Intrinsic value of Puma Biotechnology Inc - PBYI

Previous Close

$32.89

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$32.89

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of PBYI 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 1.3

 

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
  402
  620
  928
  1,346
  1,900
  2,611
  3,505
  4,603
  5,922
  7,481
  9,289
  11,357
  13,689
  16,287
  19,151
  22,277
  25,661
  29,298
  33,181
  37,306
  41,665
  46,256
  51,074
  56,118
  61,386
  66,879
  72,599
  78,551
  84,740
  91,172
Variable operating expenses, $m
  925
  1,427
  2,133
  3,092
  4,361
  5,994
  8,044
  10,560
  13,587
  17,161
  21,304
  26,047
  31,395
  37,354
  43,921
  51,091
  58,853
  67,194
  76,100
  85,559
  95,559
  106,087
  117,137
  128,704
  140,786
  153,384
  166,504
  180,154
  194,348
  209,100
Fixed operating expenses, $m
  268
  274
  280
  286
  292
  299
  305
  312
  319
  326
  333
  340
  348
  355
  363
  371
  379
  388
  396
  405
  414
  423
  432
  442
  451
  461
  471
  482
  492
  503
Total operating expenses, $m
  1,193
  1,701
  2,413
  3,378
  4,653
  6,293
  8,349
  10,872
  13,906
  17,487
  21,637
  26,387
  31,743
  37,709
  44,284
  51,462
  59,232
  67,582
  76,496
  85,964
  95,973
  106,510
  117,569
  129,146
  141,237
  153,845
  166,975
  180,636
  194,840
  209,603
Operating income, $m
  -792
  -1,081
  -1,484
  -2,032
  -2,753
  -3,681
  -4,843
  -6,270
  -7,984
  -10,006
  -12,348
  -15,030
  -18,054
  -21,422
  -25,134
  -29,186
  -33,571
  -38,284
  -43,315
  -48,659
  -54,307
  -60,254
  -66,495
  -73,028
  -79,852
  -86,967
  -94,376
  -102,085
  -110,101
  -118,431
EBITDA, $m
  -781
  -1,066
  -1,465
  -2,006
  -2,719
  -3,635
  -4,784
  -6,192
  -7,886
  -9,883
  -12,201
  -14,851
  -17,838
  -21,165
  -24,831
  -28,834
  -33,166
  -37,821
  -42,791
  -48,069
  -53,649
  -59,523
  -65,688
  -72,142
  -78,882
  -85,910
  -93,229
  -100,844
  -108,762
  -116,991
Interest expense (income), $m
  0
  17
  17
  30
  49
  75
  109
  153
  208
  276
  358
  454
  565
  693
  837
  997
  1,174
  1,367
  1,576
  1,800
  2,040
  2,295
  2,564
  2,847
  3,144
  3,456
  3,781
  4,120
  4,473
  4,840
  5,222
Earnings before tax, $m
  -808
  -1,097
  -1,515
  -2,081
  -2,829
  -3,790
  -4,997
  -6,478
  -8,260
  -10,363
  -12,802
  -15,595
  -18,747
  -22,259
  -26,131
  -30,360
  -34,938
  -39,859
  -45,115
  -50,699
  -56,601
  -62,817
  -69,342
  -76,173
  -83,307
  -90,748
  -98,496
  -106,558
  -114,941
  -123,653
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
  -808
  -1,097
  -1,515
  -2,081
  -2,829
  -3,790
  -4,997
  -6,478
  -8,260
  -10,363
  -12,802
  -15,595
  -18,747
  -22,259
  -26,131
  -30,360
  -34,938
  -39,859
  -45,115
  -50,699
  -56,601
  -62,817
  -69,342
  -76,173
  -83,307
  -90,748
  -98,496
  -106,558
  -114,941
  -123,653

