Intrinsic value of Intellia Therapeutics, Inc. - NTLA

Previous Close

$13.90

  Intrinsic Value

$1.44

stock screener

  Rating & Target

str. sell

-90%

Previous close

$13.90

 
Intrinsic value

$1.44

 
Up/down potential

-90%

 
Rating

str. sell

We calculate the intrinsic value of NTLA 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 0.6

 

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, %
  18.20
  16.88
  15.69
  14.62
  13.66
  12.79
  12.02
  11.31
  10.68
  10.11
  9.60
  9.14
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
Revenue, $m
  35
  41
  48
  55
  62
  70
  79
  88
  97
  107
  117
  128
  139
  151
  163
  176
  189
  202
  216
  231
  246
  262
  279
  296
  314
  332
  352
  372
  393
  416
Variable operating expenses, $m
  130
  151
  175
  200
  227
  256
  287
  319
  353
  388
  424
  462
  503
  545
  589
  634
  681
  730
  781
  834
  889
  947
  1,006
  1,068
  1,133
  1,200
  1,271
  1,344
  1,420
  1,500
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
  130
  151
  175
  200
  227
  256
  287
  319
  353
  388
  424
  462
  503
  545
  589
  634
  681
  730
  781
  834
  889
  947
  1,006
  1,068
  1,133
  1,200
  1,271
  1,344
  1,420
  1,500
Operating income, $m
  -94
  -110
  -127
  -145
  -165
  -186
  -208
  -231
  -256
  -281
  -306
  -334
  -364
  -394
  -425
  -458
  -492
  -528
  -565
  -603
  -643
  -684
  -727
  -772
  -819
  -868
  -919
  -972
  -1,027
  -1,085
EBITDA, $m
  -89
  -104
  -120
  -138
  -156
  -176
  -198
  -220
  -243
  -268
  -294
  -321
  -349
  -378
  -408
  -439
  -472
  -506
  -541
  -578
  -616
  -656
  -697
  -740
  -785
  -832
  -881
  -931
  -984
  -1,040
Interest expense (income), $m
  0
  0
  0
  1
  2
  3
  4
  5
  6
  7
  8
  9
  10
  12
  13
  14
  16
  17
  19
  20
  22
  24
  26
  28
  30
  32
  34
  36
  38
  41
  43
Earnings before tax, $m
  -94
  -110
  -128
  -147
  -168
  -189
  -212
  -237
  -262
  -289
  -315
  -345
  -375
  -407
  -440
  -474
  -510
  -547
  -585
  -625
  -667
  -710
  -755
  -802
  -851
  -902
  -955
  -1,010
  -1,068
  -1,128
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
  -94
  -110
  -128
  -147
  -168
  -189
  -212
  -237
  -262
  -289
  -315
  -345
  -375
  -407
  -440
  -474
  -510
  -547
  -585
  -625
  -667
  -710
  -755
  -802
  -851
  -902
  -955
  -1,010
  -1,068
  -1,128

