Intrinsic value of Supernus Pharmaceuticals, Inc. - SUPN

Previous Close

$31.90

  Intrinsic Value

$174.62

stock screener

  Rating & Target

str. buy

+447%

Previous close

$31.90

 
Intrinsic value

$174.62

 
Up/down potential

+447%

 
Rating

str. buy

We calculate the intrinsic value of SUPN 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 1.7

 

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, %
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
  6.23
Revenue, $m
  536
  689
  869
  1,078
  1,316
  1,585
  1,884
  2,214
  2,573
  2,962
  3,379
  3,825
  4,298
  4,798
  5,325
  5,877
  6,455
  7,059
  7,689
  8,344
  9,026
  9,735
  10,472
  11,238
  12,034
  12,861
  13,721
  14,615
  15,546
  16,514
Variable operating expenses, $m
  309
  397
  500
  619
  755
  909
  1,080
  1,268
  1,473
  1,695
  1,931
  2,186
  2,456
  2,742
  3,043
  3,358
  3,689
  4,034
  4,393
  4,768
  5,158
  5,563
  5,984
  6,422
  6,876
  7,349
  7,840
  8,351
  8,883
  9,436
Fixed operating expenses, $m
  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
  51
  52
  53
  55
  56
Total operating expenses, $m
  339
  427
  531
  651
  787
  942
  1,114
  1,303
  1,508
  1,731
  1,968
  2,224
  2,494
  2,781
  3,083
  3,399
  3,731
  4,077
  4,437
  4,813
  5,204
  5,610
  6,032
  6,471
  6,926
  7,400
  7,892
  8,404
  8,938
  9,492
Operating income, $m
  197
  262
  338
  427
  529
  643
  771
  911
  1,064
  1,230
  1,411
  1,602
  1,804
  2,017
  2,242
  2,478
  2,725
  2,982
  3,251
  3,531
  3,823
  4,125
  4,440
  4,767
  5,107
  5,461
  5,828
  6,210
  6,608
  7,022
EBITDA, $m
  205
  272
  350
  441
  545
  662
  792
  935
  1,092
  1,262
  1,444
  1,639
  1,845
  2,063
  2,293
  2,534
  2,787
  3,050
  3,325
  3,612
  3,909
  4,219
  4,541
  4,876
  5,223
  5,585
  5,960
  6,351
  6,758
  7,181
Interest expense (income), $m
  0
  36
  54
  76
  101
  131
  164
  202
  245
  291
  342
  397
  456
  519
  585
  656
  730
  808
  890
  975
  1,064
  1,157
  1,253
  1,353
  1,457
  1,565
  1,678
  1,794
  1,916
  2,042
  2,173
Earnings before tax, $m
  161
  208
  263
  326
  398
  479
  568
  667
  773
  888
  1,015
  1,146
  1,285
  1,432
  1,586
  1,747
  1,916
  2,093
  2,276
  2,467
  2,666
  2,873
  3,087
  3,310
  3,542
  3,783
  4,034
  4,295
  4,566
  4,848
Tax expense, $m
  43
  56
  71
  88
  107
  129
  153
  180
  209
  240
  274
  309
  347
  387
  428
  472
  517
  565
  615
  666
  720
  776
  834
  894
  956
  1,022
  1,089
  1,160
  1,233
  1,309
Net income, $m
  117
  152
  192
  238
  291
  350
  415
  487
  565
  649
  741
  837
  938
  1,045
  1,158
  1,276
  1,399
  1,528
  1,662
  1,801
  1,946
  2,097
  2,254
  2,417
  2,586
  2,762
  2,945
  3,135
  3,333
  3,539

