Intrinsic value of VIVUS, Inc. - VVUS

Previous Close

$4.09

  Intrinsic Value

$10.78

stock screener

  Rating & Target

str. buy

+164%

Previous close

$4.09

 
Intrinsic value

$10.78

 
Up/down potential

+164%

 
Rating

str. buy

We calculate the intrinsic value of VVUS 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, %
  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
  104
  161
  240
  349
  492
  676
  908
  1,192
  1,534
  1,937
  2,406
  2,941
  3,545
  4,218
  4,959
  5,769
  6,645
  7,587
  8,593
  9,661
  10,790
  11,979
  13,226
  14,532
  15,897
  17,319
  18,801
  20,342
  21,945
  23,610
Variable operating expenses, $m
  91
  134
  193
  274
  381
  519
  692
  905
  1,160
  1,462
  1,799
  2,199
  2,651
  3,154
  3,709
  4,314
  4,970
  5,674
  6,426
  7,225
  8,069
  8,958
  9,891
  10,868
  11,888
  12,952
  14,060
  15,213
  16,411
  17,657
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
  91
  134
  193
  274
  381
  519
  692
  905
  1,160
  1,462
  1,799
  2,199
  2,651
  3,154
  3,709
  4,314
  4,970
  5,674
  6,426
  7,225
  8,069
  8,958
  9,891
  10,868
  11,888
  12,952
  14,060
  15,213
  16,411
  17,657
Operating income, $m
  13
  27
  47
  75
  111
  157
  215
  287
  373
  475
  607
  742
  894
  1,064
  1,251
  1,455
  1,676
  1,913
  2,167
  2,436
  2,721
  3,020
  3,335
  3,664
  4,008
  4,367
  4,741
  5,129
  5,533
  5,953
EBITDA, $m
  33
  52
  77
  112
  158
  217
  291
  382
  492
  621
  771
  943
  1,136
  1,352
  1,590
  1,849
  2,130
  2,432
  2,755
  3,097
  3,459
  3,840
  4,240
  4,659
  5,096
  5,552
  6,027
  6,522
  7,035
  7,569
Interest expense (income), $m
  15
  37
  36
  60
  92
  136
  195
  270
  364
  480
  620
  784
  975
  1,194
  1,440
  1,714
  2,017
  2,347
  2,705
  3,089
  3,499
  3,935
  4,395
  4,880
  5,389
  5,922
  6,478
  7,059
  7,663
  8,292
  8,945
Earnings before tax, $m
  -24
  -9
  -12
  -17
  -26
  -38
  -54
  -77
  -107
  -145
  -178
  -234
  -300
  -376
  -464
  -562
  -672
  -792
  -922
  -1,063
  -1,214
  -1,375
  -1,545
  -1,725
  -1,914
  -2,111
  -2,318
  -2,534
  -2,758
  -2,992
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
  -24
  -9
  -12
  -17
  -26
  -38
  -54
  -77
  -107
  -145
  -178
  -234
  -300
  -376
  -464
  -562
  -672
  -792
  -922
  -1,063
  -1,214
  -1,375
  -1,545
  -1,725
  -1,914
  -2,111
  -2,318
  -2,534
  -2,758
  -2,992

