Intrinsic value of NantHealth, Inc. - NH

Previous Close

$0.57

  Intrinsic Value

$0.02

stock screener

  Rating & Target

str. sell

-96%

Previous close

$0.57

 
Intrinsic value

$0.02

 
Up/down potential

-96%

 
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 0.1

 

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, %
  2.40
  2.66
  2.89
  3.10
  3.29
  3.46
  3.62
  3.76
  3.88
  3.99
  4.09
  4.18
  4.27
  4.34
  4.41
  4.46
  4.52
  4.57
  4.61
  4.65
  4.68
  4.72
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
Revenue, $m
  89
  91
  94
  97
  100
  104
  107
  111
  116
  120
  125
  131
  136
  142
  148
  155
  162
  169
  177
  185
  194
  203
  213
  223
  234
  245
  257
  269
  282
  296
Variable operating expenses, $m
  222
  227
  233
  240
  247
  255
  264
  273
  283
  293
  286
  298
  311
  324
  339
  354
  370
  387
  404
  423
  443
  464
  486
  509
  534
  559
  586
  615
  645
  676
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
  222
  227
  233
  240
  247
  255
  264
  273
  283
  293
  286
  298
  311
  324
  339
  354
  370
  387
  404
  423
  443
  464
  486
  509
  534
  559
  586
  615
  645
  676
Operating income, $m
  -133
  -136
  -139
  -143
  -147
  -151
  -156
  -161
  -167
  -173
  -161
  -168
  -175
  -182
  -190
  -199
  -208
  -217
  -227
  -238
  -249
  -261
  -273
  -286
  -300
  -314
  -329
  -345
  -362
  -380
EBITDA, $m
  -99
  -101
  -104
  -107
  -111
  -115
  -119
  -123
  -128
  -133
  -139
  -144
  -151
  -157
  -164
  -171
  -179
  -187
  -196
  -205
  -215
  -225
  -235
  -247
  -258
  -271
  -284
  -298
  -312
  -328
Interest expense (income), $m
  0
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  48
  50
  53
  56
  58
  62
  65
Earnings before tax, $m
  -149
  -153
  -157
  -161
  -166
  -171
  -177
  -183
  -189
  -196
  -186
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
  -385
  -404
  -424
  -445
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
  -149
  -153
  -157
  -161
  -166
  -171
  -177
  -183
  -189
  -196
  -186
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
  -385
  -404
  -424
  -445

