Intrinsic value of Pernix Therapeutics Holdings - PTX

Previous Close

$0.57

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.57

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of PTX 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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  149
  152
  156
  161
  166
  171
  177
  183
  190
  197
  205
  213
  222
  232
  242
  252
  263
  275
  288
  301
  315
  330
  345
  361
  379
  397
  416
  436
  457
  479
Variable operating expenses, $m
  310
  317
  325
  334
  343
  354
  366
  378
  392
  407
  411
  428
  446
  465
  485
  506
  529
  552
  578
  604
  632
  662
  693
  726
  760
  796
  835
  875
  917
  962
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
  310
  317
  325
  334
  343
  354
  366
  378
  392
  407
  411
  428
  446
  465
  485
  506
  529
  552
  578
  604
  632
  662
  693
  726
  760
  796
  835
  875
  917
  962
Operating income, $m
  -161
  -164
  -168
  -173
  -178
  -183
  -189
  -195
  -202
  -210
  -206
  -215
  -224
  -233
  -243
  -254
  -265
  -277
  -290
  -303
  -317
  -332
  -348
  -364
  -381
  -400
  -419
  -439
  -460
  -483
EBITDA, $m
  -134
  -137
  -141
  -145
  -149
  -154
  -159
  -165
  -171
  -178
  -185
  -192
  -200
  -209
  -218
  -227
  -237
  -248
  -259
  -271
  -284
  -297
  -311
  -325
  -341
  -357
  -374
  -393
  -412
  -432
Interest expense (income), $m
  30
  36
  12
  12
  13
  13
  14
  15
  16
  17
  18
  19
  21
  22
  23
  25
  26
  28
  30
  32
  34
  36
  38
  40
  43
  45
  48
  51
  54
  57
  61
Earnings before tax, $m
  -197
  -176
  -181
  -186
  -191
  -197
  -204
  -211
  -219
  -228
  -226
  -235
  -246
  -257
  -268
  -280
  -293
  -307
  -322
  -337
  -353
  -370
  -388
  -407
  -427
  -448
  -470
  -493
  -518
  -544
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
  -197
  -176
  -181
  -186
  -191
  -197
  -204
  -211
  -219
  -228
  -226
  -235
  -246
  -257
  -268
  -280
  -293
  -307
  -322
  -337
  -353
  -370
  -388
  -407
  -427
  -448
  -470
  -493
  -518
  -544

