Intrinsic value of Inovio Pharmaceuticals - INO

Previous Close

$4.84

  Intrinsic Value

$0.35

stock screener

  Rating & Target

str. sell

-93%

Previous close

$4.84

 
Intrinsic value

$0.35

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of INO 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 0.4

 

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, %
  19.80
  18.32
  16.99
  15.79
  14.71
  13.74
  12.87
  12.08
  11.37
  10.73
  10.16
  9.64
  9.18
  8.76
  8.39
  8.05
  7.74
  7.47
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.96
  5.86
  5.77
  5.70
Revenue, $m
  51
  60
  70
  81
  93
  106
  119
  134
  149
  165
  182
  199
  218
  237
  257
  277
  299
  321
  344
  368
  393
  419
  446
  474
  504
  534
  566
  599
  634
  670
Variable operating expenses, $m
  108
  128
  149
  172
  197
  224
  253
  283
  315
  349
  382
  419
  458
  498
  540
  583
  628
  675
  724
  775
  827
  882
  939
  998
  1,060
  1,124
  1,191
  1,261
  1,334
  1,410
Fixed operating expenses, $m
  38
  39
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
Total operating expenses, $m
  146
  167
  188
  212
  238
  266
  296
  327
  360
  395
  429
  467
  507
  548
  591
  635
  682
  730
  780
  832
  885
  942
  1,000
  1,060
  1,124
  1,189
  1,258
  1,329
  1,404
  1,481
Operating income, $m
  -95
  -106
  -118
  -132
  -146
  -161
  -177
  -193
  -211
  -230
  -248
  -268
  -289
  -311
  -334
  -358
  -383
  -409
  -436
  -464
  -492
  -522
  -554
  -586
  -620
  -655
  -692
  -730
  -769
  -811
EBITDA, $m
  -91
  -101
  -113
  -125
  -138
  -153
  -168
  -184
  -201
  -218
  -237
  -256
  -276
  -297
  -319
  -342
  -365
  -390
  -415
  -442
  -469
  -497
  -527
  -558
  -590
  -623
  -658
  -694
  -731
  -771
Interest expense (income), $m
  0
  0
  0
  1
  2
  2
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  12
  14
  15
  16
  17
  19
  20
  22
  23
  25
  27
  28
  30
  32
  34
Earnings before tax, $m
  -95
  -107
  -119
  -133
  -148
  -164
  -180
  -198
  -216
  -236
  -255
  -276
  -298
  -322
  -346
  -371
  -397
  -424
  -452
  -481
  -511
  -543
  -575
  -609
  -645
  -682
  -720
  -760
  -801
  -845
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
  -95
  -107
  -119
  -133
  -148
  -164
  -180
  -198
  -216
  -236
  -255
  -276
  -298
  -322
  -346
  -371
  -397
  -424
  -452
  -481
  -511
  -543
  -575
  -609
  -645
  -682
  -720
  -760
  -801
  -845

