Intrinsic value of Kamada Ltd. - KMDA

Previous Close

$6.17

  Intrinsic Value

$0.54

stock screener

  Rating & Target

str. sell

-91%

Previous close

$6.17

 
Intrinsic value

$0.54

 
Up/down potential

-91%

 
Rating

str. sell

We calculate the intrinsic value of KMDA 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, %
  11.30
  10.67
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
Revenue, $m
  127
  140
  155
  169
  185
  201
  218
  235
  253
  272
  292
  312
  333
  355
  378
  402
  427
  453
  480
  508
  537
  568
  599
  633
  668
  704
  742
  782
  824
  867
Variable operating expenses, $m
  118
  130
  143
  156
  170
  185
  200
  216
  233
  250
  265
  284
  303
  323
  344
  365
  388
  411
  436
  461
  488
  515
  544
  575
  606
  639
  674
  710
  748
  787
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
  118
  130
  143
  156
  170
  185
  200
  216
  233
  250
  265
  284
  303
  323
  344
  365
  388
  411
  436
  461
  488
  515
  544
  575
  606
  639
  674
  710
  748
  787
Operating income, $m
  9
  10
  12
  13
  14
  16
  18
  19
  21
  23
  27
  29
  31
  33
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
EBITDA, $m
  16
  17
  19
  21
  23
  25
  27
  29
  31
  34
  36
  39
  41
  44
  47
  50
  53
  56
  60
  63
  67
  71
  75
  79
  83
  87
  92
  97
  102
  108
Interest expense (income), $m
  0
  0
  1
  1
  2
  3
  4
  4
  5
  6
  7
  8
  8
  9
  10
  11
  12
  14
  15
  16
  17
  18
  20
  21
  23
  24
  26
  27
  29
  31
  33
Earnings before tax, $m
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  19
  20
  21
  22
  23
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
  39
  41
  43
  45
  47
Tax expense, $m
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
Net income, $m
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34

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
  123
  136
  150
  164
  179
  195
  211
  228
  246
  264
  283
  303
  323
  345
  367
  390
  414
  439
  465
  492
  521
  551
  581
  614
  648
  683
  720
  758
  799
  841
Adjusted assets (=assets-cash), $m
  123
  136
  150
  164
  179
  195
  211
  228
  246
  264
  283
  303
  323
  345
  367
  390
  414
  439
  465
  492
  521
  551
  581
  614
  648
  683
  720
  758
  799
  841
Revenue / Adjusted assets
  1.033
  1.029
  1.033
  1.030
  1.034
  1.031
  1.033
  1.031
  1.028
  1.030
  1.032
  1.030
  1.031
  1.029
  1.030
  1.031
  1.031
  1.032
  1.032
  1.033
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.032
  1.031
  1.031
Average production assets, $m
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
  64
  69
  73
  78
  83
  88
  94
  100
  106
  112
  118
  125
  132
  139
  147
  155
  163
  172
  181
  191
Working capital, $m
  41
  46
  51
  55
  60
  66
  71
  77
  83
  89
  95
  102
  109
  116
  124
  131
  140
  148
  157
  166
  176
  186
  196
  207
  218
  230
  243
  256
  269
  284
Total debt, $m
  4
  7
  10
  14
  17
  21
  24
  28
  32
  36
  41
  45
  50
  55
  60
  65
  71
  76
  82
  88
  95
  102
  109
  116
  124
  132
  140
  149
  158
  168
Total liabilities, $m
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
  65
  69
  74
  79
  84
  89
  94
  100
  106
  112
  119
  126
  133
  140
  148
  156
  164
  173
  182
  192
Total equity, $m
  95
  105
  116
  127
  138
  151
  163
  176
  190
  204
  219
  234
  250
  266
  283
  301
  320
  339
  359
  380
  402
  425
  449
  474
  500
  527
  556
  585
  617
  649
Total liabilities and equity, $m
  123
  136
  150
  164
  179
  195
  211
  228
  246
  264
  284
  303
  324
  345
  367
  390
  414
  439
  465
  492
  521
  551
  582
  614
  648
  683
  720
  758
  799
  841
Debt-to-equity ratio
  0.040
  0.070
  0.090
  0.110
  0.120
  0.140
  0.150
  0.160
  0.170
  0.180
  0.190
  0.190
  0.200
  0.210
  0.210
  0.220
  0.220
  0.220
  0.230
  0.230
  0.240
  0.240
  0.240
  0.240
  0.250
  0.250
  0.250
  0.250
  0.260
  0.260
Adjusted equity ratio
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772
  0.772

