Intrinsic value of Pareteum Corporation - TEUM

Previous Close

$2.99

  Intrinsic Value

$0.04

stock screener

  Rating & Target

str. sell

-99%

Previous close

$2.99

 
Intrinsic value

$0.04

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of TEUM 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  22
  35
  52
  75
  106
  146
  196
  257
  330
  417
  518
  633
  764
  908
  1,068
  1,243
  1,431
  1,634
  1,851
  2,081
  2,324
  2,580
  2,849
  3,130
  3,424
  3,730
  4,049
  4,381
  4,727
  5,085
Variable operating expenses, $m
  56
  87
  129
  188
  265
  364
  489
  642
  826
  1,043
  1,295
  1,584
  1,909
  2,271
  2,670
  3,106
  3,578
  4,085
  4,627
  5,202
  5,810
  6,450
  7,122
  7,825
  8,560
  9,326
  10,123
  10,953
  11,816
  12,713
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
  56
  87
  129
  188
  265
  364
  489
  642
  826
  1,043
  1,295
  1,584
  1,909
  2,271
  2,670
  3,106
  3,578
  4,085
  4,627
  5,202
  5,810
  6,450
  7,122
  7,825
  8,560
  9,326
  10,123
  10,953
  11,816
  12,713
Operating income, $m
  -34
  -52
  -78
  -113
  -159
  -218
  -293
  -385
  -496
  -626
  -777
  -950
  -1,145
  -1,363
  -1,602
  -1,864
  -2,147
  -2,451
  -2,776
  -3,121
  -3,486
  -3,870
  -4,273
  -4,695
  -5,136
  -5,595
  -6,074
  -6,572
  -7,090
  -7,628
EBITDA, $m
  -31
  -49
  -73
  -105
  -149
  -205
  -275
  -360
  -464
  -586
  -728
  -889
  -1,072
  -1,276
  -1,500
  -1,745
  -2,010
  -2,295
  -2,599
  -2,922
  -3,263
  -3,623
  -4,000
  -4,395
  -4,808
  -5,238
  -5,686
  -6,152
  -6,637
  -7,141
Interest expense (income), $m
  1
  1
  7
  17
  30
  48
  72
  102
  141
  188
  244
  311
  389
  478
  578
  690
  813
  947
  1,092
  1,248
  1,415
  1,592
  1,780
  1,977
  2,184
  2,401
  2,627
  2,863
  3,109
  3,364
  3,630
Earnings before tax, $m
  -34
  -59
  -94
  -142
  -207
  -290
  -395
  -526
  -683
  -870
  -1,088
  -1,339
  -1,623
  -1,941
  -2,292
  -2,676
  -3,094
  -3,543
  -4,025
  -4,536
  -5,078
  -5,650
  -6,250
  -6,879
  -7,536
  -8,222
  -8,937
  -9,681
  -10,454
  -11,258
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
  -34
  -59
  -94
  -142
  -207
  -290
  -395
  -526
  -683
  -870
  -1,088
  -1,339
  -1,623
  -1,941
  -2,292
  -2,676
  -3,094
  -3,543
  -4,025
  -4,536
  -5,078
  -5,650
  -6,250
  -6,879
  -7,536
  -8,222
  -8,937
  -9,681
  -10,454
  -11,258

