Intrinsic value of SIGA Technologies Inc. - SIGA

Previous Close

$5.28

  Intrinsic Value

$46.39

stock screener

  Rating & Target

str. buy

+779%

Previous close

$5.28

 
Intrinsic value

$46.39

 
Up/down potential

+779%

 
Rating

str. buy

We calculate the intrinsic value of SIGA 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, %
  11.10
  10.49
  9.94
  9.45
  9.00
  8.60
  8.24
  7.92
  7.63
  7.36
  7.13
  6.91
  6.72
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
Revenue, $m
  530
  586
  644
  705
  768
  834
  903
  974
  1,049
  1,126
  1,206
  1,289
  1,376
  1,466
  1,560
  1,658
  1,759
  1,865
  1,975
  2,090
  2,210
  2,336
  2,467
  2,603
  2,746
  2,895
  3,052
  3,215
  3,386
  3,565
Variable operating expenses, $m
  269
  297
  326
  357
  389
  423
  458
  494
  532
  571
  611
  653
  697
  743
  791
  840
  892
  945
  1,001
  1,059
  1,120
  1,184
  1,250
  1,319
  1,392
  1,467
  1,546
  1,629
  1,716
  1,807
Fixed operating expenses, $m
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
  35
  36
  37
  38
  38
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
Total operating expenses, $m
  296
  324
  354
  385
  418
  453
  488
  525
  564
  603
  644
  687
  732
  778
  827
  877
  930
  983
  1,040
  1,099
  1,161
  1,226
  1,293
  1,363
  1,437
  1,513
  1,593
  1,677
  1,765
  1,857
Operating income, $m
  235
  262
  290
  319
  350
  382
  415
  449
  485
  523
  562
  602
  644
  688
  733
  781
  830
  881
  935
  991
  1,049
  1,110
  1,174
  1,240
  1,310
  1,382
  1,458
  1,538
  1,621
  1,708
EBITDA, $m
  235
  262
  290
  319
  350
  382
  415
  450
  486
  523
  562
  602
  644
  688
  733
  781
  830
  882
  935
  991
  1,049
  1,110
  1,174
  1,240
  1,310
  1,382
  1,458
  1,538
  1,621
  1,709
Interest expense (income), $m
  0
  16
  16
  19
  21
  24
  26
  29
  32
  35
  38
  41
  44
  47
  51
  55
  58
  62
  67
  71
  75
  80
  85
  90
  96
  101
  107
  113
  119
  126
  133
Earnings before tax, $m
  219
  245
  271
  298
  326
  356
  386
  418
  451
  485
  521
  558
  597
  637
  679
  722
  768
  815
  864
  915
  969
  1,025
  1,083
  1,145
  1,208
  1,275
  1,345
  1,418
  1,495
  1,575
Tax expense, $m
  59
  66
  73
  80
  88
  96
  104
  113
  122
  131
  141
  151
  161
  172
  183
  195
  207
  220
  233
  247
  262
  277
  293
  309
  326
  344
  363
  383
  404
  425
Net income, $m
  160
  179
  198
  218
  238
  260
  282
  305
  329
  354
  380
  407
  436
  465
  495
  527
  560
  595
  631
  668
  707
  748
  791
  836
  882
  931
  982
  1,035
  1,091
  1,150

