Intrinsic value of Molecular Templates, Inc. - MTEM

Previous Close

$5.43

  Intrinsic Value

$0.53

stock screener

  Rating & Target

str. sell

-90%

Previous close

$5.43

 
Intrinsic value

$0.53

 
Up/down potential

-90%

 
Rating

str. sell

We calculate the intrinsic value of MTEM 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  5
  7
  11
  16
  23
  31
  42
  55
  71
  89
  111
  136
  164
  195
  229
  266
  307
  350
  397
  446
  498
  553
  610
  671
  734
  799
  868
  939
  1,013
  1,090
Variable operating expenses, $m
  32
  49
  74
  107
  151
  208
  279
  367
  472
  596
  740
  905
  1,091
  1,298
  1,526
  1,775
  2,045
  2,335
  2,644
  2,973
  3,320
  3,686
  4,070
  4,472
  4,892
  5,329
  5,785
  6,259
  6,752
  7,265
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
  32
  49
  74
  107
  151
  208
  279
  367
  472
  596
  740
  905
  1,091
  1,298
  1,526
  1,775
  2,045
  2,335
  2,644
  2,973
  3,320
  3,686
  4,070
  4,472
  4,892
  5,329
  5,785
  6,259
  6,752
  7,265
Operating income, $m
  -27
  -42
  -63
  -91
  -129
  -177
  -237
  -312
  -401
  -507
  -629
  -769
  -927
  -1,103
  -1,297
  -1,509
  -1,738
  -1,984
  -2,247
  -2,527
  -2,822
  -3,133
  -3,459
  -3,801
  -4,158
  -4,530
  -4,917
  -5,321
  -5,740
  -6,175
EBITDA, $m
  -27
  -42
  -62
  -90
  -127
  -175
  -235
  -309
  -398
  -502
  -623
  -762
  -919
  -1,093
  -1,285
  -1,495
  -1,722
  -1,966
  -2,227
  -2,504
  -2,796
  -3,105
  -3,428
  -3,766
  -4,120
  -4,489
  -4,873
  -5,272
  -5,688
  -6,119
Interest expense (income), $m
  0
  0
  1
  2
  3
  5
  8
  11
  15
  20
  25
  32
  40
  50
  60
  71
  84
  98
  113
  129
  146
  165
  184
  204
  226
  248
  271
  296
  321
  347
  375
Earnings before tax, $m
  -28
  -43
  -65
  -95
  -134
  -185
  -248
  -327
  -421
  -532
  -662
  -810
  -977
  -1,163
  -1,369
  -1,593
  -1,836
  -2,097
  -2,377
  -2,673
  -2,987
  -3,317
  -3,664
  -4,027
  -4,406
  -4,801
  -5,213
  -5,642
  -6,087
  -6,550
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
  -28
  -43
  -65
  -95
  -134
  -185
  -248
  -327
  -421
  -532
  -662
  -810
  -977
  -1,163
  -1,369
  -1,593
  -1,836
  -2,097
  -2,377
  -2,673
  -2,987
  -3,317
  -3,664
  -4,027
  -4,406
  -4,801
  -5,213
  -5,642
  -6,087
  -6,550

