Intrinsic value of Momenta Pharmaceuticals - MNTA

Previous Close

$27.45

  Intrinsic Value

$1.19

stock screener

  Rating & Target

str. sell

-96%

Previous close

$27.45

 
Intrinsic value

$1.19

 
Up/down potential

-96%

 
Rating

str. sell

We calculate the intrinsic value of MNTA 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 2.1

 

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, %
  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
  142
  145
  149
  153
  157
  163
  168
  174
  181
  187
  195
  203
  211
  220
  230
  240
  250
  262
  274
  286
  299
  313
  328
  344
  360
  377
  395
  414
  434
  456
Variable operating expenses, $m
  227
  232
  238
  245
  253
  261
  270
  279
  289
  301
  312
  325
  338
  352
  368
  384
  401
  419
  438
  458
  479
  502
  525
  550
  576
  604
  633
  663
  696
  729
Fixed operating expenses, $m
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
Total operating expenses, $m
  235
  240
  247
  254
  262
  270
  279
  289
  299
  311
  322
  335
  349
  363
  379
  395
  413
  431
  450
  470
  492
  515
  538
  563
  590
  618
  647
  678
  711
  744
Operating income, $m
  -94
  -96
  -98
  -101
  -104
  -107
  -111
  -115
  -119
  -123
  -127
  -132
  -138
  -143
  -149
  -155
  -162
  -169
  -177
  -184
  -193
  -201
  -210
  -220
  -230
  -241
  -252
  -264
  -276
  -289
EBITDA, $m
  -88
  -90
  -92
  -95
  -97
  -100
  -104
  -107
  -111
  -115
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -159
  -166
  -173
  -181
  -189
  -197
  -206
  -216
  -226
  -236
  -247
  -259
  -271
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
Earnings before tax, $m
  -94
  -96
  -98
  -101
  -104
  -108
  -112
  -116
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -158
  -165
  -173
  -181
  -189
  -197
  -207
  -216
  -226
  -237
  -248
  -260
  -272
  -285
  -299
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
  -94
  -96
  -98
  -101
  -104
  -108
  -112
  -116
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -158
  -165
  -173
  -181
  -189
  -197
  -207
  -216
  -226
  -237
  -248
  -260
  -272
  -285
  -299

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
  162
  166
  170
  175
  180
  186
  192
  199
  206
  214
  223
  232
  241
  252
  262
  274
  286
  299
  313
  327
  342
  358
  375
  393
  411
  431
  452
  474
  497
  521
Adjusted assets (=assets-cash), $m
  162
  166
  170
  175
  180
  186
  192
  199
  206
  214
  223
  232
  241
  252
  262
  274
  286
  299
  313
  327
  342
  358
  375
  393
  411
  431
  452
  474
  497
  521
Revenue / Adjusted assets
  0.877
  0.873
  0.876
  0.874
  0.872
  0.876
  0.875
  0.874
  0.879
  0.874
  0.874
  0.875
  0.876
  0.873
  0.878
  0.876
  0.874
  0.876
  0.875
  0.875
  0.874
  0.874
  0.875
  0.875
  0.876
  0.875
  0.874
  0.873
  0.873
  0.875
Average production assets, $m
  28
  29
  30
  30
  31
  32
  33
  35
  36
  37
  39
  40
  42
  44
  46
  48
  50
  52
  54
  57
  60
  62
  65
  68
  72
  75
  79
  82
  86
  91
Working capital, $m
  -23
  -24
  -24
  -25
  -26
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -59
  -61
  -64
  -68
  -71
  -74
Total debt, $m
  2
  4
  6
  9
  11
  14
  18
  22
  26
  30
  34
  39
  44
  50
  56
  62
  68
  75
  83
  90
  98
  107
  116
  126
  136
  146
  157
  169
  181
  194
Total liabilities, $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
Total equity, $m
  75
  77
  79
  81
  83
  86
  89
  92
  96
  99
  103
  107
  112
  116
  122
  127
  132
  138
  145
  151
  158
  166
  174
  182
  190
  200
  209
  219
  230
  241
Total liabilities and equity, $m
  162
  166
  170
  175
  180
  186
  192
  199
  207
  214
  223
  231
  242
  251
  263
  274
  286
  299
  313
  327
  342
  358
  375
  393
  411
  431
  452
  473
  497
  521
Debt-to-equity ratio
  0.020
  0.050
  0.080
  0.110
  0.140
  0.170
  0.200
  0.230
  0.270
  0.300
  0.330
  0.370
  0.400
  0.430
  0.460
  0.490
  0.520
  0.540
  0.570
  0.600
  0.620
  0.650
  0.670
  0.690
  0.710
  0.730
  0.750
  0.770
  0.790
  0.810
Adjusted equity ratio
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463
  0.463

