Intrinsic value of Insys Therapeutics, Inc. - INSY

Previous Close

$0.34

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.34

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of INSY 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, %
  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
  84
  86
  88
  90
  93
  96
  99
  103
  107
  111
  115
  120
  125
  130
  136
  142
  148
  154
  161
  169
  177
  185
  194
  203
  213
  223
  233
  245
  257
  269
Variable operating expenses, $m
  213
  218
  223
  229
  236
  244
  252
  261
  270
  280
  286
  298
  310
  323
  337
  352
  367
  384
  401
  420
  439
  460
  481
  504
  528
  554
  580
  608
  638
  669
Fixed operating expenses, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
Total operating expenses, $m
  214
  219
  224
  230
  237
  245
  253
  262
  271
  281
  287
  299
  311
  324
  338
  353
  368
  385
  403
  422
  441
  462
  483
  506
  530
  556
  582
  610
  640
  671
Operating income, $m
  -130
  -133
  -137
  -140
  -144
  -149
  -154
  -159
  -165
  -171
  -172
  -179
  -187
  -194
  -203
  -212
  -221
  -231
  -241
  -252
  -264
  -276
  -289
  -303
  -317
  -333
  -349
  -365
  -383
  -402
EBITDA, $m
  -118
  -120
  -123
  -127
  -131
  -135
  -139
  -144
  -150
  -155
  -162
  -168
  -175
  -182
  -190
  -199
  -207
  -217
  -227
  -237
  -248
  -259
  -272
  -284
  -298
  -312
  -327
  -343
  -359
  -377
Interest expense (income), $m
  0
  0
  -3
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  0
  0
  1
  2
  2
  3
  3
  4
  5
  6
  7
  7
  8
  9
  10
  12
  13
  14
  15
  17
Earnings before tax, $m
  -130
  -130
  -134
  -138
  -142
  -147
  -152
  -158
  -164
  -170
  -172
  -180
  -188
  -196
  -205
  -214
  -224
  -235
  -246
  -258
  -271
  -284
  -298
  -312
  -328
  -344
  -361
  -379
  -398
  -418
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
  -130
  -130
  -134
  -138
  -142
  -147
  -152
  -158
  -164
  -170
  -172
  -180
  -188
  -196
  -205
  -214
  -224
  -235
  -246
  -258
  -271
  -284
  -298
  -312
  -328
  -344
  -361
  -379
  -398
  -418

