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PODD, a lower target price
Current, target price USD240, 97 (-60%)
May 21st, 2021
1 minute read
Sales, up again
Cashflow, more negative
1 minute read
Sales, up again
- Sales increased by 3% in the first quarter to 252 million dollars, which is +6% compared to our forecast.
- This is after a 5% increase in the fourth quarter & brings the quarterly average growth to 6%.
- We predict average growth of another 6% a quarter in this next 12 months which will bring sales to 317 million dollars by the first quarter of 2022.
Cashflow, more negative
- Cashflow was negative -68 million dollars in the first quarter after negative -41 million dollars in the fourth quarter on negative working capital.
- Average quarterly cashflow is still negative -21 million dollars.
- We use flat investment spending of -33 million dollars, which with higher sales, gives a positive average quarterly cashflow of 13 million dollars in this next 12 months.
Sales up again, margins stable, but cashflow negative on working capital, a billion dollars capital to pay back & expensive so lower target price...
Balance sheet, higher leverage
Profit, expecting higher profit
Value, expensive
- With negative cashflow, the net leverage of cash minus total liabilities was -405 million dollars in the first quarter from -362 million dollars in the fourth quarter & -848 million dollars a year ago (new equity).
- With our forecast higher cashflow & assuming a dividend payout of -31 million dollars...
- ...net leverage will be -385 million dollars in 12 months time.
Profit, expecting higher profit
- Net profit was at 0 million dollars in the first quarter from -17 million dollars in the fourth quarter on lower non cash costs.
- The cash cost ratio of net profit add back non cash costs minus sales as a percent of sales was flat at -85%.
- We use the same -85% costs, to predict a higher next 12 months profit of 31 million dollars.
Value, expensive
- PODD cumulative net capital is at -946 million dollars from the last six years.
- At the current market value of 15,890 million dollars, based on forecasts it’s 13.07X sales, 8.73X assets, 27.16X equity, with a 5.4% profitability & a 0.2% yield.
- Our free cashflow forecast is 51 million dollars. At 1.6% with a big 2X adjustment, gives a -60% lower target price of 97 dollars.