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
  30
  47
  70
  102
  144
  198
  266
  349
  449
  568
  705
  862
  1,039
  1,236
  1,453
  1,691
  1,947
  2,223
  2,518
  2,831
  3,162
  3,510
  3,876
  4,259
  4,658
  5,075
  5,509
  5,961
  6,431
  6,919
Adjusted assets (=assets-cash), $m
  30
  47
  70
  102
  144
  198
  266
  349
  449
  568
  705
  862
  1,039
  1,236
  1,453
  1,691
  1,947
  2,223
  2,518
  2,831
  3,162
  3,510
  3,876
  4,259
  4,658
  5,075
  5,509
  5,961
  6,431
  6,919
Revenue / Adjusted assets
  0.733
  0.745
  0.743
  0.735
  0.736
  0.737
  0.737
  0.736
  0.735
  0.734
  0.735
  0.734
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
  0.735
Average production assets, $m
  11
  17
  25
  36
  51
  70
  94
  123
  158
  200
  248
  303
  366
  435
  512
  595
  686
  783
  887
  997
  1,113
  1,236
  1,365
  1,499
  1,640
  1,787
  1,940
  2,099
  2,264
  2,436
Working capital, $m
  -7
  -11
  -17
  -24
  -34
  -47
  -63
  -83
  -106
  -134
  -167
  -204
  -246
  -293
  -344
  -400
  -461
  -526
  -596
  -670
  -748
  -831
  -917
  -1,008
  -1,102
  -1,201
  -1,304
  -1,411
  -1,522
  -1,637
Total debt, $m
  7
  15
  27
  44
  65
  93
  128
  171
  223
  284
  355
  436
  527
  629
  741
  863
  996
  1,138
  1,290
  1,452
  1,622
  1,802
  1,991
  2,188
  2,395
  2,610
  2,834
  3,067
  3,309
  3,561
Total liabilities, $m
  16
  24
  36
  53
  74
  102
  137
  180
  232
  293
  364
  445
  536
  638
  750
  872
  1,005
  1,147
  1,299
  1,461
  1,632
  1,811
  2,000
  2,197
  2,404
  2,619
  2,843
  3,076
  3,318
  3,570
Total equity, $m
  15
  23
  34
  49
  70
  96
  129
  169
  218
  275
  341
  417
  503
  598
  703
  818
  943
  1,076
  1,219
  1,370
  1,530
  1,699
  1,876
  2,061
  2,255
  2,456
  2,667
  2,885
  3,112
  3,349
Total liabilities and equity, $m
  31
  47
  70
  102
  144
  198
  266
  349
  450
  568
  705
  862
  1,039
  1,236
  1,453
  1,690
  1,948
  2,223
  2,518
  2,831
  3,162
  3,510
  3,876
  4,258
  4,659
  5,075
  5,510
  5,961
  6,430
  6,919
Debt-to-equity ratio
  0.450
  0.660
  0.800
  0.880
  0.930
  0.970
  1.000
  1.010
  1.020
  1.030
  1.040
  1.040
  1.050
  1.050
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
  1.060
Adjusted equity ratio
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484
  0.484

