Intrinsic value of Quotient - QTNT

Previous Close

$6.39

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$6.39

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of QTNT 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, %
  15.50
  14.45
  13.51
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
Revenue, $m
  29
  33
  37
  42
  47
  52
  58
  63
  69
  76
  82
  89
  96
  103
  111
  119
  127
  136
  145
  154
  164
  174
  184
  195
  207
  219
  231
  244
  257
  272
Variable operating expenses, $m
  123
  141
  160
  181
  202
  225
  248
  273
  299
  326
  355
  384
  415
  446
  479
  514
  549
  586
  625
  665
  707
  750
  796
  843
  892
  943
  997
  1,053
  1,111
  1,172
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
  123
  141
  160
  181
  202
  225
  248
  273
  299
  326
  355
  384
  415
  446
  479
  514
  549
  586
  625
  665
  707
  750
  796
  843
  892
  943
  997
  1,053
  1,111
  1,172
Operating income, $m
  -95
  -109
  -123
  -139
  -155
  -173
  -191
  -210
  -230
  -251
  -272
  -295
  -318
  -343
  -368
  -395
  -422
  -451
  -480
  -511
  -543
  -576
  -611
  -648
  -685
  -725
  -766
  -809
  -854
  -901
EBITDA, $m
  -83
  -95
  -108
  -121
  -136
  -151
  -167
  -184
  -201
  -219
  -238
  -258
  -279
  -300
  -322
  -345
  -369
  -394
  -420
  -447
  -475
  -504
  -535
  -566
  -600
  -634
  -670
  -708
  -747
  -788
Interest expense (income), $m
  2
  16
  13
  16
  20
  23
  27
  31
  36
  40
  45
  50
  55
  60
  66
  72
  78
  84
  90
  97
  104
  111
  119
  127
  135
  144
  153
  162
  172
  182
  192
Earnings before tax, $m
  -111
  -122
  -140
  -159
  -179
  -200
  -222
  -246
  -270
  -296
  -322
  -350
  -379
  -409
  -440
  -472
  -506
  -541
  -577
  -615
  -655
  -696
  -738
  -783
  -829
  -877
  -928
  -981
  -1,036
  -1,093
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
  -111
  -122
  -140
  -159
  -179
  -200
  -222
  -246
  -270
  -296
  -322
  -350
  -379
  -409
  -440
  -472
  -506
  -541
  -577
  -615
  -655
  -696
  -738
  -783
  -829
  -877
  -928
  -981
  -1,036
  -1,093

