Intrinsic value of Prothena Corporation plc - PRTA

Previous Close

$9.74

  Intrinsic Value

$2.55

stock screener

  Rating & Target

str. sell

-74%

Previous close

$9.74

 
Intrinsic value

$2.55

 
Up/down potential

-74%

 
Rating

str. sell

We calculate the intrinsic value of PRTA 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 0.4

 

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, %
  16.40
  15.26
  14.23
  13.31
  12.48
  11.73
  11.06
  10.45
  9.91
  9.42
  8.97
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
Revenue, $m
  33
  38
  43
  49
  55
  61
  68
  75
  82
  90
  98
  107
  115
  125
  134
  144
  154
  165
  176
  187
  199
  212
  225
  238
  252
  267
  282
  298
  315
  332
Variable operating expenses, $m
  992
  1,143
  1,306
  1,480
  1,664
  1,859
  2,065
  2,281
  2,507
  2,743
  2,989
  3,246
  3,512
  3,790
  4,078
  4,378
  4,689
  5,013
  5,349
  5,699
  6,063
  6,442
  6,836
  7,247
  7,675
  8,122
  8,588
  9,074
  9,582
  10,112
Fixed operating expenses, $m
  135
  138
  141
  144
  147
  150
  154
  157
  161
  164
  168
  171
  175
  179
  183
  187
  191
  195
  200
  204
  208
  213
  218
  223
  227
  232
  238
  243
  248
  254
Total operating expenses, $m
  1,127
  1,281
  1,447
  1,624
  1,811
  2,009
  2,219
  2,438
  2,668
  2,907
  3,157
  3,417
  3,687
  3,969
  4,261
  4,565
  4,880
  5,208
  5,549
  5,903
  6,271
  6,655
  7,054
  7,470
  7,902
  8,354
  8,826
  9,317
  9,830
  10,366
Operating income, $m
  -1,094
  -1,243
  -1,404
  -1,575
  -1,757
  -1,949
  -2,151
  -2,363
  -2,585
  -2,817
  -3,059
  -3,310
  -3,572
  -3,844
  -4,127
  -4,421
  -4,726
  -5,043
  -5,373
  -5,716
  -6,072
  -6,443
  -6,829
  -7,231
  -7,650
  -8,087
  -8,543
  -9,019
  -9,515
  -10,034
EBITDA, $m
  -1,090
  -1,239
  -1,399
  -1,570
  -1,751
  -1,942
  -2,144
  -2,355
  -2,576
  -2,807
  -3,048
  -3,299
  -3,559
  -3,831
  -4,112
  -4,405
  -4,709
  -5,025
  -5,354
  -5,695
  -6,050
  -6,420
  -6,805
  -7,205
  -7,623
  -8,058
  -8,512
  -8,986
  -9,481
  -9,997
Interest expense (income), $m
  0
  0
  1
  2
  3
  4
  5
  6
  7
  8
  9
  11
  12
  14
  15
  17
  18
  20
  22
  24
  25
  27
  29
  32
  34
  36
  39
  41
  44
  47
  49
Earnings before tax, $m
  -1,094
  -1,244
  -1,405
  -1,578
  -1,760
  -1,953
  -2,157
  -2,370
  -2,593
  -2,826
  -3,069
  -3,322
  -3,586
  -3,859
  -4,144
  -4,439
  -4,746
  -5,065
  -5,396
  -5,741
  -6,100
  -6,472
  -6,861
  -7,265
  -7,687
  -8,126
  -8,584
  -9,062
  -9,562
  -10,083
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
  -1,094
  -1,244
  -1,405
  -1,578
  -1,760
  -1,953
  -2,157
  -2,370
  -2,593
  -2,826
  -3,069
  -3,322
  -3,586
  -3,859
  -4,144
  -4,439
  -4,746
  -5,065
  -5,396
  -5,741
  -6,100
  -6,472
  -6,861
  -7,265
  -7,687
  -8,126
  -8,584
  -9,062
  -9,562
  -10,083