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
  374
  578
  864
  1,254
  1,769
  2,433
  3,265
  4,287
  5,517
  6,968
  8,653
  10,579
  12,752
  15,172
  17,839
  20,751
  23,904
  27,292
  30,909
  34,751
  38,812
  43,089
  47,577
  52,275
  57,182
  62,299
  67,628
  73,172
  78,937
  84,929
Adjusted assets (=assets-cash), $m
  374
  578
  864
  1,254
  1,769
  2,433
  3,265
  4,287
  5,517
  6,968
  8,653
  10,579
  12,752
  15,172
  17,839
  20,751
  23,904
  27,292
  30,909
  34,751
  38,812
  43,089
  47,577
  52,275
  57,182
  62,299
  67,628
  73,172
  78,937
  84,929
Revenue / Adjusted assets
  0.278
  0.279
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
Average production assets, $m
  55
  85
  127
  184
  259
  356
  478
  628
  808
  1,021
  1,268
  1,550
  1,868
  2,223
  2,614
  3,040
  3,502
  3,998
  4,528
  5,091
  5,686
  6,313
  6,970
  7,659
  8,378
  9,127
  9,908
  10,720
  11,565
  12,443
Working capital, $m
  21
  32
  48
  70
  99
  136
  182
  240
  308
  389
  484
  591
  713
  848
  997
  1,160
  1,336
  1,525
  1,727
  1,942
  2,169
  2,408
  2,659
  2,921
  3,195
  3,481
  3,779
  4,089
  4,411
  4,746
Total debt, $m
  289
  472
  730
  1,081
  1,545
  2,142
  2,891
  3,811
  4,918
  6,224
  7,740
  9,474
  11,429
  13,607
  16,008
  18,629
  21,466
  24,515
  27,771
  31,228
  34,883
  38,732
  42,772
  47,000
  51,416
  56,022
  60,817
  65,807
  70,996
  76,388
Total liabilities, $m
  337
  520
  778
  1,129
  1,593
  2,189
  2,939
  3,859
  4,965
  6,271
  7,788
  9,521
  11,476
  13,655
  16,055
  18,676
  21,514
  24,563
  27,818
  31,276
  34,931
  38,780
  42,819
  47,048
  51,464
  56,069
  60,865
  65,855
  71,043
  76,436
Total equity, $m
  37
  58
  86
  125
  177
  243
  327
  429
  552
  697
  865
  1,058
  1,275
  1,517
  1,784
  2,075
  2,390
  2,729
  3,091
  3,475
  3,881
  4,309
  4,758
  5,228
  5,718
  6,230
  6,763
  7,317
  7,894
  8,493
Total liabilities and equity, $m
  374
  578
  864
  1,254
  1,770
  2,432
  3,266
  4,288
  5,517
  6,968
  8,653
  10,579
  12,751
  15,172
  17,839
  20,751
  23,904
  27,292
  30,909
  34,751
  38,812
  43,089
  47,577
  52,276
  57,182
  62,299
  67,628
  73,172
  78,937
  84,929
Debt-to-equity ratio
  7.720
  8.170
  8.450
  8.620
  8.730
  8.800
  8.850
  8.890
  8.910
  8.930
  8.940
  8.950
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
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
  -24
  -9
  -12
  -17
  -26
  -38
  -54
  -77
  -107
  -145
  -178
  -234
  -300
  -376
  -464
  -562
  -672
  -792
  -922
  -1,063
  -1,214
  -1,375
  -1,545
  -1,725
  -1,914
  -2,111
  -2,318
  -2,534
  -2,758
  -2,992
Depreciation, amort., depletion, $m
  21
  24
  30
  37
  47
  60
  76
  95
  118
  146
  165
  201
  243
  289
  339
  395
  455
  519
  588
  661
  738
  820
  905
  995
  1,088
  1,185
  1,287
  1,392
  1,502
  1,616
Funds from operations, $m
  -4
  15
  18
  20
  21
  22
  21
  18
  12
  1
  -13
  -32
  -57
  -88
  -125
  -167
  -217
  -272
  -334
  -402
  -476
  -555
  -640
  -730
  -826
  -926
  -1,031
  -1,141
  -1,256
  -1,376
Change in working capital, $m
  8
  11
  16
  22
  29
  37
  47
  57
  69
  81
  94
  108
  121
  135
  149
  163
  176
  189
  202
  215
  227
  239
  251
  263
  274
  286
  298
  310
  322
  335
Cash from operations, $m
  -12
  4
  2
  -2
  -7
  -15
