Intrinsic value of OptimizeRx Corporation - OPRX

Previous Close

$15.05

  Intrinsic Value

$60.93

stock screener

  Rating & Target

str. buy

+305%

Previous close

$15.05

 
Intrinsic value

$60.93

 
Up/down potential

+305%

 
Rating

str. buy

We calculate the intrinsic value of OPRX 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, %
  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
  34
  52
  78
  113
  159
  218
  293
  385
  496
  626
  777
  950
  1,145
  1,363
  1,602
  1,864
  2,147
  2,451
  2,776
  3,121
  3,486
  3,870
  4,273
  4,695
  5,136
  5,595
  6,074
  6,572
  7,090
  7,628
Variable operating expenses, $m
  25
  38
  57
  82
  115
  158
  212
  278
  357
  451
  559
  683
  824
  980
  1,152
  1,340
  1,544
  1,763
  1,996
  2,245
  2,507
  2,783
  3,073
  3,376
  3,693
  4,024
  4,368
  4,726
  5,099
  5,486
Fixed operating expenses, $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
Total operating expenses, $m
  30
  43
  62
  87
  121
  164
  218
  284
  363
  457
  565
  689
  831
  987
  1,159
  1,347
  1,551
  1,770
  2,004
  2,253
  2,515
  2,791
  3,081
  3,384
  3,702
  4,033
  4,377
  4,735
  5,108
  5,496
Operating income, $m
  3
  8
  16
  25
  38
  55
  76
  101
  132
  169
  212
  260
  315
  376
  443
  516
  596
  681
  772
  869
  971
  1,079
  1,192
  1,310
  1,434
  1,563
  1,697
  1,837
  1,982
  2,133
EBITDA, $m
  5
  10
  17
  27
  40
  57
  79
  105
  137
  174
  218
  268
  324
  386
  455
  531
  612
  700
  794
  893
  998
  1,109
  1,225
  1,347
  1,474
  1,606
  1,744
  1,887
  2,037
  2,192
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  2
  3
  5
  6
  8
  10
  13
  16
  19
  23
  27
  31
  36
  41
  47
  53
  59
  65
  72
  79
  87
  95
  103
  111
  120
Earnings before tax, $m
  3
  8
  15
  24
  37
  52
  72
  97
  126
  161
  202
  248
  299
  357
  420
  490
  564
  645
  731
  822
  919
  1,020
  1,127
  1,238
  1,355
  1,476
  1,602
  1,734
  1,871
  2,013
Tax expense, $m
  1
  2
  4
  7
  10
  14
  20
  26
  34
  43
  54
  67
  81
  96
  113
  132
  152
  174
  197
  222
  248
  275
  304
  334
  366
  398
  433
  468
  505
  543
Net income, $m
  3
  6
  11
  18
  27
  38
  53
  71
  92
  117
  147
  181
  218
  261
  307
  357
  412
  471
  534
  600
  671
  745
  822
  904
  989
  1,077
  1,170
  1,266
  1,366
  1,469

