Intrinsic value of Alnylam Pharmaceuticals - ALNY

Previous Close

$105.93

  Intrinsic Value

$4.85

stock screener

  Rating & Target

str. sell

-95%

Previous close

$105.93

 
Intrinsic value

$4.85

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of ALNY stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  14.63
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  47
  144
  222
  333
  483
  681
  936
  1,257
  1,650
  2,124
  2,682
  3,331
  4,072
  4,908
  5,840
  6,867
  7,988
  9,201
  10,505
  11,898
  13,377
  14,940
  16,586
  18,314
  20,122
  22,011
  23,980
  26,032
  28,166
  30,385
  32,691
Variable operating expenses, $m
 
  399
  616
  921
  1,337
  1,886
  2,593
  3,480
  4,570
  5,880
  7,427
  9,223
  11,276
  13,591
  16,171
  19,014
  22,118
  25,478
  29,089
  32,945
  37,040
  41,368
  45,926
  50,710
  55,718
  60,948
  66,402
  72,081
  77,991
  84,135
  90,522
Fixed operating expenses, $m
 
  358
  366
  374
  382
  390
  399
  408
  417
  426
  435
  445
  454
  464
  475
  485
  496
  507
  518
  529
  541
  553
  565
  577
  590
  603
  616
  630
  644
  658
  672
Total operating expenses, $m
  472
  757
  982
  1,295
  1,719
  2,276
  2,992
  3,888
  4,987
  6,306
  7,862
  9,668
  11,730
  14,055
  16,646
  19,499
  22,614
  25,985
  29,607
  33,474
  37,581
  41,921
  46,491
  51,287
  56,308
  61,551
  67,018
  72,711
  78,635
  84,793
  91,194
Operating income, $m
  -425
  -612
  -759
  -962
  -1,236
  -1,595
  -2,055
  -2,631
  -3,336
  -4,182
  -5,180
  -6,337
  -7,658
  -9,147
  -10,806
  -12,632
  -14,626
  -16,784
  -19,102
  -21,576
  -24,204
  -26,981
  -29,905
  -32,974
  -36,186
  -39,540
  -43,038
  -46,680
  -50,469
  -54,408
  -58,503
EBITDA, $m
  -410
  -589
  -722
  -907
  -1,156
  -1,483
  -1,901
  -2,424
  -3,064
  -3,832
  -4,738
  -5,788
  -6,987
  -8,338
  -9,843
  -11,500
  -13,309
  -15,266
  -17,369
  -19,614
  -21,998
  -24,518
  -27,170
  -29,954
  -32,868
  -35,911
  -39,083
  -42,387
  -45,824
  -49,398
  -53,112
Interest expense (income), $m
  1
  2
  9
  20
  35
  55
  82
  117
  161
  215
  280
  356
  445
  546
  660
  788
  928
  1,082
  1,247
  1,426
  1,616
  1,818
  2,032
  2,257
  2,494
  2,741
  2,999
  3,268
  3,549
  3,841
  4,144
Earnings before tax, $m
  -410
  -614
  -768
  -982
  -1,271
  -1,650
  -2,138
  -2,748
  -3,497
  -4,397
  -5,460
  -6,693
  -8,103
  -9,693
  -11,466
  -13,420
  -15,554
  -17,865
  -20,349
  -23,002
  -25,820
  -28,800
  -31,938
  -35,231
  -38,679
  -42,281
  -46,037
  -49,948
  -54,018
  -58,249
  -62,647
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -410
  -614
  -768
  -982
  -1,271
  -1,650
  -2,138
  -2,748
  -3,497
  -4,397
  -5,460
  -6,693
  -8,103
  -9,693
  -11,466
  -13,420
  -15,554
  -17,865
  -20,349
  -23,002
  -25,820
  -28,800
  -31,938
  -35,231
  -38,679
  -42,281
  -46,037
  -49,948
  -54,018
  -58,249
  -62,647