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
  196
  201
  206
  212
  218
  225
  233
  241
  250
  260
  270
  281
  293
  305
  318
  332
  347
  363
  379
  397
  415
  434
  455
  476
  499
  523
  548
  574
  602
  631
Adjusted assets (=assets-cash), $m
  196
  201
  206
  212
  218
  225
  233
  241
  250
  260
  270
  281
  293
  305
  318
  332
  347
  363
  379
  397
  415
  434
  455
  476
  499
  523
  548
  574
  602
  631
Revenue / Adjusted assets
  0.429
  0.428
  0.427
  0.425
  0.427
  0.427
  0.425
  0.427
  0.428
  0.427
  0.426
  0.427
  0.427
  0.426
  0.428
  0.428
  0.427
  0.424
  0.425
  0.426
  0.427
  0.426
  0.426
  0.426
  0.427
  0.426
  0.425
  0.427
  0.427
  0.426
Average production assets, $m
  55
  56
  57
  59
  61
  63
  65
  67
  70
  72
  75
  78
  82
  85
  89
  93
  97
  101
  106
  110
  116
  121
  127
  133
  139
  146
  153
  160
  168
  176
Working capital, $m
  -78
  -80
  -82
  -84
  -86
  -89
  -92
  -96
  -99
  -103
  -107
  -111
  -116
  -121
  -126
  -132
  -137
  -144
  -150
  -157
  -164
  -172
  -180
  -189
  -198
  -207
  -217
  -228
  -239
  -250
Total debt, $m
  -59
  -55
  -50
  -45
  -39
  -33
  -26
  -18
  -10
  -2
  7
  17
  28
  39
  51
  63
  77
  91
  106
  121
  138
  155
  174
  193
  213
  235
  257
  281
  306
  333
Total liabilities, $m
  177
  181
  185
  191
  196
  203
  210
  217
  225
  234
  243
  253
  263
  275
  286
  299
  312
  326
  341
  357
  373
  391
  409
  429
  449
  471
  493
  517
  542
  568
Total equity, $m
  20
  20
  21
  21
  22
  23
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  41
  43
  45
  48
  50
  52
  55
  57
  60
  63
Total liabilities and equity, $m
  197
  201
  206
  212
  218
  226
  233
  241
  250
  260
  270
  281
  292
  306
  318
  332
  347
  362
  379
  397
  414
  434
  454
  477
  499
  523
  548
  574
  602
  631
Debt-to-equity ratio
  -3.000
  -2.730
  -2.440
  -2.120
  -1.800
  -1.460
  -1.110
  -0.770
  -0.420
  -0.070
  0.280
  0.620
  0.950
  1.280
  1.600
  1.910
  2.210
  2.500
  2.780
  3.060
  3.320
  3.570
  3.820
  4.050
  4.280
  4.490
  4.700
  4.900
  5.090
  5.270
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
  -130
  -130
  -134
  -138
  -142
  -147
  -152
  -158
  -164
  -170
  -172
  -180
  -188
  -196
  -205
  -214
  -224
  -235
  -246
  -258
  -271
  -284
  -298
  -312
  -328
  -344
  -361
  -379
  -398
  -418
Depreciation, amort., depletion, $m
  13
  13
  13
  14
  14
  14
  14
  15
  15
  15
  11
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  21
  23
  24
  25
Funds from operations, $m
  -118
  -117
  -120
  -124
  -128
  -133
  -138
  -143
  -149
  -155
  -161
  -169
  -176
  -184
  -192
  -201
  -211
  -221
  -231
  -243
  -254
  -267
  -280
  -294
  -308
  -324
  -340
  -357
  -375
  -393
Change in working capital, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -12
Cash from operations, $m
  -116
  -115
  -118
  -122
  -126
  -130
  -135
  -140
  -145
  -151
  -157
  -164
  -171
  -179
  -187
  -196
  -205
  -215
  -225
  -236
  -247
  -259
  -272
  -285
  -299
  -314
  -330
  -346
  -364
  -382
Maintenance CAPEX, $m
  -8
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -23
  -24
New CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
Cash from investing activities, $m
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -11
  -13
  -13
  -14
  -14
  -14
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -23
  -24
  -25
  -27
  -28
  -28
  -31
  -32
Free cash flow, $m
  -125
  -124
  -128
  -132
  -136
  -140
  -146
  -151
  -157
  -164
  -170
  -178
  -186
  -194
  -203
  -212
  -222
  -233
  -244
  -255
  -268
  -281
  -295
  -309
  -324
  -340
  -357
  -375
  -394
  -413
Issuance/(repayment) of debt, $m
  -59
  4
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  21
  23
  24
  25
  26
Issuance/(repurchase) of shares, $m
  193
  131
  134
  138
  143
  147
  153
  158
  165
  171
  173
  181
  189
  197
  206
  216
  226
  237
  248
  260
  273
  286
  300
  315
  330
  347
  364
  382
  401
  421
Cash from financing (excl. dividends), $m  
  134
  135
  139
  143
  149
  153
  160
  165
  173
  180
  182
  191
  200
  208
  218
  229
  239
  251
  263
  276
  290
  303
  318
  334
  350
  368
  387
  406
  426
  447
Total cash flow (excl. dividends), $m
  10
  10
  11
  12
  13
  13
  14
  15
  16
  16
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  32
  34
Retained Cash Flow (-), $m
  -193
  -131
  -134
  -138
  -143
  -147
  -153
  -158
  -165
  -171
  -173
  -181
  -189
  -197
  -206
  -216
  -226
  -237
  -248
  -260
  -273
  -286
  -300
  -315
  -330
  -347
  -364
  -382
  -401
  -421
Prev. year cash balance distribution, $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 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
  -184
  -120
  -123
  -126
  -130
  -134
  -139
  -144
  -149
  -155
  -161
  -168
  -175
  -183
  -191
  -200
  -209
  -219
  -229
  -240
  -251
  -263
  -276
  -290
  -304
  -319
  -335
  -351
  -369
  -387
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  -174
  -107
  -103
  -98
  -94
  -89
  -84
  -78
  -73
  -67
  -62
  -56
  -50
  -45
  -39
  -34
  -29
  -25
  -21
  -17
  -14
  -11
  -8
  -6
  -5
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  50.0
  6.5
  0.9
  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