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -94
  -96
  -98
  -101
  -104
  -108
  -112
  -116
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -158
  -165
  -173
  -181
  -189
  -197
  -207
  -216
  -226
  -237
  -248
  -260
  -272
  -285
  -299
Depreciation, amort., depletion, $m
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
Funds from operations, $m
  -88
  -90
  -92
  -95
  -98
  -101
  -104
  -108
  -112
  -117
  -121
  -126
  -131
  -137
  -143
  -149
  -155
  -162
  -170
  -177
  -186
  -194
  -203
  -213
  -223
  -233
  -244
  -256
  -268
  -281
Change in working capital, $m
  0
  -1
  -1
  -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
Cash from operations, $m
  -87
  -89
  -92
  -94
  -97
  -100
  -104
  -107
  -111
  -115
  -120
  -125
  -130
  -135
  -141
  -147
  -154
  -161
  -168
  -175
  -183
  -192
  -201
  -210
  -220
  -230
  -241
  -253
  -265
  -277
Maintenance CAPEX, $m
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
Cash from investing activities, $m
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -12
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -19
  -20
  -20
  -21
Free cash flow, $m
  -93
  -96
  -98
  -101
  -104
  -107
  -111
  -115
  -119
  -124
  -129
  -134
  -140
  -146
  -152
  -158
  -165
  -173
  -181
  -189
  -197
  -207
  -216
  -226
  -237
  -248
  -260
  -272
  -285
  -299
Issuance/(repayment) of debt, $m
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
Issuance/(repurchase) of shares, $m
  95
  98
  100
  104
  107
  111
  114
  119
  123
  128
  133
  138
  144
  150
  157
  164
  171
  179
  187
  195
  204
  214
  224
  235
  246
  257
  270
  282
  296
  310
Cash from financing (excl. dividends), $m  
  97
  100
  102
  107
  110
  114
  117
  123
  127
  132
  138
  143
  149
  155
  163
  170
  178
  186
  194
  203
  212
  223
  233
  245
  256
  268
  281
  294
  308
  323
Total cash flow (excl. dividends), $m
  3
  4
  5
  5
  6
  6
  7
  7
  8
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
Retained Cash Flow (-), $m
  -95
  -98
  -100
  -104
  -107
  -111
  -114
  -119
  -123
  -128
  -133
  -138
  -144
  -150
  -157
  -164
  -171
  -179
  -187
  -195
  -204
  -214
  -224
  -235
  -246
  -257
  -270
  -282
  -296
  -310
Prev. year cash balance distribution, $m
  301
  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
  209
  -94
  -96
  -98
  -101
  -104
  -108
  -111
  -115
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -159
  -166
  -173
  -181
  -189
  -198
  -207
  -217
  -227
  -238
  -249
  -261
  -273
  -286
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
  200
  -86
  -83
  -81
  -78
  -76
  -73
  -70
  -66
  -63
  -59
  -55
  -51
  -47
  -43
  -39
  -35
  -31
  -27
  -23
  -20
  -16
  -14
  -11
  -9
  -7
  -5
  -4
  -3
  -2
Current shareholders' claim on cash, %
  81.5
  66.3
  53.9
  43.8
  35.5
  28.8
  23.4
  18.9
  15.3
  12.4
  10.0
  8.1
  6.6
  5.3
  4.3
  3.5
  2.8
  2.3
  1.8
  1.5
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2