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
  33
  50
  75
  109
  154
  212
  284
  374
  481
  607
  754
  922
  1,111
  1,322
  1,554
  1,808
  2,082
  2,378
  2,693
  3,027
  3,381
  3,754
  4,145
  4,554
  4,981
  5,427
  5,891
  6,374
  6,877
  7,399
Adjusted assets (=assets-cash), $m
  33
  50
  75
  109
  154
  212
  284
  374
  481
  607
  754
  922
  1,111
  1,322
  1,554
  1,808
  2,082
  2,378
  2,693
  3,027
  3,381
  3,754
  4,145
  4,554
  4,981
  5,427
  5,891
  6,374
  6,877
  7,399
Revenue / Adjusted assets
  1.030
  1.040
  1.040
  1.037
  1.032
  1.028
  1.032
  1.029
  1.031
  1.031
  1.031
  1.030
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
  1.031
Average production assets, $m
  4
  6
  10
  14
  20
  27
  36
  47
  61
  77
  96
  117
  141
  168
  197
  229
  264
  301
  341
  384
  429
  476
  526
  577
  632
  688
  747
  808
  872
  938
Working capital, $m
  5
  7
  10
  15
  21
  29
  39
  52
  66
  84
  104
  127
  153
  183
  215
  250
  288
  328
  372
  418
  467
  519
  573
  629
  688
  750
  814
  881
  950
  1,022
Total debt, $m
  4
  10
  18
  29
  43
  62
  86
  114
  149
  190
  238
  292
  353
  422
  497
  579
  668
  764
  866
  974
  1,089
  1,210
  1,336
  1,469
  1,607
  1,752
  1,902
  2,059
  2,221
  2,391
Total liabilities, $m
  11
  16
  24
  35
  50
  69
  92
  121
  156
  197
  244
  299
  360
  428
  504
  586
  675
  770
  872
  981
  1,095
  1,216
  1,343
  1,475
  1,614
  1,758
  1,909
  2,065
  2,228
  2,397
Total equity, $m
  22
  34
  51
  74
  104
  143
  192
  252
  325
  410
  510
  623
  751
  893
  1,051
  1,222
  1,408
  1,607
  1,820
  2,046
  2,286
  2,537
  2,802
  3,078
  3,367
  3,669
  3,983
  4,309
  4,649
  5,001
Total liabilities and equity, $m
  33
  50
  75
  109
  154
  212
  284
  373
  481
  607
  754
  922
  1,111
  1,321
  1,555
  1,808
  2,083
  2,377
  2,692
  3,027
  3,381
  3,753
  4,145
  4,553
  4,981
  5,427
  5,892
  6,374
  6,877
  7,398
Debt-to-equity ratio
  0.180
  0.290
  0.350
  0.390
  0.420
  0.430
  0.440
  0.450
  0.460
  0.460
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.470
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
  0.480
Adjusted equity ratio
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3
  6
  11
  18
  27
  38
  53
  71
  92
  117
  147
  181
  218
  261
  307
  357
  412
  471
  534
  600
  671
  745
  822
  904
  989
  1,077
  1,170
  1,266
  1,366
  1,469
Depreciation, amort., depletion, $m
  1
  1
  2
  2
  2
  3
  3
  4
  5
  6
  6
  7
  9
  11
  12
  14
  17
  19
  21
  24
  27
  30
  33
  36
  40
  43
  47
  51
  55
  59
Funds from operations, $m
  4
  7
  12
  20
  29
  41
  56
  74
  97
  123
  153
  188
  227
  271
  319
  372
  429
  490
  555
  624
  698
  775
  855
  940
  1,029
  1,121
  1,217
  1,317
  1,420
  1,528
Change in working capital, $m
  2
  2
  3
  5
  6
  8
  10
  12
  15
  17
  20
  23
  26
  29
  32
  35
  38
  41
  44
  46
  49
  51
  54
  57
  59
  62
  64
  67
  69
  72
Cash from operations, $m
  2
  5
  9
  15
  23
  33
  46
  62
  82
  106
  133
  165
  201
  242
  287
  337
  391
  449
  511
  578
  649
  723
  801
  884
  969
  1,059
  1,153
  1,250
  1,351
  1,456
Maintenance CAPEX, $m
  0
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -9
  -11
  -12
  -14
  -17
  -19
  -21
  -24
  -27
  -30
  -33
  -36
  -40
  -43
  -47
  -51
  -55
New CAPEX, $m
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -14
  -16
  -19
  -21
  -24
  -27
  -29
  -32
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -52
  -54
  -57
  -59
  -61
  -64
  -66
Cash from investing activities, $m
  -2
  -2
  -3
  -5
  -7
  -8
  -11
  -13
  -17
  -20
  -24
  -27
  -31
  -36
  -40
  -44
  -49
  -54
  -59
  -63
  -69
  -74
  -80
  -85
  -90
  -97
  -102
  -108
  -115
  -121
Free cash flow, $m
  0
  2
  5
  10
  16
  24
  35
  49
  65
  86
  109
  138
  170
  206
  247
  292
  341
  395
  453
  514
  580
  649
  722
  799
  879
  963
  1,050
  1,142
  1,237
  1,335
Issuance/(repayment) of debt, $m
  4
  6
  8
  11
  15
  19
  24
  29
  35
  41
  48
  54
  61
  68
  75
  82
  89
  96
  102
  108
  115
  121
  127
  133
  139
  144
  150
  156
  163
  169
Issuance/(repurchase) of shares, $m
  6
  6
  6
  5
  4
  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
Cash from financing (excl. dividends), $m  
  10
  12
  14
  16
  19
  20
  24
  29
  35
  41
  48
  54
  61
  68
  75
  82
  89
  96
  102
  108
  115
  121
  127
  133
  139
  144
  150
  156
  163
  169
Total cash flow (excl. dividends), $m
  10
  14
  19
  26
  34
  44
  59
  77
  100
  127
  157
  192
  231
  275
  322
  374
  430
  491
  555
  623
  694
  770
  849
  931
  1,017
  1,107
  1,201
  1,298
  1,399
  1,504
Retained Cash Flow (-), $m
  -8
  -12
  -17
  -23
  -30
  -39
  -49
  -60
  -72
  -85
  -99
  -113
  -128
  -143
  -157
  -171
  -186
  -200
  -213
  -226
  -239
  -252
  -264
  -277
  -289
  -301
  -314
  -327
  -339
  -353
Prev. year cash balance distribution, $m
  5
  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
  6
  2
  3
  3
  4
  5
  9
  17
  28
  41
  58
  79
  103
  132
  165
  203
  245
  291
  342
  396
  455
  518
  584
  655
  728
  806
  887
  972
  1,060
  1,151
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
  6
  2
  2
  3
  3
  3
  6
  11
  16
  22
  27
  34
  39
  44
  49
  52
  53
  54
  53
  50
  47
  43
  38
  33
  28
  24
  19
  15
  12
  9
Current shareholders' claim on cash, %
  95.9
  93.4
  91.8
  90.8
  90.4
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3
  90.3

FINANCIAL RATIOS  of  OptimizeRx Corporation (OPRX)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

OPRX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OPRX stock intrinsic value calculation we used $21 million for the last fiscal year's total revenue generated by OptimizeRx Corporation. The default revenue input number comes from 0001 income statement of OptimizeRx 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 OPRX 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 OPRX is calculated based on our internal credit rating of OptimizeRx 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 OptimizeRx 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 OPRX stock the variable cost ratio is equal to 76.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5 million in the base year in the intrinsic value calculation for OPRX 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 OptimizeRx Corporation.

Corporate tax rate of 27% is the nominal tax rate for OptimizeRx 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 OPRX 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 OPRX are equal to 12.3%.

Life of production assets of 15.9 years is the average useful life of capital assets used in OptimizeRx 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 OPRX is equal to 13.4%. 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 - $18.458445 million for OptimizeRx 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 12.095 million for OptimizeRx 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 OptimizeRx Corporation at the current share price and the inputted number of shares is $0.2 billion.

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