Intrinsic value of Albany Molecular Research - AMRI

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$15.82

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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$15.82

 
Intrinsic value

$14.31

 
Up/down potential

-10%

 
Rating

hold

 
Value-price divergence* premium content

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*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of AMRI 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

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.7

 

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, %
  41.79
  51.60
  46.94
  42.75
  38.97
  35.57
  32.52
  29.77
  27.29
  25.06
  23.05
  21.25
  19.62
  18.16
  16.85
  15.66
  14.59
  13.64
  12.77
  11.99
  11.29
  10.67
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.19
Revenue, $m
  570
  864
  1,270
  1,813
  2,519
  3,415
  4,525
  5,872
  7,475
  9,348
  11,503
  13,947
  16,684
  19,714
  23,035
  26,643
  30,531
  34,694
  39,125
  43,818
  48,767
  53,968
  59,418
  65,116
  71,061
  77,255
  83,703
  90,408
  97,378
  104,622
  112,149
Variable operating expenses, $m
 
  825
  1,201
  1,704
  2,359
  3,190
  4,220
  5,470
  6,956
  8,693
  10,692
  12,936
  15,474
  18,284
  21,364
  24,710
  28,317
  32,178
  36,287
  40,640
  45,230
  50,054
  55,109
  60,393
  65,907
  71,652
  77,632
  83,851
  90,316
  97,034
  104,016
Fixed operating expenses, $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
Total operating expenses, $m
  589
  825
  1,201
  1,704
  2,359
  3,190
  4,220
  5,470
  6,956
  8,693
  10,692
  12,936
  15,474
  18,284
  21,364
  24,710
  28,317
  32,178
  36,287
  40,640
  45,230
  50,054
  55,109
  60,393
  65,907
  71,652
  77,632
  83,851
  90,316
  97,034
  104,016
Operating income, $m
  -19
  40
  69
  108
  160
  225
  305
  403
  519
  655
  811
  1,012
  1,210
  1,430
  1,671
  1,932
  2,214
  2,516
  2,838
  3,178
  3,537
  3,914
  4,309
  4,723
  5,154
  5,603
  6,071
  6,557
  7,062
  7,588
  8,134
EBITDA, $m
  32
  116
  170
  243
  337
  457
  606
  786
  1,000
  1,251
  1,539
  1,867
  2,233
  2,638
  3,083
  3,565
  4,086
  4,643
  5,236
  5,864
  6,526
  7,222
  7,952
  8,714
  9,510
  10,339
  11,202
  12,099
  13,032
  14,001
  15,009
Interest expense (income), $m
  21
  25
  43
  69
  103
  147
  204
  274
  358
  459
  577
  713
  866
  1,039
  1,229
  1,438
  1,665
  1,910
  2,172
  2,451
  2,746
  3,057
  3,384
  3,727
  4,086
  4,460
  4,850
  5,255
  5,677
  6,116
  6,571
Earnings before tax, $m
  -60
  15
  26
  40
  57
  77
  101
  129
  161
  196
  234
  299
  344
  391
  441
  494
  549
  606
  666
  727
  791
  857
  925
  995
  1,068
  1,143
  1,221
  1,302
  1,385
  1,472
  1,562
Tax expense, $m
  10
  4
  7
  11
  15
  21
  27
  35
  43
  53
  63
  81
  93
  106
  119
  133
  148
  164
  180
  196
  214
  231
  250
  269
  288
  309
  330
  351
  374
  397
  422
Net income, $m
  -70
  11
  19
  29
  41
  56
  74
  94
  117
  143
  171
  218
  251
  286
  322
  361
  401
  443
  486
  531
  577
  626
  675
  727
  780
  835
  891
  950
  1,011
  1,075
  1,141

