Intrinsic value of Veru Inc. - VERU

Previous Close

$1.59

  Intrinsic Value

$0.01

stock screener

  Rating & Target

str. sell

-99%

Previous close

$1.59

 
Intrinsic value

$0.01

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of VERU 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 0.1

 

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
  26
  40
  59
  86
  121
  166
  223
  293
  378
  477
  592
  724
  873
  1,038
  1,221
  1,420
  1,636
  1,868
  2,115
  2,378
  2,656
  2,949
  3,256
  3,577
  3,913
  4,263
  4,628
  5,007
  5,402
  5,812
Variable operating expenses, $m
  40
  60
  89
  128
  179
  245
  328
  430
  552
  697
  862
  1,054
  1,271
  1,512
  1,778
  2,068
  2,382
  2,720
  3,080
  3,463
  3,868
  4,294
  4,741
  5,209
  5,698
  6,208
  6,739
  7,292
  7,866
  8,463
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
  40
  60
  89
  128
  179
  245
  328
  430
  552
  697
  862
  1,054
  1,271
  1,512
  1,778
  2,068
  2,382
  2,720
  3,080
  3,463
  3,868
  4,294
  4,741
  5,209
  5,698
  6,208
  6,739
  7,292
  7,866
  8,463
Operating income, $m
  -14
  -21
  -30
  -42
  -58
  -79
  -105
  -137
  -175
  -220
  -270
  -330
  -398
  -474
  -557
  -648
  -746
  -852
  -965
  -1,085
  -1,212
  -1,345
  -1,485
  -1,632
  -1,785
  -1,945
  -2,111
  -2,285
  -2,465
  -2,652
EBITDA, $m
  -11
  -17
  -25
  -37
  -52
  -71
  -95
  -125
  -161
  -203
  -253
  -309
  -372
  -443
  -521
  -606
  -698
  -797
  -902
  -1,015
  -1,133
  -1,258
  -1,389
  -1,526
  -1,669
  -1,819
  -1,974
  -2,136
  -2,304
  -2,479
Interest expense (income), $m
  0
  6
  13
  23
  38
  58
  84
  118
  161
  213
  276
  350
  436
  534
  645
  768
  905
  1,053
  1,214
  1,387
  1,572
  1,768
  1,975
  2,194
  2,423
  2,663
  2,913
  3,174
  3,446
  3,729
  4,024
Earnings before tax, $m
  -20
  -34
  -53
  -80
  -116
  -163
  -223
  -297
  -388
  -496
  -620
  -766
  -932
  -1,119
  -1,325
  -1,553
  -1,800
  -2,066
  -2,352
  -2,657
  -2,980
  -3,321
  -3,679
  -4,055
  -4,448
  -4,858
  -5,286
  -5,731
  -6,194
  -6,675
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
  -20
  -34
  -53
  -80
  -116
  -163
  -223
  -297
  -388
  -496
  -620
  -766
  -932
  -1,119
  -1,325
  -1,553
  -1,800
  -2,066
  -2,352
  -2,657
  -2,980
  -3,321
  -3,679
  -4,055
  -4,448
  -4,858
  -5,286
  -5,731
  -6,194
  -6,675

