Intrinsic value of Nuvectra Corporation - NVTR

Previous Close

$12.71

  Intrinsic Value

$0.99

stock screener

  Rating & Target

str. sell

-92%

Previous close

$12.71

 
Intrinsic value

$0.99

 
Up/down potential

-92%

 
Rating

str. sell

We calculate the intrinsic value of NVTR 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, %
  51.30
  46.67
  42.50
  38.75
  35.38
  32.34
  29.61
  27.15
  24.93
  22.94
  21.14
  19.53
  18.08
  16.77
  15.59
  14.53
  13.58
  12.72
  11.95
  11.25
  10.63
  10.07
  9.56
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
Revenue, $m
  74
  109
  155
  215
  291
  385
  499
  635
  793
  975
  1,181
  1,412
  1,667
  1,946
  2,250
  2,577
  2,927
  3,299
  3,693
  4,109
  4,546
  5,003
  5,481
  5,980
  6,500
  7,041
  7,604
  8,189
  8,797
  9,429
Variable operating expenses, $m
  75
  109
  154
  213
  287
  378
  489
  621
  775
  953
  1,150
  1,374
  1,623
  1,895
  2,191
  2,509
  2,850
  3,212
  3,596
  4,001
  4,426
  4,871
  5,337
  5,823
  6,329
  6,856
  7,404
  7,973
  8,565
  9,180
Fixed operating expenses, $m
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
  53
  55
  56
  57
  58
  59
  61
  62
  64
  65
  66
  68
  69
  71
  72
  74
  76
  77
  79
  81
Total operating expenses, $m
  118
  153
  199
  259
  334
  426
  538
  671
  826
  1,005
  1,203
  1,429
  1,679
  1,952
  2,249
  2,568
  2,911
  3,274
  3,660
  4,066
  4,492
  4,939
  5,406
  5,894
  6,401
  6,930
  7,480
  8,050
  8,644
  9,261
Operating income, $m
  -44
  -44
  -44
  -43
  -42
  -41
  -39
  -37
  -33
  -30
  -22
  -17
  -12
  -6
  1
  8
  16
  25
  34
  43
  53
  64
  75
  87
  99
  112
  125
  139
  153
  168
EBITDA, $m
  -39
  -39
  -37
  -36
  -33
  -29
  -25
  -20
  -13
  -6
  3
  13
  24
  36
  49
  64
  79
  96
  113
  132
  151
  171
  193
  215
  238
  263
  288
  314
  342
  370
Interest expense (income), $m
  0
  4
  8
  12
  19
  27
  37
  50
  65
  83
  104
  129
  156
  187
  222
  259
  300
  344
  391
  441
  493
  549
  608
  669
  733
  800
  870
  943
  1,018
  1,097
  1,178
Earnings before tax, $m
  -49
  -52
  -57
  -62
  -69
  -78
  -89
  -101
  -117
  -134
  -151
  -174
  -199
  -227
  -258
  -291
  -327
  -366
  -407
  -450
  -496
  -544
  -594
  -647
  -701
  -759
  -818
  -880
  -944
  -1,010
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
  -49
  -52
  -57
  -62
  -69
  -78
  -89
  -101
  -117
  -134
  -151
  -174
  -199
  -227
  -258
  -291
  -327
  -366
  -407
  -450
  -496
  -544
  -594
  -647
  -701
  -759
  -818
  -880
  -944
  -1,010

