Intrinsic value of ViewRay, Inc. - VRAY

Previous Close

$8.72

  Intrinsic Value

$0.01

stock screener

  Rating & Target

str. sell

-100%

Previous close

$8.72

 
Intrinsic value

$0.01

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of VRAY 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 0.8

 

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, %
  44.80
  40.82
  37.24
  34.01
  31.11
  28.50
  26.15
  24.04
  22.13
  20.42
  18.88
  17.49
  16.24
  15.12
  14.10
  13.19
  12.38
  11.64
  10.97
  10.38
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
Revenue, $m
  49
  69
  95
  128
  167
  215
  271
  336
  411
  494
  588
  690
  803
  924
  1,054
  1,193
  1,341
  1,497
  1,661
  1,834
  2,014
  2,203
  2,399
  2,604
  2,817
  3,038
  3,268
  3,507
  3,755
  4,014
Variable operating expenses, $m
  67
  94
  129
  173
  226
  291
  367
  455
  555
  669
  795
  934
  1,086
  1,250
  1,426
  1,615
  1,814
  2,026
  2,248
  2,481
  2,725
  2,980
  3,246
  3,523
  3,811
  4,110
  4,421
  4,745
  5,081
  5,430
Fixed operating expenses, $m
  38
  39
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
Total operating expenses, $m
  105
  133
  168
  213
  267
  333
  410
  499
  600
  715
  842
  982
  1,135
  1,300
  1,477
  1,667
  1,868
  2,081
  2,304
  2,538
  2,783
  3,040
  3,307
  3,585
  3,875
  4,175
  4,488
  4,813
  5,151
  5,501
Operating income, $m
  -55
  -63
  -73
  -85
  -100
  -118
  -139
  -163
  -190
  -221
  -254
  -292
  -332
  -376
  -423
  -474
  -527
  -583
  -642
  -705
  -769
  -837
  -908
  -981
  -1,058
  -1,138
  -1,220
  -1,306
  -1,395
  -1,488
EBITDA, $m
  -52
  -59
  -67
  -77
  -90
  -104
  -121
  -141
  -164
  -189
  -217
  -247
  -281
  -317
  -356
  -397
  -441
  -487
  -536
  -587
  -640
  -696
  -754
  -814
  -877
  -942
  -1,010
  -1,080
  -1,154
  -1,230
Interest expense (income), $m
  0
  7
  14
  25
  40
  59
  82
  109
  141
  179
  222
  270
  324
  383
  447
  517
  592
  672
  757
  847
  941
  1,040
  1,144
  1,253
  1,366
  1,483
  1,606
  1,733
  1,865
  2,003
  2,146
Earnings before tax, $m
  -62
  -77
  -98
  -126
  -159
  -200
  -248
  -304
  -369
  -442
  -524
  -615
  -715
  -824
  -940
  -1,066
  -1,199
  -1,340
  -1,489
  -1,646
  -1,810
  -1,982
  -2,161
  -2,347
  -2,541
  -2,743
  -2,953
  -3,171
  -3,398
  -3,634
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
  -62
  -77
  -98
  -126
  -159
  -200
  -248
  -304
  -369
  -442
  -524
  -615
  -715
  -824
  -940
  -1,066
  -1,199
  -1,340
  -1,489
  -1,646
  -1,810
  -1,982
  -2,161
  -2,347
  -2,541
  -2,743
  -2,953
  -3,171
  -3,398
  -3,634

