Intrinsic value of Midatech Pharma ADR - MTP

Previous Close

$0.38

  Intrinsic Value

$0.08

stock screener

  Rating & Target

str. sell

-80%

Previous close

$0.38

 
Intrinsic value

$0.08

 
Up/down potential

-80%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as MTP.

We calculate the intrinsic value of MTP 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 0.0

 

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, %
  20.10
  18.59
  17.23
  16.01
  14.91
  13.92
  13.02
  12.22
  11.50
  10.85
  10.27
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.20
  6.08
  5.98
  5.88
  5.79
  5.71
Revenue, $m
  12
  15
  17
  20
  23
  26
  29
  33
  37
  41
  45
  49
  54
  59
  64
  69
  74
  80
  86
  92
  98
  104
  111
  118
  126
  133
  141
  149
  158
  167
Variable operating expenses, $m
  66
  77
  90
  104
  119
  135
  152
  170
  189
  209
  227
  249
  272
  296
  321
  347
  374
  402
  431
  461
  493
  526
  560
  595
  632
  671
  711
  753
  796
  842
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
  66
  77
  90
  104
  119
  135
  152
  170
  189
  209
  227
  249
  272
  296
  321
  347
  374
  402
  431
  461
  493
  526
  560
  595
  632
  671
  711
  753
  796
  842
Operating income, $m
  -54
  -63
  -73
  -84
  -96
  -109
  -122
  -137
  -152
  -168
  -182
  -199
  -218
  -237
  -257
  -278
  -300
  -322
  -346
  -370
  -395
  -421
  -449
  -477
  -507
  -538
  -570
  -603
  -638
  -675
EBITDA, $m
  -49
  -58
  -68
  -79
  -91
  -103
  -117
  -131
  -146
  -162
  -178
  -196
  -214
  -233
  -252
  -273
  -294
  -316
  -339
  -363
  -388
  -414
  -440
  -468
  -497
  -528
  -559
  -592
  -626
  -662
Interest expense (income), $m
  0
  0
  1
  1
  1
  2
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
Earnings before tax, $m
  -54
  -63
  -74
  -85
  -97
  -111
  -125
  -139
  -155
  -172
  -185
  -203
  -222
  -242
  -263
  -284
  -306
  -329
  -353
  -378
  -404
  -431
  -459
  -488
  -518
  -550
  -583
  -617
  -653
  -690
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
  -54
  -63
  -74
  -85
  -97
  -111
  -125
  -139
  -155
  -172
  -185
  -203
  -222
  -242
  -263
  -284
  -306
  -329
  -353
  -378
  -404
  -431
  -459
  -488
  -518
  -550
  -583
  -617
  -653
  -690

