Intrinsic value of Precipio, Inc. - PRPO

Previous Close

$0.28

  Intrinsic Value

$0.17

stock screener

  Rating & Target

sell

-40%

Previous close

$0.28

 
Intrinsic value

$0.17

 
Up/down potential

-40%

 
Rating

sell

We calculate the intrinsic value of PRPO 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 0.0

 

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
  5
  7
  11
  16
  23
  31
  42
  55
  71
  89
  111
  136
  164
  195
  229
  266
  307
  350
  397
  446
  498
  553
  610
  671
  734
  799
  868
  939
  1,013
  1,090
Variable operating expenses, $m
  7
  9
  12
  16
  21
  29
  37
  48
  62
  77
  93
  113
  136
  162
  191
  222
  256
  292
  331
  372
  415
  461
  509
  559
  612
  666
  723
  783
  844
  908
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
  7
  9
  12
  16
  21
  29
  37
  48
  62
  77
  93
  113
  136
  162
  191
  222
  256
  292
  331
  372
  415
  461
  509
  559
  612
  666
  723
  783
  844
  908
Operating income, $m
  -2
  -1
  -1
  0
  1
  3
  4
  7
  9
  12
  18
  23
  27
  32
  38
  44
  51
  58
  66
  74
  83
  92
  102
  112
  122
  133
  144
  156
  168
  181
EBITDA, $m
  1
  2
  3
  5
  7
  9
  12
  16
  21
  26
  33
  40
  48
  57
  67
  78
  90
  103
  116
  131
  146
  162
  179
  197
  215
  235
  255
  276
  297
  320
Interest expense (income), $m
  0
  2
  6
  13
  22
  34
  50
  71
  97
  129
  168
  213
  266
  327
  395
  471
  555
  646
  746
  852
  966
  1,086
  1,214
  1,348
  1,489
  1,637
  1,791
  1,952
  2,119
  2,293
  2,475
Earnings before tax, $m
  -4
  -8
  -13
  -21
  -33
  -47
  -66
  -90
  -120
  -155
  -195
  -244
  -300
  -363
  -433
  -511
  -595
  -687
  -786
  -891
  -1,003
  -1,122
  -1,247
  -1,378
  -1,515
  -1,658
  -1,807
  -1,963
  -2,125
  -2,293
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
  -4
  -8
  -13
  -21
  -33
  -47
  -66
  -90
  -120
  -155
  -195
  -244
  -300
  -363
  -433
  -511
  -595
  -687
  -786
  -891
  -1,003
  -1,122
  -1,247
  -1,378
  -1,515
  -1,658
  -1,807
  -1,963
  -2,125
  -2,293

