Intrinsic value of Odyssey Marine Exploration, Inc. - OMEX

Previous Close

$7.40

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$7.40

 
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
  2
  4
  5
  8
  10
  14
  18
  24
  30
  37
  45
  55
  65
  76
  89
  102
  117
  132
  149
  166
  184
  203
  224
  245
  266
  289
  313
  338
  363
Variable operating expenses, $m
  3
  5
  7
  11
  15
  21
  28
  37
  47
  60
  74
  90
  109
  130
  153
  178
  204
  233
  264
  297
  332
  369
  407
  447
  489
  533
  578
  626
  675
  726
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
  11
  13
  16
  20
  24
  30
  37
  47
  57
  70
  84
  100
  120
  141
  164
  189
  216
  245
  276
  309
  345
  382
  420
  460
  503
  547
  592
  641
  690
  741
Operating income, $m
  -10
  -11
  -12
  -14
  -16
  -20
  -23
  -28
  -33
  -40
  -47
  -56
  -65
  -76
  -87
  -100
  -114
  -129
  -144
  -161
  -179
  -197
  -217
  -237
  -258
  -281
  -304
  -328
  -353
  -379
EBITDA, $m
  -9
  -10
  -11
  -13
  -15
  -17
  -20
  -23
  -28
  -33
  -38
  -45
  -52
  -60
  -69
  -79
  -89
  -101
  -113
  -125
  -139
  -153
  -168
  -184
  -200
  -217
  -235
  -253
  -272
  -292
Interest expense (income), $m
  1
  3
  1
  1
  1
  2
  2
  3
  4
  5
  7
  8
  10
  13
  15
  18
  21
  25
  29
  33
  37
  42
  46
  52
  57
  62
  68
  74
  81
  87
  94
Earnings before tax, $m
  -13
  -11
  -13
  -15
  -18
  -22
  -26
  -32
  -39
  -47
  -56
  -66
  -78
  -91
  -106
  -122
  -139
  -157
  -177
  -198
  -220
  -244
  -268
  -294
  -321
  -349
  -378
  -408
  -440
  -473
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
  -11
  -13
  -15
  -18
  -22
  -26
  -32
  -39
  -47
  -56
  -66
  -78
  -91
  -106
  -122
  -139
  -157
  -177
  -198
  -220
  -244
  -268
  -294
  -321
  -349
  -378
  -408
  -440
  -473

