An Intrinsic Calculation For Altimmune, Inc. (NASDAQ:ALT) Suggests It's 39% Undervalued
An Intrinsic Calculation For Altimmune, Inc. (NASDAQ:ALT) Suggests It's 39% Undervalued
Key Insights
- Using the 2 Stage Free Cash Flow to Equity, Altimmune fair value estimate is US$14.49
- Altimmune's US$8.89 share price signals that it might be 39% undervalued
- Analyst price target for ALT is US$21.75, which is 50% above our fair value estimate
Does the March share price for Altimmune, Inc. (NASDAQ:ALT) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
Is Altimmune Fairly Valued?
We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value:
10-year free cash flow (FCF) forecast
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | -US$118.0m | -US$151.7m | -US$250.7m | -US$148.0m | US$38.3m | US$50.8m | US$62.7m | US$73.5m | US$82.8m | US$90.8m |
Growth Rate Estimate Source | Analyst x1 | Analyst x2 | Analyst x2 | Analyst x2 | Analyst x2 | Est @ 32.69% | Est @ 23.57% | Est @ 17.19% | Est @ 12.72% | Est @ 9.59% |
Present Value ($, Millions) Discounted @ 6.1% | -US$111 | -US$135 | -US$210 | -US$117 | US$28.4 | US$35.6 | US$41.4 | US$45.8 | US$48.6 | US$50.2 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = -US$323m
After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 6.1%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$91m× (1 + 2.3%) ÷ (6.1%– 2.3%) = US$2.4b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$2.4b÷ ( 1 + 6.1%)10= US$1.3b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$1.0b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$8.9, the company appears quite undervalued at a 39% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.
Important Assumptions
We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Altimmune as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.1%, which is based on a levered beta of 0.829. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
SWOT Analysis for Altimmune
- Currently debt free.
- Balance sheet summary for ALT.
- Shareholders have been diluted in the past year.
- Trading below our estimate of fair value by more than 20%.
- Has less than 3 years of cash runway based on current free cash flow.
- Not expected to become profitable over the next 3 years.
- Is ALT well equipped to handle threats?
Moving On:
Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Instead the best use for a DCF model is to test certain assumptions and theories to see if they would lead to the company being undervalued or overvalued. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Why is the intrinsic value higher than the current share price? For Altimmune, we've put together three further aspects you should consider:
- Risks: Case in point, we've spotted 5 warning signs for Altimmune you should be aware of, and 3 of them make us uncomfortable.
- Future Earnings: How does ALT's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGM every day. If you want to find the calculation for other stocks just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
關鍵見解
- 使用兩階段的股本自由現金流,Altimmune的公允價值估計爲14.49美元
- Altimmune的8.89美元股價表明其估值可能被低估了39%
- 分析師對ALT的目標股價爲21.75美元,比我們的公允價值估計高出50%
Altimmune, Inc.(納斯達克股票代碼:ALT)3月份的股價是否反映了其真正價值?今天,我們將通過採用預期的未來現金流並將其折現爲今天的價值來估算股票的內在價值。這將使用折扣現金流 (DCF) 模型來完成。像這樣的模型可能看起來超出外行人的理解,但它們很容易理解。
我們普遍認爲,公司的價值是其未來將產生的所有現金的現值。但是,差價合約只是衆多估值指標中的一個,而且並非沒有缺陷。任何有興趣進一步了解內在價值的人都應該讀一讀 Simply Wall St 分析模型。
Altimmune 的價值是否合理?
我們使用所謂的兩階段模型,這僅意味着公司的現金流有兩個不同的增長期。通常,第一階段是較高的增長階段,第二階段是較低的增長階段。在第一階段,我們需要估算未來十年的業務現金流。在可能的情況下,我們會使用分析師的估計值,但是當這些估計值不可用時,我們會從最新的估計值或報告的價值中推斷出之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
通常,我們假設今天的一美元比未來一美元更有價值,因此這些未來現金流的總和將折現爲今天的價值:
10 年自由現金流 (FCF) 預測
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | -118.0 億美元 | -1.517億美元 | -2.507億美元 | -1.48億美元 | 38.3 萬美元 | 50.8 萬美元 | 6270 萬美元 | 73.5 萬美元 | 8280 萬美元 | 9,080 萬美元 |
增長率估算來源 | 分析師 x1 | 分析師 x2 | 分析師 x2 | 分析師 x2 | 分析師 x2 | 美國東部標準時間 @ 32.69% | 美國東部標準時間 @ 23.57% | 美國東部標準時間 @ 17.19% | 美國東部標準時間 @ 12.72% | Est @ 9.59% |
現值(美元,百萬美元)折扣 @ 6.1% | -111 美元 | -135 美元 | -210 美元 | -117 美元 | 28.4 美元 | 35.6 美元 | 41.4 美元 | 45.8 美元 | 48.6 美元 | 50.2 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
10 年期現金流 (PVCF) 的現值 = -3.23 億美元
在計算了最初10年期內未來現金流的現值之後,我們需要計算終值,該終值涵蓋了第一階段以後的所有未來現金流。出於多種原因,使用的增長率非常保守,不能超過一個國家的GDP增長。在這種情況下,我們使用10年期國債收益率的5年平均值(2.3%)來估計未來的增長。與10年 “增長” 期一樣,我們使用6.1%的股本成本將未來的現金流折現爲今天的價值。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 9100 萬美元× (1 + 2.3%) ÷ (6.1% — 2.3%) = 24億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 24億美元÷ (1 + 6.1%)10= 13億美元
總價值是未來十年的現金流總額加上貼現的終端價值,由此得出總權益價值,在本例中爲10億美元。在最後一步中,我們將股票價值除以已發行股票的數量。相對於目前的8.9美元的股價,該公司的估值似乎被嚴重低估,與目前的股價相比折扣了39%。但是,估值是不精確的工具,就像望遠鏡一樣——移動幾度,最終進入另一個星系。請記住這一點。
重要假設
我們要指出的是,貼現現金流的最重要投入是貼現率,當然還有實際的現金流。你不必同意這些輸入,我建議你自己重做計算然後試一試。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將Altimmune視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了6.1%,這是基於0.829的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
Altimmune 的 SWOT 分析
- 目前無債務。
- ALT 的資產負債表摘要。
- 在過去的一年中,股東被稀釋了。
- 交易價格比我們估計的公允價值低20%以上。
- 根據當前的自由現金流,現金流不足 3 年。
- 預計在未來三年內不會盈利。
- ALT 有足夠的能力應對威脅嗎?
繼續前進:
儘管重要,但DCF的計算不應是你在研究公司時唯一考慮的指標。DCF模型不是完美的股票估值工具。取而代之的是,DCF模型的最佳用途是測試某些假設和理論,看看它們是否會導致公司被低估或高估。例如,公司權益成本或無風險利率的變化會對估值產生重大影響。爲什麼內在價值高於當前股價?對於 Altimmune,我們彙總了您應該考慮的另外三個方面:
- 風險:舉個例子,我們發現了你應該注意的5個Altimmune警告信號,其中3個讓我們感到不舒服。
- 未來收益:與同行和整個市場相比,ALT的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他高質量的替代品:你喜歡一個優秀的全能選手嗎?瀏覽我們的高品質股票互動清單,了解您可能還會錯過什麼!
PS。Simply Wall St應用程序每天對納斯達克通用汽車的每隻股票進行折扣現金流估值。如果您想找到其他股票的計算方法,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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