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
  120
  176
  251
  348
  471
  623
  808
  1,027
  1,283
  1,577
  1,911
  2,284
  2,697
  3,149
  3,641
  4,170
  4,736
  5,338
  5,976
  6,649
  7,355
  8,096
  8,870
  9,677
  10,518
  11,394
  12,305
  13,251
  14,235
  15,257
Adjusted assets (=assets-cash), $m
  120
  176
  251
  348
  471
  623
  808
  1,027
  1,283
  1,577
  1,911
  2,284
  2,697
  3,149
  3,641
  4,170
  4,736
  5,338
  5,976
  6,649
  7,355
  8,096
  8,870
  9,677
  10,518
  11,394
  12,305
  13,251
  14,235
  15,257
Revenue / Adjusted assets
  0.617
  0.619
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
  0.618
Average production assets, $m
  34
  49
  71
  98
  132
  175
  227
  289
  361
  444
  537
  642
  758
  886
  1,024
  1,172
  1,332
  1,501
  1,680
  1,870
  2,068
  2,276
  2,494
  2,721
  2,958
  3,204
  3,460
  3,726
  4,003
  4,290
Working capital, $m
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -45
  -50
  -55
  -60
  -65
  -70
  -76
  -82
  -88
  -94
Total debt, $m
  77
  123
  185
  265
  366
  491
  642
  822
  1,032
  1,274
  1,548
  1,854
  2,193
  2,565
  2,968
  3,402
  3,867
  4,362
  4,885
  5,438
  6,018
  6,626
  7,261
  7,924
  8,615
  9,333
  10,081
  10,858
  11,666
  12,505
Total liabilities, $m
  98
  144
  206
  286
  387
  512
  663
  843
  1,053
  1,295
  1,569
  1,875
  2,214
  2,586
  2,989
  3,423
  3,888
  4,383
  4,906
  5,459
  6,039
  6,647
  7,282
  7,945
  8,636
  9,354
  10,102
  10,879
  11,687
  12,526
Total equity, $m
  21
  31
  45
  62
  84
  112
  145
  184
  230
  282
  342
  409
  483
  564
  652
  746
  848
  956
  1,070
  1,190
  1,317
  1,449
  1,588
  1,732
  1,883
  2,040
  2,203
  2,372
  2,548
  2,731
Total liabilities and equity, $m
  119
  175
  251
  348
  471
  624
  808
  1,027
  1,283
  1,577
  1,911
  2,284
  2,697
  3,150
  3,641
  4,169
  4,736
  5,339
  5,976
  6,649
  7,356
  8,096
  8,870
  9,677
  10,519
  11,394
  12,305
  13,251
  14,235
  15,257
Debt-to-equity ratio
  3.610
  3.920
  4.120
  4.250
  4.340
  4.400
  4.440
  4.470
  4.500
  4.510
  4.530
  4.540
  4.540
  4.550
  4.550
  4.560
  4.560
  4.560
  4.570
  4.570
  4.570
  4.570
  4.570
  4.570
  4.580
  4.580
  4.580
  4.580
  4.580
  4.580
Adjusted equity ratio
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179
  0.179

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -49
  -52
  -57
  -62
  -69
  -78
  -89
  -101
  -117
  -134
  -151
  -174
  -199
  -227
  -258
  -291
  -327
  -366
  -407
  -450
  -496
  -544
  -594
  -647
  -701
  -759
  -818
  -880
  -944
  -1,010
Depreciation, amort., depletion, $m
  5
  6
  7
  8
  10
  12
  14
  17
  20
  24
  25
  30
  36
  42
  48
  55
  63
  71
  79
  88
  98
  107
  118
  128
  140
  151
  163
  176
  189
  202
Funds from operations, $m
  -44
  -46
  -50
  -54
  -60
  -66
  -75
  -85
  -96
  -110
  -126
  -143
  -163
  -185
  -210
  -236
  -264
  -295
  -327
  -362
  -398
  -436
  -476
  -518
  -562
  -607
  -655
  -704
  -755
  -808
Change in working capital, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
Cash from operations, $m
  -44
  -46
  -49
  -54
  -59
  -65
  -73
  -83
  -95
  -108
  -124
  -141
  -161
  -183
  -207
  -233
  -261
  -291
  -324
  -358
  -394
  -432
  -472
  -513
  -557
  -602
  -649
  -698
  -749
  -802
Maintenance CAPEX, $m
  -1
  -2
  -2
  -3
  -5
  -6
  -8
  -11
  -14
  -17
  -21
  -25
  -30
  -36
  -42
  -48
  -55
  -63
  -71
  -79
  -88
  -98
  -107
  -118
  -128
  -140
  -151
  -163
  -176
  -189
New CAPEX, $m
  -11
  -16
  -21
  -27
  -35
  -43
  -52
  -62
  -72
  -83
  -94
  -105
  -116
  -127
  -138
  -149
  -159
  -169
  -179
  -189
  -199
  -208
  -218
  -227
  -237
  -246
  -256
  -266
  -277
  -287
Cash from investing activities, $m
  -12
  -18
  -23
  -30
  -40
  -49
  -60
  -73
  -86
  -100
  -115
  -130
  -146
  -163
  -180
  -197
  -214
  -232
  -250
  -268
  -287
  -306
  -325
  -345
  -365
  -386
  -407
  -429
  -453
  -476
Free cash flow, $m
  -56
  -63
  -73
  -84
  -98
  -115
  -134
  -156
  -180
  -208
  -238
  -271
  -307
  -346
  -386
  -430
  -476
  -523
  -574
  -626
  -681
  -738
  -797
  -858
  -922
  -988
  -1,056
  -1,127
  -1,201
  -1,278
Issuance/(repayment) of debt, $m
  33
  46
  61
  80
  101
  125
  151
  180
  210
  242
  274
  306
  339
  371
  403
  434
  465
  495
  524
  552
  580
  608
  635
  663
  691
  719
  748
  777
  808
  839
Issuance/(repurchase) of shares, $m
  56
  62
  70
  80
  91
  105
  122
  141
  162
  187
  211
  240
  273
  308
  346
  386
  429
  474
  521
  570
  622
  676
  733
  791
  852
  915
  981
  1,049
  1,120
  1,193
Cash from financing (excl. dividends), $m  
  89
  108
  131
  160
  192
  230
  273
  321
  372
  429
  485
  546
  612
  679
  749
  820
  894
  969
  1,045
  1,122
  1,202
  1,284
  1,368
  1,454
  1,543
  1,634
  1,729
  1,826
  1,928
  2,032
Total cash flow (excl. dividends), $m
  33
  45
  59
  75
  94
  116
  140
  165
  192
  221
  246
  276
  305
  334
  363
  391
  418
  445
  471
  497
  522
  547
  571
  596
  621
  646
  672
  699
  726
  755
Retained Cash Flow (-), $m
  -56
  -62
  -70
  -80
  -91
  -105
  -122
  -141
  -162
  -187
  -211
  -240
  -273
  -308
  -346
  -386
  -429
  -474
  -521
  -570
  -622
  -676
  -733
  -791
  -852
  -915
  -981
  -1,049
  -1,120
  -1,193
Prev. year cash balance distribution, $m
  79
  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
  56
  -18
  -11
  -4
  3
  11
  18
  25
  30
  34
  36
  35
  32
  26
  17
  5
  -11
  -29
  -50
  -74
  -101
  -130
  -161
  -195
  -231
  -269
  -309
  -350
  -394
  -439
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
  54
  -16
  -10
  -4
  2
  8
  12
  15
  17
  18
  17
  15
  12
  9
  5
  1
  -2
  -5
  -8
  -9
  -10
  -11
  -11
  -10
  -9
  -8
  -7
  -5
  -4
  -3
Current shareholders' claim on cash, %
  38.0
  17.3
  9.0
  5.2
  3.3
  2.1
  1.5
  1.1
  0.8
  0.6
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Nuvectra Corporation is a neurostimulation company that focuses on helping physicians to improve the lives of people with chronic neurological conditions. The Company's Algovita Spinal Cord Stimulation (SCS) System (Algovita) is the Company's commercial offering and is Conformite Europeene (CE) marked and the United States Food and Drug Administration (FDA) approved for the treatment of chronic pain of the trunk and/or limbs. Its technology platform also has capabilities under development to support other neurological indications, such as sacral nerve stimulation (SNS) and deep brain stimulation (DBS). In addition, its NeuroNexus Technologies, Inc. (NeuroNexus) subsidiary designs, manufactures and markets neural-interface technologies for the neuroscience clinical research market. Its Virtis is an application of the Company's neurostimulation technology platform and its first product for the SNS market. Its subsidiaries include Algostim, LLC (Algostim) and PelviStim LLC (PelviStim).

