Intrinsic value of Valeritas Holdings - VLRX

Previous Close

$0.68

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$0.68

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of VLRX 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 0.0

 

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, %
  35.70
  32.63
  29.87
  27.38
  25.14
  23.13
  21.32
  19.68
  18.22
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.79
  6.61
  6.45
Revenue, $m
  27
  36
  47
  60
  75
  93
  113
  135
  159
  186
  216
  247
  281
  317
  355
  395
  437
  482
  528
  576
  627
  679
  734
  790
  849
  910
  974
  1,040
  1,108
  1,180
Variable operating expenses, $m
  76
  100
  130
  166
  207
  255
  310
  371
  438
  512
  593
  680
  773
  872
  976
  1,087
  1,203
  1,325
  1,452
  1,585
  1,723
  1,867
  2,017
  2,173
  2,335
  2,503
  2,678
  2,859
  3,048
  3,245
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
  76
  100
  130
  166
  207
  255
  310
  371
  438
  512
  593
  680
  773
  872
  976
  1,087
  1,203
  1,325
  1,452
  1,585
  1,723
  1,867
  2,017
  2,173
  2,335
  2,503
  2,678
  2,859
  3,048
  3,245
Operating income, $m
  -48
  -64
  -83
  -105
  -132
  -163
  -197
  -236
  -279
  -326
  -377
  -433
  -492
  -555
  -621
  -692
  -766
  -843
  -924
  -1,009
  -1,097
  -1,188
  -1,284
  -1,383
  -1,486
  -1,593
  -1,704
  -1,820
  -1,940
  -2,065
EBITDA, $m
  -46
  -61
  -79
  -101
  -126
  -155
  -188
  -225
  -266
  -311
  -360
  -413
  -470
  -530
  -593
  -661
  -731
  -805
  -883
  -963
  -1,047
  -1,135
  -1,226
  -1,321
  -1,419
  -1,521
  -1,628
  -1,738
  -1,853
  -1,972
Interest expense (income), $m
  0
  3
  2
  4
  5
  7
  9
  11
  14
  16
  20
  23
  27
  31
  35
  40
  45
  50
  56
  62
  68
  74
  81
  87
  94
  102
  110
  118
  126
  134
  143
Earnings before tax, $m
  -51
  -66
  -86
  -110
  -139
  -171
  -208
  -250
  -295
  -346
  -400
  -459
  -523
  -590
  -661
  -737
  -816
  -899
  -986
  -1,076
  -1,171
  -1,269
  -1,371
  -1,477
  -1,588
  -1,702
  -1,822
  -1,945
  -2,074
  -2,208
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
  -51
  -66
  -86
  -110
  -139
  -171
  -208
  -250
  -295
  -346
  -400
  -459
  -523
  -590
  -661
  -737
  -816
  -899
  -986
  -1,076
  -1,171
  -1,269
  -1,371
  -1,477
  -1,588
  -1,702
  -1,822
  -1,945
  -2,074
  -2,208