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
  435
  446
  459
  473
  489
  506
  524
  544
  565
  587
  612
  637
  664
  693
  724
  756
  790
  826
  864
  904
  947
  991
  1,039
  1,088
  1,140
  1,195
  1,253
  1,314
  1,377
  1,445
Adjusted assets (=assets-cash), $m
  435
  446
  459
  473
  489
  506
  524
  544
  565
  587
  612
  637
  664
  693
  724
  756
  790
  826
  864
  904
  947
  991
  1,039
  1,088
  1,140
  1,195
  1,253
  1,314
  1,377
  1,445
Revenue / Adjusted assets
  0.205
  0.204
  0.205
  0.205
  0.204
  0.206
  0.204
  0.204
  0.205
  0.204
  0.204
  0.206
  0.205
  0.205
  0.204
  0.205
  0.205
  0.205
  0.205
  0.205
  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
  120
  123
  127
  131
  136
  140
  146
  151
  157
  164
  171
  178
  186
  194
  203
  212
  221
  232
  242
  254
  266
  278
  292
  305
  320
  336
  352
  369
  387
Working capital, $m
  -16
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
Total debt, $m
  202
  209
  217
  225
  235
  245
  256
  268
  281
  294
  309
  324
  341
  358
  377
  396
  417
  439
  462
  486
  511
  538
  567
  597
  628
  661
  696
  733
  772
  812
Total liabilities, $m
  262
  269
  277
  286
  295
  306
  317
  328
  341
  355
  369
  385
  401
  419
  437
  457
  477
  499
  522
  546
  572
  599
  627
  657
  689
  722
  757
  793
  832
  873
Total equity, $m
  172
  177
  182
  187
  194
  200
  208
  215
  224
  233
  242
  252
  263
  274
  287
  299
  313
  327
  342
  358
  375
  393
  411
  431
  452
  473
  496
  520
  545
  572
Total liabilities and equity, $m
  434
  446
  459
  473
  489
  506
  525
  543
  565
  588
  611
  637
  664
  693
  724
  756
  790
  826
  864
  904
  947
  992
  1,038
  1,088
  1,141
  1,195
  1,253
  1,313
  1,377
  1,445
Debt-to-equity ratio
  1.170
  1.180
  1.190
  1.200
  1.210
  1.220
  1.230
  1.240
  1.260
  1.270
  1.280
  1.290
  1.300
  1.310
  1.310
  1.320
  1.330
  1.340
  1.350
  1.360
  1.360
  1.370
  1.380
  1.380
  1.390
  1.400
  1.400
  1.410
  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
  -149
  -153
  -157
  -161
  -166
  -171
  -177
  -183
  -189
  -196
  -186
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -290
  -304
  -318
  -334
  -350
  -367
  -385
  -404
  -424
  -445
Depreciation, amort., depletion, $m
  34
  35
  35
  36
  36
  37
  37
  38
  39
  40
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  38
  39
  41
  43
  45
  48
  50
  52
Funds from operations, $m
  -115
  -118
  -122
  -126
  -130
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -178
  -186
  -194
  -203
  -212
  -222
  -233
  -244
  -255
  -268
  -281
  -294
  -309
  -324
  -340
  -356
  -374
  -392
Change in working capital, $m
  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
  -2
Cash from operations, $m
  -115
  -118
  -121
  -125
  -129
  -134
  -139
  -144
  -150
  -156
  -162
  -169
  -177
  -185
  -193
  -202
  -211
  -221
  -231
  -242
  -254
  -266
  -279
  -292
  -307
  -322
  -337
  -354
  -371
  -390
Maintenance CAPEX, $m
  -15
  -16
  -16
  -17
  -17
  -18
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -48
  -50
New CAPEX, $m
  -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
  -15
  -16
  -17
  -18
Cash from investing activities, $m
  -18
  -19
  -19
  -21
  -21
  -23
  -23
  -24
  -26
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
  -39
  -40
  -42
  -44
  -46
  -49
  -51
  -53
  -56
  -58
  -61
  -65
  -68
Free cash flow, $m
  -133
  -137
  -141
  -145
  -151
  -156
  -162
  -168
  -175
  -182
  -190
  -198
  -207
  -216
  -226
  -237
  -248
  -259
  -271
  -284
  -298
  -312
  -327
  -343
  -360
  -378
  -396
  -416
  -436
  -458
Issuance/(repayment) of debt, $m
  7
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  15
  16
  17
  18
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  35
  37
  39
  41
Issuance/(repurchase) of shares, $m
  154
  157
  162
  167
  172
  178
  184
  191
  198
  205
  195
  204
  213
  222
  232
  243
  255
  267
  279
  292
  307
  321
  337
  353
  371
  389
  408
  428
  449
  471
Cash from financing (excl. dividends), $m  
  161
  164
  170
  176
  181
  188
  195
  203
  211
  219
  210
  219
  229
  239
  250
  263
  276
  289
  302
  316
  333
  348
  365
  383
  402
  422
  443
  465
  488
  512
Total cash flow (excl. dividends), $m
  27
  28
  29
  30
  31
  32
  33
  34
  35
  37
  19
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  49
  51
  54
Retained Cash Flow (-), $m
  -154
  -157
  -162
  -167
  -172
  -178
  -184
  -191
  -198
  -205
  -195
  -204
  -213
  -222
  -232
  -243
  -255
  -267
  -279
  -292
  -307
  -321
  -337
  -353
  -371
  -389
  -408
  -428
  -449
  -471
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
  -100
  -130
  -133
  -137
  -141
  -146
  -151
  -156
  -162
  -169
  -176
  -183
  -191
  -199
  -208
  -217
  -227
  -237
  -248
  -260
  -272
  -285
  -299
  -313
  -329
  -345
  -361
  -379
  -398
  -417
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
  -110
  -103
  -96
  -88
  -81
  -73
  -66
  -59
  -52
  -45
  -39
  -33
  -27
  -22
  -18
  -14
  -11
  -8
  -6
  -5
  -3
  -2
  -2
  -1
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  43.3
  18.8
  8.1
  3.5
  1.5
  0.7
  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
  0.0
  0.0
  0.0
  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, Inc. (NH)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 0.7
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow -1
Price to Free Cash Flow -0.8
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 $87 million for the last fiscal year's total revenue generated by NantHealth, Inc.. The default revenue input number comes from 0001 income statement of NantHealth, 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 NH stock valuation model: a) initial revenue growth rate of 2.4% 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, 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 NantHealth, 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 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for NantHealth, 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 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, 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 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, 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 109.491 million for NantHealth, 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 NantHealth, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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