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
  114
  126
  139
  152
  165
  180
  194
  210
  226
  242
  260
  278
  296
  316
  336
  357
  379
  401
  425
  450
  476
  503
  531
  560
  591
  623
  657
  692
  729
  767
Adjusted assets (=assets-cash), $m
  114
  126
  139
  152
  165
  180
  194
  210
  226
  242
  260
  278
  296
  316
  336
  357
  379
  401
  425
  450
  476
  503
  531
  560
  591
  623
  657
  692
  729
  767
Revenue / Adjusted assets
  4.649
  4.651
  4.633
  4.638
  4.655
  4.633
  4.655
  4.638
  4.642
  4.653
  4.638
  4.637
  4.649
  4.639
  4.643
  4.644
  4.641
  4.651
  4.647
  4.644
  4.643
  4.644
  4.646
  4.648
  4.646
  4.647
  4.645
  4.646
  4.645
  4.648
Average production assets, $m
  1
  1
  1
  1
  1
  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
Working capital, $m
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
Total debt, $m
  78
  88
  100
  112
  124
  137
  150
  164
  178
  193
  209
  225
  242
  259
  277
  296
  316
  336
  358
  380
  403
  427
  453
  479
  507
  536
  566
  598
  631
  666
Total liabilities, $m
  103
  113
  125
  136
  149
  162
  175
  189
  203
  218
  234
  250
  267
  284
  302
  321
  341
  361
  383
  405
  428
  452
  478
  504
  532
  561
  591
  623
  656
  691
Total equity, $m
  11
  13
  14
  15
  17
  18
  19
  21
  23
  24
  26
  28
  30
  32
  34
  36
  38
  40
  43
  45
  48
  50
  53
  56
  59
  62
  66
  69
  73
  77
Total liabilities and equity, $m
  114
  126
  139
  151
  166
  180
  194
  210
  226
  242
  260
  278
  297
  316
  336
  357
  379
  401
  426
  450
  476
  502
  531
  560
  591
  623
  657
  692
  729
  768
Debt-to-equity ratio
  6.810
  7.020
  7.200
  7.350
  7.490
  7.610
  7.710
  7.810
  7.890
  7.970
  8.040
  8.100
  8.160
  8.210
  8.260
  8.300
  8.340
  8.380
  8.410
  8.440
  8.470
  8.500
  8.530
  8.550
  8.580
  8.600
  8.620
  8.640
  8.660
  8.670
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
  160
  179
  198
  218
  238
  260
  282
  305
  329
  354
  380
  407
  436
  465
  495
  527
  560
  595
  631
  668
  707
  748
  791
  836
  882
  931
  982
  1,035
  1,091
  1,150
Depreciation, amort., depletion, $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
Funds from operations, $m
  160
  179
  198
  218
  238
  260
  282
  305
  329
  354
  380
  408
  436
  465
  496
  527
  560
  595
  631
  668
  708
  748
  791
  836
  882
  931
  982
  1,036
  1,092
  1,150
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  160
  179
  198
  218
  239
  260
  282
  306
  330
  355
  381
  408
  436
  465
  496
  528
  561
  595
  631
  669
  708
  749
  792
  836
  883
  932
  983
  1,036
  1,092
  1,151
Maintenance CAPEX, $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
New CAPEX, $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 from investing activities, $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
Free cash flow, $m
  160
  179
  198
  218
  238
  260
  282
  305
  330
  355
  381
  408
  436
  465
  496
  528
  561
  595
  631
  669
  708
  749
  791
  836
  883
  932
  983
  1,036
  1,092
  1,151
Issuance/(repayment) of debt, $m
  2
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  2
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
Total cash flow (excl. dividends), $m
  162
  190
  209
  230
  251
  273
  296
  319
  344
  370
  396
  424
  453
  483
  514
  547
  580
  616
  653
  691
  731
  773
  817
  863
  910
  960
  1,013
  1,068
  1,125
  1,185
Retained Cash Flow (-), $m
  -9
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
Prev. year cash balance distribution, $m
  101
  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
  254
  189
  208
  228
  249
  271
  294
  318
  342
  368
  395
  422
  451
  481
  512
  544
  578
  613
  650
  688
  729
  770
  814
  860
  907
  957
  1,010
  1,064
  1,121
  1,181
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
  243
  173
  181
  188
  193
  197
  199
  199
  197
  193
  187
  180
  171
  161
  150
  138
  126
  113
  100
  87
  75
  64
  53
  44
  35
  28
  22
  16
  12
  9
Current shareholders' claim on cash, %
  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
  100.0

FINANCIAL RATIOS  of  SIGA Technologies Inc. (SIGA)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SIGA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SIGA stock intrinsic value calculation we used $477 million for the last fiscal year's total revenue generated by SIGA Technologies Inc.. The default revenue input number comes from 0001 income statement of SIGA Technologies 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 SIGA stock valuation model: a) initial revenue growth rate of 11.1% 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 SIGA is calculated based on our internal credit rating of SIGA Technologies 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 SIGA Technologies 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 SIGA stock the variable cost ratio is equal to 50.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $26 million in the base year in the intrinsic value calculation for SIGA 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 21.1% for SIGA Technologies Inc..

Corporate tax rate of 27% is the nominal tax rate for SIGA Technologies 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 SIGA 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 SIGA are equal to 0.1%.

Life of production assets of 15.1 years is the average useful life of capital assets used in SIGA Technologies 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 SIGA is equal to -0.5%. 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 - $102.914687 million for SIGA Technologies 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 80.942 million for SIGA Technologies 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 SIGA Technologies Inc. at the current share price and the inputted number of shares is $0.4 billion.

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