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
  73
  87
  102
  118
  136
  155
  175
  197
  219
  243
  268
  294
  321
  350
  379
  410
  442
  475
  510
  545
  583
  621
  662
  704
  747
  793
  840
  890
  941
  995
Adjusted assets (=assets-cash), $m
  73
  87
  102
  118
  136
  155
  175
  197
  219
  243
  268
  294
  321
  350
  379
  410
  442
  475
  510
  545
  583
  621
  662
  704
  747
  793
  840
  890
  941
  995
Revenue / Adjusted assets
  0.164
  0.172
  0.167
  0.169
  0.169
  0.168
  0.166
  0.168
  0.169
  0.169
  0.168
  0.167
  0.168
  0.169
  0.169
  0.168
  0.167
  0.168
  0.169
  0.169
  0.168
  0.167
  0.168
  0.168
  0.169
  0.168
  0.168
  0.167
  0.168
  0.168
Average production assets, $m
  28
  33
  38
  45
  51
  58
  66
  74
  82
  91
  101
  111
  121
  131
  143
  154
  166
  179
  192
  205
  219
  234
  249
  265
  281
  298
  316
  334
  354
  374
Working capital, $m
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -16
  -17
  -19
  -21
  -23
  -24
  -26
  -28
  -30
  -32
  -35
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
Total debt, $m
  13
  18
  23
  28
  33
  40
  46
  53
  60
  68
  76
  84
  93
  102
  112
  122
  132
  143
  154
  165
  177
  190
  203
  216
  230
  245
  260
  276
  293
  310
Total liabilities, $m
  24
  28
  33
  38
  44
  50
  56
  63
  71
  78
  86
  95
  103
  113
  122
  132
  142
  153
  164
  176
  188
  200
  213
  227
  241
  255
  271
  286
  303
  320
Total equity, $m
  50
  59
  69
  80
  92
  105
  119
  133
  149
  165
  182
  199
  218
  237
  257
  278
  300
  322
  345
  370
  395
  421
  449
  477
  507
  538
  570
  603
  638
  675
Total liabilities and equity, $m
  74
  87
  102
  118
  136
  155
  175
  196
  220
  243
  268
  294
  321
  350
  379
  410
  442
  475
  509
  546
  583
  621
  662
  704
  748
  793
  841
  889
  941
  995
Debt-to-equity ratio
  0.270
  0.300
  0.330
  0.350
  0.360
  0.380
  0.390
  0.400
  0.410
  0.410
  0.420
  0.420
  0.430
  0.430
  0.430
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.460
  0.460
Adjusted equity ratio
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678
  0.678

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -54
  -63
  -74
  -85
  -97
  -111
  -125
  -139
  -155
  -172
  -185
  -203
  -222
  -242
  -263
  -284
  -306
  -329
  -353
  -378
  -404
  -431
  -459
  -488
  -518
  -550
  -583
  -617
  -653
  -690
Depreciation, amort., depletion, $m
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  12
Funds from operations, $m
  -49
  -59
  -69
  -80
  -92
  -105
  -119
  -133
  -149
  -165
  -182
  -200
  -218
  -238
  -258
  -279
  -301
  -323
  -347
  -371
  -397
  -423
  -451
  -479
  -509
  -540
  -572
  -606
  -641
  -678
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
Cash from operations, $m
  -49
  -58
  -68
  -79
  -91
  -104
  -117
  -132
  -147
  -164
  -180
  -198
  -217
  -236
  -256
  -277
  -299
  -321
  -345
  -369
  -395
  -421
  -448
  -477
  -507
  -537
  -570
  -603
  -638
  -675
Maintenance CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
New CAPEX, $m
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
Cash from investing activities, $m
  -6
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -10
  -12
  -12
  -13
  -14
  -15
  -15
  -17
  -17
  -18
  -19
  -19
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -30
  -30
  -32
Free cash flow, $m
  -55
  -64
  -75
  -86
  -99
  -113
  -127
  -142
  -158
  -175
  -193
  -211
  -231
  -251
  -272
  -293
  -316
  -339
  -364
  -389
  -415
  -443
  -471
  -501
  -532
  -564
  -597
  -632
  -669
  -707
Issuance/(repayment) of debt, $m
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
Issuance/(repurchase) of shares, $m
  63
  73
  84
  96
  109
  123
  138
  154
  171
  188
  202
  221
  241
  261
  283
  305
  328
  352
  377
  402
  429
  457
  486
  517
  548
  581
  615
  651
  688
  727
Cash from financing (excl. dividends), $m  
  67
  77
  89
  101
  115
  129
  144
  161
  178
  196
  210
  229
  250
  270
  293
  315
  338
  363
  388
  414
  441
  469
  499
  531
  562
  596
  630
  667
  705
  744
Total cash flow (excl. dividends), $m
  13
  13
  14
  15
  16
  17
  18
  19
  19
  20
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  37
Retained Cash Flow (-), $m
  -63
  -73
  -84
  -96
  -109
  -123
  -138
  -154
  -171
  -188
  -202
  -221
  -241
  -261
  -283
  -305
  -328
  -352
  -377
  -402
  -429
  -457
  -486
  -517
  -548
  -581
  -615
  -651
  -688
  -727
Prev. year cash balance distribution, $m
  7
  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
  -44
  -59
  -70
  -81
  -93
  -107
  -121
  -135
  -151
  -168
  -185
  -203
  -222
  -242
  -262
  -283
  -306
  -329
  -353
  -378
  -403
  -430
  -458
  -487
  -518
  -549
  -582
  -616
  -652
  -689
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
  -42
  -54
  -61
  -67
  -72
  -77
  -81
  -85
  -87
  -88
  -88
  -87
  -84
  -81
  -77
  -72
  -66
  -61
  -54
  -48
  -42
  -36
  -30
  -25
  -20
  -16
  -12
  -10
  -7
  -5
Current shareholders' claim on cash, %
  30.8
  10.0
  3.3
  1.1
  0.4
  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