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -34
  -59
  -94
  -142
  -207
  -290
  -395
  -526
  -683
  -870
  -1,088
  -1,339
  -1,623
  -1,941
  -2,292
  -2,676
  -3,094
  -3,543
  -4,025
  -4,536
  -5,078
  -5,650
  -6,250
  -6,879
  -7,536
  -8,222
  -8,937
  -9,681
  -10,454
  -11,258
Depreciation, amort., depletion, $m
  2
  3
  5
  7
  10
  14
  19
  25
  32
  40
  50
  61
  73
  87
  102
  119
  137
  157
  177
  199
  223
  247
  273
  300
  328
  357
  388
  420
  453
  487
Funds from operations, $m
  -32
  -56
  -89
  -135
  -197
  -276
  -377
  -501
  -652
  -830
  -1,039
  -1,278
  -1,550
  -1,854
  -2,190
  -2,557
  -2,957
  -3,387
  -3,847
  -4,337
  -4,856
  -5,403
  -5,977
  -6,579
  -7,208
  -7,865
  -8,549
  -9,261
  -10,001
  -10,771
Change in working capital, $m
  -3
  -4
  -6
  -8
  -10
  -13
  -16
  -20
  -24
  -28
  -32
  -37
  -42
  -47
  -51
  -56
  -61
  -65
  -70
  -74
  -78
  -82
  -87
  -91
  -95
  -99
  -103
  -107
  -111
  -116
Cash from operations, $m
  -29
  -52
  -84
  -128
  -187
  -263
  -361
  -481
  -628
  -802
  -1,006
  -1,241
  -1,508
  -1,807
  -2,138
  -2,501
  -2,896
  -3,322
  -3,778
  -4,263
  -4,777
  -5,320
  -5,891
  -6,489
  -7,114
  -7,766
  -8,446
  -9,154
  -9,890
  -10,655
Maintenance CAPEX, $m
  -1
  -2
  -3
  -5
  -7
  -10
  -14
  -19
  -25
  -32
  -40
  -50
  -61
  -73
  -87
  -102
  -119
  -137
  -157
  -177
  -199
  -223
  -247
  -273
  -300
  -328
  -357
  -388
  -420
  -453
New CAPEX, $m
  -4
  -6
  -8
  -11
  -15
  -19
  -24
  -29
  -35
  -42
  -48
  -55
  -62
  -69
  -77
  -84
  -90
  -97
  -104
  -110
  -116
  -123
  -129
  -135
  -141
  -147
  -153
  -159
  -165
  -172
Cash from investing activities, $m
  -5
  -8
  -11
  -16
  -22
  -29
  -38
  -48
  -60
  -74
  -88
  -105
  -123
  -142
  -164
  -186
  -209
  -234
  -261
  -287
  -315
  -346
  -376
  -408
  -441
  -475
  -510
  -547
  -585
  -625
Free cash flow, $m
  -35
  -60
  -95
  -144
  -209
  -292
  -398
  -529
  -688
  -876
  -1,095
  -1,346
  -1,631
  -1,950
  -2,302
  -2,687
  -3,105
  -3,556
  -4,038
  -4,551
  -5,093
  -5,665
  -6,267
  -6,896
  -7,554
  -8,241
  -8,956
  -9,701
  -10,475
  -11,280
Issuance/(repayment) of debt, $m
  6
  9
  12
  16
  22
  28
  35
  43
  52
  61
  71
  81
  91
  102
  112
  122
  133
  142
  152
  161
  171
  180
  189
  197
  206
  215
  224
  233
  242
  252
Issuance/(repurchase) of shares, $m
  40
  67
  106
  158
  227
  316
  428
  566
  732
  927
  1,155
  1,415
  1,709
  2,036
  2,397
  2,791
  3,218
  3,677
  4,167
  4,688
  5,239
  5,818
  6,427
  7,064
  7,730
  8,424
  9,147
  9,899
  10,681
  11,494
Cash from financing (excl. dividends), $m  
  46
  76
  118
  174
  249
  344
  463
  609
  784
  988
  1,226
  1,496
  1,800
  2,138
  2,509
  2,913
  3,351
  3,819
  4,319
  4,849
  5,410
  5,998
  6,616
  7,261
  7,936
  8,639
  9,371
  10,132
  10,923
  11,746
Total cash flow (excl. dividends), $m
  11
  16
  22
  30
  40
  52
  65
  80
  96
  113
  131
  150
  169
  188
  208
  227
  245
  264
  281
  299
  316
  333
  349
  366
  382
  398
  415
  431
  449
  466
Retained Cash Flow (-), $m
  -40
  -67
  -106
  -158
  -227
  -316
  -428
  -566
  -732
  -927
  -1,155
  -1,415
  -1,709
  -2,036
  -2,397
  -2,791
  -3,218
  -3,677
  -4,167
  -4,688
  -5,239
  -5,818
  -6,427
  -7,064
  -7,730
  -8,424
  -9,147
  -9,899
  -10,681
  -11,494
Prev. year cash balance distribution, $m
  6
  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
  -23
  -51
  -83
  -128
  -187
  -265
  -363
  -486
  -636
  -815
  -1,024
  -1,265
  -1,540
  -1,848
  -2,189
  -2,565
  -2,973
  -3,413
  -3,886
  -4,389
  -4,923
  -5,486
  -6,078
  -6,699
  -7,348
  -8,026
  -8,732
  -9,468
  -10,233
  -11,028
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
  -22
  -47
  -72
  -105
  -145
  -192
  -246
  -304
  -365
  -427
  -486
  -540
  -585
  -620
  -643
  -652
  -647
  -629
  -598
  -558
  -509
  -455
  -398
  -341
  -286
  -234
  -187
  -146
  -112
  -83
Current shareholders' claim on cash, %
  69.8
  48.0
  32.8
  22.4
  15.4
  10.6
  7.3
  5.1
  3.5
  2.5
  1.7
  1.2
  0.9
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Pareteum Corporation, formerly Elephant Talk Communications Corporation, develops Communications Cloud Services Platform. The Company provides mobility, messaging and security services and applications, with a single-sign-on, application program interface (API) and software development suite. Its platform hosts integrated information technology (IT)/Back Office and Core Network functionality for mobile network operators, and for enterprises implement and leverage mobile communications solutions on a outsourced Software as a Service, Platform as a Service and/or Infrastructure as a Service basis: made available either as an on-premise solution or as a hosted service in the Cloud depending on the needs of its customers. It also delivers an Operational Support System (OSS) for channel partners, with APIs for integration with third party systems, workflows for complex application orchestration, customer support with branded portals and plug-ins for a multitude of other applications.

