Intrinsic value of Omeros Corporation - OMER

Previous Close

$16.20

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$16.20

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of OMER 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 0.8

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  48
  74
  111
  161
  227
  312
  419
  550
  708
  894
  1,110
  1,357
  1,636
  1,947
  2,289
  2,663
  3,067
  3,502
  3,966
  4,459
  4,980
  5,529
  6,105
  6,707
  7,337
  7,993
  8,677
  9,389
  10,128
  10,897
Variable operating expenses, $m
  80
  124
  185
  268
  378
  520
  698
  917
  1,180
  1,490
  1,851
  2,263
  2,727
  3,245
  3,816
  4,439
  5,113
  5,837
  6,611
  7,433
  8,302
  9,216
  10,176
  11,181
  12,231
  13,325
  14,465
  15,651
  16,884
  18,165
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
  80
  124
  185
  268
  378
  520
  698
  917
  1,180
  1,490
  1,851
  2,263
  2,727
  3,245
  3,816
  4,439
  5,113
  5,837
  6,611
  7,433
  8,302
  9,216
  10,176
  11,181
  12,231
  13,325
  14,465
  15,651
  16,884
  18,165
Operating income, $m
  -32
  -49
  -74
  -107
  -151
  -208
  -279
  -367
  -472
  -596
  -741
  -905
  -1,091
  -1,298
  -1,527
  -1,776
  -2,046
  -2,336
  -2,645
  -2,974
  -3,322
  -3,688
  -4,072
  -4,474
  -4,894
  -5,332
  -5,788
  -6,262
  -6,756
  -7,268
EBITDA, $m
  -31
  -48
  -72
  -104
  -147
  -202
  -271
  -356
  -458
  -579
  -719
  -879
  -1,059
  -1,260
  -1,481
  -1,723
  -1,985
  -2,266
  -2,567
  -2,886
  -3,223
  -3,578
  -3,951
  -4,341
  -4,748
  -5,173
  -5,616
  -6,076
  -6,555
  -7,053
Interest expense (income), $m
  5
  1
  -33
  -12
  17
  58
  111
  179
  265
  371
  498
  648
  822
  1,021
  1,245
  1,495
  1,771
  2,072
  2,397
  2,747
  3,121
  3,518
  3,937
  4,379
  4,842
  5,328
  5,835
  6,363
  6,914
  7,486
  8,082
Earnings before tax, $m
  -33
  -16
  -62
  -125
  -209
  -319
  -459
  -632
  -843
  -1,094
  -1,388
  -1,727
  -2,112
  -2,544
  -3,022
  -3,547
  -4,117
  -4,733
  -5,392
  -6,095
  -6,839
  -7,625
  -8,451
  -9,316
  -10,221
  -11,166
  -12,151
  -13,176
  -14,242
  -15,350
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
  -33
  -16
  -62
  -125
  -209
  -319
  -459
  -632
  -843
  -1,094
  -1,388
  -1,727
  -2,112
  -2,544
  -3,022
  -3,547
  -4,117
  -4,733
  -5,392
  -6,095
  -6,839
  -7,625
  -8,451
  -9,316
  -10,221
  -11,166
  -12,151
  -13,176
  -14,242
  -15,350