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
  44
  59
  76
  97
  121
  150
  181
  217
  257
  300
  347
  398
  452
  510
  572
  636
  704
  776
  850
  928
  1,009
  1,093
  1,181
  1,272
  1,367
  1,466
  1,568
  1,674
  1,785
  1,900
Adjusted assets (=assets-cash), $m
  44
  59
  76
  97
  121
  150
  181
  217
  257
  300
  347
  398
  452
  510
  572
  636
  704
  776
  850
  928
  1,009
  1,093
  1,181
  1,272
  1,367
  1,466
  1,568
  1,674
  1,785
  1,900
Revenue / Adjusted assets
  0.614
  0.610
  0.618
  0.619
  0.620
  0.620
  0.624
  0.622
  0.619
  0.620
  0.622
  0.621
  0.622
  0.622
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.622
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
  0.621
Average production assets, $m
  11
  14
  19
  24
  30
  36
  44
  53
  62
  73
  85
  97
  110
  124
  139
  155
  171
  189
  207
  226
  246
  266
  288
  310
  333
  357
  382
  408
  435
  463
Working capital, $m
  1
  1
  1
  1
  2
  2
  2
  3
  4
  4
  5
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  21
  23
  24
  26
Total debt, $m
  27
  40
  55
  74
  96
  121
  150
  182
  218
  257
  299
  345
  394
  446
  501
  560
  621
  685
  752
  822
  895
  971
  1,050
  1,132
  1,217
  1,306
  1,398
  1,494
  1,593
  1,697
Total liabilities, $m
  40
  53
  69
  87
  109
  135
  163
  195
  231
  270
  312
  358
  407
  459
  515
  573
  634
  698
  765
  835
  908
  984
  1,063
  1,145
  1,230
  1,319
  1,411
  1,507
  1,606
  1,710
Total equity, $m
  4
  6
  8
  10
  12
  15
  18
  22
  26
  30
  35
  40
  45
  51
  57
  64
  70
  78
  85
  93
  101
  109
  118
  127
  137
  147
  157
  167
  178
  190
Total liabilities and equity, $m
  44
  59
  77
  97
  121
  150
  181
  217
  257
  300
  347
  398
  452
  510
  572
  637
  704
  776
  850
  928
  1,009
  1,093
  1,181
  1,272
  1,367
  1,466
  1,568
  1,674
  1,784
  1,900
Debt-to-equity ratio
  6.030
  6.760
  7.280
  7.650
  7.920
  8.120
  8.280
  8.390
  8.490
  8.560
  8.620
  8.670
  8.710
  8.740
  8.770
  8.790
  8.810
  8.830
  8.850
  8.860
  8.870
  8.880
  8.890
  8.900
  8.900
  8.910
  8.920
  8.920
  8.930
  8.930
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
  -51
  -66
  -86
  -110
  -139
  -171
  -208
  -250
  -295
  -346
  -400
  -459
  -523
  -590
  -661
  -737
  -816
  -899
  -986
  -1,076
  -1,171
  -1,269
  -1,371
  -1,477
  -1,588
  -1,702
  -1,822
  -1,945
  -2,074
  -2,208
Depreciation, amort., depletion, $m
  2
  3
  4
  5
  6
  7
  9
  11
  12
  15
  17
  19
  22
  25
  28
  31
  34
  38
  41
  45
  49
  53
  58
  62
  67
  71
  76
  82
  87
  93
Funds from operations, $m
  -49
  -63
  -83
  -106
  -133
  -164
  -199
  -239
  -283
  -331
  -384
  -440
  -501
  -565
  -634
  -706
  -782
  -861
  -944
  -1,031
  -1,121
  -1,216
  -1,314
  -1,415
  -1,521
  -1,631
  -1,745
  -1,864
  -1,987
  -2,116
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
Cash from operations, $m
  -49
  -64
  -83
  -106
  -133
  -164
  -200
  -239
  -283
  -332
  -384
  -441
  -501
  -566
  -634
  -707
  -783
  -862
  -945
  -1,032
  -1,123
  -1,217
  -1,315
  -1,417
  -1,522
  -1,632
  -1,747
  -1,865
  -1,989
  -2,117
Maintenance CAPEX, $m
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -9
  -11
  -12
  -15
  -17
  -19
  -22
  -25
  -28
  -31
  -34
  -38
  -41
  -45
  -49
  -53
  -58
  -62
  -67
  -71
  -76
  -82
  -87
New CAPEX, $m
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
Cash from investing activities, $m
  -5
  -6
  -7
  -9
  -11
  -13
  -15
  -18
  -21
  -23
  -26
  -29
  -32
  -36
  -40
  -44
  -48
  -51
  -56
  -60
  -65
  -70
  -74
  -80
  -85
  -91
  -96
  -102
  -109
  -115
Free cash flow, $m
  -54
  -69
  -90
  -115
  -144
  -177
  -215
  -257
  -304
  -355
  -410
  -470
  -534
  -602
  -674
  -750
  -830
  -914
  -1,001
  -1,092
  -1,187