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  627
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,263
  716
  1,107
  1,655
  2,402
  3,389
  4,658
  6,253
  8,211
  10,565
  13,345
  16,571
  20,260
  24,420
  29,055
  34,163
  39,740
  45,777
  52,265
  59,192
  66,550
  74,327
  82,517
  91,112
  100,109
  109,506
  119,305
  129,510
  140,128
  151,168
  162,642
Adjusted assets (=assets-cash), $m
  636
  716
  1,107
  1,655
  2,402
  3,389
  4,658
  6,253
  8,211
  10,565
  13,345
  16,571
  20,260
  24,420
  29,055
  34,163
  39,740
  45,777
  52,265
  59,192
  66,550
  74,327
  82,517
  91,112
  100,109
  109,506
  119,305
  129,510
  140,128
  151,168
  162,642
Revenue / Adjusted assets
  0.074
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
  0.201
Average production assets, $m
  72
  237
  367
  549
  796
  1,123
  1,544
  2,073
  2,721
  3,502
  4,423
  5,492
  6,715
  8,094
  9,630
  11,323
  13,172
  15,173
  17,323
  19,619
  22,058
  24,636
  27,350
  30,199
  33,181
  36,296
  39,544
  42,926
  46,445
  50,104
  53,908
Working capital, $m
  540
  -45
  -70
  -105
  -152
  -215
  -295
  -396
  -520
  -669
  -845
  -1,049
  -1,283
  -1,546
  -1,840
  -2,163
  -2,516
  -2,898
  -3,309
  -3,748
  -4,214
  -4,706
  -5,225
  -5,769
  -6,338
  -6,933
  -7,554
  -8,200
  -8,872
  -9,571
  -10,298
Total debt, $m
  150
  166
  365
  644
  1,024
  1,526
  2,172
  2,984
  3,981
  5,179
  6,594
  8,236
  10,113
  12,231
  14,590
  17,190
  20,029
  23,102
  26,404
  29,930
  33,675
  37,634
  41,802
  46,177
  50,757
  55,540
  60,528
  65,722
  71,126
  76,746
  82,586
Total liabilities, $m
  343
  365
  563
  843
  1,223
  1,725
  2,371
  3,183
  4,179
  5,378
  6,792
  8,435
  10,312
  12,430
  14,789
  17,389
  20,228
  23,300
  26,603
  30,129
  33,874
  37,833
  42,001
  46,376
  50,955
  55,739
  60,726
  65,921
  71,325
  76,944
  82,785
Total equity, $m
  920
  352
  543
  813
  1,179
  1,664
  2,287
  3,070
  4,031
  5,187
  6,552
  8,136
  9,947
  11,990
  14,266
  16,774
  19,512
  22,476
  25,662
  29,064
  32,676
  36,495
  40,516
  44,736
  49,153
  53,768
  58,579
  63,590
  68,803
  74,223
  79,857
Total liabilities and equity, $m
  1,263
  717
  1,106
  1,656
  2,402
  3,389
  4,658
  6,253
  8,210
  10,565
  13,344
  16,571
  20,259
  24,420
  29,055
  34,163
  39,740
  45,776
  52,265
  59,193
  66,550
  74,328
  82,517
  91,112
  100,108
  109,507
  119,305
  129,511
  140,128
  151,167
  162,642
Debt-to-equity ratio
  0.163
  0.470
  0.670
  0.790
  0.870
  0.920
  0.950
  0.970
  0.990
  1.000
  1.010
  1.010
  1.020
  1.020
  1.020
  1.020
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
  1.030
Adjusted equity ratio
  0.461
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491
  0.491