FINANCIAL RATIOS  of  Pareteum Corporation (TEUM)

Valuation Ratios
P/E Ratio -0.8
Price to Sales 1.9
Price to Book -2.8
Price to Tangible Book
Price to Cash Flow -6.3
Price to Free Cash Flow -5
Growth Rates
Sales Growth Rate -58.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -87.5%
Cap. Spend. - 3 Yr. Gr. Rate -30.1%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity -55.6%
Total Debt to Equity -100%
Interest Coverage -30
Management Effectiveness
Return On Assets -157.9%
Ret/ On Assets - 3 Yr. Avg. -72.8%
Return On Total Capital -442.9%
Ret/ On T. Cap. - 3 Yr. Avg. -182.8%
Return On Equity 6200%
Return On Equity - 3 Yr. Avg. 2001.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 69.2%
Gross Margin - 3 Yr. Avg. 73.3%
EBITDA Margin -200%
EBITDA Margin - 3 Yr. Avg. -85.1%
Operating Margin -146.2%
Oper. Margin - 3 Yr. Avg. -79.2%
Pre-Tax Margin -238.5%
Pre-Tax Margin - 3 Yr. Avg. -121.5%
Net Profit Margin -238.5%
Net Profit Margin - 3 Yr. Avg. -121.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

TEUM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TEUM stock intrinsic value calculation we used $14 million for the last fiscal year's total revenue generated by Pareteum Corporation. The default revenue input number comes from 0001 income statement of Pareteum Corporation. 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 TEUM stock valuation model: a) initial revenue growth rate of 60% 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 TEUM is calculated based on our internal credit rating of Pareteum Corporation, 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 Pareteum Corporation.
    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 TEUM stock the variable cost ratio is equal to 250%.

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 TEUM 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 109.7% for Pareteum Corporation.

Corporate tax rate of 27% is the nominal tax rate for Pareteum Corporation. 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 TEUM 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 TEUM are equal to 47.9%.

Life of production assets of 1.5 years is the average useful life of capital assets used in Pareteum Corporation 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 TEUM is equal to -32.2%. 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 - $15.421533 million for Pareteum Corporation - 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 108.144 million for Pareteum Corporation 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 Pareteum Corporation at the current share price and the inputted number of shares is $0.3 billion.

RELATED COMPANIES Price Int.Val. Rating
TEUM Pareteum Corpo 2.99 0.04  str.sell
CSCO Cisco Systems, 54.75 50.72  hold
DOX Amdocs Limited 61.29 52.54  hold

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.