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
  5
  7
  11
  16
  23
  31
  42
  55
  70
  89
  110
  135
  162
  193
  227
  264
  304
  347
  393
  442
  494
  548
  606
  665
  728
  793
  861
  931
  1,005
  1,081
Adjusted assets (=assets-cash), $m
  5
  7
  11
  16
  23
  31
  42
  55
  70
  89
  110
  135
  162
  193
  227
  264
  304
  347
  393
  442
  494
  548
  606
  665
  728
  793
  861
  931
  1,005
  1,081
Revenue / Adjusted assets
  0.400
  0.286
  0.364
  0.313
  0.348
  0.323
  0.333
  0.327
  0.343
  0.337
  0.336
  0.333
  0.340
  0.337
  0.335
  0.337
  0.336
  0.337
  0.336
  0.337
  0.336
  0.336
  0.335
  0.337
  0.337
  0.335
  0.336
  0.336
  0.336
  0.336
Average production assets, $m
  2
  3
  4
  6
  9
  12
  17
  22
  28
  36
  44
  54
  65
  78
  91
  106
  122
  139
  158
  178
  198
  220
  243
  267
  292
  318
  346
  374
  403
  434
Working capital, $m
  -13
  -20
  -30
  -44
  -62
  -86
  -115
  -151
  -194
  -245
  -304
  -372
  -448
  -533
  -627
  -730
  -840
  -959
  -1,087
  -1,222
  -1,365
  -1,515
  -1,673
  -1,838
  -2,010
  -2,190
  -2,378
  -2,572
  -2,775
  -2,986
Total debt, $m
  6
  8
  12
  16
  22
  30
  39
  51
  65
  82
  101
  123
  148
  176
  206
  240
  276
  314
  356
  400
  446
  495
  547
  601
  657
  715
  777
  840
  906
  975
Total liabilities, $m
  4
  7
  10
  14
  20
  28
  37
  49
  63
  80
  99
  121
  146
  174
  204
  238
  274
  313
  354
  398
  445
  494
  545
  599
  655
  714
  775
  838
  904
  973
Total equity, $m
  0
  1
  1
  2
  2
  3
  4
  5
  7
  9
  11
  13
  16
  19
  23
  26
  30
  35
  39
  44
  49
  55
  61
  67
  73
  79
  86
  93
  100
  108
Total liabilities and equity, $m
  4
  8
  11
  16
  22
  31
  41
  54
  70
  89
  110
  134
  162
  193
  227
  264
  304
  348
  393
  442
  494
  549
  606
  666
  728
  793
  861
  931
  1,004
  1,081
Debt-to-equity ratio
  12.750
  11.430
  10.620
  10.120
  9.790
  9.580
  9.430
  9.330
  9.250
  9.200
  9.160
  9.130
  9.110
  9.090
  9.080
  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
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
  -11
  -13
  -15
  -18
  -22
  -26
  -32
  -39
  -47
  -56
  -66
  -78
  -91
  -106
  -122
  -139
  -157
  -177
  -198
  -220
  -244
  -268
  -294
  -321
  -349
  -378
  -408
  -440
  -473
Depreciation, amort., depletion, $m
  0
  1
  1
  1
  2
  2
  3
  4
  6
  7
  9
  11
  13
  16
  18
  21
  24
  28
  32
  36
  40
  44
  49
  53
  58
  64
  69
  75
  81
  87
Funds from operations, $m
  -12
  -11
  -12
  -14
  -16
  -19
  -23
  -28
  -33
  -39
  -47
  -55
  -65
  -76
  -87
  -100
  -114
  -129
  -145
  -162
  -181
  -200
  -220
  -240
  -262
  -285
  -309
  -334
  -359
  -386
Change in working capital, $m
  -5
  -7
  -10
  -14
  -18
  -23
  -29
  -36
  -43
  -51
  -59
  -68
  -76
  -85
  -94
  -102
  -111
  -119
  -127
  -135
  -143
  -150
  -158
  -165
  -173
  -180
  -187
  -195
  -203
  -211
Cash from operations, $m
  -7
  -4
  -2
  0
  2
  4
  6
  8
  10
  12
  12
  12
  11
  9
  6
  2
  -3
  -10
  -18
  -27
  -38
  -49
  -62
  -75
  -90
  -105
  -122
  -139
  -157
  -175
Maintenance CAPEX, $m
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -16
  -18
  -21
  -24
  -28
  -32
  -36
  -40
  -44
  -49
  -53
  -58
  -64
  -69
  -75
  -81
New CAPEX, $m
  -1
  -1
  -1
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
Cash from investing activities, $m
  -1
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -13
  -16
  -19
  -22
  -25
  -30
  -33
  -37
  -41
  -46
  -52
  -57
  -62
  -67
  -73
  -78
  -84
  -91
  -97
  -104
  -112
Free cash flow, $m
  -8
  -5
  -4
  -3
  -2
  -1
  0
  0
  0
  -1
  -3
  -6
  -10
  -16
  -23
  -31
  -41
  -52
  -65
  -79
  -94
  -111
  -129
  -148
  -168
  -190
  -212
  -236
  -261
  -287
Issuance/(repayment) of debt, $m
  -21
  2
  3
  4
  6
  8
  10
  12
  14
  17
  19
  22
  25
  28
  31
  33
  36
  39
  41
  44
  47
  49
  51
  54
  56
  59
  61
  64
  66
  69
Issuance/(repurchase) of shares, $m
  36
  12
  13
  16
  19
  23
  27
  33
  40
  48
  58
  69
  81
  94
  109
  125
  143
  162
  182
  203
  225
  249
  274
  300
  327
  355
  385
  415
  447
  480
Cash from financing (excl. dividends), $m  
  15
  14
  16
  20
  25
  31
  37
  45
  54
  65
  77
  91
  106
  122
  140
  158
  179
  201
  223
  247
  272
  298
  325
  354
  383
  414
  446
  479
  513
  549
Total cash flow (excl. dividends), $m
  6
  9
  13
  17
  23
  29
  36
  45
  54
  64
  74
  84
  95
  106
  117
  128
  138
  148
  158
  168
  178
  187
  197
  206
  215
  224
  233
  243
  252
  262
Retained Cash Flow (-), $m
  -36
  -12
  -13
  -16
  -19
  -23
  -27
  -33
  -40
  -48
  -58
  -69
  -81
  -94
  -109
  -125
  -143
  -162
  -182
  -203
  -225
  -249
  -274
  -300
  -327
  -355
  -385
  -415
  -447
  -480
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
  -30
  -3
  -1
  1
  4
  6
  9
  12
  14
  15
  16
  16
  14
  12
  8
  2
  -5
  -13
  -23
  -35
  -48
  -62
  -77
  -94
  -112
  -131
  -151
  -173
  -195
  -218
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
  -26
  -2
  -1
  1
  2
  2
  2
  2
  2
  2
  1
  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
  2.0
  0.1
  0.0
  0.0
  0.0
  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, Inc. (OMEX)

Valuation Ratios
P/E Ratio -9.5
Price to Sales 11.4
Price to Book -3
Price to Tangible Book
Price to Cash Flow -7.1
Price to Free Cash Flow -7.1
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 million for the last fiscal year's total revenue generated by Odyssey Marine Exploration, Inc.. The default revenue input number comes from 0001 income statement of Odyssey Marine Exploration, 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 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, 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 Odyssey Marine Exploration, 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 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for Odyssey Marine Exploration, 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 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, 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 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, 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 9.167 million for Odyssey Marine Exploration, 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 Odyssey Marine Exploration, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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