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
  44
  67
  101
  146
  206
  284
  381
  500
  644
  813
  1,009
  1,234
  1,487
  1,770
  2,081
  2,421
  2,788
  3,183
  3,605
  4,053
  4,527
  5,026
  5,550
  6,098
  6,670
  7,267
  7,888
  8,535
  9,207
  9,906
Adjusted assets (=assets-cash), $m
  44
  67
  101
  146
  206
  284
  381
  500
  644
  813
  1,009
  1,234
  1,487
  1,770
  2,081
  2,421
  2,788
  3,183
  3,605
  4,053
  4,527
  5,026
  5,550
  6,098
  6,670
  7,267
  7,888
  8,535
  9,207
  9,906
Revenue / Adjusted assets
  0.114
  0.104
  0.109
  0.110
  0.112
  0.109
  0.110
  0.110
  0.110
  0.109
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
  0.110
Average production assets, $m
  11
  16
  24
  35
  50
  69
  92
  121
  156
  197
  244
  299
  360
  428
  504
  586
  675
  771
  873
  981
  1,096
  1,217
  1,344
  1,476
  1,615
  1,759
  1,910
  2,066
  2,229
  2,398
Working capital, $m
  -13
  -20
  -30
  -43
  -61
  -84
  -113
  -148
  -191
  -241
  -299
  -366
  -441
  -524
  -616
  -717
  -826
  -943
  -1,068
  -1,201
  -1,341
  -1,489
  -1,644
  -1,806
  -1,976
  -2,153
  -2,337
  -2,528
  -2,728
  -2,935
Total debt, $m
  12
  25
  42
  66
  97
  137
  188
  250
  325
  414
  516
  633
  766
  913
  1,076
  1,253
  1,445
  1,651
  1,871
  2,105
  2,353
  2,613
  2,886
  3,172
  3,471
  3,783
  4,107
  4,445
  4,796
  5,160
Total liabilities, $m
  23
  35
  53
  76
  108
  148
  199
  261
  336
  424
  527
  644
  776
  924
  1,086
  1,264
  1,455
  1,662
  1,882
  2,116
  2,363
  2,624
  2,897
  3,183
  3,482
  3,793
  4,118
  4,455
  4,806
  5,171
Total equity, $m
  21
  32
  48
  70
  99
  136
  182
  239
  308
  389
  482
  590
  711
  846
  995
  1,157
  1,333
  1,522
  1,723
  1,938
  2,164
  2,402
  2,653
  2,915
  3,188
  3,474
  3,771
  4,080
  4,401
  4,735
Total liabilities and equity, $m
  44
  67
  101
  146
  207
  284
  381
  500
  644
  813
  1,009
  1,234
  1,487
  1,770
  2,081
  2,421
  2,788
  3,184
  3,605
  4,054
  4,527
  5,026
  5,550
  6,098
  6,670
  7,267
  7,889
  8,535
  9,207
  9,906
Debt-to-equity ratio
  0.580
  0.760
  0.870
  0.940
  0.980
  1.010
  1.030
  1.050
  1.060
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
Adjusted equity ratio
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -4
  -8
  -13
  -21
  -33
  -47
  -66
  -90
  -120
  -155
  -195
  -244
  -300
  -363
  -433
  -511
  -595
  -687
  -786
  -891
  -1,003
  -1,122
  -1,247
  -1,378
  -1,515
  -1,658
  -1,807
  -1,963
  -2,125
  -2,293
Depreciation, amort., depletion, $m
  3
  3
  4
  5
  5
  6
  8
  9
  12
  14
  14
  17
  21
  25
  29
  34
  39
  45
  50
  57
  63
  70
  78
  85
  93
  102
  110
  119
  129
  139
Funds from operations, $m
  0
  -4
  -9
  -17
  -27
  -41
  -59
  -81
  -108
  -142
  -181
  -227
  -279
  -338
  -404
  -477
  -556
  -643
  -736
  -835
  -940
  -1,052
  -1,169
  -1,292
  -1,422
  -1,556
  -1,697
  -1,844
  -1,996
  -2,155
Change in working capital, $m
  -5
  -7
  -10
  -13
  -18
  -23
  -29
  -35
  -42
  -50
  -58
  -67
  -75
  -84
  -92
  -101
  -109
  -117
  -125
  -133
  -140
  -148
  -155
  -162
  -170
  -177
  -184
  -192
  -199
  -207
Cash from operations, $m
  4
  3
  0
  -3
  -9
  -18
  -30
  -46
  -66
  -91
  -123
  -160
  -204
  -254
  -312
  -376
  -448
  -526
  -611
  -702
  -800
  -904
  -1,014
  -1,130
  -1,252
  -1,380
  -1,513
  -1,652
  -1,797
  -1,948
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -17
  -21
  -25
  -29
  -34
  -39
  -45
  -50
  -57
  -63
  -70
  -78
  -85
  -93
  -102
  -110
  -119
  -129
New CAPEX, $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
  -145
  -150
  -157
  -163
  -169
Cash from investing activities, $m
  -4
  -7
  -9
  -12
  -17
  -22
  -28
  -34
  -42
  -50
  -59
  -68
  -78
  -89
  -100
  -111
  -123
  -135
  -147
  -158
  -172
  -184
  -197
  -211
  -224
  -238
  -252
  -267
  -282
  -298
Free cash flow, $m
  0
  -3
  -9
  -16
  -26
  -40
  -57
  -80
  -108
  -141
  -182
  -228
  -282
  -344
  -412
  -488
  -570
  -660
  -757
  -861
  -971
  -1,088
  -1,211
  -1,340
  -1,476
  -1,617
  -1,765
  -1,919
  -2,079
  -2,246
Issuance/(repayment) of debt, $m
  9
  12
  17
  24
  31
  40
  51
  62
  75
  88
  103
  117
  132
  147
  162
  177
  192
  206
  220
  234
  247
  260
  273
  286
  299
  312
  324
  338
  351
  365
Issuance/(repurchase) of shares, $m
  11
  19
  29
  43
  61
  84
  113
  147
  188
  236
  289
  351
  421
  498
  582
  673
  771
  876
  988
  1,106
  1,230
  1,360
  1,497
  1,640
  1,788
  1,943
  2,105
  2,272
  2,446
  2,627
Cash from financing (excl. dividends), $m  
  20
  31
  46
  67
  92
  124
  164
  209
  263
  324
  392
  468
  553
  645
  744
  850
  963
  1,082
  1,208
  1,340
  1,477
  1,620
  1,770
  1,926
  2,087
  2,255
  2,429
  2,610
  2,797
  2,992
Total cash flow (excl. dividends), $m
  20
  28
  38
  51
  67
  85
  106
  130
  156
  183
  210
  240
  271
  302
  332
  363
  393
  422
  451
  479
  506
  533
  559
  585
  611
  638
  664
  691
  718
  747
Retained Cash Flow (-), $m
  -11
  -19
  -29
  -43
  -61
  -84
  -113
  -147
  -188
  -236
  -289
  -351
  -421
  -498
  -582
  -673
  -771
  -876
  -988
  -1,106
  -1,230
  -1,360
  -1,497
  -1,640
  -1,788
  -1,943
  -2,105
  -2,272
  -2,446
  -2,627
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
  9
  9
  9
  8
  5
  1
  -7
  -18
  -33
  -53
  -79
  -111
  -150
  -196
  -249
  -310
  -378
  -454
  -537
  -627
  -724
  -828
  -938
  -1,054
  -1,177
  -1,306
  -1,441
  -1,581
  -1,728
  -1,881
Discount rate, %
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
  8
  8
  7
  6
  4
  0
  -4
  -8
  -14
  -19
  -25
  -30
  -34
  -36
  -38
  -37
  -36
  -33
  -30
  -26
  -22
  -18
  -14
  -11
  -8
  -6
  -4
  -3
  -2
  -1
Current shareholders' claim on cash, %
  54.3
  29.0
  15.5
  8.3
  4.5
  2.5
  1.4
  0.8
  0.4
  0.3
  0.1
  0.1
  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

