Intrinsic value of Natera, Inc. - NTRA

Previous Close

$32.04

  Intrinsic Value

$0.10

stock screener

  Rating & Target

str. sell

-100%

Previous close

$32.04

 
Intrinsic value

$0.10

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of NTRA 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 2.0

 

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, %
  16.80
  15.62
  14.56
  13.60
  12.74
  11.97
  11.27
  10.64
  10.08
  9.57
  9.11
  8.70
  8.33
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
Revenue, $m
  246
  285
  326
  371
  418
  468
  521
  576
  634
  695
  758
  824
  893
  965
  1,039
  1,116
  1,196
  1,280
  1,366
  1,456
  1,550
  1,648
  1,749
  1,855
  1,965
  2,080
  2,200
  2,325
  2,456
  2,592
Variable operating expenses, $m
  356
  412
  472
  536
  604
  676
  753
  833
  917
  1,004
  1,096
  1,191
  1,291
  1,394
  1,501
  1,613
  1,729
  1,849
  1,974
  2,105
  2,240
  2,381
  2,528
  2,680
  2,840
  3,006
  3,179
  3,360
  3,548
  3,745
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
  356
  412
  472
  536
  604
  676
  753
  833
  917
  1,004
  1,096
  1,191
  1,291
  1,394
  1,501
  1,613
  1,729
  1,849
  1,974
  2,105
  2,240
  2,381
  2,528
  2,680
  2,840
  3,006
  3,179
  3,360
  3,548
  3,745
Operating income, $m
  -110
  -127
  -145
  -165
  -186
  -208
  -232
  -256
  -282
  -309
  -338
  -367
  -397
  -429
  -462
  -497
  -532
  -569
  -608
  -648
  -690
  -733
  -778
  -825
  -874
  -926
  -979
  -1,035
  -1,093
  -1,153
EBITDA, $m
  -102
  -118
  -136
  -154
  -174
  -195
  -216
  -240
  -264
  -289
  -315
  -343
  -371
  -401
  -432
  -464
  -497
  -532
  -568
  -605
  -644
  -685
  -727
  -771
  -817
  -864
  -914
  -966
  -1,021
  -1,077
Interest expense (income), $m
  0
  7
  8
  9
  11
  12
  14
  15
  17
  19
  21
  23
  26
  28
  30
  33
  35
  38
  41
  44
  47
  50
  53
  57
  60
  64
  68
  72
  76
  80
  85
Earnings before tax, $m
  -116
  -135
  -154
  -176
  -198
  -222
  -247
  -274
  -302
  -331
  -361
  -392
  -425
  -460
  -495
  -532
  -570
  -610
  -652
  -695
  -740
  -786
  -835
  -885
  -938
  -993
  -1,051
  -1,110
  -1,173
  -1,238
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
  -116
  -135
  -154
  -176
  -198
  -222
  -247
  -274
  -302
  -331
  -361
  -392
  -425
  -460
  -495
  -532
  -570
  -610
  -652
  -695
  -740
  -786
  -835
  -885
  -938
  -993
  -1,051
  -1,110
  -1,173
  -1,238