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
  137
  156
  178
  200
  224
  249
  275
  303
  332
  362
  393
  426
  459
  495
  531
  569
  609
  650
  693
  737
  784
  832
  882
  934
  989
  1,046
  1,105
  1,167
  1,232
  1,299
Adjusted assets (=assets-cash), $m
  137
  156
  178
  200
  224
  249
  275
  303
  332
  362
  393
  426
  459
  495
  531
  569
  609
  650
  693
  737
  784
  832
  882
  934
  989
  1,046
  1,105
  1,167
  1,232
  1,299
Revenue / Adjusted assets
  0.212
  0.212
  0.208
  0.210
  0.210
  0.209
  0.211
  0.208
  0.208
  0.210
  0.209
  0.209
  0.209
  0.208
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
Average production assets, $m
  71
  81
  92
  104
  117
  130
  143
  158
  173
  188
  205
  222
  239
  258
  277
  296
  317
  338
  361
  384
  408
  433
  459
  486
  515
  544
  575
  608
  641
  677
Working capital, $m
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -42
  -44
  -47
  -50
  -52
  -55
  -58
Total debt, $m
  72
  90
  109
  129
  150
  173
  197
  222
  247
  275
  303
  332
  363
  394
  427
  462
  497
  534
  573
  613
  654
  698
  743
  790
  839
  890
  944
  999
  1,058
  1,119
Total liabilities, $m
  123
  141
  160
  180
  201
  224
  248
  273
  298
  326
  354
  383
  414
  445
  478
  512
  548
  585
  624
  664
  705
  749
  794
  841
  890
  941
  995
  1,050
  1,109
  1,170
Total equity, $m
  14
  16
  18
  20
  22
  25
  28
  30
  33
  36
  39
  43
  46
  49
  53
  57
  61
  65
  69
  74
  78
  83
  88
  93
  99
  105
  111
  117
  123
  130
Total liabilities and equity, $m
  137
  157
  178
  200
  223
  249
  276
  303
  331
  362
  393
  426
  460
  494
  531
  569
  609
  650
  693
  738
  783
  832
  882
  934
  989
  1,046
  1,106
  1,167
  1,232
  1,300
Debt-to-equity ratio
  5.270
  5.740
  6.130
  6.450
  6.720
  6.950
  7.150
  7.320
  7.460
  7.590
  7.700
  7.800
  7.890
  7.970
  8.040
  8.110
  8.160
  8.220
  8.260
  8.310
  8.350
  8.390
  8.420
  8.450
  8.480
  8.510
  8.540
  8.560
  8.590
  8.610
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
  -111
  -122
  -140
  -159
  -179
  -200
  -222
  -246
  -270
  -296
  -322
  -350
  -379
  -409
  -440
  -472
  -506
  -541
  -577
  -615
  -655
  -696
  -738
  -783
  -829
  -877
  -928
  -981
  -1,036
  -1,093
Depreciation, amort., depletion, $m
  12
  14
  15
  17
  20
  22
  24
  26
  29
  31
  34
  37
  40
  43
  46
  49
  53
  56
  60
  64
  68
  72
  77
  81
  86
  91
  96
  101
  107
  113
Funds from operations, $m
  -99
  -108
  -124
  -141
  -159
  -178
  -198
  -219
  -241
  -264
  -288
  -313
  -339
  -366
  -394
  -423
  -453
  -485
  -517
  -551
  -587
  -623
  -662
  -702
  -743
  -787
  -832
  -879
  -929
  -980
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
Cash from operations, $m
  -98
  -107
  -123
  -140
  -158
  -177
  -197
  -218
  -240
  -263
  -287
  -312
  -338
  -364
  -392
  -421
  -451
  -483
  -515
  -549
  -585
  -621
  -659
  -699
  -741
  -784
  -829
  -877
  -926
  -977
Maintenance CAPEX, $m
  -10
  -12
  -14
  -15
  -17
  -19
  -22
  -24
  -26
  -29
  -31
  -34
  -37
  -40
  -43
  -46
  -49
  -53
  -56
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -101
  -107
New CAPEX, $m
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
Cash from investing activities, $m
  -19
  -22
  -25
  -27
  -29
  -32
  -36
  -38
  -41
  -45
  -47
  -51
  -55
  -58
  -62
  -66
  -70
  -74
  -78
  -83
  -88
  -93
  -98
  -104
  -109
  -116
  -122
  -128
  -135
  -142
Free cash flow, $m
  -117
  -129
  -148
  -167
  -188
  -210
  -232
  -256
  -281
  -307
  -335
  -363
  -392
  -423
  -454
  -487
  -521
  -557
  -594
  -633
  -673
  -714
  -758
  -803
  -850
  -900
  -951
  -1,005
  -1,061
  -1,120
Issuance/(repayment) of debt, $m
  -15
  18
  19
  20
  21
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  34
  36
  37
  38
  40
  42
  43
  45
  47
  49
  51
  53
  56
  58
  61
Issuance/(repurchase) of shares, $m
  143
  124
  142
  161
  181
  202
  225
  249
  273
  299
  325
  353
  382
  412
  444
  476
  510
  545
  582
  620
  659
  700
  743
  788
  835
  883
  934
  987
  1,042
  1,100
Cash from financing (excl. dividends), $m  
  128
  142
  161
  181
  202
  225
  249
  274
  299
  326
  353
  382
  413
  444
  477
  510
  546
  582
  620
  660
  701
  743
  788
  835
  884
  934
  987
  1,043
  1,100
  1,161
Total cash flow (excl. dividends), $m
  11
  12
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  41
Retained Cash Flow (-), $m
  -143
  -124
  -142
  -161
  -181
  -202
  -225
  -249
  -273
  -299
  -325
  -353
  -382
  -412
  -444
  -476
  -510
  -545
  -582
  -620
  -659
  -700
  -743
  -788
  -835
  -883
  -934
  -987
  -1,042
  -1,100
Prev. year cash balance distribution, $m
  4
  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
  -128
  -111
  -129
  -147
  -166
  -187
  -209
  -232
  -255
  -280
  -306
  -333
  -362
  -391
  -421
  -453
  -486
  -520
  -556
  -593
  -631
  -671
  -713
  -756
  -801
  -848
  -898
  -949
  -1,003
  -1,059
Discount rate, %
  12.70
  13.34
  14.00
  14.70
  15.44
  16.21
  17.02
  17.87
  18.76
  19.70
  20.69
  21.72
  22.81
  23.95
  25.15
  26.40
  27.72
  29.11
  30.56
  32.09
  33.70
  35.38
  37.15
  39.01
  40.96
  43.01
  45.16
  47.41
  49.79
  52.27
PV of cash for distribution, $m
  -114
  -87
  -87
  -85
  -81
  -76
  -69
  -62
  -54
  -46
  -39
  -32
  -25
  -19
  -15
  -11
  -8
  -5
  -4
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  5.0
  0.5
  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

Quotient Limited is a diagnostics company. The Company focuses on blood grouping and donor disease screening, which is referred to as transfusion diagnostics. It is engaged in developing, manufacturing and commercializing conventional reagent products used for blood grouping within the global transfusion diagnostics market. It is engaged in developing MosaiQ, which is its technology platform. The Company develops, manufactures and commercializes the products, including antisera products, reagent red blood cells, whole blood controls and ancillary products. Its antisera products contain antibodies used to identify blood group antigens. Its antisera products are monoclonal antibodies manufactured from master cell lines it owns. Its reagent red blood cells products are composed of human red blood cells formulated to enable the identification of blood group antibodies. The Company develops, manufactures and sells conventional reagent products to original equipment manufacturers (OEMs).