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
  250
  387
  579
  839
  1,184
  1,628
  2,185
  2,869
  3,692
  4,664
  5,791
  7,080
  8,534
  10,154
  11,939
  13,888
  15,998
  18,265
  20,687
  23,258
  25,976
  28,838
  31,842
  34,986
  38,270
  41,695
  45,261
  48,972
  52,830
  56,840
Adjusted assets (=assets-cash), $m
  250
  387
  579
  839
  1,184
  1,628
  2,185
  2,869
  3,692
  4,664
  5,791
  7,080
  8,534
  10,154
  11,939
  13,888
  15,998
  18,265
  20,687
  23,258
  25,976
  28,838
  31,842
  34,986
  38,270
  41,695
  45,261
  48,972
  52,830
  56,840
Revenue / Adjusted assets
  1.608
  1.602
  1.603
  1.604
  1.605
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
  1.604
Average production assets, $m
  44
  68
  101
  147
  207
  285
  382
  502
  646
  815
  1,013
  1,238
  1,492
  1,775
  2,087
  2,428
  2,797
  3,193
  3,617
  4,066
  4,542
  5,042
  5,567
  6,117
  6,691
  7,290
  7,913
  8,562
  9,237
  9,938
Working capital, $m
  -54
  -84
  -125
  -182
  -256
  -353
  -473
  -621
  -800
  -1,010
  -1,254
  -1,533
  -1,848
  -2,199
  -2,585
  -3,007
  -3,464
  -3,955
  -4,479
  -5,036
  -5,625
  -6,245
  -6,895
  -7,576
  -8,287
  -9,029
  -9,801
  -10,604
  -11,440
  -12,308
Total debt, $m
  152
  275
  448
  683
  993
  1,392
  1,894
  2,510
  3,250
  4,124
  5,139
  6,299
  7,608
  9,066
  10,672
  12,427
  14,325
  16,366
  18,545
  20,859
  23,305
  25,881
  28,585
  31,415
  34,370
  37,452
  40,662
  44,002
  47,474
  51,083
Total liabilities, $m
  225
  348
  521
  755
  1,066
  1,465
  1,967
  2,583
  3,323
  4,197
  5,212
  6,372
  7,681
  9,139
  10,745
  12,499
  14,398
  16,439
  18,618
  20,932
  23,378
  25,954
  28,658
  31,488
  34,443
  37,525
  40,735
  44,075
  47,547
  51,156
Total equity, $m
  25
  39
  58
  84
  118
  163
  219
  287
  369
  466
  579
  708
  853
  1,015
  1,194
  1,389
  1,600
  1,827
  2,069
  2,326
  2,598
  2,884
  3,184
  3,499
  3,827
  4,169
  4,526
  4,897
  5,283
  5,684
Total liabilities and equity, $m
  250
  387
  579
  839
  1,184
  1,628
  2,186
  2,870
  3,692
  4,663
  5,791
  7,080
  8,534
  10,154
  11,939
  13,888
  15,998
  18,266
  20,687
  23,258
  25,976
  28,838
  31,842
  34,987
  38,270
  41,694
  45,261
  48,972
  52,830
  56,840
Debt-to-equity ratio
  6.090
  7.110
  7.740
  8.130
  8.380
  8.550
  8.670
  8.750
  8.800
  8.840
  8.870
  8.900
  8.910
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
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
  -808
  -1,097
  -1,515
  -2,081
  -2,829
  -3,790
  -4,997
  -6,478
  -8,260
  -10,363
  -12,802
  -15,595
  -18,747
  -22,259
  -26,131
  -30,360
  -34,938
  -39,859
  -45,115
  -50,699
  -56,601
  -62,817
  -69,342
  -76,173
  -83,307
  -90,748
  -98,496
  -106,558
  -114,941
  -123,653
Depreciation, amort., depletion, $m
  11
  14
  19
  26
  34
  46
  60
  77
  98
  123
  147
  179
  216
  257
  303
  352
  405
  463
  524
  589
  658
  731
  807
  886
  970
  1,056
  1,147
  1,241
  1,339
  1,440
Funds from operations, $m
  -798
  -1,083
  -1,496
  -2,055
  -2,794
  -3,744
  -4,937
  -6,401
  -8,162
  -10,241
  -12,655
  -15,416
  -18,530
  -22,002
  -25,829
  -30,008
  -34,533
  -39,396
  -44,591
  -50,109
  -55,943
  -62,087
  -68,535
  -75,286
  -82,338
  -89,691
  -97,349
  -105,317
  -113,602
  -122,213
Change in working capital, $m
  -20
  -30
  -42
  -56
  -75
  -96
  -121
  -148
  -178
  -210
  -244
  -279
  -315
  -351
  -387
  -422
  -457
  -491
  -524
  -557
  -589
  -620
  -650
  -681
  -711
  -742
  -772
  -803
  -835
  -868
Cash from operations, $m