  -1,286
  -1,389
  -1,496
  -1,607
  -1,723
  -1,843
  -1,968
  -2,097
  -2,232
Issuance/(repayment) of debt, $m
  -9
  13
  16
  19
  22
  25
  29
  32
  36
  39
  42
  46
  49
  52
  55
  58
  61
  64
  67
  70
  73
  76
  79
  82
  85
  89
  92
  96
  100
  104
Issuance/(repurchase) of shares, $m
  73
  68
  88
  113
  141
  174
  211
  253
  299
  350
  405
  465
  528
  596
  668
  743
  823
  906
  993
  1,084
  1,179
  1,277
  1,380
  1,486
  1,597
  1,712
  1,832
  1,956
  2,085
  2,220
Cash from financing (excl. dividends), $m  
  64
  81
  104
  132
  163
  199
  240
  285
  335
  389
  447
  511
  577
  648
  723
  801
  884
  970
  1,060
  1,154
  1,252
  1,353
  1,459
  1,568
  1,682
  1,801
  1,924
  2,052
  2,185
  2,324
Total cash flow (excl. dividends), $m
  9
  11
  14
  17
  19
  22
  25
  28
  31
  34
  37
  40
  43
  46
  49
  51
  54
  56
  59
  62
  64
  67
  69
  72
  75
  78
  81
  84
  88
  91
Retained Cash Flow (-), $m
  -73
  -68
  -88
  -113
  -141
  -174
  -211
  -253
  -299
  -350
  -405
  -465
  -528
  -596
  -668
  -743
  -823
  -906
  -993
  -1,084
  -1,179
  -1,277
  -1,380
  -1,486
  -1,597
  -1,712
  -1,832
  -1,956
  -2,085
  -2,220
Prev. year cash balance distribution, $m
  13
  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
  -50
  -56
  -74
  -96
  -122
  -152
  -186
  -225
  -268
  -316
  -368
  -424
  -485
  -550
  -619
  -692
  -769
  -850
  -934
  -1,022
  -1,115
  -1,211
  -1,310
  -1,414
  -1,522
  -1,634
  -1,751
  -1,872
  -1,998
  -2,129
Discount rate, %
  7.80
  8.19
  8.60
  9.03
  9.48
  9.95
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.41
  27.73
  29.12
  30.58
  32.11
PV of cash for distribution, $m
  -47
  -48
  -58
  -68
  -77
  -86
  -93
  -98
  -100
  -101
  -99
  -94
  -88
  -81
  -72
  -62
  -53
  -44
  -36
  -28
  -21
  -16
  -12
  -8
  -6
  -4
  -2
  -1
  -1
  -1
Current shareholders' claim on cash, %
  50.0
  3.1
  0.2
  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

FINANCIAL RATIOS  of  Valeritas Holdings (VLRX)

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%

VLRX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VLRX stock intrinsic value calculation we used $20.245 million for the last fiscal year's total revenue generated by Valeritas Holdings. The default revenue input number comes from 0001 income statement of Valeritas Holdings. 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 VLRX stock valuation model: a) initial revenue growth rate of 35.7% 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 7.8%, whose default value for VLRX is calculated based on our internal credit rating of Valeritas Holdings, 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 Valeritas Holdings.
    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 VLRX stock the variable cost ratio is equal to 275%.

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 VLRX 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 9% for Valeritas Holdings.

Corporate tax rate of 27% is the nominal tax rate for Valeritas Holdings. 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 VLRX 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 VLRX are equal to 39.2%.

Life of production assets of 4.2 years is the average useful life of capital assets used in Valeritas Holdings 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 VLRX is equal to 2.2%. 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 - $-4.058 million for Valeritas Holdings - 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 24.857 million for Valeritas Holdings 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 Valeritas Holdings at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Valeritas to Present at Upcoming Investor Conferences   [Mar-02-18 07:00AM  GlobeNewswire]

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