  -25
  -39
  -57
  -80
  -107
  -140
  -179
  -223
  -274
  -330
  -393
  -462
  -536
  -617
  -703
  -794
  -891
  -993
  -1,100
  -1,212
  -1,329
  -1,451
  -1,579
  -1,711
Maintenance CAPEX, $m
  -4
  -7
  -11
  -16
  -24
  -34
  -46
  -62
  -82
  -105
  -133
  -165
  -201
  -243
  -289
  -339
  -395
  -455
  -519
  -588
  -661
  -738
  -820
  -905
  -995
  -1,088
  -1,185
  -1,287
  -1,392
  -1,502
New CAPEX, $m
  -21
  -30
  -42
  -57
  -75
  -97
  -122
  -150
  -180
  -213
  -247
  -282
  -318
  -355
  -391
  -427
  -462
  -496
  -530
  -563
  -595
  -627
  -658
  -688
  -719
  -750
  -781
  -812
  -845
  -878
Cash from investing activities, $m
  -25
  -37
  -53
  -73
  -99
  -131
  -168
  -212
  -262
  -318
  -380
  -447
  -519
  -598
  -680
  -766
  -857
  -951
  -1,049
  -1,151
  -1,256
  -1,365
  -1,478
  -1,593
  -1,714
  -1,838
  -1,966
  -2,099
  -2,237
  -2,380
Free cash flow, $m
  -37
  -33
  -51
  -76
  -107
  -146
  -194
  -251
  -319
  -397
  -487
  -587
  -698
  -820
  -953
  -1,096
  -1,250
  -1,413
  -1,585
  -1,768
  -1,959
  -2,159
  -2,368
  -2,586
  -2,813
  -3,050
  -3,295
  -3,550
  -3,815
  -4,091
Issuance/(repayment) of debt, $m
  -5
  183
  258
  351
  464
  597
  749
  920
  1,107
  1,306
  1,516
  1,734
  1,955
  2,178
  2,401
  2,621
  2,837
  3,049
  3,256
  3,458
  3,655
  3,849
  4,039
  4,228
  4,416
  4,605
  4,796
  4,990
  5,188
  5,393
Issuance/(repurchase) of shares, $m
  170
  30
  41
  56
  77
  104
  138
  179
  230
  290
  346
  426
  517
  619
  731
  854
  987
  1,130
  1,284
  1,447
  1,620
  1,802
  1,994
  2,195
  2,404
  2,623
  2,851
  3,088
  3,335
  3,591
Cash from financing (excl. dividends), $m  
  165
  213
  299
  407
  541
  701
  887
  1,099
  1,337
  1,596
  1,862
  2,160
  2,472
  2,797
  3,132
  3,475
  3,824
  4,179
  4,540
  4,905
  5,275
  5,651
  6,033
  6,423
  6,820
  7,228
  7,647
  8,078
  8,523
  8,984
Total cash flow (excl. dividends), $m
  128
  180
  247
  332
  434
  555
  693
  848
  1,017
  1,199
  1,376
  1,573
  1,774
  1,976
  2,178
  2,378
  2,574
  2,767
  2,954
  3,137
  3,317
  3,492
  3,665
  3,837
  4,007
  4,179
  4,352
  4,528
  4,708
  4,893
Retained Cash Flow (-), $m
  -170
  -30
  -41
  -56
  -77
  -104
  -138
  -179
  -230
  -290
  -346
  -426
  -517
  -619
  -731
  -854
  -987
  -1,130
  -1,284
  -1,447
  -1,620
  -1,802
  -1,994
  -2,195
  -2,404
  -2,623
  -2,851
  -3,088
  -3,335
  -3,591
Prev. year cash balance distribution, $m
  68
  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
  26
  150
  206
  275
  357
  451
  556
  669
  788
  909
  1,030
  1,147
  1,257
  1,358
  1,448
  1,525
  1,588
  1,636
  1,670
  1,690
  1,696
  1,690
  1,671
  1,642
  1,603
  1,556
  1,501
  1,440
  1,373
  1,302
Discount rate, %
  12.00
  12.60
  13.23
  13.89
  14.59
  15.32
  16.08
  16.89
  17.73
  18.62
  19.55
  20.52
  21.55
  22.63
  23.76
  24.95
  26.19
  27.50
  28.88
  30.32
  31.84
  33.43
  35.10
  36.86
  38.70
  40.64
  42.67
  44.80
  47.04
  49.39
PV of cash for distribution, $m
  23
  118
  142
  164
  181
  192
  196
  192
  181
  165
  144
  122
  99
  78
  59
  43
  30
  21
  13
  8
  5
  3
  2
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  27.9
  16.3
  9.9
  6.1
  3.9
  2.5
  1.6
  1.0
  0.7
  0.5
  0.3
  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
  0.0
  0.0
  0.0
  0.0
  0.0