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
  208
  213
  218
  224
  231
  239
  247
  256
  265
  275
  286
  298
  310
  323
  337
  352
  368
  384
  402
  420
  440
  460
  482
  505
  529
  554
  581
  609
  638
  669
Adjusted assets (=assets-cash), $m
  208
  213
  218
  224
  231
  239
  247
  256
  265
  275
  286
  298
  310
  323
  337
  352
  368
  384
  402
  420
  440
  460
  482
  505
  529
  554
  581
  609
  638
  669
Revenue / Adjusted assets
  0.716
  0.714
  0.716
  0.719
  0.719
  0.715
  0.717
  0.715
  0.717
  0.716
  0.717
  0.715
  0.716
  0.718
  0.718
  0.716
  0.715
  0.716
  0.716
  0.717
  0.716
  0.717
  0.716
  0.715
  0.716
  0.717
  0.716
  0.716
  0.716
  0.716
Average production assets, $m
  80
  82
  84
  86
  89
  91
  95
  98
  102
  105
  110
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
  176
  185
  193
  203
  212
  222
  233
  244
  256
Working capital, $m
  -31
  -32
  -33
  -34
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -80
  -83
  -87
  -92
  -96
  -101
Total debt, $m
  91
  95
  100
  106
  112
  119
  126
  134
  143
  152
  162
  172
  183
  195
  207
  221
  235
  250
  265
  282
  300
  318
  338
  358
  380
  403
  427
  452
  478
  506
Total liabilities, $m
  187
  192
  197
  202
  208
  215
  222
  230
  239
  248
  258
  268
  279
  291
  304
  317
  331
  346
  362
  378
  396
  414
  434
  454
  476
  499
  523
  548
  574
  602
Total equity, $m
  21
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
  67
Total liabilities and equity, $m
  208
  213
  219
  224
  231
  239
  247
  256
  266
  276
  287
  298
  310
  323
  338
  352
  368
  384
  402
  420
  440
  460
  482
  504
  529
  554
  581
  609
  638
  669
Debt-to-equity ratio
  4.380
  4.490
  4.600
  4.720
  4.840
  4.970
  5.110
  5.240
  5.380
  5.510
  5.640
  5.770
  5.900
  6.030
  6.150
  6.270
  6.390
  6.500
  6.610
  6.710
  6.810
  6.910
  7.010
  7.100
  7.180
  7.270
  7.340
  7.420
  7.490
  7.560
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
  -197
  -176
  -181
  -186
  -191
  -197
  -204
  -211
  -219
  -228
  -226
  -235
  -246
  -257
  -268
  -280
  -293
  -307
  -322
  -337
  -353
  -370
  -388
  -407
  -427
  -448
  -470
  -493
  -518
  -544
Depreciation, amort., depletion, $m
  27
  27
  28
  28
  29
  29
  30
  30
  31
  32
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
  42
  44
  47
  49
  51
Funds from operations, $m
  -170
  -149
  -153
  -158
  -163
  -168
  -174
  -181
  -188
  -196
  -204
  -213
  -222
  -232
  -242
  -253
  -265
  -278
  -291
  -305
  -319
  -335
  -351
  -368
  -386
  -405
  -426
  -447
  -469
  -492
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
Cash from operations, $m
  -169
  -148
  -152
  -157
  -162
  -167
  -173
  -180
  -187
  -194
  -202
  -211
  -220
  -230
  -240
  -251
  -263
  -275
  -288
  -302
  -316
  -332
  -348
  -365
  -383
  -402
  -422
  -442
  -464
  -488
Maintenance CAPEX, $m
  -16
  -16
  -16
  -17
  -17
  -18
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -44
  -47
  -49
New CAPEX, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
Cash from investing activities, $m
  -18
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -24
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -38
  -39
  -42
  -43
  -46
  -48
  -51
  -52
  -55
  -58
  -61
Free cash flow, $m
  -187
  -166
  -170
  -176
  -181
  -188
  -194
  -202
  -210
  -218
  -227
  -237
  -248
  -259
  -270
  -283
  -296
  -310
  -324
  -340
  -356
  -373
  -391
  -411
  -431
  -452
  -474
  -498
  -522
  -548
Issuance/(repayment) of debt, $m
  -191
  4
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  18
  18
  19
  21
  22
  23
  24
  25
  27
  28
Issuance/(repurchase) of shares, $m
  392
  176
  181
  186
  192
  198
  205
  212
  220
  229
  227
  237
  247
  258
  270
  282
  295
  309
  323
  339
  355
  372
  390
  409
  429
  450
  473
  496
  521
  547
Cash from financing (excl. dividends), $m  
  201
  180
  186
  192
  198
  205
  212
  220
  229
  238
  237
  247
  258
  270
  283
  295
  309
  324
  339
  356
  373
  390
  409
  430
  451
  473
  497
  521
  548
  575
Total cash flow (excl. dividends), $m
  14
  15
  15
  16
  17
  17
  18
  18
  19
  19
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
Retained Cash Flow (-), $m
  -392
  -176
  -181
  -186
  -192
  -198
  -205
  -212
  -220
  -229
  -227
  -237
  -247
  -258
  -270
  -282
  -295
  -309
  -323
  -339
  -355
  -372
  -390
  -409
  -429
  -450
  -473
  -496
  -521
  -547
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
  -378
  -162
  -166
  -170
  -175
  -181
  -187
  -194
  -201
  -209
  -218
  -227
  -236
  -247
  -258
  -269
  -282
  -295
  -309
  -323
  -339
  -355
  -372
  -390
  -409
  -429
  -450
  -472
  -496
  -520
Discount rate, %
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
  -326
  -119
  -102
  -87
  -73
  -60
  -49
  -39
  -30
  -23
  -18
  -13
  -9
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  5.3
  0.6
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
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Pernix Therapeutics Holdings, Inc. is a specialty pharmaceutical company. The Company focuses on identifying, developing and commercializing differentiated products that address unmet medical needs. It focuses on underserved therapeutic areas, such as central nervous system (CNS), including neurology and psychiatry, as well as other specialty therapeutic areas. Its products include Treximet, indicated for acute migraine; Zohydro ER with BeadTek, an extended-release opioid agonist indicated for the management of pain severe; Silenor for the treatment of insomnia characterized by difficulty with sleep maintenance, and Khedezla for major depressive disorder. It promotes selected non-core branded products, such as its cough and cold products, through co-promotion arrangements with third-party sales organizations, and distributes its generic products through its subsidiaries, Macoven Pharmaceuticals, LLC (Macoven) and Cypress Pharmaceuticals, Inc.

