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Adverum Biotechnologies (Adverum Biotechnologies) Intrinsic Value: DCF (Earnings Based) : $-133.87 (As of May. 04, 2024)


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What is Adverum Biotechnologies Intrinsic Value: DCF (Earnings Based)?

As of today (2024-05-04), Adverum Biotechnologies's intrinsic value calculated from the Discounted Earnings model is $-133.87.

Note: Discounted Earnings model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.

Adverum Biotechnologies's Predictability Rank is 1-Star. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety (Earnings Based) using Discounted Earnings model for Adverum Biotechnologies is N/A.

The historical rank and industry rank for Adverum Biotechnologies's Intrinsic Value: DCF (Earnings Based) or its related term are showing as below:

ADVM's Price-to-DCF (Earnings Based) is not ranked *
in the Biotechnology industry.
Industry Median: 1.61
* Ranked among companies with meaningful Price-to-DCF (Earnings Based) only.

Adverum Biotechnologies Intrinsic Value: DCF (Earnings Based) Historical Data

The historical data trend for Adverum Biotechnologies's Intrinsic Value: DCF (Earnings Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Adverum Biotechnologies Intrinsic Value: DCF (Earnings Based) Chart

Adverum Biotechnologies Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
Intrinsic Value: DCF (Earnings Based)
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Adverum Biotechnologies Quarterly Data
Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23
Intrinsic Value: DCF (Earnings Based) Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - -

Competitive Comparison of Adverum Biotechnologies's Intrinsic Value: DCF (Earnings Based)

For the Biotechnology subindustry, Adverum Biotechnologies's Price-to-DCF (Earnings Based), along with its competitors' market caps and Price-to-DCF (Earnings Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


Adverum Biotechnologies's Price-to-DCF (Earnings Based) Distribution in the Biotechnology Industry

For the Biotechnology industry and Healthcare sector, Adverum Biotechnologies's Price-to-DCF (Earnings Based) distribution charts can be found below:

* The bar in red indicates where Adverum Biotechnologies's Price-to-DCF (Earnings Based) falls into.



Adverum Biotechnologies Intrinsic Value: DCF (Earnings Based) Calculation

This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.50%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year EPS without NRI Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year EPS without NRI Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year EPS without NRI Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Adverum Biotechnologies's average EPS without NRI Growth Rate in the past 10 years was -6.60%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. EPS without NRI: eps without nri = $-11.600.
GuruFocus DCF calculator is actually a Discounted Earnings calculator, EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Adverum Biotechnologies's Intrinsic Value: DCF (Earnings Based) for today is calculated as:

Intrinsic Value: DCF (Earnings Based)=EPS without NRI*{[(1+g1)/(1+d)+(1+g1)^2/(1+d)^2+...+(1+g1)^10/(1+d)^10]
+(1+g1)^10/(1+d)^10*[(1+g2)/(1+d)+(1+g2)^2/(1+d)^2+...+(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Earnings Based)=EPS without NRI*{[x+x^2+...+x^10]+x^10*[y+y^2+...+y^10]}
=EPS without NRI*[x*(1-x^10)/(1-x)+x^10*y*(1-y^10)/(1-y)]
=-11.600*11.5406
=-133.87

Margin of Safety % (DCF Earnings Based)=(Intrinsic Value: DCF (Earnings Based)-Current Price)/Intrinsic Value: DCF (Earnings Based)
=(-133.87-10.43)/-133.87
=N/A

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Adverum Biotechnologies  (NAS:ADVM) Intrinsic Value: DCF (Earnings Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.


Be Aware

What you need to know about Discounted Earnings model:

1. The Discounted Earnings model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that are relatively consistent performers.
4. The Discounted Earnings model works poorly for inconsistent performers like cyclicals.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.


Adverum Biotechnologies Intrinsic Value: DCF (Earnings Based) Related Terms

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Adverum Biotechnologies (Adverum Biotechnologies) Business Description

Industry
Traded in Other Exchanges
Address
100 Cardinal Way, Redwood CIty, CA, USA, 94063
Adverum Biotechnologies Inc is a U.S.-based clinical-stage gene therapy company. It develops gene therapy product candidates intended to provide durable efficacy by inducing sustained expression of a therapeutic protein. The company primarily generates revenue through license, research and collaboration arrangements with its strategic partners. Its lead product candidate is ADVM-022 which is a single, in-office intravitreal (IVT) injection gene therapy designed to deliver long-term durable levels of aflibercept associated with a robust, sustained treatment response, reducing the treatment burden and fluctuations in macular fluid associated with frequent anti-vascular endothelial growth factor (VEGF) injections. It has one segment developing and commercializing gene therapeutics.
Executives
C. David Nicholson, director 103 CHILDS ROAD, BASKIN RIDGE NJ 07092
Setareh Seyedkazemi officer: Chief Development Officer C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL DRIVE, REDWOOD CITY CA 94063
Linda M Rubinstein officer: Chief Financial Officer 25861 INDUSTRIAL BLVD, HAYWARD CA 94545
Peter Soparkar officer: Chief Legal Officer C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
Brigit Riley officer: Chief Scientific Officer 100 CARDINAL WAY, REDWOOD CITY CA 94063
Laurent Fischer director, officer: CEO and Director C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
Richard Beckman officer: Chief Medical Officer C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
Nancy E Pecota officer: Principal Accounting Officer ARADIGM CORPORATION, 3929 POINT EDEN WAY, HAYWARD CA 94545
John Rakow officer: SVP, Genl Counsel, Acting CFO C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
Rupert D'souza officer: Chief Financial Officer C/O ADVERUM BIOTECHNOLOGIES, INC., 100 CARDINAL WAY, REDWOOD CITY CA 94063
Dawn Svoronos director C/O MEDIVATION, INC., 525 MARKET ST., 36TH FLOOR, SAN FRANCISCO CA 94105
Soo Hong director C/O ADVERUM BIOTECHNOLOGIES, INC., 800 SAGINAW DRIVE, REDWOOD CITY CA 94063
Rabia Gurses Ozden director C/O AKOUOS, INC., 645 SUMMER STREET SUITE 200, BOSTON MA 02210
James Paul Scopa director 601 GATEWAY BOULEVARD, SUITE 350, SOUTH SAN FRANCISCO CA 94080
Julie Clark officer: Chief Medical Officer C/O ADVERUM BIOTECHNOLOGIES, INC., 800 SAGINAW DRIVE, REDWOOD CITY CA 94063