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
  1,027
  1,320
  1,665
  2,065
  2,522
  3,036
  3,609
  4,241
  4,929
  5,674
  6,474
  7,328
  8,234
  9,192
  10,201
  11,259
  12,367
  13,523
  14,729
  15,985
  17,291
  18,650
  20,061
  21,529
  23,053
  24,638
  26,285
  27,998
  29,781
  31,636
Adjusted assets (=assets-cash), $m
  1,027
  1,320
  1,665
  2,065
  2,522
  3,036
  3,609
  4,241
  4,929
  5,674
  6,474
  7,328
  8,234
  9,192
  10,201
  11,259
  12,367
  13,523
  14,729
  15,985
  17,291
  18,650
  20,061
  21,529
  23,053
  24,638
  26,285
  27,998
  29,781
  31,636
Revenue / Adjusted assets
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
  0.522
Average production assets, $m
  28
  36
  45
  56
  68
  82
  98
  115
  134
  154
  176
  199
  224
  250
  277
  306
  336
  367
  400
  434
  469
  506
  545
  584
  626
  669
  713
  760
  808
  859
Working capital, $m
  -31
  -40
  -50
  -63
  -76
  -92
  -109
  -128
  -149
  -172
  -196
  -222
  -249
  -278
  -309
  -341
  -374
  -409
  -446
  -484
  -524
  -565
  -607
  -652
  -698
  -746
  -796
  -848
  -902
  -958
Total debt, $m
  493
  689
  920
  1,188
  1,494
  1,839
  2,223
  2,646
  3,107
  3,606
  4,142
  4,714
  5,322
  5,964
  6,639
  7,348
  8,090
  8,865
  9,673
  10,515
  11,390
  12,300
  13,246
  14,229
  15,250
  16,312
  17,416
  18,564
  19,758
  21,001
Total liabilities, $m
  688
  884
  1,115
  1,383
  1,690
  2,034
  2,418
  2,841
  3,302
  3,801
  4,337
  4,910
  5,517
  6,159
  6,835
  7,544
  8,286
  9,061
  9,868
  10,710
  11,585
  12,495
  13,441
  14,424
  15,446
  16,507
  17,611
  18,759
  19,953
  21,196
Total equity, $m
  339
  436
  549
  681
  832
  1,002
  1,191
  1,399
  1,627
  1,872
  2,136
  2,418
  2,717
  3,033
  3,366
  3,715
  4,081
  4,463
  4,861
  5,275
  5,706
  6,154
  6,620
  7,104
  7,608
  8,131
  8,674
  9,239
  9,828
  10,440
Total liabilities and equity, $m
  1,027
  1,320
  1,664
  2,064
  2,522
  3,036
  3,609
  4,240
  4,929
  5,673
  6,473
  7,328
  8,234
  9,192
  10,201
  11,259
  12,367
  13,524
  14,729
  15,985
  17,291
  18,649
  20,061
  21,528
  23,054
  24,638
  26,285
  27,998
  29,781
  31,636
Debt-to-equity ratio
  1.450
  1.580
  1.670
  1.740
  1.800
  1.840
  1.870
  1.890
  1.910
  1.930
  1.940
  1.950
  1.960
  1.970
  1.970
  1.980
  1.980
  1.990
  1.990
  1.990
  2.000
  2.000
  2.000
  2.000
  2.000
  2.010
  2.010
  2.010
  2.010
  2.010
Adjusted equity ratio
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  117
  152
  192
  238
  291
  350
  415
  487
  565
  649
  741
  837
  938
  1,045
  1,158
  1,276
  1,399
  1,528
  1,662
  1,801
  1,946
  2,097
  2,254
  2,417
  2,586
  2,762
  2,945
  3,135
  3,333
  3,539
Depreciation, amort., depletion, $m
  8
  10
  11
  13
  16
  18
  21
  24
  28
  32
  33
  37
  41
  46
  51
  57
  62
  68
  74
  80
  87
  94
  101
  108
  116
  124
  132
  141
  150
  159
Funds from operations, $m
  126
  161
  203
  251
  306
  368
  436
  511
  592
  680
  773
  873
  980
  1,091
  1,209
  1,332
  1,461
  1,596
  1,736
  1,881
  2,033
  2,191
  2,355
  2,525
  2,702
  2,886
  3,077
  3,276
  3,483
  3,698
Change in working capital, $m
  -7
  -9
  -10
  -12
  -14
  -16
  -17
  -19
  -21
  -23
  -24
  -26
  -27
  -29
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
Cash from operations, $m
  133
  170
  214
  264
  320
  383
  453
  530
  613
  703
  798
  899
  1,007
  1,120
  1,240
  1,364
  1,495
  1,631
  1,772
  1,919
  2,073
  2,232
  2,397
  2,569
  2,748
  2,934
  3,127
  3,328
  3,537
  3,755
Maintenance CAPEX, $m
  -4
  -5
  -7
  -8
  -10
  -13
  -15
  -18
  -21
  -25
  -29
  -33
  -37
  -41
  -46
  -51
  -57
  -62
  -68
  -74
  -80
  -87
  -94
  -101
  -108
  -116
  -124
  -132
  -141
  -150
New CAPEX, $m
  -6
  -8
  -9
  -11
  -12
  -14
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -48
  -50
Cash from investing activities, $m
  -10
  -13
  -16
  -19
  -22
  -27
  -31
  -35
  -40
  -45
  -51
  -56
  -62
  -67
  -73
  -80
  -87
  -93
  -101
  -108
  -115
  -124
  -132
  -141
  -149
  -159
  -169
  -179
  -189
  -200
Free cash flow, $m
  123
  157
  198
  244
  297
  357
  423
  495
  573
  658
  747
  844
  946
  1,053
  1,166
  1,284
  1,408
  1,537
  1,671
  1,811
  1,957
  2,108
  2,265
  2,429
  2,598
  2,775
  2,958
  3,149
  3,348
  3,555
Issuance/(repayment) of debt, $m
  163
  196
  231
  268
  306
  345
  384
  423
  461
  499
  536
  572
  607
  642
  676
  709
  742
  775
  808
  841
  875
  910
  946
  983
  1,022
  1,062
  1,104
  1,148
  1,194
  1,243
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  
  163
  196
  231
  268
  306
  345
  384
  423
  461
  499
  536
  572
  607
  642
  676
  709
  742
  775
  808
  841
  875
  910
  946
  983
  1,022
  1,062
  1,104
  1,148
  1,194
  1,243
Total cash flow (excl. dividends), $m
  286
  353
  429
  512
  603
  702
  807
  918
  1,034
  1,157
  1,283
  1,416
  1,553
  1,695
  1,842
  1,993
  2,150
  2,312
  2,479
  2,653
  2,832
  3,018
  3,211
  3,412
  3,620
  3,836
  4,062
  4,297
  4,542
  4,797
Retained Cash Flow (-), $m
  -81
  -97
  -114
  -132
  -151
  -170
  -189
  -208
  -227
  -246
  -264
  -282
  -299
  -316
  -333
  -349
  -365
  -382
  -398
  -414
  -431
  -448
  -466
  -484
  -503
  -523
  -544
  -565
  -588
  -612
Prev. year cash balance distribution, $m
  195
  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
  400
  257
  315
  380
  453
  532
  617
  709
  807
  911
  1,019
  1,134
  1,254
  1,379
  1,509
  1,644
  1,785
  1,930
  2,081
  2,238
  2,401
  2,570
  2,745
  2,927
  3,117
  3,314
  3,518
  3,732
  3,954
  4,185
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
  384
  235
  274
  313
  351
  386
  417
  443
  464
  478
  484
  484
  477
  463
  443
  418
  388
  355
  320
  284
  248
  213
  180
  149
  121
  97
  76
  58
  43
  32
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