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
  135
  156
  178
  202
  227
  254
  282
  311
  342
  374
  408
  443
  479
  517
  556
  597
  639
  684
  729
  777
  827
  878
  932
  988
  1,047
  1,108
  1,171
  1,237
  1,307
  1,379
Adjusted assets (=assets-cash), $m
  135
  156
  178
  202
  227
  254
  282
  311
  342
  374
  408
  443
  479
  517
  556
  597
  639
  684
  729
  777
  827
  878
  932
  988
  1,047
  1,108
  1,171
  1,237
  1,307
  1,379
Revenue / Adjusted assets
  0.244
  0.244
  0.242
  0.243
  0.242
  0.240
  0.241
  0.241
  0.240
  0.241
  0.240
  0.242
  0.240
  0.242
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
  0.241
Average production assets, $m
  65
  75
  85
  97
  109
  122
  135
  149
  164
  179
  195
  212
  230
  248
  267
  286
  307
  328
  350
  373
  397
  421
  447
  474
  502
  531
  562
  593
  627
  661
Working capital, $m
  -33
  -38
  -44
  -50
  -56
  -63
  -69
  -77
  -84
  -92
  -101
  -109
  -118
  -128
  -137
  -147
  -158
  -169
  -180
  -192
  -204
  -217
  -230
  -244
  -258
  -273
  -289
  -305
  -322
  -340
Total debt, $m
  15
  31
  48
  66
  85
  106
  127
  150
  173
  198
  224
  251
  279
  308
  338
  369
  402
  436
  471
  508
  546
  585
  627
  670
  715
  761
  810
  861
  914
  970
Total liabilities, $m
  104
  120
  137
  155
  174
  195
  216
  239
  263
  287
  313
  340
  368
  397
  427
  458
  491
  525
  560
  597
  635
  675
  716
  759
  804
  851
  899
  950
  1,003
  1,059
Total equity, $m
  31
  36
  41
  47
  53
  59
  65
  72
  79
  87
  95
  103
  111
  120
  129
  138
  148
  159
  169
  180
  192
  204
  216
  229
  243
  257
  272
  287
  303
  320
Total liabilities and equity, $m
  135
  156
  178
  202
  227
  254
  281
  311
  342
  374
  408
  443
  479
  517
  556
  596
  639
  684
  729
  777
  827
  879
  932
  988
  1,047
  1,108
  1,171
  1,237
  1,306
  1,379
Debt-to-equity ratio
  0.470
  0.850
  1.150
  1.410
  1.620
  1.800
  1.950
  2.080
  2.190
  2.280
  2.370
  2.440
  2.510
  2.570
  2.620
  2.670
  2.710
  2.750
  2.780
  2.820
  2.850
  2.870
  2.900
  2.920
  2.940
  2.960
  2.980
  3.000
  3.020
  3.030
Adjusted equity ratio
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,094
  -1,244
  -1,405
  -1,578
  -1,760
  -1,953
  -2,157
  -2,370
  -2,593
  -2,826
  -3,069
  -3,322
  -3,586
  -3,859
  -4,144
  -4,439
  -4,746
  -5,065
  -5,396
  -5,741
  -6,100
  -6,472
  -6,861
  -7,265
  -7,687
  -8,126
  -8,584
  -9,062
  -9,562
  -10,083
Depreciation, amort., depletion, $m
  4
  4
  5
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  34
  36
Funds from operations, $m
  -1,090
  -1,240
  -1,401
  -1,572
  -1,754
  -1,947
  -2,149
  -2,362
  -2,584
  -2,816
  -3,059
  -3,311
  -3,573
  -3,846
  -4,129
  -4,423
  -4,729
  -5,047
  -5,377
  -5,721
  -6,078
  -6,449
  -6,836
  -7,239
  -7,659
  -8,097
  -8,553
  -9,030
  -9,527
  -10,047
Change in working capital, $m
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
Cash from operations, $m
  -1,086
  -1,235
  -1,395
  -1,566
  -1,748
  -1,940
  -2,142
  -2,355
  -2,577
  -2,809
  -3,050
  -3,302
  -3,564
  -3,836
  -4,119
  -4,413
  -4,719
  -5,036
  -5,366
  -5,709
  -6,065
  -6,437
  -6,823
  -7,225
  -7,645
  -8,082
  -8,538
  -9,013
  -9,510
  -10,029
Maintenance CAPEX, $m
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -33
  -34
New CAPEX, $m
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
Cash from investing activities, $m
  -12
  -14
  -15
  -16
  -17
  -19
  -20
  -21
  -23
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -52
  -54
  -57
  -59
  -63
  -66
  -69
Free cash flow, $m
  -1,098
  -1,248
  -1,410
  -1,582
  -1,765
  -1,959
  -2,162
  -2,376
  -2,600
  -2,833
  -3,076
  -3,330
  -3,593
  -3,867
  -4,152
  -4,448
  -4,755
  -5,074
  -5,406
  -5,751
  -6,110
  -6,483
  -6,872
  -7,277
  -7,699
  -8,138
  -8,597
  -9,076
  -9,576
  -10,098
Issuance/(repayment) of debt, $m
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  56
Issuance/(repurchase) of shares, $m
  1,098
  1,249
  1,411
  1,583
  1,766
  1,960
  2,163
  2,377
  2,600
  2,834
  3,077
  3,331
  3,594
  3,868
  4,153
  4,449
  4,756
  5,075
  5,407
  5,752
  6,111
  6,484
  6,873
  7,278
  7,700
  8,140
  8,599
  9,078
  9,578
  10,100
Cash from financing (excl. dividends), $m  
  1,113
  1,265
  1,428
  1,601
  1,785
  1,980
  2,185
  2,400
  2,624
  2,859
  3,103
  3,358
  3,622
  3,897
  4,183
  4,480
  4,789
  5,109
  5,442
  5,789
  6,149
  6,524
  6,914
  7,321
  7,745
  8,187
  8,648
  9,129
  9,631
  10,156
Total cash flow (excl. dividends), $m
  15
  16
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  50
  53
  55
  57
Retained Cash Flow (-), $m
  -1,098
  -1,249
  -1,411
  -1,583
  -1,766
  -1,960
  -2,163
  -2,377
  -2,600
  -2,834
  -3,077
  -3,331
  -3,594
  -3,868
  -4,153
  -4,449
  -4,756
  -5,075
  -5,407
  -5,752
  -6,111
  -6,484
  -6,873
  -7,278
  -7,700
  -8,140
  -8,599
  -9,078
  -9,578
  -10,100
Prev. year cash balance distribution, $m
  380
  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
  -703
  -1,233
  -1,393
  -1,564
  -1,746
  -1,938
  -2,141
  -2,353
  -2,576
  -2,808
  -3,051
  -3,303
  -3,565
  -3,838
  -4,122
  -4,416
  -4,722
  -5,040
  -5,371
  -5,714
  -6,072
  -6,443
  -6,831
  -7,234
  -7,654
  -8,092
  -8,548
  -9,025
  -9,523
  -10,042
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
  -674
  -1,128
  -1,212
  -1,288
  -1,353
  -1,407
  -1,446
  -1,471
  -1,480
  -1,472
  -1,449
  -1,409
  -1,356
  -1,289
  -1,210
  -1,122
  -1,027
  -928
  -827
  -726
  -628
  -535
  -448
  -368
  -298
  -236
  -183
  -140
  -104
  -76
Current shareholders' claim on cash, %
  2.3
  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
  0.0
  0.0
  0.0