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
Depreciation, amort., depletion, $m
  7
  7
  8
  8
  8
  9
  10
  10
  11
  11
  9
  10
  11
  11
  12
  13
  14
  15
  16
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
Funds from operations, $m
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  26
  28
  29
  31
  33
  34
  36
  38
  40
  42
  44
  46
  49
  51
  54
  56
  59
  62
Change in working capital, $m
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
Cash from operations, $m
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  17
  18
  19
  21
  22
  23
  24
  26
  27
  29
  30
  32
  34
  36
  37
  39
  41
  43
  46
  48
Maintenance CAPEX, $m
  -4
  -4
  -5
  -5
  -5
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
New CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
Cash from investing activities, $m
  -7
  -7
  -8
  -8
  -8
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -15
  -16
  -16
  -17
  -18
  -20
  -21
  -22
  -22
  -24
  -25
  -26
  -28
  -30
  -31
  -33
  -34
  -37
Free cash flow, $m
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
Issuance/(repayment) of debt, $m
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
Issuance/(repurchase) of shares, $m
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
Total cash flow (excl. dividends), $m
  8
  9
  9
  9
  10
  10
  10
  10
  11
  11
  9
  9
  10
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
Retained Cash Flow (-), $m
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
Prev. year cash balance distribution, $m
  27
  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
  26
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
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
  25
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  98.4
  96.9
  95.6
  94.4
  93.4
  92.5
  91.7
  91.0
  90.4
  89.9
  89.7
  89.6
  89.6
  89.6
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5
  89.5

Kamada Ltd. is an Israel-based biopharmaceutical company, which develops, produces and markets therapeutics, based on chromatographic purification technology. It offers bio-therapeutics for human use, such as specialty proteins, specific immunoglobulins, and other prescription medicines. The Company’s product line includes intravenous AAT for chronic replacement therapy in individuals with congenital alpha-1 antitrypsin deficiency; KamRAB for prophylaxis of rabies infection; KamRho-D IM for prophylaxis of Rh hemolytic disease of the newborn; KamRho-D IV for treatment of immune thrombocytopenic purpura; and IVIG, a replacement therapy in primary and secondary immune therapy. Its product line also comprises Protosol to reduce blood loss in patients undergoing cardiac surgery; Heparin sodium injection for coagulation inhibition and prophylaxis of thromboembolic diseases and Heparin Lock Flush to maintain potency of intravenous injection device among other.

FINANCIAL RATIOS  of  Kamada Ltd. (KMDA)

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%

KMDA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the KMDA stock intrinsic value calculation we used $114 million for the last fiscal year's total revenue generated by Kamada Ltd.. The default revenue input number comes from 0001 income statement of Kamada Ltd.. 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 KMDA stock valuation model: a) initial revenue growth rate of 11.3% 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 KMDA is calculated based on our internal credit rating of Kamada Ltd., 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 Kamada Ltd..
    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 KMDA stock the variable cost ratio is equal to 93%.

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 KMDA 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 20.8% for Kamada Ltd..

Corporate tax rate of 27% is the nominal tax rate for Kamada Ltd.. 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 KMDA 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 KMDA are equal to 22%.

Life of production assets of 6.8 years is the average useful life of capital assets used in Kamada Ltd. 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 KMDA is equal to 32.7%. 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 - $112.376 million for Kamada Ltd. - 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 40.295 million for Kamada Ltd. 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 Kamada Ltd. at the current share price and the inputted number of shares is $0.2 billion.

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