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -410
  -614
  -768
  -982
  -1,271
  -1,650
  -2,138
  -2,748
  -3,497
  -4,397
  -5,460
  -6,693
  -8,103
  -9,693
  -11,466
  -13,420
  -15,554
  -17,865
  -20,349
  -23,002
  -25,820
  -28,800
  -31,938
  -35,231
  -38,679
  -42,281
  -46,037
  -49,948
  -54,018
  -58,249
  -62,647
Depreciation, amort., depletion, $m
  15
  24
  37
  55
  80
  112
  154
  207
  272
  350
  442
  549
  672
  809
  963
  1,132
  1,317
  1,517
  1,732
  1,962
  2,206
  2,464
  2,735
  3,020
  3,318
  3,630
  3,954
  4,293
  4,645
  5,010
  5,391
Funds from operations, $m
  -291
  -590
  -731
  -927
  -1,191
  -1,538
  -1,983
  -2,541
  -3,225
  -4,047
  -5,017
  -6,144
  -7,431
  -8,884
  -10,503
  -12,288
  -14,237
  -16,348
  -18,617
  -21,040
  -23,614
  -26,336
  -29,203
  -32,211
  -35,361
  -38,651
  -42,082
  -45,656
  -49,373
  -53,239
  -57,256
Change in working capital, $m
  17
  -17
  -25
  -35
  -47
  -62
  -80
  -101
  -124
  -149
  -176
  -204
  -234
  -263
  -293
  -323
  -353
  -382
  -411
  -439
  -466
  -492
  -519
  -544
  -570
  -595
  -620
  -646
  -672
  -699
  -727
Cash from operations, $m
  -308
  -573
  -707
  -892
  -1,144
  -1,476
  -1,903
  -2,440
  -3,101
  -3,898
  -4,841
  -5,939
  -7,198
  -8,621
  -10,210
  -11,965
  -13,884
  -15,966
  -18,206
  -20,601
  -23,149
  -25,844
  -28,684
  -31,667
  -34,792
  -38,056
  -41,462
  -45,009
  -48,701
  -52,540
  -56,530
Maintenance CAPEX, $m
  0
  -15
  -24
  -37
  -55
  -80
  -112
  -154
  -207
  -272
  -350
  -442
  -549
  -672
  -809
  -963
  -1,132
  -1,317
  -1,517
  -1,732
  -1,962
  -2,206
  -2,464
  -2,735
  -3,020
  -3,318
  -3,630
  -3,954
  -4,293
  -4,645
  -5,010
New CAPEX, $m
  -65
  -89
  -129
  -182
  -247
  -327
  -421
  -529
  -649
  -780
  -921
  -1,069
  -1,223
  -1,379
  -1,536
  -1,693
  -1,848
  -2,001
  -2,150
  -2,296
  -2,439
  -2,578
  -2,714
  -2,849
  -2,982
  -3,115
  -3,248
  -3,382
  -3,519
  -3,659
  -3,803
Cash from investing activities, $m
  143
  -104
  -153
  -219
  -302
  -407
  -533
  -683
  -856
  -1,052
  -1,271
  -1,511
  -1,772
  -2,051
  -2,345
  -2,656
  -2,980
  -3,318
  -3,667
  -4,028
  -4,401
  -4,784
  -5,178
  -5,584
  -6,002
  -6,433
  -6,878
  -7,336
  -7,812
  -8,304
  -8,813
Free cash flow, $m
  -165
  -677
  -860
  -1,111
  -1,446
  -1,882
  -2,436
  -3,123
  -3,957
  -4,951
  -6,113
  -7,451
  -8,970
  -10,671
  -12,555
  -14,621
  -16,865
  -19,284
  -21,874
  -24,630
  -27,549
  -30,627
  -33,862
  -37,251
  -40,793
  -44,489
  -48,339
  -52,346
  -56,513
  -60,844
  -65,344
Issuance/(repayment) of debt, $m
  150
  136
  199
  279
  380
  502
  646
  812
  996
  1,198
  1,415
  1,642
  1,878
  2,117
  2,359
  2,600
  2,839
  3,073
  3,302
  3,526
  3,745
  3,959
  4,168
  4,375
  4,579
  4,783
  4,988
  5,194
  5,404
  5,619
  5,841
Issuance/(repurchase) of shares, $m
  28
  746
  960
  1,251
  1,637
  2,135
  2,761
  3,531
  4,458
  5,553
  6,824
  8,277
  9,914
  11,736
  13,742
  15,929
  18,293
  20,829
  23,534
  26,404
  29,433
  32,618
  35,959
  39,451
  43,097
  46,895
  50,848
  54,959
  59,231
  63,670
  68,281
Cash from financing (excl. dividends), $m  
  178
  882
  1,159
  1,530
  2,017
  2,637
  3,407
  4,343
  5,454
  6,751
  8,239
  9,919
  11,792
  13,853
  16,101
  18,529
  21,132
  23,902
  26,836
  29,930
  33,178
  36,577
  40,127
  43,826
  47,676
  51,678
  55,836
  60,153
  64,635
  69,289
  74,122
Total cash flow (excl. dividends), $m
  13
  205
  299
  420
  571
  755
  972
  1,220
  1,498
  1,801
  2,126
  2,468
  2,822
  3,182
  3,546
  3,908
  4,266
  4,618
  4,963
  5,300
  5,629
  5,950
  6,265
  6,575
  6,883
  7,189
  7,496
  7,807
  8,123
  8,446
  8,778
Retained Cash Flow (-), $m
  345
  -746
  -960
  -1,251
  -1,637
  -2,135
  -2,761
  -3,531
  -4,458
  -5,553
  -6,824
  -8,277
  -9,914
  -11,736
  -13,742
  -15,929
  -18,293
  -20,829
  -23,534
  -26,404
  -29,433
  -32,618
  -35,959
  -39,451
  -43,097
  -46,895
  -50,848
  -54,959
  -59,231
  -63,670
  -68,281
Prev. year cash balance distribution, $m
 
