Intrinsic value of Progenics Pharmaceuticals Inc. - PGNX

Previous Close

$3.70

  Intrinsic Value

$10.87

stock screener

  Rating & Target

str. buy

+194%

Previous close

$3.70

 
Intrinsic value

$10.87

 
Up/down potential

+194%

 
Rating

str. buy

We calculate the intrinsic value of PGNX 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 0.3

 

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
  19
  30
  44
  64
  91
  125
  168
  220
  283
  358
  444
  543
  654
  779
  916
  1,065
  1,227
  1,401
  1,586
  1,784
  1,992
  2,211
  2,442
  2,683
  2,935
  3,197
  3,471
  3,755
  4,051
  4,359
Variable operating expenses, $m
  15
  21
  29
  40
  55
  74
  98
  127
  162
  204
  248
  303
  366
  435
  511
  595
  685
  783
  886
  996
  1,113
  1,235
  1,364
  1,499
  1,640
  1,786
  1,939
  2,098
  2,263
  2,435
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
  15
  21
  29
  40
  55
  74
  98
  127
  162
  204
  248
  303
  366
  435
  511
  595
  685
  783
  886
  996
  1,113
  1,235
  1,364
  1,499
  1,640
  1,786
  1,939
  2,098
  2,263
  2,435
Operating income, $m
  4
  9
  15
  24
  36
  51
  70
  93
  121
  154
  196
  240
  289
  344
  404
  470
  541
  618
  700
  787
  879
  976
  1,078
  1,184
  1,295
  1,411
  1,532
  1,657
  1,788
  1,924
EBITDA, $m
  10
  15
  23
  33
  47
  64
  86
  113
  146
  184
  228
  279
  336
  400
  471
  548
  631
  720
  816
  917
  1,024
  1,137
  1,255
  1,379
  1,509
  1,644
  1,785
  1,931
  2,083
  2,241
Interest expense (income), $m
  0
  4
  6
  10
  16
  25
  36
  51
  69
  92
  119
  151
  188
  231
  279
  332
  391
  455
  525
  600
  680
  764
  854
  948
  1,047
  1,151
  1,259
  1,372
  1,490
  1,612
  1,739
Earnings before tax, $m
  0
  3
  5
  8
  11
  14
  19
  23
  29
  34
  45
  51
  58
  65
  72
  79
  86
  93
  100
  108
  115
  122
  129
  137
  144
  152
  160
  168
  176
  184
Tax expense, $m
  0
  1
  1
  2
  3
  4
  5
  6
  8
  9
  12
  14
  16
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  37
  39
  41
  43
  45
  47
  50
Net income, $m
  0
  2
  4
  6
  8
  10
  14
  17
  21
  25
  33
  37
  42
  47
  52
  58
  63
  68
  73
  79
  84
  89
  94
  100
  105
  111
  116
  122
  128
  134