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
  115
  178
  266
  386
  544
  748
  1,005
  1,319
  1,698
  2,144
  2,662
  3,255
  3,924
  4,668
  5,489
  6,385
  7,355
  8,397
  9,511
  10,693
  11,942
  13,258
  14,639
  16,085
  17,595
  19,169
  20,809
  22,515
  24,288
  26,132
Adjusted assets (=assets-cash), $m
  115
  178
  266
  386
  544
  748
  1,005
  1,319
  1,698
  2,144
  2,662
  3,255
  3,924
  4,668
  5,489
  6,385
  7,355
  8,397
  9,511
  10,693
  11,942
  13,258
  14,639
  16,085
  17,595
  19,169
  20,809
  22,515
  24,288
  26,132
Revenue / Adjusted assets
  0.417
  0.416
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
  0.417
Average production assets, $m
  5
  7
  11
  16
  22
  31
  41
  54
  70
  89
  110
  134
  162
  193
  227
  264
  304
  347
  393
  441
  493
  547
  604
  664
  726
  791
  859
  929
  1,003
  1,079
Working capital, $m
  -11
  -18
  -26
  -38
  -54
  -74
  -99
  -130
  -168
  -212
  -263
  -322
  -388
  -461
  -542
  -631
  -727
  -830
  -940
  -1,057
  -1,180
  -1,310
  -1,447
  -1,590
  -1,739
  -1,894
  -2,056
  -2,225
  -2,400
  -2,583
Total debt, $m
  -89
  -33
  47
  155
  297
  481
  711
  995
  1,335
  1,737
  2,204
  2,737
  3,338
  4,009
  4,747
  5,554
  6,427
  7,365
  8,367
  9,431
  10,555
  11,740
  12,982
  14,283
  15,642
  17,059
  18,535
  20,070
  21,667
  23,326
Total liabilities, $m
  104
  160
  239
  347
  490
  674
  904
  1,187
  1,528
  1,930
  2,396
  2,930
  3,531
  4,201
  4,940
  5,747
  6,620
  7,558
  8,559
  9,623
  10,748
  11,932
  13,175
  14,476
  15,835
  17,252
  18,728
  20,263
  21,860
  23,519
Total equity, $m
  12
  18
  27
  39
  54
  75
  100
  132
  170
  214
  266
  326
  392
  467
  549
  639
  736
  840
  951
  1,069
  1,194
  1,326
  1,464
  1,608
  1,759
  1,917
  2,081
  2,251
  2,429
  2,613
Total liabilities and equity, $m
  116
  178
  266
  386
  544
  749
  1,004
  1,319
  1,698
  2,144
  2,662
  3,256
  3,923
  4,668
  5,489
  6,386
  7,356
  8,398
  9,510
  10,692
  11,942
  13,258
  14,639
  16,084
  17,594
  19,169
  20,809
  22,514
  24,289
  26,132
Debt-to-equity ratio
  -7.740
  -1.840
  1.750
  4.010
  5.460
  6.420
  7.080
  7.540
  7.860
  8.100
  8.280
  8.410
  8.510
  8.590
  8.650
  8.700
  8.740
  8.770
  8.800
  8.820
  8.840
  8.850
  8.870
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
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
  -33
  -16
  -62
  -125
  -209
  -319
  -459
  -632
  -843
  -1,094
  -1,388
  -1,727
  -2,112
  -2,544
  -3,022
  -3,547
  -4,117
  -4,733
  -5,392
  -6,095
  -6,839
  -7,625
  -8,451
  -9,316
  -10,221
  -11,166
  -12,151
  -13,176
  -14,242
  -15,350
Depreciation, amort., depletion, $m
  1
  1
  2
  3
  4
  6
  8
  11
  14
  18
  22
  27
  32
  39
  45
  53
  61
  69
  79
  88
  99
  109
  121
  133
  145
  158
  172
  186
  201
  216
Funds from operations, $m
  -32
  -15
  -60
  -122
  -205
  -313
  -451
  -621
  -829
  -1,077
  -1,366
  -1,700
  -2,080
  -2,505
  -2,977
  -3,494
  -4,057
  -4,664
  -5,314
  -6,007
  -6,741
  -7,515
  -8,330
  -9,183
  -10,076
  -11,008
  -11,979
  -12,990
  -14,041
  -15,134
Change in working capital, $m
  -4
  -6
  -9
  -12
  -16
  -20
  -25
  -31
  -37
  -44
  -51
  -59
  -66
  -74
  -81
  -89
  -96
  -103
  -110
  -117
  -123
  -130
  -136
  -143
  -149
  -156
  -162
  -169
  -175
  -182
Cash from operations, $m
  -28
  -9
  -51
  -110
  -189
  -293
  -425
  -590
  -792
  -1,032
  -1,315
  -1,642
  -2,014
  -2,432
  -2,896
  -3,405
  -3,961
  -4,561
  -5,204
  -5,890
  -6,617
  -7,385
  -8,193
  -9,041
  -9,927
  -10,852
  -11,817
  -12,821
  -13,866
  -14,952
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -3
  -4
  -6
  -8
  -11
  -14
  -18
  -22
  -27
  -32
  -39
  -45
  -53
  -61
  -69
  -79
  -88
  -99
  -109
  -121
  -133
  -145
  -158
  -172
  -186
  -201
New CAPEX, $m
  -2
  -3
  -4
  -5
  -7
  -8
  -11
  -13
  -16
  -18
  -21
  -24
  -28
  -31
  -34
  -37
  -40
  -43
  -46
  -49
  -52
  -54
  -57
  -60
  -62
  -65
  -68
  -70
  -73
  -76
Cash from investing activities, $m
  -3
  -4
  -5
  -7
  -10
  -12
  -17
  -21
  -27
  -32
  -39
  -46
  -55
  -63
  -73
  -82
  -93
  -104
  -115
  -128
  -140
  -153
  -166
  -181
  -195
  -210
  -226
  -242
  -259
  -277
Free cash flow, $m
  -30
  -12
  -56
  -117
  -199
  -306
  -442
  -612
  -818
  -1,065
  -1,354
  -1,688
  -2,068
  -2,495
  -2,968
  -3,488
  -4,053
  -4,664
  -5,319
  -6,017
  -6,757
  -7,538
  -8,360
  -9,221
  -10,122
  -11,063
  -12,043
  -13,063
  -14,125
  -15,229
Issuance/(repayment) of debt, $m
  -92
  56
  79
  108
  143
  184
  231
  283
  340
  402
  467
  533
  602
  670
  739
  806
  873
  938
  1,002
  1,064
  1,125
  1,184
  1,243
  1,301
  1,359
  1,417
  1,476
  1,535
  1,596
  1,659
Issuance/(repurchase) of shares, $m
  168
  22
  71
  137
  225
  339
  484
  664
  881
  1,139
  1,440
  1,787
  2,179
  2,618
  3,104
  3,636
  4,214
  4,837
  5,504
  6,213
  6,964
  7,756
  8,589
  9,461
  10,372
  11,324
  12,315
  13,346
  14,419
  15,534
Cash from financing (excl. dividends), $m  
  76
  78
  150
  245
  368
  523
  715
  947
  1,221
  1,541
  1,907
  2,320
  2,781
  3,288
  3,843
  4,442
  5,087
  5,775
  6,506
  7,277
  8,089
  8,940
  9,832
  10,762
  11,731
  12,741
  13,791
  14,881
  16,015
  17,193
Total cash flow (excl. dividends), $m
  46
  67
  94
  128
  169
  217
  273
  335
  403
  476
  552
  632
  712
  794
  875
  955
  1,034
  1,111
  1,186
  1,260
  1,332
  1,402
  1,472
  1,541
  1,609
  1,678
  1,748
  1,818
  1,891
  1,965
Retained Cash Flow (-), $m
  -168
  -22
  -71
  -137
  -225
  -339
  -484
  -664
  -881
  -1,139
  -1,440
  -1,787
  -2,179
  -2,618
  -3,104
  -3,636
  -4,214
  -4,837
  -5,504
  -6,213
  -6,964
  -7,756
  -8,589
  -9,461
  -10,372
  -11,324
  -12,315
  -13,346
  -14,419
  -15,534
Prev. year cash balance distribution, $m
  23
  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
  -99
  44
  23
  -9
  -56
  -122
  -211
  -329
  -478
  -663
  -888
  -1,155
  -1,467
  -1,824
  -2,229
  -2,681
  -3,180
  -3,726
  -4,317
  -4,953
  -5,632
  -6,354
  -7,117
  -7,920
  -8,763
  -9,646
  -10,567
  -11,528
  -12,529
  -13,569
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
  -94
  41
  20
  -7
  -43
  -89
  -143
  -205
  -274
  -348
  -422
  -493
  -558
  -612
  -654
  -681
  -692
  -686
  -665
  -629
  -583
  -527
  -466
  -403
  -341
  -281
  -227
  -178
  -137
  -102
Current shareholders' claim on cash, %
  50.0
  16.9
  3.4
  0.6
  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
  0.0
  0.0
  0.0
  0.0