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
  177
  204
  234
  266
  299
  335
  373
  413
  454
  498
  543
  591
  640
  691
  744
  800
  857
  917
  979
  1,043
  1,110
  1,180
  1,253
  1,329
  1,408
  1,490
  1,576
  1,665
  1,759
  1,857
Adjusted assets (=assets-cash), $m
  177
  204
  234
  266
  299
  335
  373
  413
  454
  498
  543
  591
  640
  691
  744
  800
  857
  917
  979
  1,043
  1,110
  1,180
  1,253
  1,329
  1,408
  1,490
  1,576
  1,665
  1,759
  1,857
Revenue / Adjusted assets
  1.390
  1.397
  1.393
  1.395
  1.398
  1.397
  1.397
  1.395
  1.396
  1.396
  1.396
  1.394
  1.395
  1.397
  1.397
  1.395
  1.396
  1.396
  1.395
  1.396
  1.396
  1.397
  1.396
  1.396
  1.396
  1.396
  1.396
  1.396
  1.396
  1.396
Average production assets, $m
  36
  42
  48
  55
  61
  69
  77
  85
  93
  102
  111
  121
  131
  142
  153
  164
  176
  188
  201
  214
  228
  242
  257
  273
  289
  306
  323
  342
  361
  381
Working capital, $m
  7
  9
  10
  11
  13
  14
  16
  17
  19
  21
  23
  25
  27
  29
  31
  33
  36
  38
  41
  44
  47
  49
  52
  56
  59
  62
  66
  70
  74
  78
Total debt, $m
  143
  168
  195
  223
  254
  286
  320
  356
  393
  432
  473
  516
  560
  606
  654
  704
  755
  809
  865
  923
  983
  1,046
  1,112
  1,180
  1,251
  1,325
  1,402
  1,483
  1,567
  1,655
Total liabilities, $m
  159
  184
  210
  239
  270
  302
  336
  372
  409
  448
  489
  532
  576
  622
  670
  720
  771
  825
  881
  939
  999
  1,062
  1,128
  1,196
  1,267
  1,341
  1,418
  1,499
  1,583
  1,671
Total equity, $m
  18
  20
  23
  27
  30
  34
  37
  41
  45
  50
  54
  59
  64
  69
  74
  80
  86
  92
  98
  104
  111
  118
  125
  133
  141
  149
  158
  167
  176
  186
Total liabilities and equity, $m
  177
  204
  233
  266
  300
  336
  373
  413
  454
  498
  543
  591
  640
  691
  744
  800
  857
  917
  979
  1,043
  1,110
  1,180
  1,253
  1,329
  1,408
  1,490
  1,576
  1,666
  1,759
  1,857
Debt-to-equity ratio
  8.100
  8.220
  8.320
  8.400
  8.470
  8.530
  8.570
  8.610
  8.650
  8.680
  8.710
  8.730
  8.750
  8.770
  8.790
  8.800
  8.810
  8.830
  8.840
  8.850
  8.860
  8.870
  8.870
  8.880
  8.890
  8.890
  8.900
  8.900
  8.910
  8.910
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
  -116
  -135
  -154
  -176
  -198
  -222
  -247
  -274
  -302
  -331
  -361
  -392
  -425
  -460
  -495
  -532
  -570
  -610
  -652
  -695
  -740
  -786
  -835
  -885
  -938
  -993
  -1,051
  -1,110
  -1,173
  -1,238
Depreciation, amort., depletion, $m
  7
  8
  10
  11
  12
  14
  15
  17
  19
  20
  22
  24
  26
  28
  31
  33
  35
  38
  40
  43
  46
  48
  51
  55
  58
  61
  65
  68
  72
  76
Funds from operations, $m
  -109
  -126
  -145
  -165
  -186
  -208
  -232
  -257
  -283
  -310
  -339
  -368
  -399
  -431
  -464
  -499
  -535
  -573
  -612
  -652
  -694
  -738
  -783
  -831
  -880
  -932
  -986
  -1,042
  -1,101
  -1,162
Change in working capital, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
Cash from operations, $m
  -110
  -127
  -146
  -166
  -187
  -210
  -233
  -258
  -285
  -312
  -340
  -370
  -401
  -433
  -467
  -501
  -538
  -575
  -614
  -655
  -697
  -741
  -787
  -834
  -884
  -935
  -989
  -1,046
  -1,105
  -1,166
Maintenance CAPEX, $m
  -6
  -7
  -8
  -10
  -11
  -12
  -14
  -15
  -17
  -19
  -20
  -22
  -24
  -26
  -28
  -31
  -33
  -35
  -38
  -40
  -43
  -46
  -48
  -51
  -55
  -58
  -61
  -65
  -68
  -72
New CAPEX, $m
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
Cash from investing activities, $m
  -11
  -13
  -14
  -17
  -18
  -19
  -22
  -23
  -26
  -28
  -29
  -32
  -34
  -37
  -39
  -42
  -45
  -47
  -51
  -53
  -57
  -60
  -63
  -67
  -71
  -75
  -79
  -83
  -87
  -92
Free cash flow, $m
  -122
  -140
  -160
  -182
  -205
  -229
  -255
  -282
  -310
  -340
  -370
  -402
  -435
  -470
  -506
  -543
  -582
  -623
  -664
  -708
  -753
  -801
  -850
  -901
  -954
  -1,010
  -1,068
  -1,129
  -1,192
  -1,258
Issuance/(repayment) of debt, $m
  20
  25
  27
  29
  30
  32
  34
  36
  37
  39
  41
  43
  44
  46
  48
  50
  52
  54
  56
  58
  60
  63
  65
  68
  71
  74
  77
  81
  84
  88
Issuance/(repurchase) of shares, $m
  122
  137
  157
  179
  201
  226
  251
  278
  306
  335
  365
  397
  430
  465
  500
  538
  576
  616
  658
  701
  746
  793
  842
  893
  946
  1,001
  1,059
  1,119
  1,182
  1,248
Cash from financing (excl. dividends), $m  
  142
  162
  184
  208
  231
  258
  285
  314
  343
  374
  406
  440
  474
  511
  548
  588
  628
  670
  714
  759
  806
  856
  907
  961
  1,017
  1,075
  1,136
  1,200
  1,266
  1,336
Total cash flow (excl. dividends), $m
  20
  22
  24
  25
  27
  28
  30
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  47
  49
  51
  53
  55
  58
  60
  63
  65
  68
  71
  74
  78
Retained Cash Flow (-), $m
  -122
  -137
  -157
  -179
  -201
  -226
  -251
  -278
  -306
  -335
  -365
  -397
  -430
  -465
  -500
  -538
  -576
  -616
  -658
  -701
  -746
  -793
  -842
  -893
  -946
  -1,001
  -1,059
  -1,119
  -1,182
  -1,248
Prev. year cash balance distribution, $m
  13
  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
  -88
  -115
  -134
  -153
  -175
  -197
  -221
  -246
  -273
  -300
  -329
  -360
  -391
  -424
  -458
  -494
  -530
  -569
  -609
  -650
  -693
  -738
  -784
  -833
  -883
  -936
  -991
  -1,048
  -1,108
  -1,170
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  -84
  -103
  -111
  -118
  -124
  -128
  -131
  -131
  -130
  -127
  -122
  -116
  -108
  -99
  -90
  -80
  -70
  -60
  -51
  -42
  -34
  -27
  -21
  -16
  -12
  -9
  -6
  -4
  -3
  -2
Current shareholders' claim on cash, %
  49.8
  28.0
  15.8
  9.0
  5.1
  2.9
  1.7
  1.0
  0.5
  0.3
  0.2
  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

