Intrinsic value of Jounce Therapeutics, Inc. - JNCE

Previous Close

$3.54

  Intrinsic Value

$2.42

stock screener

  Rating & Target

sell

-32%

Previous close

$3.54

 
Intrinsic value

$2.42

 
Up/down potential

-32%

 
Rating

sell

We calculate the intrinsic value of JNCE 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 0.1

 

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, %
  54.70
  49.73
  45.26
  41.23
  37.61
  34.35
  31.41
  28.77
  26.39
  24.25
  22.33
  20.60
  19.04
  17.63
  16.37
  15.23
  14.21
  13.29
  12.46
  11.71
  11.04
  10.44
  9.89
  9.40
  8.96
  8.57
  8.21
  7.89
  7.60
  7.34
Revenue, $m
  101
  151
  219
  309
  425
  571
  750
  966
  1,221
  1,518
  1,856
  2,239
  2,665
  3,135
  3,648
  4,204
  4,801
  5,439
  6,117
  6,833
  7,588
  8,380
  9,209
  10,075
  10,978
  11,919
  12,898
  13,915
  14,973
  16,072
Variable operating expenses, $m
  126
  188
  273
  385
  529
  710
  932
  1,200
  1,516
  1,884
  2,303
  2,777
  3,306
  3,889
  4,525
  5,215
  5,956
  6,747
  7,588
  8,477
  9,413
  10,395
  11,424
  12,498
  13,618
  14,785
  15,999
  17,261
  18,573
  19,937
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
  126
  188
  273
  385
  529
  710
  932
  1,200
  1,516
  1,884
  2,303
  2,777
  3,306
  3,889
  4,525
  5,215
  5,956
  6,747
  7,588
  8,477
  9,413
  10,395
  11,424
  12,498
  13,618
  14,785
  15,999
  17,261
  18,573
  19,937
Operating income, $m
  -26
  -38
  -54
  -76
  -104
  -139
  -182
  -234
  -295
  -366
  -446
  -538
  -641
  -754
  -877
  -1,011
  -1,154
  -1,308
  -1,471
  -1,643
  -1,825
  -2,015
  -2,214
  -2,423
  -2,640
  -2,866
  -3,101
  -3,346
  -3,600
  -3,865
EBITDA, $m
  -20
  -29
  -43
  -60
  -83
  -111
  -146
  -188
  -238
  -296
  -362
  -436
  -519
  -611
  -711
  -819
  -936
  -1,060
  -1,192
  -1,332
  -1,479
  -1,633
  -1,794
  -1,963
  -2,139
  -2,323
  -2,513
  -2,712
  -2,918
  -3,132
Interest expense (income), $m
  0
  0
  1
  4
  9
  15
  23
  33
  45
  59
  76
  96
  119
  145
  174
  205
  240
  277
  318
  361
  406
  455
  506
  559
  615
  673
  734
  797
  863
  932
  1,003
Earnings before tax, $m
  -26
  -38
  -58
  -84
  -118
  -161
  -214
  -278
  -354
  -443
  -543
  -658
  -786
  -928
  -1,083
  -1,251
  -1,432
  -1,626
  -1,832
  -2,050
  -2,279
  -2,521
  -2,773
  -3,037
  -3,313
  -3,600
  -3,899
  -4,210
  -4,532
  -4,868
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
  -26
  -38
  -58
  -84
  -118
  -161
  -214
  -278
  -354
  -443
  -543
  -658
  -786
  -928
  -1,083
  -1,251
  -1,432
  -1,626
  -1,832
  -2,050
  -2,279
  -2,521
  -2,773
  -3,037
  -3,313
  -3,600
  -3,899
  -4,210
  -4,532
  -4,868