Midatech Pharma PLC is an early-stage biopharmaceutical company that focuses on commercializing and developing products in oncology and other therapeutic areas. The Company's segments include Pipeline Research and Development, and Commercial. The Pipeline Research and Development segment seeks to develop products using the nanomedicine and sustained release technology platforms. The Commercial segment distributes and sells the commercial products. Its products include Zuplenz, Gelclair, Oravig and Soltamox. Zuplenz is an oral soluble film indicated for moderately emetogenic chemotherapy-induced nausea and vomiting (CINV), radiotherapy-induced nausea and vomiting (RINV), and post-operative nausea and vomiting (PONV). Gelclair is a product indicated for the management and relief of pain due to oral mucositis. Oravig is an orally dissolving buccal tablet approved for oral thrush. Soltamox is an oral liquid solution of tamoxifen citrate for the prevention of breast cancer.

FINANCIAL RATIOS  of  Midatech Pharma ADR (MTP)

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%

MTP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MTP stock intrinsic value calculation we used $10.2675675676 million for the last fiscal year's total revenue generated by Midatech Pharma ADR. The default revenue input number comes from 0001 income statement of Midatech Pharma ADR. 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 MTP stock valuation model: a) initial revenue growth rate of 20.1% 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 MTP is calculated based on our internal credit rating of Midatech Pharma ADR, 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 Midatech Pharma ADR.
    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 MTP stock the variable cost ratio is equal to 540%.

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 MTP 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 Midatech Pharma ADR.

Corporate tax rate of 27% is the nominal tax rate for Midatech Pharma ADR. 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 MTP 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 MTP are equal to 223.8%.

Life of production assets of 31.1 years is the average useful life of capital assets used in Midatech Pharma ADR 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 MTP is equal to -35.4%. 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 - $46.8594594595 million for Midatech Pharma ADR - 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 30.542 million for Midatech Pharma ADR 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 Midatech Pharma ADR at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Who Are Midatech Pharma Plcs (LON:MTPH) Major Shareholders?   [Sep-18-18 06:36AM  Simply Wall St.]
▶ MTP: Positive Interim Results for MTD201 Proof-of-Concept Study   [Sep-07-18 10:30AM  Zacks Small Cap Research]
▶ Midatech Pharma PLC: Trading Update   [Jul-25-18 07:00AM  GlobeNewswire]
▶ Benzinga Pro's 5 Stocks To Watch Today   [Jul-23-18 09:23AM  Benzinga]
▶ Tuesday's Market Sell-Off: The 52 Week Highs and Lows   [May-29-18 02:51PM  TheStreet.com]
▶ MTP: Midatech Targeting $2 Billion Market Opportunity with MTD201   [Apr-27-18 09:45AM  Zacks Small Cap Research]
▶ Midatech announces changes in Senior Management Team   [Mar-15-18 08:01AM  GlobeNewswire]
▶ Midatech Pharma Plc: Trading update   [Feb-14-18 07:00AM  GlobeNewswire]
▶ Is Midatech Pharma Plc (AIM:MTPH) Undervalued?   [Oct-27-17 01:59PM  Simply Wall St.]

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