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  52
  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
  1,210
  1,756
  2,581
  3,684
  5,120
  6,941
  9,198
  11,936
  15,193
  19,000
  23,380
  28,348
  33,911
  40,070
  46,819
  54,152
  62,055
  70,516
  79,522
  89,060
  99,119
  109,691
  120,768
  132,349
  144,433
  157,023
  170,127
  183,756
  197,923
  212,646
  227,946
Adjusted assets (=assets-cash), $m
  1,158
  1,756
  2,581
  3,684
  5,120
  6,941
  9,198
  11,936
  15,193
  19,000
  23,380
  28,348
  33,911
  40,070
  46,819
  54,152
  62,055
  70,516
  79,522
  89,060
  99,119
  109,691
  120,768
  132,349
  144,433
  157,023
  170,127
  183,756
  197,923
  212,646
  227,946
Revenue / Adjusted assets
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
Average production assets, $m
  430
  652
  957
  1,367
  1,899
  2,575
  3,412
  4,428
  5,636
  7,048
  8,673
  10,516
  12,580
  14,865
  17,368
  20,088
  23,020
  26,159
  29,500
  33,038
  36,770
  40,692
  44,801
  49,097
  53,580
  58,251
  63,112
  68,168
  73,423
  78,885
  84,561
Working capital, $m
  217
  306
  449
  642
  892
  1,209
  1,602
  2,079
  2,646
  3,309
  4,072
  4,937
  5,906
  6,979
  8,154
  9,431
  10,808
  12,282
  13,850
  15,511
  17,263
  19,105
  21,034
  23,051
  25,156
  27,348
  29,631
  32,004
  34,472
  37,036
  39,701
Total debt, $m
  641
  1,056
  1,678
  2,511
  3,595
  4,970
  6,674
  8,741
  11,200
  14,075
  17,382
  21,133
  25,333
  29,983
  35,079
  40,614
  46,581
  52,969
  59,769
  66,970
  74,565
  82,547
  90,910
  99,654
  108,777
  118,282
  128,176
  138,466
  149,162
  160,278
  171,829
Total liabilities, $m
  911
  1,326
  1,948
  2,781
  3,865
  5,240
  6,944
  9,011
  11,470
  14,345
  17,652
  21,403
  25,603
  30,253
  35,349
  40,884
  46,851
  53,239
  60,039
  67,240
  74,835
  82,817
  91,180
  99,924
  109,047
  118,552
  128,446
  138,736
  149,432
  160,548
  172,099
Total equity, $m
  299
  430
  632
  903
  1,254
  1,701
  2,253
  2,924
  3,722
  4,655
  5,728
  6,945
  8,308
  9,817
  11,471
  13,267
  15,203
  17,276
  19,483
  21,820
  24,284
  26,874
  29,588
  32,426
  35,386
  38,471
  41,681
  45,020
  48,491
  52,098
  55,847
Total liabilities and equity, $m
  1,210
  1,756
  2,580
  3,684
  5,119
  6,941
  9,197
  11,935
  15,192
  19,000
  23,380
  28,348
  33,911
  40,070
  46,820
  54,151
  62,054
  70,515
  79,522
  89,060
  99,119
  109,691
  120,768
  132,350
  144,433
  157,023
  170,127
  183,756
  197,923
  212,646
  227,946
Debt-to-equity ratio
  2.144
  2.450
  2.650
  2.780
  2.870
  2.920
  2.960
  2.990
  3.010
  3.020
  3.030
  3.040
  3.050
  3.050
  3.060
  3.060
  3.060
  3.070
  3.070
  3.070
  3.070
  3.070
  3.070
  3.070
  3.070
  3.070
  3.080
  3.080
  3.080
  3.080
  3.080
Adjusted equity ratio
  0.233
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245
  0.245