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
  193
  272
  373
  500
  656
  842
  1,063
  1,318
  1,610
  1,939
  2,305
  2,708
  3,148
  3,623
  4,134
  4,680
  5,259
  5,871
  6,515
  7,192
  7,899
  8,638
  9,408
  10,211
  11,045
  11,913
  12,815
  13,753
  14,727
  15,739
Adjusted assets (=assets-cash), $m
  193
  272
  373
  500
  656
  842
  1,063
  1,318
  1,610
  1,939
  2,305
  2,708
  3,148
  3,623
  4,134
  4,680
  5,259
  5,871
  6,515
  7,192
  7,899
  8,638
  9,408
  10,211
  11,045
  11,913
  12,815
  13,753
  14,727
  15,739
Revenue / Adjusted assets
  0.254
  0.254
  0.255
  0.256
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
  0.255
Average production assets, $m
  17
  24
  32
  43
  57
  73
  92
  115
  140
  169
  200
  235
  274
  315
  360
  407
  457
  511
  567
  625
  687
  751
  818
  888
  960
  1,036
  1,114
  1,196
  1,281
  1,369
Working capital, $m
  12
  16
  22
  30
  39
  50
  63
  79
  96
  116
  138
  162
  188
  216
  247
  279
  314
  350
  389
  429
  471
  515
  561
  609
  659
  711
  765
  821
  879
  939
Total debt, $m
  85
  155
  247
  361
  501
  669
  867
  1,097
  1,360
  1,656
  1,985
  2,348
  2,744
  3,172
  3,632
  4,123
  4,644
  5,195
  5,775
  6,383
  7,020
  7,685
  8,378
  9,100
  9,852
  10,633
  11,445
  12,288
  13,165
  14,076
Total liabilities, $m
  174
  245
  336
  450
  590
  758
  956
  1,186
  1,449
  1,745
  2,074
  2,437
  2,833
  3,261
  3,721
  4,212
  4,733
  5,284
  5,864
  6,472
  7,109
  7,774
  8,468
  9,190
  9,941
  10,722
  11,534
  12,377
  13,254
  14,165
Total equity, $m
  19
  27
  37
  50
  66
  84
  106
  132
  161
  194
  230
  271
  315
  362
  413
  468
  526
  587
  652
  719
  790
  864
  941
  1,021
  1,105
  1,191
  1,282
  1,375
  1,473
  1,574
Total liabilities and equity, $m
  193
  272
  373
  500
  656
  842
  1,062
  1,318
  1,610
  1,939
  2,304
  2,708
  3,148
  3,623
  4,134
  4,680
  5,259
  5,871
  6,516
  7,191
  7,899
  8,638
  9,409
  10,211
  11,046
  11,913
  12,816
  13,752
  14,727
  15,739
Debt-to-equity ratio
  4.380
  5.720
  6.610
  7.220
  7.640
  7.940
  8.160
  8.320
  8.450
  8.540
  8.610
  8.670
  8.720
  8.750
  8.780
  8.810
  8.830
  8.850
  8.860
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.940
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
  -62
  -77
  -98
  -126
  -159
  -200
  -248
  -304
  -369
  -442
  -524
  -615
  -715
  -824
  -940
  -1,066
  -1,199
  -1,340
  -1,489
  -1,646
  -1,810
  -1,982
  -2,161
  -2,347
  -2,541
  -2,743
  -2,953
  -3,171
  -3,398
  -3,634
Depreciation, amort., depletion, $m
  3
  4
  6
  8
  11
  14
  17
  22
  26
  32
  38
  44
  52
  59
  68
  77
  86
  96
  107
  118
  130
  142
  154
  168
  181
  195
  210
  226
  242
  258
Funds from operations, $m
  -59
  -72
  -92
  -117
  -148
  -186
  -230
  -282
  -342
  -410
  -487
  -571
  -663
  -764
  -873
  -989
  -1,113
  -1,244
  -1,382
  -1,528
  -1,680
  -1,840
  -2,006
  -2,180
  -2,360
  -2,548
  -2,743
  -2,946
  -3,157
  -3,375
Change in working capital, $m
  4
  5
  6
  8
  9
  11
  13
  15
  17
  20
  22
  24
  26
  28
  30
  33
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  54
  56
  58
  60
Cash from operations, $m
  -63
  -77
  -98
  -125
  -158
  -197
  -244
  -298
  -360
  -430
  -508
  -595
  -690
  -792
  -903
  -1,021
  -1,147
  -1,280
  -1,421
  -1,568
  -1,723
  -1,884
  -2,052
  -2,228
  -2,410
  -2,600
  -2,797
  -3,002
  -3,215
  -3,436
Maintenance CAPEX, $m
  -2
  -3
  -4
  -6
  -8
  -11
  -14
  -17
  -22
  -26
  -32
  -38
  -44
  -52
  -59
  -68
  -77
  -86
  -96
  -107
  -118
  -130
  -142
  -154
  -168
  -181
  -195
  -210
  -226
  -242
New CAPEX, $m
  -5
  -7
  -9
  -11
  -14
  -16
  -19
  -22
  -25
  -29
  -32
  -35
  -38
  -41
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -64
  -67
  -70
  -73
  -75
  -78
  -82
  -85
  -88
Cash from investing activities, $m
  -7
  -10
  -13
  -17
  -22
  -27
  -33
  -39
  -47
  -55
  -64
  -73
  -82
  -93
  -103
  -115
  -127
  -139
  -152
  -166
  -180
  -194
  -209
  -224
  -241
  -256
  -273
  -292
  -311
  -330
Free cash flow, $m
  -70
  -87
  -112
  -142
  -179
  -224
  -276
  -337
  -407
  -485
  -572
  -668
  -772
  -886
  -1,007
  -1,137
  -1,274
  -1,420
  -1,573
  -1,734
  -1,902
  -2,078
  -2,261
  -2,452
  -2,650
  -2,856
  -3,071
  -3,294
  -3,525
  -3,766
Issuance/(repayment) of debt, $m
  40
  71
  91
  114
  140
  168
  198
  230
  263
  296
  329
  363
  396
  428
  460
  491
  521
  551
  580
  608
  637
  665
  693
  722
  751
  781
  812
  844
  877
  911
Issuance/(repurchase) of shares, $m
  82
  85
  109
  138
  175
  218
  270
  330
  398
  475
  561
  656
  759
  871
  992
  1,120
  1,257
  1,401
  1,554
  1,713
  1,881
  2,055
  2,238
  2,427
  2,625
  2,830
  3,044
  3,265
  3,496
  3,735
Cash from financing (excl. dividends), $m  
  122
  156
  200
  252
  315
  386
  468
  560
  661
  771
  890
  1,019
  1,155
  1,299
  1,452
  1,611
  1,778
  1,952
  2,134
  2,321
  2,518
  2,720
  2,931
  3,149
  3,376
  3,611
  3,856
  4,109
  4,373
  4,646
Total cash flow (excl. dividends), $m
  52
  69
  88
  110
  135
  163
  192
  222
  254
  286
  318
  351
  383
  414
  445
  474
  504
  532
  560
  588
  615
  643
  670
  698
  726
  755
  785
  815
  847
  881
Retained Cash Flow (-), $m
  -82
  -85
  -109
  -138
  -175
  -218
  -270
  -330
  -398
  -475
  -561
  -656
  -759
  -871
  -992
  -1,120
  -1,257
  -1,401
  -1,554
  -1,713
  -1,881
  -2,055
  -2,238
  -2,427
  -2,625
  -2,830
  -3,044
  -3,265
  -3,496
  -3,735
Prev. year cash balance distribution, $m
  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
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
  -28
  -16
  -20
  -28
  -39
  -56
  -78
  -107
  -144
  -189
  -243
  -305
  -377
  -457
  -547
  -646
  -753
  -869
  -993
  -1,125
  -1,265
  -1,413
  -1,568
  -1,730
  -1,899
  -2,075
  -2,259
  -2,450
  -2,648
  -2,854
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
  -27
  -15
  -18
  -23
  -30
  -40
  -53
  -67
  -83
  -99
  -115
  -130
  -143
  -154
  -161
  -164
  -164
  -160
  -153
  -143
  -131
  -117
  -103
  -88
  -74
  -61
  -48
  -38
  -29
  -21
Current shareholders' claim on cash, %
  50.0
  34.7
  24.8
  18.1
  13.4
  10.1
  7.6
  5.8
  4.5
  3.5
  2.7
  2.1
  1.6
  1.3
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0