  1,546
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  23
  36
  56
  83
  121
  170
  234
  314
  413
  531
  671
  833
  1,018
  1,227
  1,460
  1,717
  1,997
  2,300
  2,626
  2,974
  3,344
  3,735
  4,146
  4,578
  5,030
  5,503
  5,995
  6,508
  7,041
  7,596
Cash available for distribution, $m
 
  1,005
  -661
  -832
  -1,066
  -1,380
  -1,790
  -2,311
  -2,961
  -3,752
  -4,698
  -5,809
  -7,092
  -8,554
  -10,196
  -12,021
  -14,026
  -16,211
  -18,571
  -21,104
  -23,804
  -26,669
  -29,694
  -32,876
  -36,214
  -39,706
  -43,352
  -47,152
  -51,109
  -55,224
  -59,503
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  964
  -605
  -724
  -878
  -1,070
  -1,299
  -1,562
  -1,851
  -2,155
  -2,463
  -2,759
  -3,026
  -3,252
  -3,423
  -3,529
  -3,564
  -3,527
  -3,420
  -3,249
  -3,025
  -2,758
  -2,464
  -2,155
  -1,844
  -1,545
  -1,265
  -1,012
  -791
  -603
  -448
Current shareholders' claim on cash, %
  100
  61.6
  41.1
  28.9
  21.1
  15.9
  12.2
  9.5
  7.5
  6.0
  4.8
  3.9
  3.2
  2.6
  2.2
  1.8
  1.5
  1.3
  1.1
  0.9
  0.7
  0.6
  0.5
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1

Alnylam Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of ribonucleic acid (RNA) interference (RNAi) therapeutics. The Company is focused on the use of its N-acetylgalactosamine (GalNAc)-conjugate platform for delivery of small interfering RNAs (siRNAs). Its pipeline of investigational RNAi therapeutics focuses on three Strategic Therapeutic Areas (STArs): Genetic Medicines, with multiple product candidates for the treatment of rare diseases; Cardio-Metabolic Diseases, with product candidates directed toward genetically validated, liver-expressed disease targets for unmet needs in cardiovascular and metabolic diseases, and Hepatic Infectious Diseases, with product candidates designed to address the global health challenges of hepatic infectious diseases, beginning with hepatitis B and hepatitis D viral infections. The Company's lead product, Patisiran, is formulated utilizing lipid nanoparticles (LNPs).

FINANCIAL RATIOS  of  Alnylam Pharmaceuticals (ALNY)

Valuation Ratios
P/E Ratio -22.2
Price to Sales 193.7
Price to Book 9.9
Price to Tangible Book
Price to Cash Flow -29.6
Price to Free Cash Flow -24.4
Growth Rates
Sales Growth Rate 14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 400%
Cap. Spend. - 3 Yr. Gr. Rate 74.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 16.3%
Total Debt to Equity 16.3%
Interest Coverage -409
Management Effectiveness
Return On Assets -30.9%
Ret/ On Assets - 3 Yr. Avg. -34.1%
Return On Total Capital -35.1%
Ret/ On T. Cap. - 3 Yr. Avg. -40.4%
Return On Equity -37.5%
Return On Equity - 3 Yr. Avg. -41.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -838.3%
EBITDA Margin - 3 Yr. Avg. -754%
Operating Margin -904.3%
Oper. Margin - 3 Yr. Avg. -806.8%
Pre-Tax Margin -872.3%
Pre-Tax Margin - 3 Yr. Avg. -788.6%
Net Profit Margin -872.3%
Net Profit Margin - 3 Yr. Avg. -761.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 3.4%
Payout Ratio 0%

