Intrinsic value of Intrexon - XON

Previous Close

$10.31

  Intrinsic Value

$0.27

stock screener

  Rating & Target

str. sell

-97%

Previous close

$10.31

 
Intrinsic value

$0.27

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of XON 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 1.4

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  236
  241
  247
  254
  262
  270
  280
  290
  300
  312
  324
  337
  351
  366
  382
  399
  416
  435
  455
  476
  498
  521
  546
  571
  599
  627
  657
  689
  723
  758
Variable operating expenses, $m
  309
  316
  323
  331
  339
  349
  360
  371
  384
  397
  372
  387
  404
  421
  439
  458
  478
  500
  523
  547
  572
  599
  627
  657
  688
  721
  755
  792
  830
  870
Fixed operating expenses, $m
  67
  69
  70
  72
  74
  75
  77
  79
  80
  82
  84
  86
  88
  90
  91
  93
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  121
  124
  127
Total operating expenses, $m
  376
  385
  393
  403
  413
  424
  437
  450
  464
  479
  456
  473
  492
  511
  530
  551
  574
  598
  623
  649
  676
  706
  736
  768
  802
  837
  874
  913
  954
  997
Operating income, $m
  -141
  -143
  -146
  -148
  -151
  -154
  -157
  -160
  -164
  -167
  -132
  -136
  -140
  -144
  -148
  -153
  -158
  -162
  -167
  -173
  -178
  -184
  -190
  -196
  -203
  -210
  -217
  -224
  -232
  -240
EBITDA, $m
  -84
  -86
  -87
  -89
  -92
  -94
  -96
  -98
  -101
  -103
  -106
  -109
  -112
  -115
  -118
  -121
  -124
  -128
  -131
  -135
  -138
  -142
  -146
  -151
  -155
  -159
  -164
  -169
  -174
  -179
Interest expense (income), $m
  1
  1
  1
  2
  2
  3
  4
  4
  5
  6
  7
  8
  10
  11
  12
  14
  15
  17
  19
  20
  22
  24
  27
  29
  31
  34
  36
  39
  42
  45
  48
Earnings before tax, $m
  -142
  -144
  -147
  -151
  -154
  -158
  -162
  -166
  -170
  -174
  -141
  -146
  -151
  -156
  -162
  -168
  -174
  -181
  -188
  -195
  -203
  -211
  -219
  -228
  -237
  -246
  -256
  -266
  -277
  -288
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
  -142
  -144
  -147
  -151
  -154
  -158
  -162
  -166
  -170
  -174
  -141
  -146
  -151
  -156
  -162
  -168
  -174
  -181
  -188
  -195
  -203
  -211
  -219
  -228
  -237
  -246
  -256
  -266
  -277
  -288

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
  857
  876
  899
  924
  952
  983
  1,016
  1,053
  1,092
  1,134
  1,178
  1,226
  1,277
  1,331
  1,389
  1,450
  1,514
  1,582
  1,654
  1,730
  1,810
  1,895
  1,984
  2,078
  2,177
  2,281
  2,391
  2,506
  2,628
  2,755
Adjusted assets (=assets-cash), $m
  857
  876
  899
  924
  952
  983
  1,016
  1,053
  1,092
  1,134
  1,178
  1,226
  1,277
  1,331
  1,389
  1,450
  1,514
  1,582
  1,654
  1,730
  1,810
  1,895
  1,984
  2,078
  2,177
  2,281
  2,391
  2,506
  2,628
  2,755
Revenue / Adjusted assets
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.276
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
  0.275
Average production assets, $m
  286
  293
  301
  309
  318
  329
  340
  352
  365
  379
  394
  410
  427
  445
  464
  485
  506
  529
  553
  579
  605
  634
  663
  695
  728
  763
  799
  838
  879
  921
Working capital, $m
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
Total debt, $m
  14
  22
  30
  40
  50
  61
  74
  87
  102
  118
  134
  152
  171
  191
  212
  235
  259
  284
  311
  339
  369
  401
  434
  469
  506
  544
  585
  628
  673
  721
Total liabilities, $m
  319
  326
  334
  344
  354
  366
  378
  392
  406
  422
  438
  456
  475
  495
  517
  539
  563
  589
  615
  644
  673
  705
  738
  773
  810
  849
  889
  932
  977
  1,025
Total equity, $m
  538
  550
  565
  580
  598
  617
  638
  661
  686
  712
  740
  770
  802
  836
  872
  910
  951
  994
  1,039
  1,087
  1,137
  1,190
  1,246
  1,305
  1,367
  1,433
  1,501
  1,574
  1,650
  1,730
Total liabilities and equity, $m
  857
  876
  899
  924
  952
  983
  1,016
  1,053
  1,092
  1,134
  1,178
  1,226
  1,277
  1,331
  1,389
  1,449
  1,514
  1,583
  1,654
  1,731
  1,810
  1,895
  1,984
  2,078
  2,177
  2,282
  2,390
  2,506
  2,627
  2,755
Debt-to-equity ratio
  0.030
  0.040
  0.050
  0.070
  0.080
  0.100
  0.120
  0.130
  0.150
  0.170
  0.180
  0.200
  0.210
  0.230
  0.240
  0.260
  0.270
  0.290
  0.300
  0.310
  0.320
  0.340
  0.350
  0.360
  0.370
  0.380
  0.390
  0.400
  0.410
  0.420
Adjusted equity ratio
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628
  0.628