  -777
  -1,054
  -1,454
  -1,999
  -2,719
  -3,648
  -4,816
  -6,253
  -7,984
  -10,031
  -12,411
  -15,137
  -18,216
  -21,651
  -25,442
  -29,586
  -34,076
  -38,906
  -44,067
  -49,552
  -55,355
  -61,467
  -67,885
  -74,605
  -81,627
  -88,950
  -96,577
  -104,514
  -112,767
  -121,345
Maintenance CAPEX, $m
  -4
  -6
  -10
  -15
  -21
  -30
  -41
  -55
  -73
  -94
  -118
  -147
  -179
  -216
  -257
  -303
  -352
  -405
  -463
  -524
  -589
  -658
  -731
  -807
  -886
  -970
  -1,056
  -1,147
  -1,241
  -1,339
New CAPEX, $m
  -16
  -24
  -34
  -46
  -60
  -78
  -97
  -120
  -144
  -170
  -197
  -225
  -254
  -283
  -312
  -341
  -369
  -396
  -423
  -450
  -475
  -500
  -525
  -550
  -574
  -599
  -624
  -649
  -675
  -701
Cash from investing activities, $m
  -20
  -30
  -44
  -61
  -81
  -108
  -138
  -175
  -217
  -264
  -315
  -372
  -433
  -499
  -569
  -644
  -721
  -801
  -886
  -974
  -1,064
  -1,158
  -1,256
  -1,357
  -1,460
  -1,569
  -1,680
  -1,796
  -1,916
  -2,040
Free cash flow, $m
  -798
  -1,084
  -1,497
  -2,059
  -2,801
  -3,756
  -4,955
  -6,428
  -8,200
  -10,294
  -12,726
  -15,509
  -18,649
  -22,150
  -26,011
  -30,229
  -34,797
  -39,707
  -44,953
  -50,526
  -56,419
  -62,626
  -69,141
  -75,962
  -83,087
  -90,518
  -98,257
  -106,309
  -114,682
  -123,385
Issuance/(repayment) of debt, $m
  1
  123
  173
  235
  310
  399
  502
  616
  741
  874
  1,015
  1,160
  1,308
  1,458
  1,607
  1,754
  1,899
  2,041
  2,179
  2,314
  2,446
  2,576
  2,703
  2,830
  2,956
  3,082
  3,210
  3,340
  3,472
  3,609
Issuance/(repurchase) of shares, $m
  902
  1,111
  1,534
  2,107
  2,863
  3,834
  5,052
  6,546
  8,342
  10,461
  12,915
  15,724
  18,892
  22,421
  26,310
  30,554
  35,149
  40,086
  45,358
  50,956
  56,873
  63,104
  69,643
  76,487
  83,636
  91,090
  98,853
  106,929
  115,327
  124,055
Cash from financing (excl. dividends), $m  
  903
  1,234
  1,707
  2,342
  3,173
  4,233
  5,554
  7,162
  9,083
  11,335
  13,930
  16,884
  20,200
  23,879
  27,917
  32,308
  37,048
  42,127
  47,537
  53,270
  59,319
  65,680
  72,346
  79,317
  86,592
  94,172
  102,063
  110,269
  118,799
  127,664
Total cash flow (excl. dividends), $m
  104
  150
  209
  283
  372
  478
  599
  734
  882
  1,041
  1,203
  1,376
  1,551
  1,728
  1,905
  2,080
  2,251
  2,419
  2,583
  2,744
  2,900
  3,054
  3,205
  3,355
  3,504
  3,654
  3,806
  3,959
  4,117
  4,279
Retained Cash Flow (-), $m
  -902
  -1,111
  -1,534
  -2,107
  -2,863
  -3,834
  -5,052
  -6,546
  -8,342
  -10,461
  -12,915
  -15,724
  -18,892
  -22,421
  -26,310
  -30,554
  -35,149
  -40,086
  -45,358
  -50,956
  -56,873
  -63,104
  -69,643
  -76,487
  -83,636
  -91,090
  -98,853
  -106,929
  -115,327
  -124,055
Prev. year cash balance distribution, $m
  103
  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
  -694
  -961
  -1,325
  -1,824
  -2,491
  -3,356
  -4,453
  -5,812
  -7,460
  -9,420
  -11,711
  -14,349
  -17,341
  -20,693
  -24,405
  -28,475
  -32,898
  -37,667
  -42,774
  -48,212
  -53,973
  -60,050
  -66,437
  -73,132
  -80,131
  -87,436
  -95,047
  -102,970
  -111,210
  -119,776
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
  -666
  -880
  -1,153
  -1,502
  -1,931
  -2,436
  -3,009
  -3,633
  -4,285
  -4,938
  -5,562
  -6,123
  -6,593
  -6,947
  -7,165
  -7,236
  -7,158
  -6,937
  -6,586
  -6,126
  -5,583
  -4,983
  -4,354
  -3,725
  -3,117
  -2,551
  -2,040
  -1,593
  -1,214
  -902
Current shareholders' claim on cash, %
  50.0
  9.2
  1.9
  0.4
  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

