Intrinsic value of Immuron ADR - IMRN

Previous Close

$7.90

  Intrinsic Value

$0.39

stock screener

  Rating & Target

str. sell

-95%

Previous close

$7.90

 
Intrinsic value

$0.39

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of IMRN 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, %
  44.10
  40.19
  36.67
  33.50
  30.65
  28.09
  25.78
  23.70
  21.83
  20.15
  18.63
  17.27
  16.04
  14.94
  13.94
  13.05
  12.25
  11.52
  10.87
  10.28
  9.75
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
  7.05
  6.84
Revenue, $m
  2
  2
  3
  4
  5
  7
  8
  10
  13
  15
  18
  21
  24
  28
  32
  36
  40
  45
  50
  55
  61
  66
  72
  78
  85
  91
  98
  105
  112
  120
Variable operating expenses, $m
  3
  4
  6
  8
  10
  13
  17
  21
  25
  30
  36
  42
  49
  56
  64
  72
  81
  90
  100
  110
  121
  132
  144
  156
  169
  182
  196
  210
  225
  240
Fixed operating expenses, $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
Total operating expenses, $m
  8
  9
  11
  13
  16
  19
  23
  27
  31
  36
  42
  48
  56
  63
  71
  79
  88
  97
  108
  118
  129
  140
  152
  164
  178
  191
  205
  219
  234
  250
Operating income, $m
  -7
  -7
  -8
  -9
  -11
  -12
  -14
  -16
  -19
  -21
  -24
  -27
  -31
  -35
  -39
  -43
  -48
  -53
  -58
  -63
  -68
  -74
  -80
  -87
  -93
  -100
  -107
  -114
  -122
  -130
EBITDA, $m
  -7
  -7
  -8
  -9
  -11
  -12
  -14
  -16
  -19
  -21
  -24
  -27
  -31
  -35
  -39
  -43
  -48
  -52
  -57
  -63
  -68
  -74
  -80
  -86
  -93
  -100
  -107
  -114
  -122
  -129
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
Earnings before tax, $m
  -7
  -7
  -8
  -10
  -11
  -13
  -14
  -17
  -19
  -22
  -25
  -28
  -32
  -36
  -40
  -45
  -50
  -55
  -60
  -66
  -72
  -78
  -84
  -91
  -97
  -105
  -112
  -120
  -128
  -136
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
  -7
  -7
  -8
  -10
  -11
  -13
  -14
  -17
  -19
  -22
  -25
  -28
  -32
  -36
  -40
  -45
  -50
  -55
  -60
  -66
  -72
  -78
  -84
  -91
  -97
  -105
  -112
  -120
  -128
  -136