Omeros Corporation is a biopharmaceutical company. The Company is engaged in discovering, developing and commercializing small-molecule and protein therapeutics for large-market, as well as orphan indications targeting inflammation, coagulopathies and disorders of the central nervous system. Its marketed drug product, Omidria (phenylephrine and ketorolac injection), is used during cataract surgery or intraocular lens (IOL) replacement. Omidria is derived from its PharmacoSurgery platform, which is designed for patients undergoing ophthalmological, arthroscopic, urological and other surgical procedures. Its PharmacoSurgery platform is based on low-dose combinations of the United States Food and Drug Administration (FDA) approved therapeutic agents delivered directly to the surgical site throughout the duration of the procedure to inhibit preemptively inflammation and other problems caused by surgical trauma, and to provide clinical assistances both during and after surgery.

FINANCIAL RATIOS  of  Omeros Corporation (OMER)

Valuation Ratios
P/E Ratio -10.6
Price to Sales 16.9
Price to Book -19.2
Price to Tangible Book
Price to Cash Flow -13.7
Price to Free Cash Flow -13.7
Growth Rates
Sales Growth Rate 200%
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 -216.2%
Total Debt to Equity -216.2%
Interest Coverage -12
Management Effectiveness
Return On Assets -106.9%
Ret/ On Assets - 3 Yr. Avg. -283.6%
Return On Total Capital -200%
Ret/ On T. Cap. - 3 Yr. Avg. 165.4%
Return On Equity 212.7%
Return On Equity - 3 Yr. Avg. 224.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 95.2%
Gross Margin - 3 Yr. Avg. 60.3%
EBITDA Margin -147.6%
EBITDA Margin - 3 Yr. Avg. -2584.9%
Operating Margin -140.5%
Oper. Margin - 3 Yr. Avg. -2551.6%
Pre-Tax Margin -159.5%
Pre-Tax Margin - 3 Yr. Avg. -2698.4%
Net Profit Margin -159.5%
Net Profit Margin - 3 Yr. Avg. -2698.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

OMER stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OMER stock intrinsic value calculation we used $30 million for the last fiscal year's total revenue generated by Omeros Corporation. The default revenue input number comes from 0001 income statement of Omeros 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 OMER stock valuation model: a) initial revenue growth rate of 60% 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 OMER is calculated based on our internal credit rating of Omeros 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 Omeros 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 OMER stock the variable cost ratio is equal to 166.7%.

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 OMER 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 37.3% for Omeros Corporation.

Corporate tax rate of 27% is the nominal tax rate for Omeros 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 OMER 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 OMER are equal to 9.9%.

Life of production assets of 3.1 years is the average useful life of capital assets used in Omeros 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 OMER is equal to -23.7%. 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 - $-100.156 million for Omeros 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 49.012 million for Omeros 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 Omeros Corporation at the current share price and the inputted number of shares is $0.8 billion.

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