Natera, Inc. is a diagnostics company. The Company is engaged in the discovery, development and commercialization of genetic testing services. It offers Panorama Non-Invasive Prenatal Test that screens for chromosomal abnormalities of a fetus with a blood draw from the mother; Horizon Carrier Screening to determine carrier status for a large number of severe genetic diseases that could be passed on to the carrier's children; Spectrum Pre-implantation Genetic Screening and Spectrum Pre-implantation Genetic Diagnosis to analyze chromosomal anomalies or inherited genetic conditions during an in vitro fertilization cycle to select embryos with the probability of becoming healthy children; Anora Products of Conception test to analyze fetal chromosomes to understand the cause of miscarriage, and Non-Invasive Paternity Testing, to determine paternity by analyzing the fragments of fetal deoxyribonucleic acid in a pregnant mother's blood and a blood sample from the alleged father(s).

FINANCIAL RATIOS  of  Natera, Inc. (NTRA)

Valuation Ratios
P/E Ratio -17.6
Price to Sales 7.8
Price to Book 15.9
Price to Tangible Book
Price to Cash Flow -22.8
Price to Free Cash Flow -17.4
Growth Rates
Sales Growth Rate 14.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 187.5%
Cap. Spend. - 3 Yr. Gr. Rate 23.5%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 47.2%
Interest Coverage 0
Management Effectiveness
Return On Assets -40.3%
Ret/ On Assets - 3 Yr. Avg. -26.2%
Return On Total Capital -50.1%
Ret/ On T. Cap. - 3 Yr. Avg. -33.6%
Return On Equity -66%
Return On Equity - 3 Yr. Avg. -44.4%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 37.8%
Gross Margin - 3 Yr. Avg. 43.3%
EBITDA Margin -41.5%
EBITDA Margin - 3 Yr. Avg. -24.3%
Operating Margin -44.7%
Oper. Margin - 3 Yr. Avg. -25.4%
Pre-Tax Margin -44.2%
Pre-Tax Margin - 3 Yr. Avg. -28.1%
Net Profit Margin -44.2%
Net Profit Margin - 3 Yr. Avg. -28.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

NTRA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NTRA stock intrinsic value calculation we used $211 million for the last fiscal year's total revenue generated by Natera, Inc.. The default revenue input number comes from 0001 income statement of Natera, 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 NTRA stock valuation model: a) initial revenue growth rate of 16.8% 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 5.8%, whose default value for NTRA is calculated based on our internal credit rating of Natera, 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 Natera, 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 NTRA stock the variable cost ratio is equal to 144.5%.

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 NTRA 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 Natera, Inc..

Corporate tax rate of 27% is the nominal tax rate for Natera, 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 NTRA 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 NTRA are equal to 14.7%.

Life of production assets of 4.3 years is the average useful life of capital assets used in Natera, 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 NTRA is equal to 3%. 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 - $25.417 million for Natera, 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 61.856 million for Natera, 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 Natera, Inc. at the current share price and the inputted number of shares is $2.0 billion.

RELATED COMPANIES Price Int.Val. Rating
GHDX Genomic Health 74.35 109.47  buy
ILMN Illumina, Inc. 270.00 144.08  str.sell
LH Laboratory Cor 172.93 184.03  hold
VCYT Veracyte, Inc. 25.67 14.38  sell
GNMK GenMark Diagno 6.01 1.48  str.sell
MYGN Myriad Genetic 24.25 5.20  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.