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
  115
  136
  159
  184
  211
  240
  271
  303
  338
  374
  412
  452
  493
  537
  582
  628
  677
  728
  780
  835
  892
  951
  1,012
  1,076
  1,142
  1,212
  1,284
  1,359
  1,438
  1,519
Adjusted assets (=assets-cash), $m
  115
  136
  159
  184
  211
  240
  271
  303
  338
  374
  412
  452
  493
  537
  582
  628
  677
  728
  780
  835
  892
  951
  1,012
  1,076
  1,142
  1,212
  1,284
  1,359
  1,438
  1,519
Revenue / Adjusted assets
  0.443
  0.441
  0.440
  0.440
  0.441
  0.442
  0.439
  0.442
  0.441
  0.441
  0.442
  0.440
  0.442
  0.441
  0.442
  0.441
  0.442
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
Average production assets, $m
  27
  32
  37
  43
  49
  56
  64
  71
  79
  88
  97
  106
  116
  126
  136
  147
  159
  171
  183
  196
  209
  223
  237
  252
  268
  284
  301
  319
  337
  356
Working capital, $m
  -29
  -35
  -41
  -47
  -54
  -62
  -70
  -78
  -87
  -96
  -106
  -116
  -127
  -138
  -150
  -162
  -174
  -187
  -201
  -215
  -229
  -244
  -260
  -277
  -294
  -312
  -330
  -349
  -370
  -391
Total debt, $m
  9
  19
  30
  42
  54
  68
  83
  98
  114
  131
  149
  168
  188
  208
  229
  251
  274
  298
  323
  348
  375
  403
  432
  462
  493
  526
  560
  595
  632
  671
Total liabilities, $m
  54
  64
  75
  87
  99
  113
  127
  143
  159
  176
  194
  213
  232
  253
  274
  296
  319
  343
  367
  393
  420
  448
  477
  507
  538
  571
  605
  640
  677
  716
Total equity, $m
  61
  72
  84
  97
  112
  127
  143
  160
  179
  198
  218
  239
  261
  284
  308
  332
  358
  385
  413
  442
  472
  503
  535
  569
  604
  641
  679
  719
  760
  804
Total liabilities and equity, $m
  115
  136
  159
  184
  211
  240
  270
  303
  338
  374
  412
  452
  493
  537
  582
  628
  677
  728
  780
  835
  892
  951
  1,012
  1,076
  1,142
  1,212
  1,284
  1,359
  1,437
  1,520
Debt-to-equity ratio
  0.150
  0.270
  0.360
  0.430
  0.490
  0.540
  0.580
  0.610
  0.640
  0.660
  0.680
  0.700
  0.720
  0.730
  0.740
  0.760
  0.770
  0.770
  0.780
  0.790
  0.800
  0.800
  0.810
  0.810
  0.820
  0.820
  0.820
  0.830
  0.830
  0.830
Adjusted equity ratio
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -95
  -107
  -119
  -133
  -148
  -164
  -180
  -198
  -216
  -236
  -255
  -276
  -298
  -322
  -346
  -371
  -397
  -424
  -452
  -481
  -511
  -543
  -575
  -609
  -645
  -682
  -720
  -760
  -801
  -845
Depreciation, amort., depletion, $m
  5
  5
  6
  6
  7
  8
  9
  10
  11
  12
  11
  12
  13
  14
  15
  17
  18
  19
  21
  22
  24
  25
  27
  28
  30
  32
  34
  36
  38
  40
Funds from operations, $m
  -91
  -102
  -114
  -127
  -141
  -156
  -171
  -188
  -206
  -224
  -244
  -264
  -285
  -307
  -330
  -354
  -379
  -405
  -431
  -459
  -488
  -518
  -549
  -581
  -615
  -650
  -686
  -724
  -764
  -805
Change in working capital, $m
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
Cash from operations, $m
  -86
  -96
  -108
  -120
  -134
  -148
  -163
  -180
  -197
  -215
  -234
  -254
  -275
  -296
  -319
  -342
  -366
  -392
  -418
  -445
  -473
  -503
  -533
  -565
  -598
  -632
  -668
  -705
  -743
  -784
Maintenance CAPEX, $m
  -3
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -38
New CAPEX, $m
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
Cash from investing activities, $m
  -8
  -8
  -9
  -10
  -11
  -13
  -13
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -34
  -35
  -38
  -39
  -42
  -44
  -46
  -49
  -52
  -54
  -57
Free cash flow, $m
  -93
  -104
  -117
  -130
  -145
  -160
  -177
  -195
  -213
  -233
  -253
  -274
  -296
  -319
  -343
  -368
  -394
  -421
  -449
  -478
  -509
  -540
  -572
  -606
  -642
  -678
  -716
  -756
  -798
  -841
Issuance/(repayment) of debt, $m
  9
  10
  11
  12
  13
  14
  15
  15
  16
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  39
Issuance/(repurchase) of shares, $m
  106
  118
  132
  146
  162
  179
  197
  215
  235
  255
  275
  297
  320
  344
  369
  395
  422
  451
  480
  510
  541
  574
  608
  643
  680
  718
  758
  800
  843
  888
Cash from financing (excl. dividends), $m  
  115
  128
  143
  158
  175
  193
  212
  230
  251
  272
  293
  316
  340
  364
  390
  417
  445
  475
  505
  536
  568
  602
  637
  673
  711
  751
  792
  835
  880
  927
Total cash flow (excl. dividends), $m
  22
  24
  26
  28
  30
  32
  34
  36
  38
  40
  40
  42
  44
  45
  47
  49
  51
  53
  55
  57
  60
  62
  64
  67
  70
  73
  76
  79
  82
  86
Retained Cash Flow (-), $m
  -106
  -118
  -132
  -146
  -162
  -179
  -197
  -215
  -235
  -255
  -275
  -297
  -320
  -344
  -369
  -395
  -422
  -451
  -480
  -510
  -541
  -574
  -608
  -643
  -680
  -718
  -758
  -800
  -843
  -888
Prev. year cash balance distribution, $m
  92
  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
  8
  -94
  -106
  -118
  -132
  -147
  -163
  -179
  -197
  -215
  -235
  -255
  -277
  -299
  -322
  -346
  -371
  -397
  -425
  -453
  -482
  -512
  -544
  -576
  -610
  -646
  -682
  -721
  -761
  -802
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
  8
  -86
  -92
  -98
  -102
  -107
  -110
  -112
  -113
  -113
  -112
  -109
  -105
  -100
  -95
  -88
  -81
  -73
  -65
  -58
  -50
  -42
  -36
  -29
  -24
  -19
  -15
  -11
  -8
  -6
Current shareholders' claim on cash, %
  59.6
  36.6
  23.0
  14.7
  9.5
  6.3
  4.2
  2.8
  1.9
  1.3
  0.9
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Inovio Pharmaceuticals, Inc. (Inovio) is a clinical-stage pharmaceutical company, which is involved in developing deoxyribonucleic acid (DNA) immunotherapies and vaccines focused on treating and preventing cancers and infectious diseases. The Company's DNA-based immunotherapies, in combination with its electroporation delivery devices, generates immune responses, in particular T cells, in the body to fight target diseases. It has completed, current or planned clinical programs of its SynCon immunotherapies for human papillomavirus (HPV)-caused pre-cancers and cancers, influenza, prostate cancer, breast/lung/pancreatic cancer, hepatitis C virus (HCV), hepatitis B virus (HBV), human immunodeficiency virus (HIV), Ebola, Middle East Respiratory Syndrome (MERS) and Zika virus. With its immunotherapy platform, as well as with its CELLECTRA electroporation delivery technology, it has a pipeline of pre-clinical and clinical stage products that have generated in vivo immune responses.

