to Tangible Book
Price to Cash Flow -8.6
Price to Free Cash Flow -8.6
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
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 -85%
Ret/ On Assets - 3 Yr. Avg. -59.4%
Return On Total Capital -103%
Ret/ On T. Cap. - 3 Yr. Avg. -68.9%
Return On Equity -103%
Return On Equity - 3 Yr. Avg. -68.9%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

GLMD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GLMD stock intrinsic value calculation we used $2 million for the last fiscal year's total revenue generated by Galmed Pharmaceuticals Ltd.. The default revenue input number comes from 0001 income statement of Galmed Pharmaceuticals Ltd.. 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 GLMD 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 GLMD is calculated based on our internal credit rating of Galmed Pharmaceuticals Ltd., 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 Galmed Pharmaceuticals Ltd..
    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 GLMD stock the variable cost ratio is equal to 1250%.

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 GLMD 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 Galmed Pharmaceuticals Ltd..

Corporate tax rate of 27% is the nominal tax rate for Galmed Pharmaceuticals Ltd.. 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 GLMD 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 GLMD are equal to 17.1%.

Life of production assets of 0.9 years is the average useful life of capital assets used in Galmed Pharmaceuticals Ltd. 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 GLMD is equal to -124.4%. 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 - $87.894 million for Galmed Pharmaceuticals Ltd. - 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 21.004 million for Galmed Pharmaceuticals Ltd. 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 Galmed Pharmaceuticals Ltd. at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
ICPT Intercept Phar 109.85 0.16  str.sell
CNAT Conatus Pharma 1.28 0.21  str.sell
ENTA Enanta Pharmac 95.41 1,371.38  str.buy
TCON TRACON Pharmac 1.47 0.19  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.