ALNY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALNY stock intrinsic value calculation we used $90 million for the last fiscal year's total revenue generated by Alnylam Pharmaceuticals. The default revenue input number comes from 2016 income statement of Alnylam Pharmaceuticals. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our ALNY stock valuation model: a) initial revenue growth rate of 60% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ALNY is calculated based on our internal credit rating of Alnylam Pharmaceuticals, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Alnylam Pharmaceuticals.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of ALNY stock the variable cost ratio is equal to 276.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $350 million in the base year in the intrinsic value calculation for ALNY stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Alnylam Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Alnylam Pharmaceuticals. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the ALNY stock is equal to 25%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for ALNY are equal to 164.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Alnylam Pharmaceuticals operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for ALNY is equal to -31.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1766 million for Alnylam Pharmaceuticals - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 91 million for Alnylam Pharmaceuticals is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Alnylam Pharmaceuticals at the current share price and the inputted number of shares is $9.6 billion.

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COMPANY NEWS

▶ Why This Biotech Company 'Dominates' Its Rival In Drug Study   [Jul-05-18 04:27PM  Investor's Business Daily]
▶ Alnylam to Host Fifth Annual RNAi Roundtable Webcast Series   [Jun-21-18 07:00AM  Business Wire]
▶ 3 Top Biotech Stocks to Buy in June   [Jun-04-18 11:36AM  Motley Fool]
▶ Is Alnylam Pharmaceuticals, Inc. (ALNY) a Buy?   [May-17-18 06:32AM  Motley Fool]
▶ Alnylam Appoints Colleen Reitan to the Board of Directors   [May-15-18 07:00AM  Business Wire]
▶ Alnylam Looks Forward   [May-08-18 10:00AM  Motley Fool]
▶ Alnylam: 1Q Earnings Snapshot   [May-03-18 05:03PM  Associated Press]
▶ Boston biotech entrepreneur Christoph Westphal launches new startup   [May-02-18 11:56AM  American City Business Journals]
▶ Why Dicerna Rocketed Higher Today   [Apr-20-18 04:08PM  Motley Fool]
▶ Dicerna to pay $27M to settle Alnylam trade secrets lawsuit   [02:20PM  American City Business Journals]
▶ Pfizer Takes On Alnylam, Ionis With Rare Disease Treatment   [Mar-29-18 05:15PM  Investor's Business Daily]
▶ Is Ionis Pharmaceuticals, Inc. a Buy?   [07:17AM  Motley Fool]
▶ Better Buy: Bellicum Pharmaceuticals, Inc. vs. Alnylam   [Mar-22-18 04:51PM  Motley Fool]
▶ Why Biotech Stocks Face Steep Declines Ahead   [Mar-07-18 02:31PM  Investopedia]
▶ Is Alnylam Pharmaceuticals, Inc. a Buy?   [Feb-26-18 07:32AM  Motley Fool]
▶ 3 Biotech Stocks To Avoid   [Feb-20-18 10:07AM  Forbes]
▶ 3 Biotech Stocks Facing Steep Declines   [Feb-13-18 12:20PM  Investopedia]
▶ Alnylam Pharmaceuticals Starts the Wait for Approval   [Feb-12-18 03:37PM  Motley Fool]
▶ Alnylam reports 4Q loss   [Feb-08-18 08:31AM  Associated Press]
▶ 3 Top Cholesterol Drug Stocks to Consider Buying Now   [Feb-06-18 09:04AM  Motley Fool]
▶ Affimed, Alnylam Are End Of The Week Movers In Biotech   [Feb-05-18 10:15AM  Market Exclusive]
Financial statements of ALNY
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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