Latest news with #SpectralAI
Yahoo
12 hours ago
- Business
- Yahoo
A Look At The Intrinsic Value Of Spectral AI, Inc. (NASDAQ:MDAI)
Using the 2 Stage Free Cash Flow to Equity, Spectral AI fair value estimate is US$2.30 Current share price of US$2.19 suggests Spectral AI is potentially trading close to its fair value Our fair value estimate is 52% lower than Spectral AI's analyst price target of US$4.79 Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Spectral AI, Inc. (NASDAQ:MDAI) as an investment opportunity by estimating the company's future cash flows and discounting them to their present value. We will take advantage of the Discounted Cash Flow (DCF) model for this purpose. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We use what is known as a 2-stage model, which simply means we have two different periods of growth rates for the company's cash flows. Generally the first stage is higher growth, and the second stage is a lower growth phase. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, and so the sum of these future cash flows is then discounted to today's value: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) -US$8.90m -US$1.80m US$3.70m US$2.90m US$3.30m US$3.60m US$3.87m US$4.10m US$4.31m US$4.50m Growth Rate Estimate Source Analyst x1 Analyst x1 Analyst x1 Analyst x1 Analyst x1 Est @ 9.20% Est @ 7.32% Est @ 6.01% Est @ 5.09% Est @ 4.44% Present Value ($, Millions) Discounted @ 7.4% -US$8.3 -US$1.6 US$3.0 US$2.2 US$2.3 US$2.3 US$2.3 US$2.3 US$2.3 US$2.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$9.1m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 7.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$4.5m× (1 + 2.9%) ÷ (7.4%– 2.9%) = US$103m Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$103m÷ ( 1 + 7.4%)10= US$50m 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$59m. In the final step we divide the equity value by the number of shares outstanding. Compared to the current share price of US$2.2, the company appears about fair value at a 4.9% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Spectral AI as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 1.040. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for Spectral AI Strength Debt is well covered by earnings. Weakness Shareholders have been diluted in the past year. Opportunity Forecast to reduce losses next year. Current share price is below our estimate of fair value. Threat Debt is not well covered by operating cash flow. Has less than 3 years of cash runway based on current free cash flow. Total liabilities exceed total assets, which raises the risk of financial distress. Not expected to become profitable over the next 3 years. Valuation is only one side of the coin in terms of building your investment thesis, and it is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Spectral AI, we've put together three essential factors you should further research: Risks: Take risks, for example - Spectral AI has 4 warning signs (and 2 which make us uncomfortable) we think you should know about. Future Earnings: How does MDAI's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQCM every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Associated Press
12-03-2025
- Business
- Associated Press
DeepRx Inc. Appoints Mr. Wensheng Fan as CEO for the AI in Precision Oncology Company
Accomplished Technology Executive and Entrepreneur Wensheng Fan Joins DeepRx Inc. PITTSBURGH, PENNSYLVANIA / ACCESS Newswire / March 11, 2025 / DeepRx Inc., a predictive analytics company advancing AI-driven solutions for precision oncology, is pleased to announce the appointment of Wensheng Fan as its new Chief Executive Officer. As CEO of DeepRx, Wensheng Fan will guide DeepRx in the commercialization of COLOXIS, an AI-powered chemotherapy drug-selection tool, which optimizes treatment for colorectal cancer patients. Wensheng Fan joins DeepRx as an accomplished technology executive and entrepreneur with over three decades of experience in leading high-tech product development. For the past 15 years, he co-founded and led Spectral AI, driving the development of DeepView®, an FDA Breakthrough-designated diagnostic technology. As CEO, Wensheng Fan secured over $250 million in U.S. federal contracts and $39 million in commercial funding. He led the company IPO on the London Stock Exchange in 2021 and later transitioned it to NASDAQ Global Market in 2023, demonstrating his ability to scale and commercialize groundbreaking AI technologies in medicine. Before Spectral AI, Wensheng Fan played pivotal roles in start-ups and large, international companies, including imaging technologies for self-driving cars at Sensata Technologies; broadband wireless communications at Navini Networks (acquired by Cisco); and as an early core member of PureSpeech Inc., a natural speech recognition technology company later acquired by Phillips. Mr. Fan earned his M.S. in Electrical Engineering from Northeastern University in Boston, MA, and B.S. in Electrical Engineering from Tsinghua University in Beijing, China. Wensheng Fan, Chief Executive Officer of DeepRx, said, 'I am honored to join DeepRx at such a pivotal moment to commercialize COLOXIS. I am dedicated to leading DeepRx in delivering AI-driven solutions that support oncologists and improve care for cancer patients.' Prof. Xinghua Lu, MD, PhD, co-founder and Chief Science Officer of DeepRx, said, 'We are thrilled to welcome Mr. Wensheng Fan as our new CEO. His proven track record in advancing transformative technologies will be invaluable as we push the boundaries of AI in precision oncology. With his leadership, we are confident DeepRx will bring COLOXIS to oncologists, empowering them to make more precise, informed decisions for the benefit of colorectal cancer patients worldwide.' DeepRx is committed to leveraging artificial intelligence to revolutionize personalized medicine, and Wensheng Fan's expertise in AI-driven healthcare solutions aligns seamlessly with the company's mission. His leadership will accelerate the development and deployment of COLOXIS, ensuring oncologists have access to state-of-the-art tools to enhance clinical decision-making. About DeepRx: DeepRx is an innovative healthcare technology company focused on developing AI-powered solutions to optimize cancer treatment. Its first flagship product, COLOXIS, utilizes advanced algorithms to assist oncologists in selecting the most effective chemotherapy drugs for colorectal cancer patients. COLOXIS was successfully double-blind tested in 1,065 colorectal cancer samples, with the outcome published in the Journal of Clinical Oncology. By harnessing AI, DeepRx aims to enhance precision medicine and improve patient care outcomes worldwide.