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
  139
  209
  303
  428
  590
  792
  1,041
  1,340
  1,694
  2,105
  2,575
  3,105
  3,696
  4,348
  5,060
  5,831
  6,659
  7,544
  8,484
  9,478
  10,524
  11,623
  12,773
  13,974
  15,227
  16,531
  17,889
  19,300
  20,767
  22,292
Adjusted assets (=assets-cash), $m
  139
  209
  303
  428
  590
  792
  1,041
  1,340
  1,694
  2,105
  2,575
  3,105
  3,696
  4,348
  5,060
  5,831
  6,659
  7,544
  8,484
  9,478
  10,524
  11,623
  12,773
  13,974
  15,227
  16,531
  17,889
  19,300
  20,767
  22,292
Revenue / Adjusted assets
  0.727
  0.722
  0.723
  0.722
  0.720
  0.721
  0.720
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
Average production assets, $m
  23
  34
  50
  70
  97
  130
  171
  220
  278
  346
  423
  510
  608
  715
  832
  958
  1,095
  1,240
  1,395
  1,558
  1,730
  1,911
  2,100
  2,297
  2,503
  2,718
  2,941
  3,173
  3,414
  3,664
Working capital, $m
  -98
  -146
  -213
  -300
  -413
  -555
  -729
  -939
  -1,187
  -1,475
  -1,804
  -2,176
  -2,590
  -3,047
  -3,546
  -4,086
  -4,667
  -5,287
  -5,946
  -6,642
  -7,375
  -8,145
  -8,951
  -9,793
  -10,671
  -11,585
  -12,537
  -13,526
  -14,554
  -15,622
Total debt, $m
  15
  78
  163
  275
  420
  602
  826
  1,096
  1,414
  1,784
  2,207
  2,684
  3,216
  3,803
  4,443
  5,137
  5,883
  6,679
  7,525
  8,420
  9,361
  10,350
  11,385
  12,466
  13,594
  14,768
  15,989
  17,260
  18,580
  19,952
Total liabilities, $m
  126
  188
  273
  386
  531
  713
  937
  1,206
  1,525
  1,894
  2,317
  2,795
  3,327
  3,913
  4,554
  5,247
  5,993
  6,789
  7,635
  8,530
  9,472
  10,460
  11,495
  12,577
  13,704
  14,878
  16,100
  17,370
  18,690
  20,062
Total equity, $m
  14
  21
  30
  43
  59
  79
  104
  134
  169
  210
  257
  311
  370
  435
  506
  583
  666
  754
  848
  948
  1,052
  1,162
  1,277
  1,397
  1,523
  1,653
  1,789
  1,930
  2,077
  2,229
Total liabilities and equity, $m
  140
  209
  303
  429
  590
  792
  1,041
  1,340
  1,694
  2,104
  2,574
  3,106
  3,697
  4,348
  5,060
  5,830
  6,659
  7,543
  8,483
  9,478
  10,524
  11,622
  12,772
  13,974
  15,227
  16,531
  17,889
  19,300
  20,767
  22,291
Debt-to-equity ratio
  1.090
  3.720
  5.360
  6.420
  7.130
  7.610
  7.940
  8.180
  8.350
  8.480
  8.570
  8.640
  8.700
  8.750
  8.780
  8.810
  8.830
  8.850
  8.870
  8.880
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
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
  -26
  -38
  -58
  -84
  -118
  -161
  -214
  -278
  -354
  -443
  -543
  -658
  -786
  -928
  -1,083
  -1,251
  -1,432
  -1,626
  -1,832
  -2,050
  -2,279
  -2,521
  -2,773
  -3,037
  -3,313
  -3,600
  -3,899
  -4,210
  -4,532
  -4,868
Depreciation, amort., depletion, $m
  6
  8
  11
  15
  21
  27
  36
  45
  57
  71
  85
  102
  122
  143
  166
  192
  219
  248
  279
  312
  346
  382
  420
  459
  501
  544
  588
  635
  683
  733
Funds from operations, $m
  -20
  -30
  -47
  -69
  -98
  -134
  -179
  -233
  -297
  -372
  -458
  -555
  -664
  -785
  -916
  -1,059
  -1,213
  -1,378
  -1,553
  -1,738
  -1,933
  -2,138
  -2,353
  -2,578
  -2,812
  -3,057
  -3,311
  -3,575
  -3,850
  -4,135
Change in working capital, $m
  -35
  -49
  -66
  -88
  -113
  -142
  -174
  -210
  -248
  -288
  -329
  -372
  -414
  -457
  -499
  -540
  -581
  -620
  -659
  -696
  -733
  -770
  -806
  -842
  -878
  -914
  -951
  -989
  -1,028
  -1,068
Cash from operations, $m
  15
  18
  19
  19
  15
  8
  -4
  -23
  -49
  -84
  -129
  -184
  -250
  -328
  -417
  -519
  -632
  -757
  -894
  -1,041
  -1,200
  -1,369
  -1,547
  -1,736
  -1,935
  -2,142
  -2,359
  -2,586
  -2,822
  -3,067
Maintenance CAPEX, $m
  -3
  -5
  -7
  -10
  -14
  -19
  -26
  -34
  -44
  -56
  -69
  -85
  -102
  -122
  -143
  -166
  -192
  -219
  -248
  -279
  -312
  -346
  -382
  -420
  -459
  -501
  -544
  -588
  -635
  -683
New CAPEX, $m
  -8
  -11
  -16
  -21
  -26
  -33
  -41
  -49
  -58
  -68
  -77
  -87
  -97
  -107
  -117
  -127
  -136
  -145
  -155
  -163
  -172
  -181
  -189
  -197
  -206
  -214
  -223
  -232
  -241
  -251
Cash from investing activities, $m
  -11
  -16
  -23
  -31
  -40
  -52
  -67
  -83
  -102
  -124
  -146
  -172
  -199
  -229
  -260
  -293
  -328
  -364
  -403
  -442
  -484
  -527
  -571
  -617
  -665
  -715
  -767
  -820
  -876
  -934
Free cash flow, $m
  4
  2
  -3
  -12
  -25
  -45
  -71
  -107
  -151
  -207
  -275
  -356
  -449
  -556
  -677
  -812
  -960
  -1,122
  -1,296
  -1,484
  -1,683
  -1,895
  -2,119
  -2,354
  -2,600
  -2,857
  -3,126
  -3,406
  -3,697
  -4,000
Issuance/(repayment) of debt, $m
  15
  62
  85
  113
  145
  182
  224
  269
  318
  370
  423
  477
  532
  587
  641
  694
  746
  796
  846
  894
  942
  989
  1,035
  1,081
  1,127
  1,174
  1,222
  1,270
  1,320
  1,372
Issuance/(repurchase) of shares, $m
  60
  45
  68
  97
  135
  182
  239
  308
  390
  484
  590
  711
  845
  993
  1,154
  1,328
  1,515
  1,714
  1,926
  2,149
  2,384
  2,630
  2,888
  3,158
  3,438
  3,731
  4,035
  4,351
  4,679
  5,021
Cash from financing (excl. dividends), $m  
  75
  107
  153
  210
  280
  364
  463
  577
  708
  854
  1,013
  1,188
  1,377
  1,580
  1,795
  2,022
  2,261
  2,510
  2,772
  3,043
  3,326
  3,619
  3,923
  4,239
  4,565
  4,905
  5,257
  5,621
  5,999
  6,393
Total cash flow (excl. dividends), $m
  79
  110
  150
  198
  254
  319
  392
  471
  557
  646
  738
  832
  928
  1,023
  1,117
  1,210
  1,300
  1,389
  1,475
  1,560
  1,642
  1,724
  1,805
  1,885
  1,966
  2,047
  2,130
  2,215
  2,302
  2,392
Retained Cash Flow (-), $m
  -60
  -45
  -68
  -97
  -135
  -182
  -239
  -308
  -390
  -484
  -590
  -711
  -845
  -993
  -1,154
  -1,328
  -1,515
  -1,714
  -1,926
  -2,149
  -2,384
  -2,630
  -2,888
  -3,158
  -3,438
  -3,731
  -4,035
  -4,351
  -4,679
  -5,021
Prev. year cash balance distribution, $m
  124
  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
  143
  65
  82
  101
  120
  138
  153
  163
  167
  162
  148
  122
  83
  30
  -37
  -118
  -215
  -325
  -450
  -589
  -742
  -907
  -1,084
  -1,272
  -1,472
  -1,683
  -1,904
  -2,136
  -2,377
  -2,628
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
  138
  59
  71
  83
  93
  100
  103
  102
  96
  85
  70
  52
  31
  10
  -11
  -30
  -47
  -60
  -69
  -75
  -77
  -75
  -71
  -65
  -57
  -49
  -41
  -33
  -26
  -20
Current shareholders' claim on cash, %
  50.0
  12.8
  3.3
  0.9
  0.2
  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

