Intrinsic value of Inovio Pharmaceuticals, Inc. - INO

Previous Close

$2.41

  Intrinsic Value

$0.18

stock screener

  Rating & Target

str. sell

-92%

Previous close

$2.41

 
Intrinsic value

$0.18

 
Up/down potential

-92%

 
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 0.2

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  31
  31
  32
  33
  34
  35
  36
  38
  39
  40
  42
  44
  46
  48
  50
  52
  54
  57
  59
  62
  65
  68
  71
  74
  78
  81
  85
  90
  94
  98
Variable operating expenses, $m
  18
  19
  19
  20
  20
  21
  21
  22
  23
  24
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  51
  54
Fixed operating expenses, $m
  105
  108
  110
  112
  115
  117
  120
  123
  125
  128
  131
  134
  137
  140
  143
  146
  149
  152
  156
  159
  163
  166
  170
  174
  177
  181
  185
  189
  194
  198
Total operating expenses, $m
  123
  127
  129
  132
  135
  138
  141
  145
  148
  152
  154
  158
  162
  166
  170
  174
  179
  183
  188
  193
  198
  203
  209
  215
  220
  226
  232
  238
  245
  252
Operating income, $m
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -107
  -109
  -111
  -112
  -114
  -116
  -118
  -120
  -122
  -125
  -127
  -129
  -131
  -133
  -136
  -138
  -140
  -142
  -144
  -147
  -149
  -151
  -153
EBITDA, $m
  -88
  -89
  -91
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -106
  -108
  -110
  -112
  -114
  -116
  -118
  -120
  -121
  -123
  -125
  -127
  -129
  -131
  -132
  -134
  -136
  -138
  -139
  -141
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
Earnings before tax, $m
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -108
  -110
  -112
  -113
  -115
  -117
  -119
  -122
  -124
  -126
  -129
  -131
  -133
  -136
  -138
  -141
  -143
  -146
  -148
  -151
  -153
  -156
  -158
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
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -108
  -110
  -112
  -113
  -115
  -117
  -119
  -122
  -124
  -126
  -129
  -131
  -133
  -136
  -138
  -141
  -143
  -146
  -148
  -151
  -153
  -156
  -158

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
  87
  89
  91
  94
  97
  100
  103
  107
  111
  115
  120
  124
  130
  135
  141
  147
  154
  161
  168
  176
  184
  192
  201
  211
  221
  231
  243
  254
  267
  280
Adjusted assets (=assets-cash), $m
  87
  89
  91
  94
  97
  100
  103
  107
  111
  115
  120
  124
  130
  135
  141
  147
  154
  161
  168
  176
  184
  192
  201
  211
  221
  231
  243
  254
  267
  280
Revenue / Adjusted assets
  0.356
  0.348
  0.352
  0.351
  0.351
  0.350
  0.350
  0.355
  0.351
  0.348
  0.350
  0.355
  0.354
  0.356
  0.355
  0.354
  0.351
  0.354
  0.351
  0.352
  0.353
  0.354
  0.353
  0.351
  0.353
  0.351
  0.350
  0.354
  0.352
  0.350
Average production assets, $m
  26
  26
  27
  28
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  52
  54
  57
  59
  62
  65
  68
  71
  75
  78
  82
Working capital, $m
  -29
  -30
  -31
  -32
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -47
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
  -78
  -82
  -86
  -90
  -94
Total debt, $m
  1
  2
  3
  4
  6
  8
  9
  11
  13
  16
  18
  20
  23
  26
  29
  32
  36
  39
  43
  47
  51
  56
  60
  65
  70
  76
  82
  88
  94
  101
Total liabilities, $m
  45
  46
  47
  49
  50
  52
  54
  55
  57
  60
  62
  65
  67
  70
  73
  76
  80
  83
  87
  91
  95
  100
  104
  109
  115
  120
  126
  132
  138
  145
Total equity, $m
  42
  43
  44
  45
  46
  48
  50
  51
  53
  55
  58
  60
  62
  65
  68
  71
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  117
  122
  128
  134
Total liabilities and equity, $m
  87
  89
  91
  94
  96
  100
  104
  106
  110
  115
  120
  125
  129
  135
  141
  147
  154
  160
  168
  175
  183
  192
  201
  210
  221
  231
  243
  254
  266
  279
Debt-to-equity ratio
  0.020
  0.050
  0.070
  0.100
  0.130
  0.160
  0.190
  0.220
  0.250
  0.280
  0.310
  0.340
  0.370
  0.400
  0.430
  0.450
  0.480
  0.510
  0.530
  0.560
  0.580
  0.600
  0.620
  0.640
  0.660
  0.680
  0.700
  0.720
  0.730
  0.750
Adjusted equity ratio
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481
  0.481