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
  107
  165
  246
  358
  505
  694
  931
  1,222
  1,573
  1,987
  2,467
  3,016
  3,636
  4,326
  5,086
  5,917
  6,816
  7,782
  8,813
  9,909
  11,067
  12,286
  13,566
  14,905
  16,304
  17,763
  19,283
  20,863
  22,507
  24,216
Adjusted assets (=assets-cash), $m
  107
  165
  246
  358
  505
  694
  931
  1,222
  1,573
  1,987
  2,467
  3,016
  3,636
  4,326
  5,086
  5,917
  6,816
  7,782
  8,813
  9,909
  11,067
  12,286
  13,566
  14,905
  16,304
  17,763
  19,283
  20,863
  22,507
  24,216
Revenue / Adjusted assets
  0.178
  0.182
  0.179
  0.179
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
Average production assets, $m
  42
  65
  97
  141
  198
  273
  366
  481
  619
  781
  970
  1,186
  1,430
  1,701
  2,001
  2,327
  2,681
  3,061
  3,466
  3,897
  4,352
  4,832
  5,335
  5,862
  6,412
  6,986
  7,584
  8,206
  8,852
  9,524
Working capital, $m
  -13
  -20
  -30
  -44
  -62
  -85
  -115
  -151
  -194
  -245
  -304
  -371
  -448
  -533
  -626
  -728
  -839
  -958
  -1,085
  -1,220
  -1,363
  -1,513
  -1,670
  -1,835
  -2,007
  -2,187
  -2,374
  -2,569
  -2,771
  -2,981
Total debt, $m
  66
  118
  191
  291
  424
  594
  808
  1,070
  1,385
  1,758
  2,190
  2,684
  3,242
  3,863
  4,547
  5,295
  6,104
  6,973
  7,901
  8,887
  9,930
  11,027
  12,179
  13,384
  14,643
  15,957
  17,324
  18,747
  20,226
  21,764
Total liabilities, $m
  96
  148
  222
  322
  454
  624
  838
  1,100
  1,416
  1,788
  2,221
  2,715
  3,272
  3,893
  4,578
  5,325
  6,134
  7,003
  7,932
  8,918
  9,960
  11,057
  12,209
  13,415
  14,674
  15,987
  17,354
  18,777
  20,256
  21,794
Total equity, $m
  11
  16
  25
  36
  50
  69
  93
  122
  157
  199
  247
  302
  364
  433
  509
  592
  682
  778
  881
  991
  1,107
  1,229
  1,357
  1,491
  1,630
  1,776
  1,928
  2,086
  2,251
  2,422
Total liabilities and equity, $m
  107
  164
  247
  358
  504
  693
  931
  1,222
  1,573
  1,987
  2,468
  3,017
  3,636
  4,326
  5,087
  5,917
  6,816
  7,781
  8,813
  9,909
  11,067
  12,286
  13,566
  14,906
  16,304
  17,763
  19,282
  20,863
  22,507
  24,216
Debt-to-equity ratio
  6.150
  7.160
  7.770
  8.150
  8.400
  8.560
  8.670
  8.750
  8.810
  8.850
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.980
  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
  0
  2
  4
  6
  8
  10
  14
  17
  21
  25
  33
  37
  42
  47
  52
  58
  63
  68
  73
  79
  84
  89
  94
  100
  105
  111
  116
  122
  128
  134
Depreciation, amort., depletion, $m
  6
  6
  8
  9
  11
  13
  17
  20
  25
  30
  32
  40
  48
  57
  67
  78
  89
  102
  116
  130
  145
  161
  178
  195
  214
  233
  253
  274
  295
  317
Funds from operations, $m
  6
  9
  11
  15
  19
  24
  30
  37
  46
  55
  65
  77
  90
  104
  119
  135
  152
  170
  189
  208
  229
  250
  272
  295
  319
  344
  369
  396
  423
  452
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
  -172
  -180
  -187
  -195
  -202
  -210
Cash from operations, $m
  11
  16
  21
  28
  37
  47
  59
  73
  89
  106
  124
  145
  166
  189
  213
  237
  263
  289
  316
  343
  371
  400
  430
  460
  491
  523
  556
  590
  626
  662
Maintenance CAPEX, $m
  -1
  -1
  -2
  -3
  -5
  -7
  -9
  -12
  -16
  -21
  -26
  -32
  -40
  -48
  -57
  -67
  -78
  -89
  -102
  -116
  -130
  -145
  -161
  -178
  -195
  -214
  -233
  -253
  -274
  -295
New CAPEX, $m
  -16
  -23
  -32
  -44
  -58
  -74
  -93
  -115
  -138
  -163
  -189
  -216
  -244
  -271
  -299
  -327
  -354
  -380
  -406
  -431
  -455
  -480
  -503
  -527
  -550
  -574
  -598
  -622
  -646
  -672
Cash from investing activities, $m
  -17
  -24
  -34
  -47
  -63
  -81
  -102
  -127
  -154
  -184
  -215
  -248
  -284
  -319
  -356
  -394
  -432
  -469
  -508
  -547
  -585
  -625
  -664
  -705
  -745
  -788
  -831
  -875
  -920
  -967
Free cash flow, $m
  -6
  -8
  -13
  -19
  -26
  -34
  -43
  -54
  -65
  -77
  -91
  -104
  -117
  -130
  -143
  -156
  -168
  -180
  -192
  -203
  -214
  -224
  -235
  -245
  -254
  -264
  -274
  -284
  -294
  -305
Issuance/(repayment) of debt, $m
  16
  52
  73
  100
  132
  170
  214
  262
  315
  372
  432
  494
  557
  621
  685
  747
  809
  869
  928
  986
  1,042
  1,097
  1,152
  1,206
  1,259
  1,313
  1,367
  1,423
  1,479
  1,538
Issuance/(repurchase) of shares, $m
  24
  4
  4
  6
  7
  8
  10
  12
  14
  16
  15
  17
  20
  22
  24
  25
  27
  29
  30
  31
  32
  33
  34
  34
  35
  35
  35
  36
  36
  36
Cash from financing (excl. dividends), $m  
  40
  56
  77
  106
  139
  178
  224
  274
  329
  388
  447
  511
  577
  643
  709
  772
  836
  898
  958
  1,017
  1,074
  1,130
  1,186
  1,240
  1,294
  1,348
  1,402
  1,459
  1,515
  1,574
Total cash flow (excl. dividends), $m
  34
  47
  65
  87
  113
  145
  181
  221
  265
  312
  357
  408
  460
  513
  565
  617
  668
  718
  766
  814
  860
  906
  951
  995
  1,039
  1,084
  1,129
  1,174
  1,221
  1,269
Retained Cash Flow (-), $m
  -24
  -6
  -8
  -11
  -15
  -19
  -24
  -29
  -35
  -41
  -48
  -55
  -62
  -69
  -76
  -83
  -90
  -97
  -103
  -110
  -116
  -122
  -128
  -134
  -140
  -146
  -152
  -158
  -164
  -171
Prev. year cash balance distribution, $m
  77
  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
  87
  42
  57
  76
  99
  126
  157
  192
  230
  270
  309
  353
  398
  444
  489
  534
  578
  621
  663
  704
  745
  784
  823
  861
  900
  938
  977
  1,016
  1,057
  1,098
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
  83
  38
  49
  62
  77
  91
  106
  120
  132
  142
  147
  151
  151
  149
  144
  136
  126
  114
  102
  89
  77
  65
  54
  44
  35
  27
  21
  16
  12
  8
Current shareholders' claim on cash, %
  50.0
  46.9
  44.4
  42.5
  40.9
  39.6
  38.4
  37.4
  36.6
  35.8
  35.3
  34.8
  34.3
  33.9
  33.6
  33.2
  32.9
  32.6
  32.4
  32.2
  31.9
  31.8
  31.6
  31.4
  31.3
  31.1
  31.0
  30.9
  30.8
  30.7