FINANCIAL RATIOS  of  Pernix Therapeutics Holdings (PTX)

Valuation Ratios
P/E Ratio -0
Price to Sales 0
Price to Book -0.1
Price to Tangible Book
Price to Cash Flow -0.3
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate -19.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity -254.4%
Total Debt to Equity -264%
Interest Coverage -5
Management Effectiveness
Return On Assets -34.6%
Ret/ On Assets - 3 Yr. Avg. -22.4%
Return On Total Capital -63.3%
Ret/ On T. Cap. - 3 Yr. Avg. -39.3%
Return On Equity 419.8%
Return On Equity - 3 Yr. Avg. 43.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 69.5%
Gross Margin - 3 Yr. Avg. 67.7%
EBITDA Margin -36.9%
EBITDA Margin - 3 Yr. Avg. -18.2%
Operating Margin -99.3%
Oper. Margin - 3 Yr. Avg. -60.6%
Pre-Tax Margin -119.9%
Pre-Tax Margin - 3 Yr. Avg. -80%
Net Profit Margin -120.6%
Net Profit Margin - 3 Yr. Avg. -77.8%
Effective Tax Rate -0.6%
Eff/ Tax Rate - 3 Yr. Avg. 7.7%
Payout Ratio 0%

PTX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PTX stock intrinsic value calculation we used $146.068 million for the last fiscal year's total revenue generated by Pernix Therapeutics Holdings. The default revenue input number comes from 0001 income statement of Pernix Therapeutics Holdings. 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 PTX stock valuation model: a) initial revenue growth rate of 2% 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 15.8%, whose default value for PTX is calculated based on our internal credit rating of Pernix Therapeutics Holdings, 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 Pernix Therapeutics Holdings.
    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 PTX stock the variable cost ratio is equal to 208.2%.

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 PTX 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 12.7% for Pernix Therapeutics Holdings.

Corporate tax rate of 27% is the nominal tax rate for Pernix Therapeutics Holdings. 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 PTX 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 PTX are equal to 53.5%.

Life of production assets of 2.1 years is the average useful life of capital assets used in Pernix Therapeutics Holdings 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 PTX is equal to -21%. 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 - $-174.257 million for Pernix Therapeutics Holdings - 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 11.874 million for Pernix Therapeutics Holdings 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 Pernix Therapeutics Holdings at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Pernix Therapeutics: 3Q Earnings Snapshot   [Nov-08-18 05:07PM  Associated Press]
▶ Pernix Therapeutics Announces Sale of Non-Core Product   [Nov-06-17 04:01PM  GlobeNewswire]
▶ Pernix Therapeutics Added to Russell Microcap® Index   [Jun-28-17 04:01PM  GlobeNewswire]
▶ Platinex Inc.-Proposed Private Placement   [Apr-18-17 04:00PM  Marketwired]
▶ Pernix: An Investor's Rationale to Staying Long   [Mar-23-17 04:44PM  GuruFocus.com]
▶ Webcast-Q4 Earnings Call for Pernix Therapeutics Holdings, Inc.   [Mar-16-17 12:14AM  at Company Spotlight]
▶ Pernix Therapeutics Provides Update on Arbitration   [Feb-03-17 08:00AM  GlobeNewswire]

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