Intrinsic value of Odyssey Marine Exploration - OMEX

Previous Close

$5.91

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$5.91

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of OMEX 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, %
  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
  2
  3
  5
  7
  9
  13
  17
  23
  29
  37
  46
  56
  68
  81
  95
  111
  128
  146
  165
  186
  207
  230
  254
  279
  305
  333
  361
  391
  421
  453
Variable operating expenses, $m
  4
  6
  9
  13
  19
  26
  35
  46
  59
  74
  92
  113
  136
  162
  191
  222
  255
  291
  330
  371
  414
  460
  508
  558
  611
  665
  722
  781
  843
  907
Fixed operating expenses, $m
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
Total operating expenses, $m
  12
  14
  18
  22
  28
  35
  44
  56
  69
  84
  102
  123
  147
  173
  202
  233
  267
  303
  342
  383
  427
  473
  521
  571
  625
  679
  736
  796
  858
  922
Operating income, $m
  -10
  -11
  -13
  -15
  -18
  -22
  -27
  -32
  -39
  -47
  -56
  -67
  -79
  -92
  -106
  -122
  -139
  -158
  -177
  -198
  -220
  -243
  -267
  -293
  -319
  -347
  -376
  -405
  -437
  -469
EBITDA, $m
  -10
  -11
  -12
  -14
  -16
  -19
  -23
  -27
  -32
  -38
  -45
  -53
  -62
  -72
  -84
  -96
  -109
  -123
  -138
  -154
  -170
  -188
  -207
  -226
  -246
  -267
  -289
  -312
  -336
  -360
Interest expense (income), $m
  1
  3
  1
  1
  1
  2
  3
  4
  5
  7
  8
  11
  13
  16
  19
  23
  27
  31
  36
  41
  46
  52
  58
  64
  71
  78
  85
  93
  101
  109
  118
Earnings before tax, $m
  -13
  -12
  -14
  -17
  -20
  -25
  -31
  -37
  -46
  -56
  -67
  -80
  -95
  -111
  -129
  -149
  -170
  -193
  -218
  -244
  -272
  -301
  -332
  -364
  -397
  -432
  -468
  -506
  -546
  -586
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
  -13
  -12
  -14
  -17
  -20
  -25
  -31
  -37
  -46
  -56
  -67
  -80
  -95
  -111
  -129
  -149
  -170
  -193
  -218
  -244
  -272
  -301
  -332
  -364
  -397
  -432
  -468
  -506
  -546
  -586