Puma Biotechnology, Inc. is a biopharmaceutical company that focuses on the development and commercialization of products for the treatment of cancer. The Company focuses on in-licensing the development and commercialization rights to over three drug candidates, including PB272 (neratinib (oral)), PB272 (neratinib (intravenous)) and PB357. Neratinib is a potent irreversible tyrosine kinase inhibitor (TKI) that blocks signal transduction through the epidermal growth factor receptors (EGFRs), HER1, HER2 and HER4. Its initial focus is on the development of neratinib as an oral treatment of patients with HER2 positive metastatic breast cancer. It focuses on developing neratinib as an intravenously administered agent. The intravenous version of neratinib resulted in exposure levels of neratinib in pre-clinical models. Its product candidate, PB357, is an orally administered agent that is an irreversible TKI that blocks signal transduction through the epidermal growth factor receptors.

FINANCIAL RATIOS  of  Puma Biotechnology Inc (PBYI)

Valuation Ratios
P/E Ratio -4.4
Price to Sales 0
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow -8.5
Price to Free Cash Flow -8.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 600%
Cap. Spend. - 3 Yr. Gr. Rate 47.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -112%
Ret/ On Assets - 3 Yr. Avg. -112.3%
Return On Total Capital -132.7%
Ret/ On T. Cap. - 3 Yr. Avg. -140.7%
Return On Equity -132.7%
Return On Equity - 3 Yr. Avg. -140.7%
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%

PBYI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PBYI stock intrinsic value calculation we used $251 million for the last fiscal year's total revenue generated by Puma Biotechnology Inc. The default revenue input number comes from 0001 income statement of Puma Biotechnology 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 PBYI 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 PBYI is calculated based on our internal credit rating of Puma Biotechnology 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 Puma Biotechnology 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 PBYI stock the variable cost ratio is equal to 231.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $262 million in the base year in the intrinsic value calculation for PBYI 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 11% for Puma Biotechnology Inc.

Corporate tax rate of 27% is the nominal tax rate for Puma Biotechnology 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 PBYI 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 PBYI are equal to 10.9%.

Life of production assets of 6.9 years is the average useful life of capital assets used in Puma Biotechnology 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 PBYI is equal to -13.5%. 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 - $34.306 million for Puma Biotechnology 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 38.550 million for Puma Biotechnology 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 Puma Biotechnology Inc at the current share price and the inputted number of shares is $1.3 billion.

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