FINANCIAL RATIOS  of  Quotient (QTNT)

Valuation Ratios
P/E Ratio -2.2
Price to Sales 8.6
Price to Book -7.9
Price to Tangible Book
Price to Cash Flow -3.4
Price to Free Cash Flow -2.5
Growth Rates
Sales Growth Rate 15.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -31%
Cap. Spend. - 3 Yr. Gr. Rate 23.4%
Financial Strength
Quick Ratio 11
Current Ratio 0
LT Debt to Equity -412.5%
Total Debt to Equity -420.8%
Interest Coverage -42
Management Effectiveness
Return On Assets -72.2%
Ret/ On Assets - 3 Yr. Avg. -69.9%
Return On Total Capital -98.3%
Ret/ On T. Cap. - 3 Yr. Avg. -134.4%
Return On Equity -739.1%
Return On Equity - 3 Yr. Avg. 1014.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 49.1%
EBITDA Margin -336.4%
EBITDA Margin - 3 Yr. Avg. -266.7%
Operating Margin -336.4%
Oper. Margin - 3 Yr. Avg. -253.6%
Pre-Tax Margin -386.4%
Pre-Tax Margin - 3 Yr. Avg. -297.7%
Net Profit Margin -386.4%
Net Profit Margin - 3 Yr. Avg. -297.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

QTNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QTNT stock intrinsic value calculation we used $24.732 million for the last fiscal year's total revenue generated by Quotient. The default revenue input number comes from 0001 income statement of Quotient. 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 QTNT stock valuation model: a) initial revenue growth rate of 15.5% 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 12.7%, whose default value for QTNT is calculated based on our internal credit rating of Quotient, 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 Quotient.
    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 QTNT stock the variable cost ratio is equal to 432%.

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 QTNT 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 18.2% for Quotient.

Corporate tax rate of 27% is the nominal tax rate for Quotient. 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 QTNT 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 QTNT are equal to 249.1%.

Life of production assets of 6 years is the average useful life of capital assets used in Quotient 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 QTNT is equal to -21.5%. 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 - $-14.631 million for Quotient - 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 54.122 million for Quotient 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 Quotient at the current share price and the inputted number of shares is $0.3 billion.

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COMPANY NEWS

▶ Quotient: Fiscal 2Q Earnings Snapshot   [06:12AM  Associated Press]
▶ Quotient: Fiscal 1Q Earnings Snapshot   [05:32PM  Associated Press]
▶ Quotient Limited Announces Details of Investor Day   [Jul-16-18 04:05PM  GlobeNewswire]
▶ Analysts Expect Breakeven For Quotient Limited (NASDAQ:QTNT)   [Jun-26-18 08:34AM  Simply Wall St.]
▶ Quotient Limited to Host Investor Day on July 16, 2018   [Jun-18-18 04:05PM  GlobeNewswire]
▶ Quotient: Fiscal 4Q Earnings Snapshot   [May-29-18 06:34AM  Associated Press]
▶ Why Quotient Ltd. Is Soaring Today   [May-18-18 11:40AM  Motley Fool]
▶ Quotient reports 3Q loss   [Feb-05-18 04:27PM  Associated Press]
▶ ETFs with exposure to Quotient Ltd. : December 7, 2017   [Dec-07-17 02:28PM  Capital Cube]
▶ Is Quotient Limited (QTNT) Overpaying Its CEO?   [Nov-17-17 12:14PM  Simply Wall St.]
▶ ETFs with exposure to Quotient Ltd. : November 6, 2017   [Nov-06-17 12:23PM  Capital Cube]
▶ Quotient reports 2Q loss   [Oct-30-17 05:29PM  Associated Press]
▶ Are Quotient Limiteds (QTNT) Interest Costs Too High?   [Oct-25-17 08:29PM  Simply Wall St.]
▶ ETFs with exposure to Quotient Ltd. : October 18, 2017   [Oct-18-17 09:57AM  Capital Cube]
▶ ETFs with exposure to Quotient Ltd. : October 2, 2017   [Oct-02-17 11:03AM  Capital Cube]
▶ Quotient reports 1Q loss   [Aug-07-17 10:46PM  Associated Press]
▶ Quotient reports 4Q loss   [May-22-17 04:25PM  Associated Press]
▶ Quotient reports 3Q loss   [Feb-06-17 05:22PM  Associated Press]

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