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
  63
  98
  146
  212
  299
  411
  551
  724
  931
  1,176
  1,461
  1,786
  2,153
  2,561
  3,012
  3,503
  4,036
  4,608
  5,218
  5,867
  6,553
  7,275
  8,032
  8,825
  9,654
  10,518
  11,417
  12,353
  13,327
  14,338
Adjusted assets (=assets-cash), $m
  63
  98
  146
  212
  299
  411
  551
  724
  931
  1,176
  1,461
  1,786
  2,153
  2,561
  3,012
  3,503
  4,036
  4,608
  5,218
  5,867
  6,553
  7,275
  8,032
  8,825
  9,654
  10,518
  11,417
  12,353
  13,327
  14,338
Revenue / Adjusted assets
  0.079
  0.071
  0.075
  0.075
  0.077
  0.075
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
  0.076
Average production assets, $m
  2
  3
  4
  6
  9
  12
  16
  21
  27
  34
  42
  52
  62
  74
  87
  101
  117
  133
  151
  170
  190
  211
  233
  256
  280
  305
  331
  358
  386
  415
Working capital, $m
  -10
  -16
  -24
  -35
  -49
  -68
  -91
  -120
  -154
  -195
  -242
  -296
  -357
  -424
  -499
  -580
  -668
  -763
  -864
  -972
  -1,085
  -1,205
  -1,330
  -1,462
  -1,599
  -1,742
  -1,891
  -2,046
  -2,207
  -2,374
Total debt, $m
  10
  19
  32
  50
  74
  104
  142
  189
  245
  312
  389
  477
  576
  687
  809
  942
  1,086
  1,241
  1,407
  1,583
  1,769
  1,964
  2,170
  2,384
  2,609
  2,843
  3,087
  3,341
  3,604
  3,878
Total liabilities, $m
  17
  26
  40
  57
  81
  111
  149
  196
  252
  319
  396
  484
  583
  694
  816
  949
  1,094
  1,249
  1,414
  1,590
  1,776
  1,971
  2,177
  2,392
  2,616
  2,850
  3,094
  3,348
  3,612
  3,886
Total equity, $m
  46
  71
  106
  154
  218
  299
  402
  528
  679
  858
  1,065
  1,302
  1,569
  1,867
  2,196
  2,554
  2,942
  3,359
  3,804
  4,277
  4,777
  5,303
  5,856
  6,434
  7,038
  7,667
  8,323
  9,006
  9,715
  10,453
Total liabilities and equity, $m
  63
  97
  146
  211
  299
  410
  551
  724
  931
  1,177
  1,461
  1,786
  2,152
  2,561
  3,012
  3,503
  4,036
  4,608
  5,218
  5,867
  6,553
  7,274
  8,033
  8,826
  9,654
  10,517
  11,417
  12,354
  13,327
  14,339
Debt-to-equity ratio
  0.210
  0.270
  0.300
  0.320
  0.340
  0.350
  0.350
  0.360
  0.360
  0.360
  0.360
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
Adjusted equity ratio
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -28
  -43
  -65
  -95
  -134
  -185
  -248
  -327
  -421
  -532
  -662
  -810
  -977
  -1,163
  -1,369
  -1,593
  -1,836
  -2,097
  -2,377
  -2,673
  -2,987
  -3,317
  -3,664
  -4,027
  -4,406
  -4,801
  -5,213
  -5,642
  -6,087
  -6,550
Depreciation, amort., depletion, $m
  0
  0
  1
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  10
  12
  14
  16
  18
  20
  23
  26
  28
  31
  35
  38
  41
  45
  48
  52
  56
Funds from operations, $m
  -27
  -43
  -64
  -94
  -133
  -183
  -246
  -324
  -417
  -528
  -656
  -803
  -968
  -1,153
  -1,357
  -1,579
  -1,820
  -2,079
  -2,356
  -2,650
  -2,961
  -3,289
  -3,632
  -3,992
  -4,368
  -4,760
  -5,168
  -5,593
  -6,035
  -6,494
Change in working capital, $m
  -4
  -6
  -8
  -11
  -14
  -19
  -23
  -29
  -34
  -41
  -47
  -54
  -61
  -68
  -75
  -81
  -88
  -95
  -101
  -107
  -114
  -120
  -125
  -131
  -137
  -143
  -149
  -155
  -161
  -168
Cash from operations, $m
  -23
  -37
  -56
  -83
  -118
  -164
  -223
  -295
  -383
  -487
  -609
  -749
  -908
  -1,085
  -1,282
  -1,498
  -1,732
  -1,985
  -2,255
  -2,543
  -2,848
  -3,169
  -3,507
  -3,861
  -4,231
  -4,617
  -5,019
  -5,438
  -5,874
  -6,327
Maintenance CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -8
  -10
  -12
  -14
  -16
  -18
  -20
  -23
  -26
  -28
  -31
  -35
  -38
  -41
  -45
  -48
  -52
New CAPEX, $m
  -1
  -1
  -1
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -11
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
Cash from investing activities, $m
  -1
  -1
  -1
  -3
  -4
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -18
  -20
  -23
  -26
  -29
  -33
  -36
  -39
  -43
  -47
  -50
  -54
  -59
  -63
  -67
  -72
  -76
  -81
Free cash flow, $m
  -24
  -38
  -58
  -85
  -122
  -169
  -228
  -302
  -392
  -498
  -622
  -764
  -925
  -1,106
  -1,305
  -1,524
  -1,761
  -2,017
  -2,291
  -2,582
  -2,890
  -3,216
  -3,557
  -3,915
  -4,289
  -4,680
  -5,087
  -5,510
  -5,950
  -6,408
Issuance/(repayment) of debt, $m
  6
  9
  13
  18
  24
  30
  38
  47
  56
  66
  77
  88
  99
  111
  122
  133
  144
  155
  166
  176
  186
  196
  205
  215
  225
  234
  244
  254
  264
  274
Issuance/(repurchase) of shares, $m
  45
  68
  100
  143
  197
  266
  351
  452
  572
  711
  869
  1,047
  1,244
  1,461
  1,697
  1,951
  2,224
  2,514
  2,822
  3,146
  3,487
  3,843
  4,216
  4,605
  5,010
  5,431
  5,869
  6,324
  6,797
  7,288
Cash from financing (excl. dividends), $m  
  51
  77
  113
  161
  221
  296
  389
  499
  628
  777
  946
  1,135
  1,343
  1,572
  1,819
  2,084
  2,368
  2,669
  2,988
  3,322
  3,673
  4,039
  4,421
  4,820
  5,235
  5,665
  6,113
  6,578
  7,061
  7,562
Total cash flow (excl. dividends), $m
  27
  39
  55
  75
  99
  128
  160
  197
  237
  279
  324
  371
  418
  466
  514
  561
  607
  652
  697
  740
  782
  823
  864
  905
  945
  985
  1,026
  1,068
  1,110
  1,154
Retained Cash Flow (-), $m
  -45
  -68
  -100
  -143
  -197
  -266
  -351
  -452
  -572
  -711
  -869
  -1,047
  -1,244
  -1,461
  -1,697
  -1,951
  -2,224
  -2,514
  -2,822
  -3,146
  -3,487
  -3,843
  -4,216
  -4,605
  -5,010
  -5,431
  -5,869
  -6,324
  -6,797
  -7,288
Prev. year cash balance distribution, $m
  48
  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
  31
  -29
  -45
  -67
  -98
  -138
  -190
  -256
  -335
  -431
  -545
  -676
  -826
  -995
  -1,183
  -1,391
  -1,617
  -1,862
  -2,125
  -2,406
  -2,705
  -3,020
  -3,352
  -3,700
  -4,065
  -4,446
  -4,843
  -5,256
  -5,687
  -6,134
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
  29
  -26
  -39
  -56
  -76
  -100
  -129
  -160
  -193
  -226
  -259
  -288
  -314
  -334
  -347
  -353
  -352
  -343
  -327
  -306
  -280
  -251
  -220
  -188
  -158
  -130
  -104
  -81
  -62
  -46
Current shareholders' claim on cash, %
  62.3
  39.5
  25.5
  16.7
  11.2
  7.6
  5.2
  3.6
  2.5
  1.8
  1.3
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Molecular Templates, Inc., formerly Threshold Pharmaceuticals, Inc., is a clinical-stage biotechnology company. The Company is engaged in the discovery and development of therapeutic and diagnostic agents that selectively target tumor cells for the treatment of patients living with cancer. The Company also focused on the discovery, development, and commercialization of immunotoxins called engineered toxin bodies (ETBs). The Company is developing two therapeutic product candidates based on hypoxia-activated prodrug technology: evofosfamide and tarloxotinib. The Company’s lead drug candidate MT-3724 is an is an immunotoxin that targets the CD20 cell surface antigen present in a variety of lymphomas and leukemias.

