Intrinsic value of Momenta Pharmaceuticals - MNTA

Previous Close

$12.55

  Intrinsic Value

$1.22

stock screener

  Rating & Target

str. sell

-90%

Previous close

$12.55

 
Intrinsic value

$1.22

 
Up/down potential

-90%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 2016), $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 1.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.22
  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
  110
  112
  115
  118
  121
  125
  129
  133
  138
  143
  148
  154
  161
  167
  174
  182
  190
  198
  207
  217
  227
  237
  248
  260
  272
  285
  299
  313
  328
  344
  361
Variable operating expenses, $m
 
  56
  57
  59
  61
  62
  64
  67
  69
  71
  74
  77
  80
  84
  87
  91
  95
  99
  104
  108
  113
  119
  124
  130
  136
  143
  149
  157
  164
  172
  180
Fixed operating expenses, $m
 
  135
  139
  142
  146
  149
  153
  157
  161
  165
  169
  173
  178
  182
  187
  191
  196
  201
  206
  211
  216
  222
  227
  233
  239
  245
  251
  257
  264
  270
  277
Total operating expenses, $m
  184
  191
  196
  201
  207
  211
  217
  224
  230
  236
  243
  250
  258
  266
  274
  282
  291
  300
  310
  319
  329
  341
  351
  363
  375
  388
  400
  414
  428
  442
  457
Operating income, $m
  -75
  -79
  -81
  -83
  -85
  -87
  -89
  -90
  -92
  -93
  -95
  -96
  -97
  -98
  -99
  -100
  -101
  -102
  -102
  -103
  -103
  -103
  -103
  -103
  -103
  -102
  -101
  -101
  -99
  -98
  -96
EBITDA, $m
  -65
  -74
  -76
  -78
  -80
  -81
  -83
  -84
  -85
  -87
  -88
  -89
  -90
  -91
  -91
  -92
  -92
  -93
  -93
  -93
  -92
  -92
  -92
  -91
  -90
  -89
  -88
  -86
  -84
  -82
  -80
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
Earnings before tax, $m
  -21
  -79
  -81
  -83
  -85
  -87
  -89
  -91
  -93
  -94
  -96
  -97
  -99
  -100
  -101
  -102
  -103
  -104
  -105
  -106
  -107
  -107
  -107
  -108
  -108
  -108
  -107
  -107
  -106
  -105
  -104
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
  0
Net income, $m
  -21
  -79
  -81
  -83
  -85
  -87
  -89
  -91
  -93
  -94
  -96
  -97
  -99
  -100
  -101
  -102
  -103
  -104
  -105
  -106
  -107
  -107
  -107
  -108
  -108
  -108
  -107
  -107
  -106
  -105
  -104

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  353
  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
  478
  128
  130
  134
  138
  142
  146
  151
  157
  162
  169
  175
  183
  190
  198
  207
  216
  225
  235
  246
  257
  269
  282
  295
  309
  324
  339
  356
  373
  391
  410
Adjusted assets (=assets-cash), $m
  125
  128
  130
  134
  138
  142
  146
  151
  157
  162
  169
  175
  183
  190
  198
  207
  216
  225
  235
  246
  257
  269
  282
  295
  309
  324
  339
  356
  373
  391
  410
Revenue / Adjusted assets
  0.880
  0.875
  0.885
  0.881
  0.877
  0.880
  0.884
  0.881
  0.879
  0.883
  0.876
  0.880
  0.880
  0.879
  0.879
  0.879
  0.880
  0.880
  0.881
  0.882
  0.883
  0.881
  0.879
  0.881
  0.880
  0.880
  0.882
  0.879
  0.879
  0.880
  0.880
Average production assets, $m
  26
  26
  27
  27
  28
  29
  30
  31
  32
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  60
  63
  66
  69
  73
  76
  80
  84
Working capital, $m
  357
  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
  12
  13
Total debt, $m
  0
  2
  5
  7
  11
  14
  18
  22
  27
  32
  37
  43
  49
  55
  62
  69
  77
  85
  94
  103
  112
  122
  133
  144
  156
  169
  182
  196
  210
  226
  242
Total liabilities, $m
  106
  108
  111
  113
  117
  120
  124
  128
  133
  138
  143
  149
  155
  161
  168
  175
  183
  191
  200
  209
  218
  228
  239
  250
  262
  275
  288
  302
  316
  332
  348
Total equity, $m
  372
  19
  20
  20
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  49
  52
  54
  57
  59
  62
Total liabilities and equity, $m
  478
  127
  131
  133
  138
  142
  146
  151
  157
  163
  169
  176
  183
  190
  198
  206
  216
  225
  236
  246
  257
  269
  282
  295
  309
  324
  340
  356
  373
  391
  410
Debt-to-equity ratio
  0.000
  0.110
  0.230
  0.370
  0.510
  0.660
  0.810
  0.970
  1.130
  1.290
  1.450
  1.600
  1.760
  1.910
  2.060
  2.200
  2.350
  2.480
  2.620
  2.750
  2.870
  2.990
  3.110
  3.220
  3.320
  3.430
  3.520
  3.620
  3.710
  3.800
  3.880
Adjusted equity ratio
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152
  0.152