Supernus Pharmaceuticals, Inc. is a pharmaceutical company focused on developing and commercializing products for the treatment of central nervous system diseases. The Company offers Oxtellar XR (extended-release oxcarbazepine) and Trokendi XR (extended-release topiramate), its two treatments for patients with epilepsy. In addition, it is developing multiple product candidates in psychiatry to address unmet medical needs and market opportunities for the treatment of impulsive aggression (IA) and for the treatment of attention deficit hyperactivity disorder (ADHD). It is developing SPN-810 (molindone hydrochloride) to treat IA in patients having ADHD. It is developing SPN-812 (viloxazine hydrochloride) as a candidate to treat patients having ADHD. The Company's neurology portfolio consists of Oxtellar XR and Trokendi XR, which are the first once-daily extended release oxcarbazepine and topiramate products, respectively, indicated for epilepsy in the United States market.

FINANCIAL RATIOS  of  Supernus Pharmaceuticals, Inc. (SUPN)

Valuation Ratios
P/E Ratio 17.5
Price to Sales 7.4
Price to Book 8.3
Price to Tangible Book
Price to Cash Flow 23.8
Price to Free Cash Flow 24.5
Growth Rates
Sales Growth Rate 46.3%
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 NaN
Current Ratio 0
LT Debt to Equity 2.1%
Total Debt to Equity 2.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 36.5%
Ret/ On Assets - 3 Yr. Avg. 13.1%
Return On Total Capital 62.5%
Ret/ On T. Cap. - 3 Yr. Avg. 21.1%
Return On Equity 65%
Return On Equity - 3 Yr. Avg. 19%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 94.4%
Gross Margin - 3 Yr. Avg. 94.2%
EBITDA Margin 24.2%
EBITDA Margin - 3 Yr. Avg. 9.8%
Operating Margin 25.1%
Oper. Margin - 3 Yr. Avg. 9.6%
Pre-Tax Margin 23.3%
Pre-Tax Margin - 3 Yr. Avg. 7.6%
Net Profit Margin 42.3%
Net Profit Margin - 3 Yr. Avg. 13.3%
Effective Tax Rate -82%
Eff/ Tax Rate - 3 Yr. Avg. -28.4%
Payout Ratio 0%

SUPN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SUPN stock intrinsic value calculation we used $409 million for the last fiscal year's total revenue generated by Supernus Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of Supernus Pharmaceuticals, 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 SUPN stock valuation model: a) initial revenue growth rate of 31.1% 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 SUPN is calculated based on our internal credit rating of Supernus Pharmaceuticals, 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 Supernus Pharmaceuticals, 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 SUPN stock the variable cost ratio is equal to 57.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $29 million in the base year in the intrinsic value calculation for SUPN 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 11% for Supernus Pharmaceuticals, Inc..

Corporate tax rate of 27% is the nominal tax rate for Supernus Pharmaceuticals, 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 SUPN 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 SUPN are equal to 5.2%.

Life of production assets of 5.4 years is the average useful life of capital assets used in Supernus Pharmaceuticals, 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 SUPN is equal to -5.8%. 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 - $453.023 million for Supernus Pharmaceuticals, 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 52.368 million for Supernus Pharmaceuticals, 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 Supernus Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $1.7 billion.

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