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
  6
  9
  14
  20
  28
  39
  52
  68
  88
  111
  138
  168
  203
  241
  283
  330
  380
  434
  491
  552
  617
  685
  756
  831
  909
  990
  1,075
  1,163
  1,254
  1,350
Adjusted assets (=assets-cash), $m
  6
  9
  14
  20
  28
  39
  52
  68
  88
  111
  138
  168
  203
  241
  283
  330
  380
  434
  491
  552
  617
  685
  756
  831
  909
  990
  1,075
  1,163
  1,254
  1,350
Revenue / Adjusted assets
  0.333
  0.333
  0.357
  0.350
  0.321
  0.333
  0.327
  0.338
  0.330
  0.333
  0.333
  0.333
  0.335
  0.336
  0.336
  0.336
  0.337
  0.336
  0.336
  0.337
  0.335
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
Average production assets, $m
  2
  4
  6
  8
  11
  16
  21
  27
  35
  44
  55
  68
  81
  97
  114
  132
  153
  174
  197
  222
  248
  275
  304
  334
  365
  398
  432
  467
  504
  542
Working capital, $m
  -16
  -25
  -38
  -55
  -78
  -107
  -143
  -188
  -242
  -306
  -380
  -464
  -560
  -666
  -783
  -911
  -1,049
  -1,198
  -1,357
  -1,525
  -1,704
  -1,891
  -2,088
  -2,294
  -2,510
  -2,734
  -2,968
  -3,212
  -3,465
  -3,728
Total debt, $m
  7
  10
  14
  20
  27
  37
  48
  63
  81
  101
  126
  153
  184
  219
  257
  299
  344
  392
  444
  499
  557
  618
  682
  749
  820
  893
  969
  1,048
  1,131
  1,216
Total liabilities, $m
  5
  8
  12
  18
  25
  35
  47
  61
  79
  100
  124
  151
  182
  217
  255
  297
  342
  390
  442
  497
  555
  616
  680
  748
  818
  891
  967
  1,047
  1,129
  1,215
Total equity, $m
  1
  1
  1
  2
  3
  4
  5
  7
  9
  11
  14
  17
  20
  24
  28
  33
  38
  43
  49
  55
  62
  68
  76
  83
  91
  99
  107
  116
  125
  135
Total liabilities and equity, $m
  6
  9
  13
  20
  28
  39
  52
  68
  88
  111
  138
  168
  202
  241
  283
  330
  380
  433
  491
  552
  617
  684
  756
  831
  909
  990
  1,074
  1,163
  1,254
  1,350
Debt-to-equity ratio
  12.000
  10.940
  10.300
  9.900
  9.630
  9.460
  9.340
  9.260
  9.200
  9.160
  9.130
  9.110
  9.090
  9.070
  9.060
  9.050
  9.050
  9.040
  9.040
  9.030
  9.030
  9.030
  9.020
  9.020
  9.020
  9.020
  9.020
  9.020
  9.010
  9.010
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
  -13
  -12
  -14
  -17
  -20
  -25
  -31
  -37
  -46
  -56
  -67
  -80
  -95
  -111
  -129
  -149
  -170
  -193
  -218
  -244
  -272
  -301
  -332
  -364
  -397
  -432
  -468
  -506
  -546
  -586
Depreciation, amort., depletion, $m
  0
  1
  1
  2
  2
  3
  4
  5
  7
  9
  11
  14
  16
  19
  23
  26
  31
  35
  39
  44
  50
  55
  61
  67
  73
  80
  86
  93
  101
  108
Funds from operations, $m
  -13
  -11
  -13
  -15
  -18
  -22
  -26
  -32
  -39
  -47
  -56
  -66
  -78
  -92
  -106
  -122
  -140
  -158
  -178
  -200
  -222
  -246
  -271
  -297
  -324
  -352
  -382
  -413
  -445
  -478
Change in working capital, $m
  -6
  -9
  -13
  -17
  -23
  -29
  -37
  -45
  -54
  -64
  -74
  -85
  -95
  -106
  -117
  -128
  -138
  -149
  -159
  -169
  -178
  -188
  -197
  -206
  -215
  -225
  -234
  -243
  -253
  -263
Cash from operations, $m
  -6
  -2
  -1
  2
  4
  7
  10
  13
  15
  17
  18
  18
  17
  15
  11
  5
  -1
  -10
  -20
  -31
  -44
  -58
  -74
  -91
  -109
  -128
  -148
  -169
  -192
  -215
Maintenance CAPEX, $m
  0
  0
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -16
  -19
  -23
  -26
  -31
  -35
  -39
  -44
  -50
  -55
  -61
  -67
  -73
  -80
  -86
  -93
  -101
New CAPEX, $m
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -7
  -8
  -9
  -11
  -12
  -14
  -15
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
Cash from investing activities, $m
  -1
  -1
  -3
  -3
  -5
  -6
  -8
  -11
  -13
  -16
  -20
  -23
  -28
  -31
  -36
  -42
  -46
  -53
  -58
  -64
  -70
  -77
  -84
  -91
  -98
  -106
  -114
  -121
  -130
  -139
Free cash flow, $m
  -8
  -4
  -3
  -2
  0
  1
  2
  2
  2
  1
  -2
  -5
  -10
  -17
  -26
  -36
  -48
  -62
  -78
  -95
  -114
  -135
  -157
  -181
  -207
  -234
  -262
  -291
  -322
  -354
Issuance/(repayment) of debt, $m
  -20
  3
  4
  6
  7
  9
  12
  15
  18
  21
  24
  28
  31
  35
  38
  42
  45
  48
  52
  55
  58
  61
  64
  67
  70
  73
  76
  79
  82
  86
Issuance/(repurchase) of shares, $m
  36
  13
  15
  18
  21
  26
  32
  39
  48
  58
  70
  83
  98
  115
  133
  153
  175
  199
  224
  250
  278
  308
  339
  371
  405
  440
  477
  515
  555
  596
Cash from financing (excl. dividends), $m  
  16
  16
  19
  24
  28
  35
  44
  54
  66
  79
  94
  111
  129
  150
  171
  195
  220
  247
  276
  305
  336
  369
  403
  438
  475
  513
  553
  594
  637
  682
Total cash flow (excl. dividends), $m
  8
  11
  16
  21
  28
  36
  46
  56
  67
  79
  92
  105
  119
  132
  146
  159
  172
  185
  198
  210
  222
  234
  245
  257
  268
  280
  291
  303
  315
  328
Retained Cash Flow (-), $m
  -36
  -13
  -15
  -18
  -21
  -26
  -32
  -39
  -48
  -58
  -70
  -83
  -98
  -115
  -133
  -153
  -175
  -199
  -224
  -250
  -278
  -308
  -339
  -371
  -405
  -440
  -477
  -515
  -555
  -596
Prev. year cash balance distribution, $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 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
  -28
  -1
  1
  4
  7
  10
  14
  17
  20
  22
  23
  22
  21
  17
  13
  6
  -3
  -13
  -26
  -40
  -56
  -74
  -93
  -114
  -137
  -160
  -185
  -212
  -240
  -268
Discount rate, %
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
  -24
  -1
  1
  2
  3
  3
  4
  3
  3
  2
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  2.3
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
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Odyssey Marine Exploration, Inc. (Odyssey) is a deep-ocean exploration company. The Company's techniques are applied to mineral exploration, shipwreck cargo recovery, and other marine survey and exploration charter services. The Company is engaged in discovering shipwreck sites in the deep ocean and conducting archaeological excavations with remotely operated vehicles (ROVs). Its shipwreck discoveries include the SS Republic, HMS Victory, Black Swan, La Marquise de Tourny and other unidentified shipwrecks. The Company offers exploration services, including geophysical and geotechnical assessments of seabed mineral deposits to companies, including its subsidiaries and companies, in which it holds an equity position, as a resource development partner. The Company evaluates or explores various types of seabed mineral deposits, such as phosphorites, polymetallic nodules and seafloor massive sulfides. Odyssey offers its marine exploration services to third-party companies.