FINANCIAL RATIOS  of  Inovio Pharmaceuticals (INO)

Valuation Ratios
P/E Ratio -4.8
Price to Sales 10.2
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow -5.7
Price to Free Cash Flow -5.4
Growth Rates
Sales Growth Rate -14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 33.3%
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 -38.1%
Ret/ On Assets - 3 Yr. Avg. -29.2%
Return On Total Capital -49.5%
Ret/ On T. Cap. - 3 Yr. Avg. -38%
Return On Equity -49.5%
Return On Equity - 3 Yr. Avg. -38%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -202.9%
EBITDA Margin - 3 Yr. Avg. -204.5%
Operating Margin -220%
Oper. Margin - 3 Yr. Avg. -234.3%
Pre-Tax Margin -211.4%
Pre-Tax Margin - 3 Yr. Avg. -215.7%
Net Profit Margin -211.4%
Net Profit Margin - 3 Yr. Avg. -214.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 2.2%
Payout Ratio 0%

INO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INO stock intrinsic value calculation we used $42.220086 million for the last fiscal year's total revenue generated by Inovio Pharmaceuticals. The default revenue input number comes from 0001 income statement of Inovio Pharmaceuticals. 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 INO stock valuation model: a) initial revenue growth rate of 19.8% 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 INO is calculated based on our internal credit rating of Inovio Pharmaceuticals, 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 Inovio Pharmaceuticals.
    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 INO stock the variable cost ratio is equal to 214.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $37 million in the base year in the intrinsic value calculation for INO 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 Inovio Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Inovio Pharmaceuticals. 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 INO 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 INO are equal to 53.2%.

Life of production assets of 8.9 years is the average useful life of capital assets used in Inovio Pharmaceuticals 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 INO is equal to -58.3%. 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 - $142.39254 million for Inovio Pharmaceuticals - 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 90.962 million for Inovio Pharmaceuticals 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 Inovio Pharmaceuticals at the current share price and the inputted number of shares is $0.4 billion.

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COMPANY NEWS

▶ Inovio: 3Q Earnings Snapshot   [06:30PM  Associated Press]
▶ Why Inovio Pharmaceuticals, Inc. Stock Is Soaring Today   [Oct-02-18 12:18PM  Motley Fool]
▶ Undervalued Cannabis and Biotech Stocks   [Sep-18-18 10:30AM  ACCESSWIRE]
▶ Inovio: 2Q Earnings Snapshot   [07:08PM  Associated Press]
▶ Is Inovio Pharmaceuticals, Inc. a Buy?   [Jul-08-18 11:42AM  Motley Fool]
▶ Are These 2 Dark Horse Vaccine Makers Worth the Risk?   [Jun-16-18 07:33AM  Motley Fool]
▶ Inovio: 1Q Earnings Snapshot   [May-09-18 07:09PM  Associated Press]
▶ Is Inovio Pharmaceuticals, Inc. (INO) a Buy?   [Apr-30-18 08:04AM  Motley Fool]
▶ Benzinga Pro's 5 Stocks To Watch Today   [Apr-11-18 08:34AM  Benzinga]
▶ $43M deal: Inovio finalizes restructured collaboration with Chinese biopharm firm   [Mar-20-18 10:52AM  American City Business Journals]
▶ Inovio reports 4Q loss   [05:16PM  Associated Press]
▶ Inovio lands $4.6M in funding for malaria, tuberculosis vaccines   [Feb-12-18 10:50AM  American City Business Journals]
▶ 3 Stocks Under $10 That Surged Yesterday   [02:05PM  InvestorPlace]

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