FINANCIAL RATIOS  of  Molecular Templates, Inc. (MTEM)

Valuation Ratios
P/E Ratio -1.5
Price to Sales 0
Price to Book -2.5
Price to Tangible Book
Price to Cash Flow -1.4
Price to Free Cash Flow -1.4
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 0
Current Ratio 0
LT Debt to Equity -28.6%
Total Debt to Equity -92.9%
Interest Coverage 0
Management Effectiveness
Return On Assets -84.2%
Ret/ On Assets - 3 Yr. Avg. -12.6%
Return On Total Capital -120%
Ret/ On T. Cap. - 3 Yr. Avg. 163.8%
Return On Equity -177.8%
Return On Equity - 3 Yr. Avg. 144.5%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. -27.2%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. -57.2%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. -29.8%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. -29.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MTEM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTEM stock intrinsic value calculation we used $3 million for the last fiscal year's total revenue generated by Molecular Templates, Inc.. The default revenue input number comes from 0001 income statement of Molecular Templates, 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 MTEM stock valuation model: a) initial revenue growth rate of 60% 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 MTEM is calculated based on our internal credit rating of Molecular Templates, 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 Molecular Templates, 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 MTEM stock the variable cost ratio is equal to 666.7%.

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 MTEM 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 10.4% for Molecular Templates, Inc..

Corporate tax rate of 27% is the nominal tax rate for Molecular Templates, 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 MTEM 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 MTEM are equal to 38.1%.

Life of production assets of 7.4 years is the average useful life of capital assets used in Molecular Templates, 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 MTEM is equal to -217.9%. 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 - $77.289 million for Molecular Templates, 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 36.496 million for Molecular Templates, 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 Molecular Templates, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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