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -142
  -144
  -147
  -151
  -154
  -158
  -162
  -166
  -170
  -174
  -141
  -146
  -151
  -156
  -162
  -168
  -174
  -181
  -188
  -195
  -203
  -211
  -219
  -228
  -237
  -246
  -256
  -266
  -277
  -288
Depreciation, amort., depletion, $m
  57
  58
  58
  59
  60
  60
  61
  62
  63
  64
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
Funds from operations, $m
  -84
  -87
  -89
  -92
  -94
  -97
  -101
  -104
  -107
  -111
  -115
  -119
  -123
  -127
  -132
  -136
  -141
  -146
  -152
  -157
  -163
  -169
  -175
  -182
  -189
  -196
  -203
  -211
  -219
  -227
Change in working capital, $m
  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
  -2
  -2
  -2
  -2
Cash from operations, $m
  -84
  -86
  -89
  -91
  -94
  -97
  -100
  -103
  -107
  -110
  -114
  -118
  -122
  -126
  -131
  -135
  -140
  -145
  -151
  -156
  -162
  -168
  -174
  -180
  -187
  -194
  -202
  -209
  -217
  -226
Maintenance CAPEX, $m
  -18
  -19
  -19
  -20
  -20
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -53
  -55
  -58
New CAPEX, $m
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
Cash from investing activities, $m
  -24
  -26
  -27
  -28
  -29
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -54
  -56
  -59
  -61
  -65
  -68
  -72
  -75
  -79
  -83
  -87
  -92
  -96
  -101
Free cash flow, $m
  -108
  -112
  -116
  -120
  -124
  -128
  -133
  -138
  -143
  -148
  -154
  -160
  -166
  -172
  -179
  -186
  -194
  -201
  -209
  -218
  -227
  -236
  -245
  -256
  -266
  -277
  -288
  -300
  -313
  -326
Issuance/(repayment) of debt, $m
  6
  7
  8
  9
  10
  11
  12
  13
  15
  16
  17
  18
  19
  20
  21
  23
  24
  25
  27
  28
  30
  31
  33
  35
  37
  39
  41
  43
  45
  47
Issuance/(repurchase) of shares, $m
  153
  157
  162
  166
  172
  177
  183
  188
  194
  201
  169
  176
  183
  190
  198
  206
  215
  224
  233
  243
  253
  264
  275
  287
  299
  311
  325
  339
  353
  368
Cash from financing (excl. dividends), $m  
  159
  164
  170
  175
  182
  188
  195
  201
  209
  217
  186
  194
  202
  210
  219
  229
  239
  249
  260
  271
  283
  295
  308
  322
  336
  350
  366
  382
  398
  415
Total cash flow (excl. dividends), $m
  51
  52
  54
  56
  58
  60
  62
  64
  66
  68
  31
  34
  36
  38
  40
  43
  45
  48
  51
  53
  56
  59
  63
  66
  69
  73
  77
  81
  85
  90
Retained Cash Flow (-), $m
  -153
  -157
  -162
  -166
  -172
  -177
  -183
  -188
  -194
  -201
  -169
  -176
  -183
  -190
  -198
  -206
  -215
  -224
  -233
  -243
  -253
  -264
  -275
  -287
  -299
  -311
  -325
  -339
  -353
  -368
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
  -95
  -104
  -107
  -110
  -113
  -117
  -120
  -124
  -128
  -133
  -137
  -142
  -147
  -152
  -158
  -164
  -170
  -176
  -183
  -190
  -197
  -204
  -212
  -221
  -229
  -238
  -248
  -258
  -268
  -279
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
  -91
  -96
  -93
  -91
  -88
  -85
  -81
  -78
  -74
  -70
  -65
  -61
  -56
  -51
  -46
  -42
  -37
  -32
  -28
  -24
  -20
  -17
  -14
  -11
  -9
  -7
  -5
  -4
  -3
  -2
Current shareholders' claim on cash, %
  90.1
  81.2
  73.1
  65.8
  59.2
  53.2
  47.9
  43.1
  38.8
  34.9
  32.0
  29.4
  27.0
  24.8
  22.7
  20.9
  19.1
  17.6
  16.2
  14.8
  13.6
  12.5
  11.5
  10.6
  9.8
  9.0
  8.3
  7.6
  7.0
  6.5