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
  87
  102
  118
  135
  154
  174
  194
  216
  240
  264
  289
  315
  343
  372
  401
  432
  465
  498
  533
  569
  607
  646
  686
  729
  773
  819
  867
  917
  969
  1,023
Adjusted assets (=assets-cash), $m
  87
  102
  118
  135
  154
  174
  194
  216
  240
  264
  289
  315
  343
  372
  401
  432
  465
  498
  533
  569
  607
  646
  686
  729
  773
  819
  867
  917
  969
  1,023
Revenue / Adjusted assets
  0.402
  0.402
  0.407
  0.407
  0.403
  0.402
  0.407
  0.407
  0.404
  0.405
  0.405
  0.406
  0.405
  0.406
  0.406
  0.407
  0.406
  0.406
  0.405
  0.406
  0.405
  0.406
  0.407
  0.406
  0.406
  0.405
  0.406
  0.406
  0.406
  0.407
Average production assets, $m
  19
  22
  26
  30
  34
  38
  43
  47
  52
  58
  63
  69
  75
  81
  88
  95
  102
  109
  117
  125
  133
  141
  150
  159
  169
  179
  190
  201
  212
  224
Working capital, $m
  -35
  -41
  -47
  -54
  -62
  -70
  -78
  -87
  -96
  -106
  -116
  -127
  -138
  -149
  -161
  -173
  -186
  -200
  -214
  -228
  -243
  -259
  -275
  -292
  -310
  -328
  -348
  -368
  -389
  -411
Total debt, $m
  9
  22
  37
  52
  69
  87
  106
  125
  146
  168
  191
  215
  239
  265
  292
  320
  349
  379
  410
  443
  477
  512
  548
  587
  626
  668
  711
  756
  803
  852
Total liabilities, $m
  79
  92
  106
  122
  138
  156
  175
  195
  216
  237
  260
  284
  309
  335
  361
  389
  418
  448
  480
  512
  546
  581
  618
  656
  696
  737
  780
  825
  872
  921
Total equity, $m
  9
  10
  12
  14
  15
  17
  19
  22
  24
  26
  29
  32
  34
  37
  40
  43
  46
  50
  53
  57
  61
  65
  69
  73
  77
  82
  87
  92
  97
  102
Total liabilities and equity, $m
  88
  102
  118
  136
  153
  173
  194
  217
  240
  263
  289
  316
  343
  372
  401
  432
  464
  498
  533
  569
  607
  646
  687
  729
  773
  819
  867
  917
  969
  1,023
Debt-to-equity ratio
  1.050
  2.200
  3.120
  3.870
  4.490
  5.000
  5.430
  5.790
  6.100
  6.370
  6.600
  6.800
  6.980
  7.130
  7.270
  7.400
  7.510
  7.610
  7.700
  7.780
  7.860
  7.930
  7.990
  8.050
  8.100
  8.150
  8.200
  8.240
  8.280
  8.320
Adjusted equity ratio
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -94
  -110
  -128
  -147
  -168
  -189
  -212
  -237
  -262
  -289
  -315
  -345
  -375
  -407
  -440
  -474
  -510
  -547
  -585
  -625
  -667
  -710
  -755
  -802
  -851
  -902
  -955
  -1,010
  -1,068
  -1,128
Depreciation, amort., depletion, $m
  6
  6
  7
  8
  8
  9
  10
  11
  12
  13
  13
  14
  15
  16
  18
  19
  20
  22
  23
  25
  27
  28
  30
  32
  34
  36
  38
  40
  42
  45
Funds from operations, $m
  -89
  -104
  -121
  -140
  -159
  -180
  -202
  -226
  -250
  -276
  -303
  -331
  -360
  -391
  -422
  -455
  -489
  -525
  -562
  -600
  -640
  -682
  -725
  -770
  -817
  -866
  -917
  -970
  -1,025
  -1,083
Change in working capital, $m
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
Cash from operations, $m
  -83
  -98
  -115
  -133
  -152
  -172
  -194
  -217
  -241
  -266
  -293
  -320
  -349
  -379
  -410
  -443
  -476
  -512
  -548
  -586
  -625
  -666
  -709
  -753
  -799
  -847
  -898
  -950
  -1,004
  -1,061
Maintenance CAPEX, $m
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -9
  -10
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
New CAPEX, $m
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
Cash from investing activities, $m
  -6
  -7
  -8
  -9
  -10
  -11
  -13
  -14
  -14
  -15
  -18
  -19
  -20
  -21
  -23
  -25
  -26
  -27
  -30
  -31
  -33
  -36
  -37
  -39
  -42
  -44
  -46
  -49
  -51
  -54
Free cash flow, $m
  -90
  -105
  -123
  -142
  -162
  -183
  -206
  -230
  -255
  -282
  -310
  -339
  -369
  -400
  -433
  -467
  -502
  -539
  -577
  -617
  -658
  -701
  -746
  -792
  -841
  -891
  -944
  -999
  -1,056
  -1,116
Issuance/(repayment) of debt, $m
  9
  13
  14
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
Issuance/(repurchase) of shares, $m
  99
  112
  130
  149
  169
  191
  214
  239
  265
  292
  318
  347
  378
  410
  443
  477
  513
  550
  589
  629
  671
  714
  759
  806
  855
  906
  959
  1,015
  1,073
  1,133
Cash from financing (excl. dividends), $m  
  108
  125
  144
  165
  186
  209
  233
  259
  286
  314
  341
  371
  403
  436
  470
  505
  542
  580
  620
  662
  705
  749
  796
  844
  895
  947
  1,002
  1,060
  1,120
  1,182
Total cash flow (excl. dividends), $m
  19
  20
  21
  23
  24
  26
  27
  29
  30
  31
  31
  32
  34
  35
  37
  38
  39
  41
  43
  44
  46
  48
  50
  52
  54
  56
  59
  61
  64
  67
Retained Cash Flow (-), $m
  -99
  -112
  -130
  -149
  -169
  -191
  -214
  -239
  -265
  -292
  -318
  -347
  -378
  -410
  -443
  -477
  -513
  -550
  -589
  -629
  -671
  -714
  -759
  -806
  -855
  -906
  -959
  -1,015
  -1,073
  -1,133
Prev. year cash balance distribution, $m
  273
  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
  193
  -92
  -108
  -126
  -145
  -165
  -187
  -210
  -235
  -260
  -287
  -315
  -344
  -375
  -406
  -439
  -473
  -509
  -546
  -585
  -625
  -666
  -709
  -754
  -801
  -850
  -901
  -954
  -1,009
  -1,067
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
  185
  -84
  -94
  -104
  -112
  -120
  -126
  -131
  -135
  -136
  -136
  -134
  -131
  -126
  -119
  -112
  -103
  -94
  -84
  -74
  -65
  -55
  -46
  -38
  -31
  -25
  -19
  -15
  -11
  -8
Current shareholders' claim on cash, %
  9.2
  1.4
  0.2
  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
  0.0
  0.0
  0.0

