Intrinsic value of NantHealth - NH

Previous Close

$1.46

  Intrinsic Value

$0.02

stock screener

  Rating & Target

str. sell

-99%

Previous close

$1.46

 
Intrinsic value

$0.02

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of NH 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, %
  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
  88
  90
  93
  95
  98
  101
  105
  109
  113
  117
  122
  127
  132
  137
  143
  150
  156
  163
  171
  179
  187
  196
  205
  214
  225
  235
  247
  259
  271
  284
Variable operating expenses, $m
  220
  225
  230
  236
  243
  250
  258
  266
  275
  285
  277
  289
  301
  313
  327
  341
  356
  373
  389
  407
  426
  446
  467
  489
  513
  537
  563
  590
  619
  649
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
  220
  225
  230
  236
  243
  250
  258
  266
  275
  285
  277
  289
  301
  313
  327
  341
  356
  373
  389
  407
  426
  446
  467
  489
  513
  537
  563
  590
  619
  649
Operating income, $m
  -132
  -134
  -137
  -141
  -144
  -148
  -153
  -158
  -163
  -168
  -156
  -162
  -169
  -176
  -184
  -192
  -200
  -209
  -219
  -229
  -239
  -251
  -262
  -275
  -288
  -302
  -316
  -331
  -348
  -364
EBITDA, $m
  -98
  -100
  -103
  -105
  -109
  -112
  -116
  -120
  -124
  -129
  -134
  -140
  -146
  -152
  -158
  -165
  -173
  -180
  -189
  -197
  -206
  -216
  -226
  -237
  -248
  -260
  -273
  -286
  -300
  -314
Interest expense (income), $m
  0
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
  59
  62
Earnings before tax, $m
  -148
  -151
  -155
  -159
  -163
  -168
  -173
  -179
  -185
  -191
  -180
  -187
  -195
  -204
  -213
  -222
  -232
  -243
  -254
  -266
  -279
  -292
  -306
  -320
  -336
  -352
  -369
  -387
  -406
  -426
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
  -148
  -151
  -155
  -159
  -163
  -168
  -173
  -179
  -185
  -191
  -180
  -187
  -195
  -204
  -213
  -222
  -232
  -243
  -254
  -266
  -279
  -292
  -306
  -320
  -336
  -352
  -369
  -387
  -406
  -426