Prothena Corporation Public Limited Company is a global biotechnology company. The Company is focused on the discovery, development and commercialization of immunotherapies for the treatment of diseases that involve protein misfolding or cell adhesion. The Company's clinical pipeline of antibody-based product candidates targets a range of indications, including Amyloid Light-chain (AL) amyloidosis (NEOD001), Parkinson's disease and other related synucleinopathies (PRX002), and inflammatory diseases, including psoriasis and psoriatic arthritis (PRX003) and ATTR amyloidosis (PRX004). The Company has generated monoclonal antibodies that selectively bind to amyloidogenic (diseased) forms of the Transthyretin (TTR)-mediated amyloidosis (ATTR) protein. The Company's pipeline also includes late discovery-stage programs for which the Company is testing the efficacy of antibodies in preclinical models of diseases related to amyloid or cell adhesion.

FINANCIAL RATIOS  of  Prothena Corporation plc (PRTA)

Valuation Ratios
P/E Ratio -2.1
Price to Sales 338.5
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow -2.9
Price to Free Cash Flow -2.5
Growth Rates
Sales Growth Rate -50%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1600%
Cap. Spend. - 3 Yr. Gr. Rate 76.2%
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 -37.9%
Ret/ On Assets - 3 Yr. Avg. -21.4%
Return On Total Capital -44.1%
Ret/ On T. Cap. - 3 Yr. Avg. -24%
Return On Equity -44.1%
Return On Equity - 3 Yr. Avg. -24%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -15700%
EBITDA Margin - 3 Yr. Avg. -6553.3%
Operating Margin -16000%
Oper. Margin - 3 Yr. Avg. -6671.2%
Pre-Tax Margin -15900%
Pre-Tax Margin - 3 Yr. Avg. -6637.3%
Net Profit Margin -16000%
Net Profit Margin - 3 Yr. Avg. -6687.9%
Effective Tax Rate -0.6%
Eff/ Tax Rate - 3 Yr. Avg. -6.2%
Payout Ratio 0%

PRTA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PRTA stock intrinsic value calculation we used $28 million for the last fiscal year's total revenue generated by Prothena Corporation plc. The default revenue input number comes from 0001 income statement of Prothena Corporation plc. 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 PRTA stock valuation model: a) initial revenue growth rate of 16.4% 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 PRTA is calculated based on our internal credit rating of Prothena Corporation plc, 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 Prothena Corporation plc.
    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 PRTA stock the variable cost ratio is equal to 3042.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $132 million in the base year in the intrinsic value calculation for PRTA 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 Prothena Corporation plc.

Corporate tax rate of 27% is the nominal tax rate for Prothena Corporation plc. 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 PRTA 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 PRTA are equal to 199%.

Life of production assets of 18.2 years is the average useful life of capital assets used in Prothena Corporation plc 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 PRTA is equal to -102.4%. 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 - $407.189 million for Prothena Corporation plc - 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 39.863 million for Prothena Corporation plc 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 Prothena Corporation plc at the current share price and the inputted number of shares is $0.4 billion.

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