ViewRay, Inc. designs, manufactures and markets MRIdian, the magnetic resonance imaging (MRI)-guided radiation therapy system to image and treat cancer patients simultaneously. The Company offers radiation therapy technology combined with magnetic resonance imaging. MRIdian integrates MRI technology, radiation delivery and the Company's software to locate, target and track the position and shape of soft-tissue tumors while radiation is delivered. MRIdian delivers radiation to the tumor accurately while delivering less radiation to healthy tissue. MRIdian provides real-time imaging that defines the targeted tumor from the surrounding soft tissue and other critical organs during radiation treatment. MRIdian allows physicians to record the level of radiation exposure that the tumor has received and adapt the prescription between fractions as needed.

FINANCIAL RATIOS  of  ViewRay, Inc. (VRAY)

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%

VRAY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VRAY stock intrinsic value calculation we used $34 million for the last fiscal year's total revenue generated by ViewRay, Inc.. The default revenue input number comes from 0001 income statement of ViewRay, 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 VRAY stock valuation model: a) initial revenue growth rate of 44.8% 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 VRAY is calculated based on our internal credit rating of ViewRay, 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 ViewRay, 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 VRAY stock the variable cost ratio is equal to 135.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $37 million in the base year in the intrinsic value calculation for VRAY 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 16.3% for ViewRay, Inc..

Corporate tax rate of 27% is the nominal tax rate for ViewRay, 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 VRAY 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 VRAY are equal to 34.1%.

Life of production assets of 5.3 years is the average useful life of capital assets used in ViewRay, 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 VRAY is equal to 23.4%. 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 - $1.987 million for ViewRay, 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 95.731 million for ViewRay, 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 ViewRay, Inc. at the current share price and the inputted number of shares is $0.8 billion.

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