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
  431
  441
  453
  465
  479
  495
  512
  530
  550
  571
  593
  617
  643
  670
  699
  730
  762
  796
  833
  871
  911
  954
  999
  1,046
  1,096
  1,148
  1,203
  1,262
  1,323
  1,387
Adjusted assets (=assets-cash), $m
  431
  441
  453
  465
  479
  495
  512
  530
  550
  571
  593
  617
  643
  670
  699
  730
  762
  796
  833
  871
  911
  954
  999
  1,046
  1,096
  1,148
  1,203
  1,262
  1,323
  1,387
Revenue / Adjusted assets
  0.204
  0.204
  0.205
  0.204
  0.205
  0.204
  0.205
  0.206
  0.205
  0.205
  0.206
  0.206
  0.205
  0.204
  0.205
  0.205
  0.205
  0.205
  0.205
  0.206
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
  0.205
Average production assets, $m
  116
  118
  121
  125
  128
  133
  137
  142
  147
  153
  159
  165
  172
  180
  187
  196
  204
  213
  223
  233
  244
  256
  268
  280
  294
  308
  322
  338
  354
  372
Working capital, $m
  -16
  -16
  -17
  -17
  -18
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -40
  -42
  -44
  -47
  -49
  -51
Total debt, $m
  200
  206
  213
  221
  229
  238
  249
  260
  272
  284
  298
  312
  328
  344
  362
  380
  400
  421
  443
  466
  490
  516
  543
  571
  601
  633
  666
  702
  738
  777
Total liabilities, $m
  260
  266
  273
  281
  290
  299
  309
  320
  332
  345
  358
  373
  388
  405
  422
  441
  460
  481
  503
  526
  550
  576
  603
  632
  662
  694
  727
  762
  799
  838
Total equity, $m
  171
  175
  179
  184
  190
  196
  203
  210
  218
  226
  235
  244
  255
  265
  277
  289
  302
  315
  330
  345
  361
  378
  396
  414
  434
  455
  477
  500
  524
  549
Total liabilities and equity, $m
  431
  441
  452
  465
  480
  495
  512
  530
  550
  571
  593
  617
  643
  670
  699
  730
  762
  796
  833
  871
  911
  954
  999
  1,046
  1,096
  1,149
  1,204
  1,262
  1,323
  1,387
Debt-to-equity ratio
  1.170
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.250
  1.260
  1.270
  1.280
  1.290
  1.300
  1.310
  1.320
  1.330
  1.330
  1.340
  1.350
  1.360
  1.370
  1.370
  1.380
  1.390
  1.390
  1.400
  1.400
  1.410
  1.420
Adjusted equity ratio
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -148
  -151
  -155
  -159
  -163
  -168
  -173
  -179
  -185
  -191
  -180
  -187
  -195
  -204
  -213
  -222
  -232
  -243
  -254
  -266
  -279
  -292
  -306
  -320
  -336
  -352
  -369
  -387
  -406
  -426
Depreciation, amort., depletion, $m
  34
  34
  35
  35
  36
  36
  37
  38
  38
  39
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
Funds from operations, $m
  -114
  -117
  -120
  -123
  -127
  -131
  -136
  -141
  -146
  -152
  -158
  -165
  -172
  -179
  -187
  -196
  -205
  -214
  -224
  -234
  -246
  -257
  -270
  -283
  -296
  -311
  -326
  -342
  -359
  -376
Change in working capital, $m
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Cash from operations, $m
  -114
  -116
  -119
  -123
  -127
  -131
  -135
  -140
  -146
  -151
  -157
  -164
  -171
  -178
  -186
  -195
  -203
  -213
  -223
  -233
  -244
  -256
  -268
  -281
  -294
  -309
  -324
  -340
  -356
  -374
Maintenance CAPEX, $m
  -15
  -16
  -16
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
New CAPEX, $m
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
Cash from investing activities, $m
  -17
  -19
  -19
  -19
  -21
  -21
  -23
  -24
  -24
  -26
  -27
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -40
  -43
  -44
  -47
  -49
  -51
  -54
  -57
  -60
  -62
  -65
Free cash flow, $m
  -131
  -135
  -138
  -143
  -147
  -152
  -158
  -164
  -170
  -177
  -184
  -192
  -200
  -209
  -218
  -228
  -239
  -250
  -261
  -273
  -286
  -300
  -314
  -330
  -346
  -362
  -380
  -399
  -418
  -439
Issuance/(repayment) of debt, $m
  5
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  15
  16
  17
  19
  20
  21
  22
  23
  24
  26
  27
  29
  30
  32
  33
  35
  37
  39
Issuance/(repurchase) of shares, $m
  151
  155
  159
  164
  168
  174
  180
  186
  192
  200
  189
  197
  205
  214
  224
  234
  245
  256
  268
  281
  295
  309
  324
  339
  356
  373
  391
  410
  431
  452
Cash from financing (excl. dividends), $m  
  156
  161
  166
  172
  177
  183
  190
  197
  204
  213
  203
  212
  220
  230
  241
  253
  265
  277
  290
  304
  319
  335
  351
  368
  386
  405
  424
  445
  468
  491
Total cash flow (excl. dividends), $m
  25
  26
  28
  29
  30
  31
  32
  33
  34
  35
  18
  19
  21
  22
  23
  25
  26
  28
  29
  31
  33
  34
  36
  38
  40
  42
  44
  47
  49
  52
Retained Cash Flow (-), $m
  -151
  -155
  -159
  -164
  -168
  -174
  -180
  -186
  -192
  -200
  -189
  -197
  -205
  -214
  -224
  -234
  -245
  -256
  -268
  -281
  -295
  -309
  -324
  -339
  -356
  -373
  -391
  -410
  -431
  -452
Prev. year cash balance distribution, $m
  26
  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
  -101
  -129
  -132
  -135
  -139
  -143
  -148
  -153
  -158
  -164
  -171
  -177
  -185
  -192
  -201
  -210
  -219
  -229
  -239
  -250
  -262
  -274
  -287
  -301
  -316
  -331
  -347
  -364
  -381
  -400
Discount rate, %
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
  -93
  -109
  -102
  -94
  -87
  -79
  -72
  -64
  -57
  -50
  -44
  -37
  -32
  -26
  -22
  -17
  -14
  -11
  -8
  -6
  -4
  -3
  -2
  -1
  -1
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  47.6
  22.6
  10.7
  5.1
  2.4
  1.1
  0.5
  0.3
  0.1
  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
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  0.0