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -21
  -79
  -81
  -83
  -85
  -87
  -89
  -91
  -93
  -94
  -96
  -97
  -99
  -100
  -101
  -102
  -103
  -104
  -105
  -106
  -107
  -107
  -107
  -108
  -108
  -108
  -107
  -107
  -106
  -105
  -104
Depreciation, amort., depletion, $m
  10
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
Funds from operations, $m
  9
  -74
  -76
  -78
  -80
  -82
  -83
  -85
  -86
  -88
  -89
  -90
  -91
  -92
  -93
  -94
  -95
  -95
  -96
  -96
  -96
  -96
  -96
  -96
  -95
  -94
  -94
  -92
  -91
  -89
  -88
Change in working capital, $m
  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
  1
  1
  1
  1
Cash from operations, $m
  8
  -74
  -76
  -78
  -80
  -82
  -83
  -85
  -86
  -88
  -89
  -90
  -91
  -93
  -93
  -94
  -95
  -96
  -96
  -96
  -96
  -96
  -96
  -96
  -96
  -95
  -94
  -93
  -92
  -90
  -88
Maintenance CAPEX, $m
  0
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
New CAPEX, $m
  -6
  -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
  -4
  -4
  -4
Cash from investing activities, $m
  80
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -19
  -19
  -20
Free cash flow, $m
  88
  -80
  -82
  -84
  -86
  -88
  -90
  -92
  -94
  -95
  -97
  -99
  -100
  -102
  -103
  -104
  -105
  -106
  -107
  -108
  -109
  -109
  -110
  -110
  -110
  -111
  -110
  -110
  -110
  -109
  -108
Issuance/(repayment) of debt, $m
  0
  2
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  15
  15
  16
Issuance/(repurchase) of shares, $m
  1
  80
  82
  84
  86
  88
  90
  92
  93
  95
  97
  98
  100
  101
  102
  104
  105
  106
  107
  108
  108
  109
  109
  110
  110
  110
  110
  109
  109
  108
  107
Cash from financing (excl. dividends), $m  
  1
  82
  84
  87
  89
  92
  94
  96
  98
  100
  102
  104
  106
  107
  109
  111
  113
  114
  116
  117
  118
  119
  120
  121
  122
  122
  123
  123
  124
  123
  123
Total cash flow (excl. dividends), $m
  89
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  15
  15
Retained Cash Flow (-), $m
  -2
  -80
  -82
  -84
  -86
  -88
  -90
  -92
  -93
  -95
  -97
  -98
  -100
  -101
  -102
  -104
  -105
  -106
  -107
  -108
  -108
  -109
  -109
  -110
  -110
  -110
  -110
  -109
  -109
  -108
  -107
Prev. year cash balance distribution, $m
 
  353
  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
 
  275
  -79
  -81
  -83
  -85
  -86
  -88
  -89
  -91
  -92
  -93
  -94
  -95
  -96
  -97
  -98
  -98
  -99
  -99
  -99
  -99
  -99
  -99
  -99
  -98
  -97
  -96
  -95
  -94
  -92
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
 
  264
  -73
  -71
  -68
  -66
  -63
  -59
  -56
  -52
  -48
  -44
  -40
  -36
  -32
  -28
  -25
  -21
  -18
  -15
  -13
  -10
  -8
  -6
  -5
  -4
  -3
  -2
  -1
  -1
  -1
Current shareholders' claim on cash, %
  100
  38.0
  14.4
  5.4
  2.1
  0.8
  0.3
  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

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 -42.5
Price to Sales 8.1
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 111.5
Price to Free Cash Flow 446
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 $110 million for the last fiscal year's total revenue generated by Momenta Pharmaceuticals. The default revenue input number comes from 2016 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 50%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $132 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 3.5% 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 23.2%.

Life of production assets of 2.6 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 3.6%. 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 - $372 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 76.157 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 $1.0 billion.

RELATED COMPANIES Price Int.Val. Rating
NVS Novartis ADR 83.80 35.31  str.sell
CHRS Coherus BioSci 8.60 0.09  str.sell
BIIB Biogen 328.03 341.26  hold
PFE Pfizer 36.21 28.44  sell
AMGN Amgen 176.83 97.61  sell
MRK Merck&Co 56.34 30.41  str.sell

COMPANY NEWS

▶ 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]
▶ How Mylan's MS-Generic Approval Caused Teva, Momenta To Plunge   [04:11PM  Investor's Business Daily]
▶ Momenta reports 2Q loss   [Aug-02-17 10:43PM  Associated Press]
▶ Momenta reports 2Q loss   [08:13AM  Associated Press]
▶ Jury nixes Momenta patent case that sought $938M in damages   [03:00PM  American City Business Journals]
▶ Mylan In FDA Limbo On Generic Multiple Sclerosis Drug   [Jun-15-17 12:15PM  Investor's Business Daily]
▶ Novartis CEO sees no need for big takeover   [May-31-17 11:44AM  Reuters]
▶ Momenta Pharmaceuticals, Inc. Looks for Some Momentum   [May-03-17 04:19PM  Motley Fool]
▶ Momenta reports 1Q loss   [08:07AM  Associated Press]
Financial statements of MNTA
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.