Insys Therapeutics, Inc. is a commercial-stage specialty pharmaceutical company. The Company develops and commercializes supportive care products. The Company's product Subsys, is a sublingual fentanyl spray for breakthrough cancer pain (BTCP) in opioid-tolerant patients and a single-use product that delivers fentanyl, an opioid analgesic, for transmucosal absorption underneath the tongue. The Company markets Subsys through its field sales force focused on supportive care physicians in the United States. Subsys delivers a liquid fentanyl formulation in approximately 100, 200, 400, 600, 800, 1,200 and 1,600 micrograms (mcg) dosages. The Company's lead dronabinol product candidate is Syndros, which is under review for approval at the Food and Drug Administration. In addition, the Company is evaluating sublingual spray, inhaled and intravenous formulations of dronabinol in preclinical studies.

FINANCIAL RATIOS  of  Insys Therapeutics, Inc. (INSY)

Valuation Ratios
P/E Ratio 3.1
Price to Sales 0.1
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow 0.4
Price to Free Cash Flow 0.5
Growth Rates
Sales Growth Rate -26.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.4%
Cap. Spend. - 3 Yr. Gr. Rate 17.1%
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 2.3%
Ret/ On Assets - 3 Yr. Avg. 15.2%
Return On Total Capital 3.1%
Ret/ On T. Cap. - 3 Yr. Avg. 20.1%
Return On Equity 3.1%
Return On Equity - 3 Yr. Avg. 20.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 89.7%
Gross Margin - 3 Yr. Avg. 90.3%
EBITDA Margin 5.8%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin 2.9%
Oper. Margin - 3 Yr. Avg. 19.3%
Pre-Tax Margin 3.3%
Pre-Tax Margin - 3 Yr. Avg. 19.6%
Net Profit Margin 3.3%
Net Profit Margin - 3 Yr. Avg. 12.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 25.7%
Payout Ratio 0%

INSY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INSY stock intrinsic value calculation we used $82 million for the last fiscal year's total revenue generated by Insys Therapeutics, Inc.. The default revenue input number comes from 0001 income statement of Insys Therapeutics, 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 INSY 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 5.6%, whose default value for INSY is calculated based on our internal credit rating of Insys Therapeutics, 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 Insys Therapeutics, 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 INSY stock the variable cost ratio is equal to 254.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1 million in the base year in the intrinsic value calculation for INSY 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 Insys Therapeutics, Inc..

Corporate tax rate of 27% is the nominal tax rate for Insys Therapeutics, 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 INSY 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 INSY are equal to 65.4%.

Life of production assets of 7.1 years is the average useful life of capital assets used in Insys Therapeutics, 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 INSY is equal to -93%. 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 - $-43.1 million for Insys Therapeutics, 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 74.271 million for Insys Therapeutics, 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 Insys Therapeutics, Inc. at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
GWPH GW Pharmaceuti 154.19 3.34  str.sell
ABBV AbbVie Inc. 64.43 31.53  str.sell
MRK Merck & Compan 85.06 44.01  sell
HRTX Heron Therapeu 17.18 1.19  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

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