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PODD, a -44% lower target price
Current 257 Target 144 -44%

December 21st 2021
1 minute read
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Sales grew slower than expected 5%

• Sales grew 5% in the third quarter to 276 million dollars vs our 284 million dollars forecast.
• This brings the quarterly average to 4% growth.
• We predict average growth of 3% in this next 12 months to bring sales to 312 million dollars in the third quarter of 2022.

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Costs up 2 points, profit down

• The cash cost ratio went from -81% to -83% profit from 567 to -132 million dollars in the third quarter.
• The average cost ratio is at -84% now.
• We use an -82% cost ratio to predict a return to positive 22 million dollars profit in the third quarter of 2022.

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Cashflow lower on working capital, to turn positive

• Free cashflow went from -2 to -53 million dollars in the third quarter with -27 million dollars investment Cashflow but was positive excluding working capital.
• Average quarterly Cashflow is at -41 million dollars now.
• We assume the same -27 million dollars investment spending which with higher sales gives a positive 28 million dollars Cashflow in the third quarter of 2022.

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Balance sheet higher leverage

• Cash declined 872 to 587 million dollars in the third quarter.
• Liabilities increased 1,465 to 1,501 million dollars
• so net cash worsened -593 to -914 million dollars.
• With our forecast cashflow & a -76 million dollars equity payout -23 million dollars liabilities payment net cash will be -891 million dollars in 12 months time.

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Valuation, expensive, a -44% lower target price

• PODD capital from the last 27 quarters worsened -974 to -1,016 million dollars in the third quarter but will be -917 million dollars in12 months time.
• At the current market value of 17,720 million dollars based on our forecasts it’s at 9 X assets with a 14 years payback & a 0% yield.
• Our cashflow forecast is 99 million dollars which means an 178 X valuation. A 100 X valuation gives a -44% lower target price of 144 dollars.

Data file & model