Momenta Pharmaceuticals, Inc. is a biotechnology company. The Company is focused on developing generic versions of drugs, biosimilars and therapeutics for oncology and autoimmune disease. The Company has developed generic version of LOVENOX (enoxaparin sodium injection) and COPAXONE (glatiramer acetate injection). GLATOPA 20 milligrams (mg)/ milliliters (mL) is a generic version of once-daily COPAXONE 20 mg/mL indicated for the treatment of patients with relapsing forms of multiple sclerosis, a chronic disease of the central nervous system characterized by inflammation and neurodegeneration. COPAXONE is available in both a once-daily 20 mg/mL formulation and a three-times-weekly 40 mg/mL formulation. The Company's Enoxaparin Sodium Injection is a generic version of LOVENOX indicated for the prevention and treatment of deep vein thrombosis and to support the treatment of acute coronary syndromes. The Company's programs include M254, M281 (Anti-FcRn candidate) and M230.

FINANCIAL RATIOS  of  Momenta Pharmaceuticals (MNTA)

Valuation Ratios
P/E Ratio -92.9
Price to Sales 17.7
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow 243.9
Price to Free Cash Flow 975.6
Growth Rates
Sales Growth Rate 22.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate -7.8%
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 -4.7%
Ret/ On Assets - 3 Yr. Avg. -21.2%
Return On Total Capital -5.7%
Ret/ On T. Cap. - 3 Yr. Avg. -25.4%
Return On Equity -5.7%
Return On Equity - 3 Yr. Avg. -25.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -10%
EBITDA Margin - 3 Yr. Avg. -88.4%
Operating Margin -67.3%
Oper. Margin - 3 Yr. Avg. -117.6%
Pre-Tax Margin -19.1%
Pre-Tax Margin - 3 Yr. Avg. -100.6%
Net Profit Margin -19.1%
Net Profit Margin - 3 Yr. Avg. -100.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MNTA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MNTA stock intrinsic value calculation we used $138.882 million for the last fiscal year's total revenue generated by Momenta Pharmaceuticals. The default revenue input number comes from 0001 income statement of Momenta 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 MNTA 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 MNTA is calculated based on our internal credit rating of Momenta 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 Momenta 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 MNTA stock the variable cost ratio is equal to 160.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8 million in the base year in the intrinsic value calculation for MNTA 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 Momenta Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Momenta 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 MNTA 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 MNTA are equal to 19.9%.

Life of production assets of 3.3 years is the average useful life of capital assets used in Momenta 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 MNTA is equal to -16.3%. 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 - $374.154 million for Momenta 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 77.589 million for Momenta 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 Momenta Pharmaceuticals at the current share price and the inputted number of shares is $2.1 billion.

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COMPANY NEWS

▶ Momenta Moves Meticulously   [Aug-13-18 03:30PM  Motley Fool]
▶ Momenta: 2Q Earnings Snapshot   [Aug-09-18 06:16AM  Associated Press]
▶ Momenta Pharmaceuticals Contemplates Its Future   [May-15-18 01:49PM  Motley Fool]
▶ Boston biotech entrepreneur Christoph Westphal launches new startup   [May-02-18 11:56AM  American City Business Journals]
▶ Momenta Pharmaceuticals Wraps Up a Bleak Year   [Feb-22-18 03:04PM  Motley Fool]
▶ Momenta posts 4Q profit   [Feb-21-18 08:29AM  Associated Press]
▶ What Happened in the Stock Market Today   [Jan-05-18 05:06PM  Motley Fool]
▶ The Stock Market Is on Autopilot   [01:44PM  TheStreet.com]
▶ Price, Momentum Driving the Action Now   [01:20PM  TheStreet.com]
▶ Momenta Pharmaceuticals, Inc.'s Rough Month   [Nov-10-17 03:30PM  Motley Fool]
▶ Why Momenta Pharmaceuticals Fell 12.6% Today   [Nov-01-17 04:30PM  Motley Fool]
▶ Momenta reports 3Q loss   [08:13AM  Associated Press]

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