Intellia Therapeutics, Inc. is a genome editing company. The Company is focused on developing therapeutics utilizing a biological tool known as CRISPR/Cas9. The CRISPR/Cas9 genome editing system includes two components: the Cas9 protein and the guide RNA sequence. The Cas9 protein acts like a pair of molecular scissors that initiates the natural cellular repair process to knockout, repair or insert a gene. The guide RNA sequence recognizes and directs the Cas9 to a specific target deoxyribonucleic acid (DNA) sequence. The Company's sentinel in vivo programs focus on the use of Lipid Nanoparticle (LNPs) for delivery of the CRISPR/Cas9 complex to the liver. The Company's division, eXtellia Therapeutics, is focused on the application of CRISPR/Cas9 genome editing in the fields of immuno-oncology and autoimmune and inflammatory diseases. The Company's subsidiary is Intellia Securities Corp. As of September 30, 2016, the Company had not generated any revenue.

FINANCIAL RATIOS  of  Intellia Therapeutics, Inc. (NTLA)

Valuation Ratios
P/E Ratio -15.6
Price to Sales 31.3
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 13.9
Price to Free Cash Flow 16.7
Growth Rates
Sales Growth Rate 166.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
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 -16.8%
Ret/ On Assets - 3 Yr. Avg. -74.8%
Return On Total Capital -23.1%
Ret/ On T. Cap. - 3 Yr. Avg. -101.7%
Return On Equity -23.1%
Return On Equity - 3 Yr. Avg. -101.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -193.8%
EBITDA Margin - 3 Yr. Avg. -136.8%
Operating Margin -206.3%
Oper. Margin - 3 Yr. Avg. -141%
Pre-Tax Margin -200%
Pre-Tax Margin - 3 Yr. Avg. -138.9%
Net Profit Margin -200%
Net Profit Margin - 3 Yr. Avg. -133.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 2.6%
Payout Ratio 0%

NTLA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTLA stock intrinsic value calculation we used $30 million for the last fiscal year's total revenue generated by Intellia Therapeutics, Inc.. The default revenue input number comes from 0001 income statement of Intellia Therapeutics, 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 NTLA stock valuation model: a) initial revenue growth rate of 18.2% 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 NTLA is calculated based on our internal credit rating of Intellia Therapeutics, 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 Intellia Therapeutics, 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 NTLA stock the variable cost ratio is equal to 366.7%.

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 NTLA 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 Intellia Therapeutics, Inc..

Corporate tax rate of 27% is the nominal tax rate for Intellia Therapeutics, 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 NTLA 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 NTLA are equal to 53.9%.

Life of production assets of 3.6 years is the average useful life of capital assets used in Intellia Therapeutics, 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 NTLA is equal to -98.8%. 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 - $277.92 million for Intellia Therapeutics, 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 45.256 million for Intellia Therapeutics, 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 Intellia Therapeutics, Inc. at the current share price and the inputted number of shares is $0.6 billion.

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