Jounce Therapeutics, Inc. is a clinical stage immunotherapy company. The Company is engaged in transforming the treatment of cancer by developing therapies that enable the immune system to attack tumors and provide long lasting benefits to patients. Through the use of its Translational Science Platform, Jounce first focuses on specific cell types within tumors to prioritize targets, and then identifies related biomarkers designed to match the right therapy to the right patient. The Company’s lead product candidate, JTX-2011, is a monoclonal antibody that binds to and activates Inducible T cell CO-Stimulator (ICOS) and is in a Phase II trial.

FINANCIAL RATIOS  of  Jounce Therapeutics, Inc. (JNCE)

Valuation Ratios
P/E Ratio -8.1
Price to Sales 3.1
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 0.6
Price to Free Cash Flow 0.6
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -16.7%
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 -8.6%
Ret/ On Assets - 3 Yr. Avg. -77.5%
Return On Total Capital -23.9%
Ret/ On T. Cap. - 3 Yr. Avg. -142.7%
Return On Equity -23.9%
Return On Equity - 3 Yr. Avg. 128.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -32.4%
EBITDA Margin - 3 Yr. Avg. -10.8%
Operating Margin -40.5%
Oper. Margin - 3 Yr. Avg. -13.5%
Pre-Tax Margin -37.8%
Pre-Tax Margin - 3 Yr. Avg. -12.6%
Net Profit Margin -37.8%
Net Profit Margin - 3 Yr. Avg. -12.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

JNCE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JNCE stock intrinsic value calculation we used $65 million for the last fiscal year's total revenue generated by Jounce Therapeutics, Inc.. The default revenue input number comes from 0001 income statement of Jounce 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 JNCE stock valuation model: a) initial revenue growth rate of 54.7% 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 JNCE is calculated based on our internal credit rating of Jounce 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 Jounce 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 JNCE stock the variable cost ratio is equal to 126.2%.

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 JNCE 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 Jounce Therapeutics, Inc..

Corporate tax rate of 27% is the nominal tax rate for Jounce 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 JNCE 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 JNCE are equal to 22.8%.

Life of production assets of 3.9 years is the average useful life of capital assets used in Jounce 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 JNCE is equal to -97.2%. 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 - $104.129 million for Jounce 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 32.972 million for Jounce 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 Jounce Therapeutics, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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