FINANCIAL RATIOS  of  Nuvectra Corporation (NVTR)

Valuation Ratios
P/E Ratio -3.5
Price to Sales 10.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow -5
Price to Free Cash Flow -5
Growth Rates
Sales Growth Rate 160%
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 0
LT Debt to Equity 15.7%
Total Debt to Equity 15.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -46.3%
Ret/ On Assets - 3 Yr. Avg. -47.7%
Return On Total Capital -53.9%
Ret/ On T. Cap. - 3 Yr. Avg. -53.2%
Return On Equity -59.8%
Return On Equity - 3 Yr. Avg. -55.2%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 46.2%
Gross Margin - 3 Yr. Avg. 45.4%
EBITDA Margin -276.9%
EBITDA Margin - 3 Yr. Avg. -412.3%
Operating Margin -284.6%
Oper. Margin - 3 Yr. Avg. -436.5%
Pre-Tax Margin -292.3%
Pre-Tax Margin - 3 Yr. Avg. -432.4%
Net Profit Margin -292.3%
Net Profit Margin - 3 Yr. Avg. -432.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

NVTR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVTR stock intrinsic value calculation we used $49 million for the last fiscal year's total revenue generated by Nuvectra Corporation. The default revenue input number comes from 0001 income statement of Nuvectra Corporation. 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 NVTR stock valuation model: a) initial revenue growth rate of 51.3% 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 NVTR is calculated based on our internal credit rating of Nuvectra Corporation, 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 Nuvectra Corporation.
    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 NVTR stock the variable cost ratio is equal to 104.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $42 million in the base year in the intrinsic value calculation for NVTR 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 10.1% for Nuvectra Corporation.

Corporate tax rate of 27% is the nominal tax rate for Nuvectra Corporation. 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 NVTR 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 NVTR are equal to 45.5%.

Life of production assets of 21.2 years is the average useful life of capital assets used in Nuvectra Corporation 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 NVTR is equal to -1%. 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 - $92.896 million for Nuvectra Corporation - 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 17.699 million for Nuvectra Corporation 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 Nuvectra Corporation at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
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NURO NeuroMetrix, I 1.06 0.20  str.sell

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