GREY:ALEAF - Post by User
Post by
DCFruleson May 17, 2021 4:25pm
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Post# 33215994
Improved FCF
Improved FCFI agree that Aleafia’s financial performance has been a disaster. However, one minor positive aspect that has gone unnoticed is that Aleafia’s free cash flow (FCF) improved slightly in Q1, although still negative. This is worth mentioning because a stock’s intrinsic value is driven primarily by the anticipated future generation of positive FCFs. Aleafia’s historic FCFs generated in 2020 Q2, Q3 and Q4 and 2021 Q1 are -$16.1M, -$10.4M, -$10.1M and -$7.1M respectively. Although this represents a slight improvement, Aleafia needs to generate positive FCFs and quickly.
Intrinsic value obviously depends on the FCF forecast used. For analysis purposes, I generated 8 FCF forecasts and applied a simplified FCF valuation technique. Aleafia’s intrinsic value per share ranged from $0.24 to $2.36 depending on which FCF forecast one is comfortable with. The concept of FCF, the simplified FCF valuation technique and my eight FCF forecasts, calculations and assumptions are described on my website:
https://www.npvguide.com/valuing-aleafia-health-inc/