Enterprise Value to FCFF (EV/FCFF)
Free Cash Flow to The Firm (FCFF)
Cytokinetics Inc., FCFF calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
An analysis of the cash flow trajectory from 2018 to 2022 indicates a period of substantial cash consumption, with a marked acceleration in outflows during the final two years of the period. The financial performance is characterized by a brief anomaly of positive cash flow in 2020, situated between years of increasing operational burn.
- Net Cash Provided by Operating Activities
- Operating cash flows were negative in 2018 and 2019, totaling approximately 101.2 million USD and 90.9 million USD respectively. A temporary shift to a positive position occurred in 2020 with a surplus of 8.9 million USD. This trend reversed sharply in 2021, with outflows increasing to 142.5 million USD, and intensified further in 2022, reaching 299.5 million USD.
- Free Cash Flow to the Firm (FCFF)
- FCFF trends closely aligned with operating cash flows, remaining negative in 2018 and 2019 before turning positive at 7.5 million USD in 2020. A significant deterioration followed, with FCFF dropping to negative 183.5 million USD in 2021 and negative 296.7 million USD in 2022. The disparity between operating cash flow and FCFF in 2021 suggests a higher allocation toward capital expenditures during that year compared to other periods in the observed timeframe.
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Interest Paid, Net of Tax
Cytokinetics Inc., interest paid, net of tax calculation
US$ in thousands
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
2 2022 Calculation
Cash paid for interest, tax = Cash paid for interest × EITR
= 15,165 × 0.00% = 0
The cash paid for interest, net of tax, demonstrates a substantial overall increase from 2018 to 2022, reflecting a significant rise in the net cost of debt servicing over the analyzed period.
- Overall Growth Trajectory
- A consistent upward trend is observed, with expenditures rising from 2,877 thousand USD in 2018 to 15,165 thousand USD by the end of 2022. This represents a total increase of approximately 427% over the five-year interval.
- Accelerated Increase (2018–2020)
- The period between 2018 and 2020 was characterized by rapid growth. Specifically, the net interest paid rose from 2,877 thousand USD to 9,620 thousand USD, with the most significant single-year jump occurring between 2019 and 2020, where costs increased by approximately 137%.
- Short-term Stabilization and Recent Peak (2021–2022)
- A brief period of stabilization occurred in 2021, as payments decreased slightly to 9,175 thousand USD. However, this was followed by a sharp increase in 2022, reaching a five-year peak of 15,165 thousand USD, which represents a 65% increase over the previous year.
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Enterprise Value to FCFF Ratio, Current
Cytokinetics Inc., current EV/FCFF calculation, comparison to benchmarks
| Selected Financial Data (US$ in thousands) | |
| Enterprise value (EV) | 13,914,826) |
| Free cash flow to the firm (FCFF) | (296,741) |
| Valuation Ratio | |
| EV/FCFF | — |
| Benchmarks | |
| EV/FCFF, Competitors1 | |
| AbbVie Inc. | 29.55 |
| Amgen Inc. | 28.72 |
| Bristol-Myers Squibb Co. | 11.48 |
| Danaher Corp. | 32.13 |
| Eli Lilly & Co. | 144.44 |
| Gilead Sciences Inc. | 22.56 |
| Johnson & Johnson | 32.50 |
| Merck & Co. Inc. | 30.09 |
| Pfizer Inc. | 19.96 |
| Regeneron Pharmaceuticals Inc. | 23.78 |
| Thermo Fisher Scientific Inc. | 37.17 |
| Vertex Pharmaceuticals Inc. | 41.41 |
| EV/FCFF, Sector | |
| Pharmaceuticals, Biotechnology & Life Sciences | 30.85 |
| EV/FCFF, Industry | |
| Health Care | 28.30 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.
Enterprise Value to FCFF Ratio, Historical
Cytokinetics Inc., historical EV/FCFF calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | ||||||
| Enterprise value (EV)1 | 3,931,450) | 2,644,163) | 1,003,554) | 787,578) | 173,561) | |
| Free cash flow to the firm (FCFF)2 | (296,741) | (183,513) | 7,511) | (89,467) | (99,213) | |
| Valuation Ratio | ||||||
| EV/FCFF3 | — | — | 133.61 | — | — | |
| Benchmarks | ||||||
| EV/FCFF, Competitors4 | ||||||
| AbbVie Inc. | 12.15 | 13.18 | — | — | — | |
| Amgen Inc. | 16.01 | 15.82 | — | — | — | |
| Bristol-Myers Squibb Co. | 13.87 | 10.52 | — | — | — | |
| Danaher Corp. | 25.74 | 28.25 | — | — | — | |
| Eli Lilly & Co. | 59.17 | 38.39 | — | — | — | |
| Gilead Sciences Inc. | 13.58 | 8.42 | — | — | — | |
| Johnson & Johnson | 23.80 | 21.25 | — | — | — | |
| Merck & Co. Inc. | 19.09 | 23.27 | — | — | — | |
| Pfizer Inc. | 9.15 | 8.40 | — | — | — | |
| Regeneron Pharmaceuticals Inc. | 23.31 | 9.81 | — | — | — | |
| Thermo Fisher Scientific Inc. | 31.61 | 33.14 | — | — | — | |
| Vertex Pharmaceuticals Inc. | 16.68 | 22.47 | — | — | — | |
| EV/FCFF, Sector | ||||||
| Pharmaceuticals, Biotechnology & Life Sciences | 18.08 | 16.12 | — | — | — | |
| EV/FCFF, Industry | ||||||
| Health Care | 18.66 | 17.80 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
3 2022 Calculation
EV/FCFF = EV ÷ FCFF
= 3,931,450 ÷ -296,741 = —
4 Click competitor name to see calculations.
An examination of the financial metrics from 2018 to 2022 reveals a significant divergence between the market valuation of the entity and its operational cash flow performance. While the enterprise value has experienced exponential growth, the free cash flow to the firm has remained predominantly negative, reflecting a financial profile where valuation is driven by future expectations rather than current cash generation.
- Enterprise Value (EV) Trend
- The enterprise value demonstrated consistent and rapid appreciation over the five-year period. Starting at 173,561 thousand US$ in 2018, the value ascended to 3,931,450 thousand US$ by 2022. This trajectory indicates a substantial increase in total valuation, with the most pronounced acceleration occurring between 2020 and 2022.
- Free Cash Flow to the Firm (FCFF) Performance
- Cash flow performance has been characterized by instability and persistent deficits. The entity recorded negative FCFF in 2018 and 2019, followed by a brief transition to a positive position of 7,511 thousand US$ in 2020. This positive trend was short-lived, as FCFF returned to negative territory in 2021 and deteriorated further to negative 296,741 thousand US$ by the end of 2022.
- EV/FCFF Ratio Interpretation
- The EV/FCFF ratio provides limited analytical utility for the majority of the observed period due to the prevalence of negative cash flows. A positive ratio of 133.61 was recorded only in 2020, coinciding with the sole instance of positive FCFF. The inability to calculate a meaningful ratio in 2018, 2019, 2021, and 2022 highlights a disconnect between the expanding enterprise value and the firm's current ability to generate free cash flow.
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