NantHealth, Inc. is a healthcare cloud-based information technology (IT) company. The Company is engaged in converging science and technology through a single integrated clinical platform, to provide actionable health information at the point of care. The Company offers the Genomic Proteomic Spectrometry (GPS) Cancer test, a molecular test and decision support solution that measures the proteins present in the patient's tumor tissue, combined with whole genomic and transcriptomic sequencing of tumor and normal samples. The Company also offers Nant Operating System (NantOS) and NantOS applications to healthcare providers and payors, self-insured employers and biopharmaceutical companies. It offers CLINICS, an integrated solution that includes GPS Cancer, NantOS and the NantOS applications. The CLINICS solution includes System Infrastructure, Knowledge Platform, Provider Platform and Payor Platform.

FINANCIAL RATIOS  of  NantHealth (NH)

Valuation Ratios
P/E Ratio -1
Price to Sales 1.8
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -2.5
Price to Free Cash Flow -2
Growth Rates
Sales Growth Rate 72.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 23.1%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 47.8%
Total Debt to Equity 47.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -33.6%
Ret/ On Assets - 3 Yr. Avg. -31.1%
Return On Total Capital -38.3%
Ret/ On T. Cap. - 3 Yr. Avg. -39.3%
Return On Equity -48.2%
Return On Equity - 3 Yr. Avg. -48.3%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 28%
Gross Margin - 3 Yr. Avg. 32.9%
EBITDA Margin -176%
EBITDA Margin - 3 Yr. Avg. -157.3%
Operating Margin -162%
Oper. Margin - 3 Yr. Avg. -178.1%
Pre-Tax Margin -207%
Pre-Tax Margin - 3 Yr. Avg. -193.7%
Net Profit Margin -184%
Net Profit Margin - 3 Yr. Avg. -185.1%
Effective Tax Rate 11.1%
Eff/ Tax Rate - 3 Yr. Avg. 3.7%
Payout Ratio 0%

NH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NH stock intrinsic value calculation we used $86.676 million for the last fiscal year's total revenue generated by NantHealth. The default revenue input number comes from 0001 income statement of NantHealth. 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 NH 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 8.1%, whose default value for NH is calculated based on our internal credit rating of NantHealth, 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 NantHealth.
    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 NH stock the variable cost ratio is equal to 249.4%.

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 NH 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 8.4% for NantHealth.

Corporate tax rate of 27% is the nominal tax rate for NantHealth. 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 NH 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 NH are equal to 130.7%.

Life of production assets of 7.4 years is the average useful life of capital assets used in NantHealth 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 NH is equal to -18%. 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 - $193.302 million for NantHealth - 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 108.592 million for NantHealth 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 NantHealth at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ NantHealth, Inc. to Host Earnings Call   [02:30PM  ACCESSWIRE]
▶ NantHealth Inc (NASDAQ:NH) Is Expected To Breakeven   [Jun-25-18 02:41PM  Simply Wall St.]
▶ Soon-Shiong completes purchase of L.A. Times, hires new executive editor   [Jun-18-18 02:31PM  American City Business Journals]
▶ NantHealth Q4 Earnings Preview   [09:33AM  Benzinga]
▶ Rockville biotech founded by L.A. billionaire to lay off 52   [Mar-13-18 03:12PM  American City Business Journals]
▶ [$$] Former Officials Raise Questions About New LA Times Owners Business   [Feb-11-18 10:52PM  The Wall Street Journal]
▶ [$$] Former Officials Raise Questions About New LA Times Owner's Business   [Feb-10-18 07:12AM  The Wall Street Journal]
▶ Calculating The Intrinsic Value Of NantHealth Inc (NASDAQ:NH)   [Dec-19-17 07:55AM  Simply Wall St.]
▶ NantHealth, Inc. to Host Earnings Call   [12:00PM  ACCESSWIRE]
▶ ETFs with exposure to NantHealth, Inc. : November 3, 2017   [Nov-03-17 12:23PM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : October 12, 2017   [Oct-12-17 10:44AM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : August 31, 2017   [Aug-31-17 07:34PM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : August 1, 2017   [Aug-01-17 04:58PM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : June 27, 2017   [Jun-27-17 03:27PM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : June 15, 2017   [Jun-15-17 02:46PM  Capital Cube]
▶ ETFs with exposure to NantHealth, Inc. : June 5, 2017   [Jun-05-17 02:33PM  Capital Cube]
▶ NantHealth Names Ronald A. Louks as Chief Operating Officer   [May-23-17 08:00AM  Business Wire]

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