Precipio, Inc., formerly Transgenomic, Inc., is a biotechnology company. The Company is engaged in advancing personalized medicine for the detection and treatment of cancer, and inherited diseases through its molecular technologies and clinical and research services. The Company operates through its Laboratory Services segment. The Company is engaged in the provision of its Multiplexed ICE COLD-PCR (MX-ICP) product to the clinical market, enabling the use of blood and other bodily fluids for diagnosis, monitoring and treatment of cancer. MX-ICP amplifies the ability to detect genetic mutations by approximately 100 to 400 fold. MX-ICP is validated internally on sequencing platforms, including Sanger, Next Gen Sequencing and Digital polymerase chain reaction (PCR). Its laboratory in Omaha, Nebraska is focused on providing genetic analytical services related to oncology and pharmacogenomics research services supporting Phase II and Phase III clinical trials conducted.

FINANCIAL RATIOS  of  Precipio, Inc. (PRPO)

Valuation Ratios
P/E Ratio -0
Price to Sales 0.1
Price to Book -0
Price to Tangible Book
Price to Cash Flow -0
Price to Free Cash Flow -0
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 0%
Total Debt to Equity -16.7%
Interest Coverage 0
Management Effectiveness
Return On Assets -266.7%
Ret/ On Assets - 3 Yr. Avg. -167.3%
Return On Total Capital 160%
Ret/ On T. Cap. - 3 Yr. Avg. -194.9%
Return On Equity 84.2%
Return On Equity - 3 Yr. Avg. 342.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. -33.3%
EBITDA Margin -400%
EBITDA Margin - 3 Yr. Avg. -633.3%
Operating Margin -400%
Oper. Margin - 3 Yr. Avg. -650%
Pre-Tax Margin -400%
Pre-Tax Margin - 3 Yr. Avg. -666.7%
Net Profit Margin -400%
Net Profit Margin - 3 Yr. Avg. -1150%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

PRPO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PRPO stock intrinsic value calculation we used $3 million for the last fiscal year's total revenue generated by Precipio, Inc.. The default revenue input number comes from 0001 income statement of Precipio, 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 PRPO 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 6.8%, whose default value for PRPO is calculated based on our internal credit rating of Precipio, 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 Precipio, 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 PRPO stock the variable cost ratio is equal to 166.7%.

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 PRPO 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 51.6% for Precipio, Inc..

Corporate tax rate of 27% is the nominal tax rate for Precipio, 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 PRPO 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 PRPO are equal to 220.1%.

Life of production assets of 17.3 years is the average useful life of capital assets used in Precipio, 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 PRPO is equal to -269.3%. 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 - $13.025 million for Precipio, 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 48.381 million for Precipio, 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 Precipio, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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