FINANCIAL RATIOS  of  Odyssey Marine Exploration (OMEX)

Valuation Ratios
P/E Ratio -7.6
Price to Sales 9.1
Price to Book -2.4
Price to Tangible Book
Price to Cash Flow -5.7
Price to Free Cash Flow -5.7
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity -21.1%
Total Debt to Equity -131.6%
Interest Coverage -8
Management Effectiveness
Return On Assets -83.3%
Ret/ On Assets - 3 Yr. Avg. -85.1%
Return On Total Capital -150%
Ret/ On T. Cap. - 3 Yr. Avg. -144.1%
Return On Equity 34.3%
Return On Equity - 3 Yr. Avg. -61.9%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 60%
EBITDA Margin -140%
EBITDA Margin - 3 Yr. Avg. -906.7%
Operating Margin -200%
Oper. Margin - 3 Yr. Avg. -1140%
Pre-Tax Margin -180%
Pre-Tax Margin - 3 Yr. Avg. -1166.7%
Net Profit Margin -120%
Net Profit Margin - 3 Yr. Avg. -1026.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

OMEX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OMEX stock intrinsic value calculation we used $1.248477 million for the last fiscal year's total revenue generated by Odyssey Marine Exploration. The default revenue input number comes from 0001 income statement of Odyssey Marine Exploration. 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 OMEX 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 15.8%, whose default value for OMEX is calculated based on our internal credit rating of Odyssey Marine Exploration, 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 Odyssey Marine Exploration.
    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 OMEX stock the variable cost ratio is equal to 200%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8 million in the base year in the intrinsic value calculation for OMEX 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 10.4% for Odyssey Marine Exploration.

Corporate tax rate of 27% is the nominal tax rate for Odyssey Marine Exploration. 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 OMEX 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 OMEX are equal to 119.5%.

Life of production assets of 1.6 years is the average useful life of capital assets used in Odyssey Marine Exploration 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 OMEX is equal to -822%. 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 - $-22.605719 million for Odyssey Marine Exploration - 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 8.467 million for Odyssey Marine Exploration 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 Odyssey Marine Exploration at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Odyssey Marine Exploration to Acquire Ocean Mineral Project   [Aug-20-18 08:15AM  GlobeNewswire]
▶ Dont Let the Navy Contract News Make You Jump on Coda Stock   [Jul-18-18 10:15AM  InvestorPlace]
▶ How Tampa Bays public companies performed in the stock market in Q1 2018   [Apr-02-18 07:28AM  American City Business Journals]
▶ Benzinga Pro's 6 Stocks To Watch Today   [Mar-23-18 08:06AM  Benzinga]
▶ Odyssey Marine Exploration Reports Full Year 2016 Results   [Mar-10-17 08:27AM  GlobeNewswire]
▶ What is Going on With These 5 Falling Stocks?   [Apr-11-16 01:24PM  at Insider Monkey]
▶ Odyssey sells shipwreck assets for $21M   [03:13PM  at bizjournals.com]

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