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
  78
  120
  179
  260
  367
  504
  677
  889
  1,144
  1,445
  1,794
  2,194
  2,644
  3,146
  3,699
  4,303
  4,957
  5,659
  6,410
  7,206
  8,048
  8,935
  9,866
  10,840
  11,858
  12,919
  14,024
  15,173
  16,369
  17,611
Adjusted assets (=assets-cash), $m
  78
  120
  179
  260
  367
  504
  677
  889
  1,144
  1,445
  1,794
  2,194
  2,644
  3,146
  3,699
  4,303
  4,957
  5,659
  6,410
  7,206
  8,048
  8,935
  9,866
  10,840
  11,858
  12,919
  14,024
  15,173
  16,369
  17,611
Revenue / Adjusted assets
  0.333
  0.333
  0.330
  0.331
  0.330
  0.329
  0.329
  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
Average production assets, $m
  23
  35
  53
  76
  108
  148
  199
  261
  336
  424
  526
  644
  776
  923
  1,085
  1,262
  1,454
  1,660
  1,880
  2,114
  2,361
  2,621
  2,894
  3,180
  3,479
  3,790
  4,114
  4,451
  4,802
  5,167
Working capital, $m
  1
  1
  2
  3
  4
  6
  8
  10
  13
  17
  21
  25
  31
  36
  43
  50
  57
  65
  74
  83
  93
  103
  114
  125
  137
  149
  162
  175
  189
  203
Total debt, $m
  21
  37
  61
  92
  134
  188
  256
  339
  439
  557
  694
  850
  1,027
  1,224
  1,441
  1,677
  1,934
  2,209
  2,503
  2,815
  3,145
  3,493
  3,858
  4,240
  4,639
  5,055
  5,488
  5,938
  6,407
  6,894
Total liabilities, $m
  30
  47
  70
  102
  144
  198
  265
  349
  448
  566
  703
  860
  1,037
  1,233
  1,450
  1,687
  1,943
  2,218
  2,513
  2,825
  3,155
  3,503
  3,867
  4,249
  4,648
  5,064
  5,497
  5,948
  6,417
  6,904
Total equity, $m
  47
  73
  109
  158
  223
  307
  412
  541
  696
  879
  1,091
  1,334
  1,608
  1,913
  2,249
  2,616
  3,014
  3,441
  3,897
  4,381
  4,893
  5,433
  5,998
  6,591
  7,209
  7,855
  8,526
  9,225
  9,952
  10,708
Total liabilities and equity, $m
  77
  120
  179
  260
  367
  505
  677
  890
  1,144
  1,445
  1,794
  2,194
  2,645
  3,146
  3,699
  4,303
  4,957
  5,659
  6,410
  7,206
  8,048
  8,936
  9,865
  10,840
  11,857
  12,919
  14,023
  15,173
  16,369
  17,612
Debt-to-equity ratio
  0.440
  0.510
  0.560
  0.580
  0.600
  0.610
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
  0.640
Adjusted equity ratio
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -20
  -34
  -53
  -80
  -116
  -163
  -223
  -297
  -388
  -496
  -620
  -766
  -932
  -1,119
  -1,325
  -1,553
  -1,800
  -2,066
  -2,352
  -2,657
  -2,980
  -3,321
  -3,679
  -4,055
  -4,448
  -4,858
  -5,286
  -5,731
  -6,194
  -6,675
Depreciation, amort., depletion, $m
  3
  4
  4
  5
  6
  8
  9
  11
  14
  17
  18
  21
  26
  31
  36
  42
  48
  55
  63
  70
  79
  87
  96
  106
  116
  126
  137
  148
  160
  172
Funds from operations, $m
  -17
  -30
  -49
  -75
  -110
  -155
  -213
  -286
  -374
  -479
  -602
  -745
  -906
  -1,088
  -1,289
  -1,510
  -1,751
  -2,011
  -2,290
  -2,586
  -2,901
  -3,233
  -3,583
  -3,949
  -4,332
  -4,732
  -5,149
  -5,582
  -6,034
  -6,503
Change in working capital, $m
  0
  0
  1
  1
  1
  2
  2
  2
  3
  3
  4
  5
  5
  6
  6
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
Cash from operations, $m
  -17
  -30
  -49
  -76
  -111
  -157
  -215
  -288
  -377
  -483
  -606
  -749
  -912
  -1,094
  -1,296
  -1,517
  -1,759
  -2,019
  -2,298
  -2,596
  -2,911
  -3,243
  -3,593
  -3,960
  -4,344
  -4,744
  -5,161
  -5,596
  -6,048
  -6,517
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -18
  -21
  -26
  -31
  -36
  -42
  -48
  -55
  -63
  -70
  -79
  -87
  -96
  -106
  -116
  -126
  -137
  -148
  -160
New CAPEX, $m
  -9
  -12
  -17
  -24
  -31
  -40
  -51
  -62
  -75
  -88
  -102
  -117
  -132
  -147
  -162
  -177
  -192
  -206
  -220
  -234
  -247
  -260
  -273
  -286
  -299
  -311
  -324
  -337
  -351
  -365
Cash from investing activities, $m
  -9
  -13
  -18
  -26
  -34
  -44
  -56
  -69
  -84
  -99
  -116
  -135
  -153
  -173
  -193
  -213
  -234
  -254
  -275
  -297
  -317
  -339
  -360
  -382
  -405
  -427
  -450
  -474
  -499
  -525
Free cash flow, $m
  -26
  -44
  -68
  -101
  -145
  -201
  -271
  -357
  -460
  -582
  -723
  -884
  -1,065
  -1,267
  -1,489
  -1,731
  -1,993
  -2,274
  -2,574
  -2,892
  -3,228
  -3,582
  -3,954
  -4,342
  -4,748
  -5,171
  -5,612
  -6,070
  -6,547
  -7,042
Issuance/(repayment) of debt, $m
  11
  17
  23
  32
  42
  54
  68
  83
  100
  118
  137
  157
  177
  197
  217
  237
  256
  275
  294
  312
  330
  348
  365
  382
  399
  416
  433
  451
  469
  487
Issuance/(repurchase) of shares, $m
  38
  60
  89
  129
  181
  247
  328
  426
  543
  679
  832
  1,009
  1,206
  1,424
  1,662
  1,920
  2,197
  2,493
  2,808
  3,141
  3,492
  3,860
  4,245
  4,647
  5,067
  5,503
  5,958
  6,430
  6,921
  7,431
Cash from financing (excl. dividends), $m  
  49
  77
  112
  161
  223
  301
  396
  509
  643
  797
  969
  1,166
  1,383
  1,621
  1,879
  2,157
  2,453
  2,768
  3,102
  3,453
  3,822
  4,208
  4,610
  5,029
  5,466
  5,919
  6,391
  6,881
  7,390
  7,918
Total cash flow (excl. dividends), $m
  23
  33
  45
  60
  78
  100
  124
  152
  182
  215
  246
  282
  318
  354
  390
  426
  461
  495
  529
  562
  594
  625
  656
  687
  717
  748
  779
  810
  843
  876
Retained Cash Flow (-), $m
  -38
  -60
  -89
  -129
  -181
  -247
  -328
  -426
  -543
  -679
  -832
  -1,009
  -1,206
  -1,424
  -1,662
  -1,920
  -2,197
  -2,493
  -2,808
  -3,141
  -3,492
  -3,860
  -4,245
  -4,647
  -5,067
  -5,503
  -5,958
  -6,430
  -6,921
  -7,431
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
  -15
  -27
  -45
  -69
  -103
  -147
  -203
  -274
  -360
  -464
  -586
  -727
  -889
  -1,070
  -1,272
  -1,494
  -1,736
  -1,998
  -2,280
  -2,580
  -2,898
  -3,235
  -3,589
  -3,960
  -4,349
  -4,755
  -5,179
  -5,619
  -6,078
  -6,555
Discount rate, %
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
  -14
  -24
  -36
  -52
  -70
  -91
  -113
  -136
  -158
  -178
  -194
  -205
  -212
  -212
  -207
  -197
  -182
  -164
  -144
  -123
  -103
  -83
  -65
  -50
  -37
  -27
  -19
  -13
  -8
  -5
Current shareholders' claim on cash, %
  72.4
  52.8
  38.8
  28.7
  21.5
  16.2
  12.3
  9.4
  7.3
  5.6
  4.4
  3.5
  2.7
  2.2
  1.7
  1.4
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