Intrexon Corporation (Intrexon) forms collaborations to create biologically-based products and processes using synthetic biology. The Company's domestic operations are in California, Florida, Maryland, and Virginia, and its primary international operations are in Belgium and Hungary. The Company designs, builds and regulates gene programs, which are deoxyribonucleic acid (DNA) sequences that consist of genetic components. The Company's synthetic biology capabilities include the ability to control the amount, location and modification of biological molecules to control the function and output of living cells and optimize for desired results at an industrial scale. The Company's technologies include UltraVector gene design and fabrication platform, and its associated library of modular DNA components; Cell Systems Informatics; RheoSwitch inducible gene switch; AttSite Recombinases; Protein Engineering; Laser-Enabled Analysis and Processing (LEAP), and ActoBiotics platform.

FINANCIAL RATIOS  of  Intrexon (XON)

Valuation Ratios
P/E Ratio -6.5
Price to Sales 6.4
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow -21.9
Price to Free Cash Flow -12.9
Growth Rates
Sales Growth Rate 9.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 200%
Cap. Spend. - 3 Yr. Gr. Rate 81.1%
Financial Strength
Quick Ratio 237
Current Ratio 0.1
LT Debt to Equity 1.4%
Total Debt to Equity 1.6%
Interest Coverage -172
Management Effectiveness
Return On Assets -19.3%
Ret/ On Assets - 3 Yr. Avg. -15.2%
Return On Total Capital -29.4%
Ret/ On T. Cap. - 3 Yr. Avg. -22%
Return On Equity -29.8%
Return On Equity - 3 Yr. Avg. -22.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 67.5%
Gross Margin - 3 Yr. Avg. 73.2%
EBITDA Margin -77%
EBITDA Margin - 3 Yr. Avg. -69.4%
Operating Margin -65.4%
Oper. Margin - 3 Yr. Avg. -82.2%
Pre-Tax Margin -90.6%
Pre-Tax Margin - 3 Yr. Avg. -82.2%
Net Profit Margin -97.9%
Net Profit Margin - 3 Yr. Avg. -86.7%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 0.3%
Payout Ratio 0%

XON stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XON stock intrinsic value calculation we used $230.981 million for the last fiscal year's total revenue generated by Intrexon. The default revenue input number comes from 0001 income statement of Intrexon. 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 XON stock valuation model: a) initial revenue growth rate of 2% 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 XON is calculated based on our internal credit rating of Intrexon, 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 Intrexon.
    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 XON stock the variable cost ratio is equal to 131.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $66 million in the base year in the intrinsic value calculation for XON 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 7.2% for Intrexon.

Corporate tax rate of 27% is the nominal tax rate for Intrexon. 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 XON 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 XON are equal to 121.6%.

Life of production assets of 15.2 years is the average useful life of capital assets used in Intrexon 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 XON is equal to -5.2%. 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 - $533.631 million for Intrexon - 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 136.992 million for Intrexon 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 Intrexon at the current share price and the inputted number of shares is $1.4 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ A Preview Of Intrexon's Q3 Earnings   [07:56AM  Benzinga]
▶ Gaithersburg biotech CEO to step down   [Oct-23-18 03:05PM  American City Business Journals]
▶ Intrexons Latest Pitch: Were a Pot Stock   [Sep-25-18 03:00PM  Motley Fool]
▶ How to Make a Killing in Gene Therapy   [12:25PM  Barrons.com]
▶ Germantown's Intrexon leaving the NYSE for Nasdaq   [Sep-12-18 07:56AM  American City Business Journals]
▶ Why Intrexon Corporation Stock Is Slipping Today   [Aug-10-18 12:31PM  Motley Fool]
▶ Intrexon Business Update and Conference Call   [Aug-09-18 04:57PM  PR Newswire]
▶ The Global Cannabis Market Is Set To Explode   [Jul-22-18 07:30PM  Oilprice.com]
▶ Deutsche Bank Brought in Some Help   [11:06AM  Bloomberg]
▶ Here's What's Causing Intrexon to Tumble 20% Today   [May-11-18 04:00PM  Motley Fool]
▶ Intrexon Announces First Quarter 2018 Financial Results   [May-10-18 04:05PM  PR Newswire]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.