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
  7
  9
  13
  17
  22
  29
  36
  45
  54
  65
  77
  91
  105
  121
  138
  156
  175
  195
  217
  239
  262
  287
  312
  338
  366
  394
  424
  455
  487
  520
Adjusted assets (=assets-cash), $m
  7
  9
  13
  17
  22
  29
  36
  45
  54
  65
  77
  91
  105
  121
  138
  156
  175
  195
  217
  239
  262
  287
  312
  338
  366
  394
  424
  455
  487
  520
Revenue / Adjusted assets
  0.286
  0.222
  0.231
  0.235
  0.227
  0.241
  0.222
  0.222
  0.241
  0.231
  0.234
  0.231
  0.229
  0.231
  0.232
  0.231
  0.229
  0.231
  0.230
  0.230
  0.233
  0.230
  0.231
  0.231
  0.232
  0.231
  0.231
  0.231
  0.230
  0.231
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
Working capital, $m
  1
  1
  1
  2
  3
  3
  4
  5
  6
  8
  9
  10
  12
  14
  16
  18
  20
  23
  25
  28
  30
  33
  36
  39
  42
  46
  49
  53
  56
  60
Total debt, $m
  1
  1
  2
  3
  5
  6
  8
  10
  12
  15
  18
  21
  24
  28
  32
  37
  41
  46
  51
  56
  62
  68
  74
  80
  87
  94
  101
  108
  116
  124
Total liabilities, $m
  2
  2
  3
  4
  5
  7
  9
  11
  13
  16
  19
  22
  25
  29
  33
  37
  42
  47
  52
  57
  63
  68
  75
  81
  87
  94
  101
  109
  116
  124
Total equity, $m
  5
  7
  10
  13
  17
  22
  27
  34
  41
  50
  59
  69
  80
  92
  105
  119
  133
  149
  165
  182
  200
  218
  237
  257
  278
  300
  323
  346
  371
  396
Total liabilities and equity, $m
  7
  9
  13
  17
  22
  29
  36
  45
  54
  66
  78
  91
  105
  121
  138
  156
  175
  196
  217
  239
  263
  286
  312
  338
  365
  394
  424
  455
  487
  520
Debt-to-equity ratio
  0.170
  0.210
  0.240
  0.260
  0.270
  0.280
  0.290
  0.290
  0.300
  0.300
  0.300
  0.300
  0.300
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
  0.310
Adjusted equity ratio
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7
  -7
  -8
  -10
  -11
  -13
  -14
  -17
  -19
  -22
  -25
  -28
  -32
  -36
  -40
  -45
  -50
  -55
  -60
  -66
  -72
  -78
  -84
  -91
  -97
  -105
  -112
  -120
  -128
  -136
Depreciation, amort., depletion, $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
Funds from operations, $m
  -7
  -7
  -8
  -10
  -11
  -13
  -14
  -17
  -19
  -22
  -25
  -28
  -32
  -36
  -40
  -45
  -50
  -55
  -60
  -66
  -71
  -77
  -84
  -90
  -97
  -104
  -112
  -119
  -127
  -136
Change in working capital, $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
Cash from operations, $m
  -7
  -8
  -9
  -10
  -12
  -13
  -15
  -18
  -20
  -23
  -26
  -30
  -34
  -38
  -42
  -47
  -52
  -57
  -62
  -68
  -74
  -80
  -87
  -93
  -100
  -108
  -115
  -123
  -131
  -140
Maintenance CAPEX, $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
New CAPEX, $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 from investing activities, $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
Free cash flow, $m
  -7
  -8
  -9
  -10
  -12
  -13
  -15
  -18
  -20
  -23
  -26
  -30
  -34
  -38
  -42
  -47
  -52
  -57
  -63
  -68
  -74
  -80
  -87
  -94
  -101
  -108
  -116
  -123
  -132
  -140
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
Issuance/(repurchase) of shares, $m
  8
  9
  11
  13
  15
  17
  20
  23
  27
  30
  34
  39
  43
  48
  53
  59
  64
  70
  76
  83
  89
  96
  103
  111
  118
  126
  135
  143
  152
  161
Cash from financing (excl. dividends), $m  
  9
  10
  12
  14
  16
  19
  22
  25
  29
  33
  37
  42
  46
  52
  57
  63
  69
  75
  81
  88
  95
  102
  109
  117
  125
  133
  142
  150
  160
  169
Total cash flow (excl. dividends), $m
  2
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
Retained Cash Flow (-), $m
  -8
  -9
  -11
  -13
  -15
  -17
  -20
  -23
  -27
  -30
  -34
  -39
  -43
  -48
  -53
  -59
  -64
  -70
  -76
  -83
  -89
  -96
  -103
  -111
  -118
  -126
  -135
  -143
  -152
  -161
Prev. year cash balance distribution, $m
  2
  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
  -5
  -7
  -8
  -9
  -10
  -12
  -14
  -16
  -18
  -21
  -24
  -27
  -30
  -34
  -38
  -43
  -47
  -52
  -58
  -63
  -69
  -75
  -81
  -87
  -94
  -101
  -108
  -116
  -124
  -132
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
  -4
  -7
  -7
  -7
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -11
  -11
  -11
  -10
  -10
  -9
  -8
  -7
  -6
  -5
  -4
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  66.5
  48.7
  37.4
  29.7
  24.3
  20.2
  17.1
  14.7
  12.7
  11.1
  9.8
  8.7
  7.7
  6.9
  6.2
  5.6
  5.1
  4.6
  4.2
  3.8
  3.5
  3.2
  2.9
  2.7
  2.4
  2.2
  2.1
  1.9
  1.7
  1.6

FINANCIAL RATIOS  of  Immuron ADR (IMRN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
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%

IMRN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IMRN stock intrinsic value calculation we used $1.0739976923 million for the last fiscal year's total revenue generated by Immuron ADR. The default revenue input number comes from 0001 income statement of Immuron ADR. 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 IMRN stock valuation model: a) initial revenue growth rate of 44.1% 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 IMRN is calculated based on our internal credit rating of Immuron ADR, 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 Immuron ADR.
    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 IMRN stock the variable cost ratio is equal to 200%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5 million in the base year in the intrinsic value calculation for IMRN 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 Immuron ADR.

Corporate tax rate of 27% is the nominal tax rate for Immuron ADR. 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 IMRN 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 IMRN are equal to 1.4%.

Life of production assets of 0 years is the average useful life of capital assets used in Immuron ADR 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 IMRN is equal to 50%. 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 - $5.0576353846 million for Immuron ADR - 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 3.261 million for Immuron ADR 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 Immuron ADR at the current share price and the inputted number of shares is $0.0 billion.

COMPANY NEWS

▶ Immuron Announces Board Appointment   [Jun-25-18 08:36PM  GlobeNewswire]
▶ Immuron Announces A$5.1M Private Placement to U.S. Fund   [Mar-13-18 06:20PM  GlobeNewswire]
▶ Immuron Reports Positive Results in NASH Clinical Trial   [Mar-07-18 06:30PM  GlobeNewswire]
▶ Immuron to Receive $2.16M R&D Tax Concession Refund   [Jan-24-18 09:30AM  GlobeNewswire]

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