Progenics Pharmaceuticals, Inc. is engaged in developing medicines and other products for targeting and treating cancer. The Company's pipeline includes therapeutic agents designed to target cancer (AZEDRA and 1095); prostate specific membrane antigen (PSMA)-targeted imaging agents for prostate cancer (1404 and PyL), and imaging analysis tools. It also includes commercial product, RELISTOR (methylnaltrexone bromide) for opioid-induced constipation. AZEDRA is a radiotherapeutic product candidate in development as a treatment for malignant and/or recurrent pheochromocytoma and paraganglioma, rare tumors found in the adrenal glands and outside of the adrenal glands, respectively. RELISTOR is a treatment for opioid induced constipation. PyL is a clinical-stage, fluorinated PSMA-targeted Positron Emission Topography (PET) imaging agent for prostate cancer. PSMA TTC is a thorium-227 labeled PSMA-targeted antibody therapeutic.

FINANCIAL RATIOS  of  Progenics Pharmaceuticals Inc. (PGNX)

Valuation Ratios
P/E Ratio 23.6
Price to Sales 3.8
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 13.7
Price to Free Cash Flow 17.3
Growth Rates
Sales Growth Rate 666.7%
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 0.3
LT Debt to Equity 46.7%
Total Debt to Equity 46.7%
Interest Coverage 0
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. -5.7%
Return On Total Capital 9%
Ret/ On T. Cap. - 3 Yr. Avg. -7.8%
Return On Equity 11.3%
Return On Equity - 3 Yr. Avg. -7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 33.3%
EBITDA Margin 21.7%
EBITDA Margin - 3 Yr. Avg. -130.5%
Operating Margin 18.8%
Oper. Margin - 3 Yr. Avg. -135.9%
Pre-Tax Margin 18.8%
Pre-Tax Margin - 3 Yr. Avg. -135.9%
Net Profit Margin 15.9%
Net Profit Margin - 3 Yr. Avg. -136.1%
Effective Tax Rate 15.4%
Eff/ Tax Rate - 3 Yr. Avg. -6%
Payout Ratio 0%

PGNX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PGNX stock intrinsic value calculation we used $12 million for the last fiscal year's total revenue generated by Progenics Pharmaceuticals Inc.. The default revenue input number comes from 0001 income statement of Progenics Pharmaceuticals 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 PGNX 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 PGNX is calculated based on our internal credit rating of Progenics Pharmaceuticals 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 Progenics Pharmaceuticals 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 PGNX stock the variable cost ratio is equal to 91.7%.

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 PGNX 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 8.6% for Progenics Pharmaceuticals Inc..

Corporate tax rate of 27% is the nominal tax rate for Progenics Pharmaceuticals 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 PGNX 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 PGNX are equal to 218.5%.

Life of production assets of 42.8 years is the average useful life of capital assets used in Progenics Pharmaceuticals 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 PGNX is equal to -68.4%. 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 - $63.453 million for Progenics Pharmaceuticals 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 84.543 million for Progenics Pharmaceuticals 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 Progenics Pharmaceuticals Inc. at the current share price and the inputted number of shares is $0.3 billion.

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