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -108
  -110
  -112
  -113
  -115
  -117
  -119
  -122
  -124
  -126
  -129
  -131
  -133
  -136
  -138
  -141
  -143
  -146
  -148
  -151
  -153
  -156
  -158
Depreciation, amort., depletion, $m
  5
  6
  6
  6
  6
  6
  6
  6
  7
  7
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
Funds from operations, $m
  -88
  -89
  -91
  -93
  -95
  -97
  -99
  -101
  -103
  -105
  -107
  -109
  -111
  -113
  -115
  -117
  -119
  -122
  -124
  -126
  -128
  -130
  -132
  -134
  -136
  -138
  -140
  -142
  -144
  -146
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
Cash from operations, $m
  -87
  -89
  -91
  -93
  -94
  -96
  -98
  -100
  -102
  -104
  -106
  -108
  -110
  -112
  -113
  -115
  -117
  -119
  -121
  -123
  -125
  -127
  -129
  -131
  -133
  -134
  -136
  -138
  -140
  -142
Maintenance CAPEX, $m
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
New CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
Cash from investing activities, $m
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -15
  -16
Free cash flow, $m
  -91
  -93
  -95
  -97
  -99
  -101
  -104
  -106
  -108
  -110
  -112
  -114
  -117
  -119
  -121
  -123
  -126
  -128
  -130
  -133
  -135
  -138
  -140
  -142
  -145
  -147
  -150
  -152
  -155
  -157
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
Issuance/(repurchase) of shares, $m
  94
  96
  98
  100
  103
  105
  107
  109
  112
  114
  115
  117
  120
  122
  124
  127
  129
  132
  135
  137
  140
  142
  145
  148
  151
  153
  156
  159
  162
  165
Cash from financing (excl. dividends), $m  
  95
  97
  99
  101
  104
  107
  109
  111
  114
  116
  117
  120
  123
  125
  127
  130
  132
  136
  139
  141
  144
  146
  150
  153
  156
  158
  162
  165
  168
  172
Total cash flow (excl. dividends), $m
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
Retained Cash Flow (-), $m
  -94
  -96
  -98
  -100
  -103
  -105
  -107
  -109
  -112
  -114
  -115
  -117
  -120
  -122
  -124
  -127
  -129
  -132
  -135
  -137
  -140
  -142
  -145
  -148
  -151
  -153
  -156
  -159
  -162
  -165
Prev. year cash balance distribution, $m
  46
  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
  -44
  -92
  -94
  -96
  -98
  -100
  -102
  -104
  -106
  -108
  -110
  -112
  -114
  -116
  -118
  -120
  -122
  -124
  -127
  -129
  -131
  -133
  -135
  -137
  -140
  -142
  -144
  -146
  -148
  -150
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
  -43
  -84
  -82
  -79
  -76
  -72
  -69
  -65
  -61
  -57
  -52
  -48
  -43
  -39
  -35
  -31
  -27
  -23
  -19
  -16
  -14
  -11
  -9
  -7
  -5
  -4
  -3
  -2
  -2
  -1
Current shareholders' claim on cash, %
  54.2
  29.3
  15.9
  8.6
  4.7
  2.5
  1.4
  0.8
  0.4
  0.2
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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, Inc. (INO)

Valuation Ratios
P/E Ratio -2.4
Price to Sales 5.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow -2.8
Price to Free Cash Flow -2.7
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 $30 million for the last fiscal year's total revenue generated by Inovio Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of Inovio Pharmaceuticals, 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 INO stock valuation model: a) initial revenue growth rate of 2% 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, 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 Inovio Pharmaceuticals, 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 INO stock the variable cost ratio is equal to 60%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $103 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for Inovio Pharmaceuticals, 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 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 83.6%.

Life of production assets of 6.6 years is the average useful life of capital assets used in Inovio Pharmaceuticals, 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 INO is equal to -95.7%. 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 - $86.936138 million for Inovio Pharmaceuticals, 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 97.636 million for Inovio Pharmaceuticals, 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 Inovio Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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