VIVUS, Inc. is a biopharmaceutical company. The Company operates in the development and commercialization of therapeutic products segment. It provides over two therapies approved by the Food and Drug Association (FDA), which include Qsymia (phentermine and topiramate extended-release) for chronic weight management and STENDRA (avanafil) for erectile dysfunction (ED). The Company has completed the Phase II studies of Qsymia for the indication of Obstructive Sleep Apnea (OSA) and diabetes. Its Qsymia is available in over 40,000 certified retail pharmacies across the country. Its STENDRA is also approved by the European Commission (EC), under the name, SPEDRA, for the treatment of ED in the Europe. The United States Food and Drug Association approved a Supplemental New Drug Application (sNDA) for STENDRA. STENDRA is indicated to be taken approximately 15 minutes before sexual activity.

FINANCIAL RATIOS  of  VIVUS, Inc. (VVUS)

Valuation Ratios
P/E Ratio 18.6
Price to Sales 3.5
Price to Book 23.8
Price to Tangible Book
Price to Cash Flow 11.3
Price to Free Cash Flow 11.3
Growth Rates
Sales Growth Rate 30.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 30
Current Ratio 0
LT Debt to Equity 1288.9%
Total Debt to Equity 1338.9%
Interest Coverage 3
Management Effectiveness
Return On Assets 13%
Ret/ On Assets - 3 Yr. Avg. -8.6%
Return On Total Capital 9.5%
Ret/ On T. Cap. - 3 Yr. Avg. -16.6%
Return On Equity 418.2%
Return On Equity - 3 Yr. Avg. 34.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 91.9%
Gross Margin - 3 Yr. Avg. 75.7%
EBITDA Margin 31.5%
EBITDA Margin - 3 Yr. Avg. -33.3%
Operating Margin 44.4%
Oper. Margin - 3 Yr. Avg. -21.5%
Pre-Tax Margin 18.5%
Pre-Tax Margin - 3 Yr. Avg. -50.7%
Net Profit Margin 18.5%
Net Profit Margin - 3 Yr. Avg. -50.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

VVUS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VVUS stock intrinsic value calculation we used $65 million for the last fiscal year's total revenue generated by VIVUS, Inc.. The default revenue input number comes from 0001 income statement of VIVUS, 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 VVUS 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 12%, whose default value for VVUS is calculated based on our internal credit rating of VIVUS, 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 VIVUS, 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 VVUS stock the variable cost ratio is equal to 95.4%.

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 VVUS 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 12.6% for VIVUS, Inc..

Corporate tax rate of 27% is the nominal tax rate for VIVUS, 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 VVUS 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 VVUS are equal to 52.7%.

Life of production assets of 7.7 years is the average useful life of capital assets used in VIVUS, 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 VVUS is equal to 20.1%. 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 - $-40.023 million for VIVUS, 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 10.637 million for VIVUS, 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 VIVUS, Inc. at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
ARNA Arena Pharmace 51.84 3.06  str.sell
CAH Cardinal Healt 45.43 157.75  str.buy
KDMN Kadmon Holding 2.52 0.29  str.sell
LLY Eli Lilly and 114.05 89.42  sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

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