Veru Inc., formerly The Female Health Company, is a therapeutics company focused on developing and commercializing pharmaceuticals and devices in men's and women's health and oncology. The Company is engaged in the development, manufacture and marketing of consumer healthcare products. The Company has three divisions: Pharmaceutical and Devices, Consumer Health Products and Public Sector. For men, product and product candidates are in the areas of benign prostatic hyperplasia, male infertility, amelioration of side effects of hormonal prostate cancer therapies, prostate cancer, gout and sexual dysfunction. Women's Health has product candidates for female sexual health, and advanced breast and ovarian cancers. It manufactures, markets and sells the FC2 Female Condom. FC2 provides dual protection against unintended pregnancy and sexually transmitted infections (STIs), including human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS).

FINANCIAL RATIOS  of  Veru Inc. (VERU)

Valuation Ratios
P/E Ratio 0
Price to Sales 2.1
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow -23.1
Price to Free Cash Flow -23.1
Growth Rates
Sales Growth Rate -33.3%
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 0
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. 5.9%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 6.6%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 6.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 59.1%
Gross Margin - 3 Yr. Avg. 56.9%
EBITDA Margin 13.6%
EBITDA Margin - 3 Yr. Avg. 18.6%
Operating Margin 13.6%
Oper. Margin - 3 Yr. Avg. 15.8%
Pre-Tax Margin 13.6%
Pre-Tax Margin - 3 Yr. Avg. 17.2%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 6.8%
Effective Tax Rate 100%
Eff/ Tax Rate - 3 Yr. Avg. 64.3%
Payout Ratio 0%

VERU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VERU stock intrinsic value calculation we used $16 million for the last fiscal year's total revenue generated by Veru Inc.. The default revenue input number comes from 0001 income statement of Veru 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 VERU 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 6.5%, whose default value for VERU is calculated based on our internal credit rating of Veru 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 Veru 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 VERU stock the variable cost ratio is equal to 162.5%.

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 VERU 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 62.8% for Veru Inc..

Corporate tax rate of 27% is the nominal tax rate for Veru 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 VERU 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 VERU are equal to 88.9%.

Life of production assets of 61.9 years is the average useful life of capital assets used in Veru 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 VERU is equal to 3.5%. 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 - $29.481418 million for Veru 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 62.785 million for Veru 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 Veru Inc. at the current share price and the inputted number of shares is $0.1 billion.

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