Discounted Cash Flow Calculation for DB:S09 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:S09 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Sutro Biopharma's share price is below the future cash flow value, and at a moderate discount (> 20%).
Sutro Biopharma's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Sutro Biopharma's earnings available for a low price, and how does
this compare to other companies in the same industry?
Sutro Biopharma is not considered high growth as it is expected to be loss making for the next 1-3 years.
Sutro Biopharma's revenue is expected to grow by 8.2% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Sutro Biopharma's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
0/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. William J. Newell, also known as Bill, J.D. has been the Chief Executive Officer and Director of Sutro Biopharma, Inc. since January 2009. Mr. Newell has over 15 years of senior management experience in the biotechnology industry. He has legal and business development experience. He served as Executive Vice President of Aerovance, Inc. Mr. Newell served as President of Aerovance, Inc. from January 2006 to March 1, 2007. Mr. Newell served as a Senior Vice President and Chief Business Officer of QLT Inc. from June 2002 to January 1, 2005. Prior to QLT Inc., he served as a Senior Vice President for Corporate and Business Development and Secretary of AXYS Pharmaceuticals, Inc. He joined AXYS Pharmaceuticals, Inc. in 1998 and served various positions of increasing responsibility including Vice President, General Counsel and Senior Vice President of Corporate and Business Development and General Counsel. Mr. Newell held responsibility for all of AXYS Pharmaceuticals, Inc.'s corporate development and business development activities. He was previously responsible for AXYS Pharmaceuticals, Inc.'s legal affairs. Prior to AXYS Pharmaceuticals, Inc., Mr. Newell was a Partner in the law firm of Bingham McCutchen, Doyle, Brown & Enersen, LLP since 1990, where he specialized in strategic business transactions, including mergers and acquisitions and licensing and financing transactions. He serves as a Director of St. Paul's Hospital Foundation and SutroVax, Inc. He has been a Director of SYMIC Biomedical, Inc. since February 2015. He serves as Member of the board of BIOTECanada. He has been the Chair of the Board of California Life Sciences Association since May 30, 2018. He practiced corporate law in the San Francisco Bay Area. He is a Member of the Governing Board of the Emerging Companies Section of the Biotechnology Innovation Organization (BIO). Mr. Newell received his J.D. from the University Of Michigan Law School and holds an A.B. from Dartmouth College.
Insufficient data for Bill to compare compensation growth.
Bill's remuneration is about average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Sutro Biopharma management team is about average.
CEO & Director
Chief Scientific Officer
Chief Medical Officer
Founder and Member of Scientific Advisory Board
CFO & Secretary
Chief Technical Operations Officer
Chief People & Communications Officer
Senior Vice President of Alliance Management
Chief Business Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Sutro Biopharma board of directors is about average.
Sutro Biopharma, Inc. operates as clinical stage drug discovery, development, and manufacturing company. It focuses on creating protein therapeutics for cancer and autoimmune disorders through integrated cell-free protein synthesis platform, XpressCF. The company’s product candidates include STRO-001, an antibody-drug conjugate (ADC) directed against the cancer target CD74 for multiple myeloma and non-Hodgkin lymphoma; and STRO-002, an ADC directed against folate receptor-alpha for patients with ovarian and endometrial cancers. It has collaboration and license agreement with Celgene Corporation to discover and develop bispecific antibodies and/or ADCs focused primarily on the field of immuno-oncology. The company was formerly known as Fundamental Applied Biology, Inc. Sutro Biopharma, Inc. was incorporated in 2003 and is headquartered in South San Francisco, California.
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