Is There An Opportunity With MannKind's 44% Undervaluation?

[Clement]

Simply Wall St
finance.yahoo.com/news/opportunity-mannkind-corporations-nasdaq-mnkd-121101048.html

"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$2.5b. The last step is to then divide the equity value by the number of shares outstanding." 

According to the article, Fair Value per share is $9.48.

[peppy]

Dec 31, 2022 8:48:28 GMT -5 Clement said:

Simply Wall St
finance.yahoo.com/news/opportunity-mannkind-corporations-nasdaq-mnkd-121101048.html

"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$2.5b. The last step is to then divide the equity value by the number of shares outstanding." 

Fair value per share is $9.48.

Price is going to get there fast.
All systems go.

Turn the hour glass.

[hellodolly]

Just read this article. The authors conclusions on fair value is OK for a static number. But, I think we can all agree there is a likelihood more revenue sources are closer than farther away if we consider the ongoing PHIII trials in India and pediatrics. Levels of market penetration used for each indication can be easily manipulated so, I use conservative numbers myself when calculating DCF.

As always, for companies with multiple indications or assets, you will want to model at least a revenue build for each important indication of each important asset.

Sometimes you will also model the full income statement for each indication or asset; in other cases, you can just model revenue for each major asset, then model the income statement for all the assets together.

Don't rely too much on any DCF.

A DCF is more precise than many other valuation techniques, but even the best models are not accurate.

DCFs are also highly sensitive to key inputs. You can test different values for key inputs to see how sensitive the model is to each inputs.

For inputs that are both uncertain and important, explicitly model and present a range of DCF values based on a range of assumptions around these key inputs.

[Clement]

I agree, HD. MNKD revenues are increasing sooner than the article expects. "Sooner" alters the discounting and would result in a higher fair value.