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -70
  11
  19
  29
  41
  56
  74
  94
  117
  143
  171
  218
  251
  286
  322
  361
  401
  443
  486
  531
  577
  626
  675
  727
  780
  835
  891
  950
  1,011
  1,075
  1,141
Depreciation, amort., depletion, $m
  51
  76
  101
  134
  178
  232
  301
  383
  481
  596
  728
  855
  1,023
  1,208
  1,412
  1,633
  1,872
  2,127
  2,398
  2,686
  2,989
  3,308
  3,642
  3,992
  4,356
  4,736
  5,131
  5,542
  5,969
  6,413
  6,875
Funds from operations, $m
  42
  87
  120
  163
  219
  289
  374
  477
  599
  739
  899
  1,073
  1,274
  1,494
  1,734
  1,994
  2,272
  2,569
  2,884
  3,217
  3,567
  3,934
  4,318
  4,718
  5,136
  5,570
  6,022
  6,492
  6,981
  7,488
  8,015
Change in working capital, $m
  15
  104
  144
  192
  250
  317
  393
  477
  567
  663
  763
  865
  969
  1,073
  1,176
  1,277
  1,376
  1,474
  1,569
  1,661
  1,752
  1,841
  1,929
  2,017
  2,105
  2,193
  2,282
  2,374
  2,467
  2,564
  2,665
Cash from operations, $m
  27
  83
  -24
  -29
  -31
  -28
  -19
  1
  31
  76
  136
  208
  305
  421
  559
  717
  896
  1,096
  1,316
  1,556
  1,815
  2,093
  2,388
  2,701
  3,031
  3,378
  3,740
  4,119
  4,513
  4,924
  5,351
Maintenance CAPEX, $m
  0
  -35
  -53
  -78
  -111
  -154
  -209
  -277
  -360
  -458
  -573
  -705
  -855
  -1,023
  -1,208
  -1,412
  -1,633
  -1,872
  -2,127
  -2,398
  -2,686
  -2,989
  -3,308
  -3,642
  -3,992
  -4,356
  -4,736
  -5,131
  -5,542
  -5,969
  -6,413
New CAPEX, $m
  -52
  -222
  -306
  -409
  -533
  -676
  -837
  -1,016
  -1,208
  -1,412
  -1,625
  -1,843
  -2,064
  -2,285
  -2,504
  -2,720
  -2,932
  -3,139
  -3,341
  -3,538
  -3,732
  -3,922
  -4,109
  -4,296
  -4,483
  -4,671
  -4,861
  -5,056
  -5,256
  -5,462
  -5,676
Cash from investing activities, $m
  -193
  -257
  -359
  -487
  -644
  -830
  -1,046
  -1,293
  -1,568
  -1,870
  -2,198
  -2,548
  -2,919
  -3,308
  -3,712
  -4,132
  -4,565
  -5,011
  -5,468
  -5,936
  -6,418
  -6,911
  -7,417
  -7,938
  -8,475
  -9,027
  -9,597
  -10,187
  -10,798
  -11,431
  -12,089
Free cash flow, $m
  -166
  -174
  -383
  -516
  -675
  -858
  -1,065
  -1,293
  -1,537
  -1,795
  -2,062
  -2,340
  -2,614
  -2,886
  -3,154
  -3,415
  -3,669
  -3,915
  -4,152
  -4,381
  -4,603
  -4,819
  -5,029
  -5,237
  -5,443
  -5,649
  -5,857
  -6,068
  -6,284
  -6,507
  -6,738
Issuance/(repayment) of debt, $m
  175
  452
  622
  833
  1,084
  1,375
  1,704
  2,067
  2,459
  2,874
  3,307
  3,751
  4,200
  4,650
  5,096
  5,536
  5,967
  6,388
  6,800
  7,201
  7,595
  7,982
  8,364
  8,743
  9,123
  9,506
  9,894
  10,290
  10,696
  11,116
  11,551
Issuance/(repurchase) of shares, $m
  1
  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
Cash from financing (excl. dividends), $m  
  171
  452
  622
  833
  1,084
  1,375
  1,704
  2,067
  2,459
  2,874
  3,307
  3,751
  4,200
  4,650
  5,096
  5,536
  5,967
  6,388
  6,800
  7,201
  7,595
  7,982
  8,364
  8,743
  9,123
  9,506
  9,894
  10,290
  10,696
  11,116
  11,551
Total cash flow (excl. dividends), $m
  3
  278
  240
  317
  409
  517
  639
  775
  922
  1,080
  1,245
  1,411
  1,586
  1,764
  1,942
  2,121
  2,298
  2,474
  2,648
  2,820
  2,992
  3,163
  3,334
  3,506
  3,680
  3,857
  4,037
  4,221
  4,412
  4,609
  4,813
Retained Cash Flow (-), $m
  -12
  -146
  -202
  -270
  -352
  -446
  -553
  -671
  -798
  -933
  -1,073
  -1,217
  -1,363
  -1,509
  -1,654
  -1,796
  -1,936
  -2,073
  -2,206
  -2,337
  -2,465
  -2,590
  -2,714
  -2,837
  -2,960
  -3,085
  -3,211
  -3,339
  -3,471
  -3,607
  -3,748
Prev. year cash balance distribution, $m
 
  15
  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
 
  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
Cash available for distribution, $m
 
  147
  38
  46
  57
  70
  86
  104
  124
  147
  172
  193
  223
  255
  289
  324
  362
  401
  441
  484
  527
  573
  620
  669
  720
  772
  826
  882
  941
  1,001
  1,064
Discount rate, %
 
  11.00
  11.55
  12.13
  12.73
  13.37
  14.04
  14.74
  15.48
  16.25
  17.06
  17.92
  18.81
  19.75
  20.74
  21.78
  22.87
  24.01
  25.21
  26.47
  27.80
  29.19
  30.65
  32.18
  33.79
  35.48
  37.25
  39.11
  41.07
  43.12
  45.28
PV of cash for distribution, $m
 
  132
  30
  33
  35
  38
  39
  40
  39
  38
  36
  32
  28
  24
  21
  17
  13
  10
  8
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Albany Molecular Research, Inc., a contract research and manufacturing company, provides integrated drug discovery, development, and manufacturing services primarily in the United States, Europe, and Asia. The company’s Discovery and Development Services segment offers services from target identification tools to investigational new drug enabling activities, such as diverse chemistry library design and synthesis, high throughput and high content screening, medicinal chemistry, and biology, as well as pharmacology, including drug metabolism and pharmacokinetics. It also provides analytical chemistry services for drug discovery, and pharmaceutical development and manufacturing; and chemical development technologies to promote the solutions for route development from late lead optimization to commercial manufacturing. Its Active Pharmaceutical Ingredients segment offers chemical synthesis and manufacturing services in accordance with current good manufacturing practices (cGMP) regulations. The company’s Drug Product Manufacturing segment provides integrated pharmaceutical drug development programs and services, including process research and development, pre-formulation and formulation development, and GLP bioanalytical and separation sciences. It also offers formulation development services for solid dosage, solution, suspension, topicals, and injectables; and cGMP early clinical phase capsules filling and cGMP early clinical powder in bottle for solution and suspension. In addition, this segment provides cGMP contract manufacturing services in sterile syringe and vial filling using specialized technologies, including lyophilization. The company serves pharmaceutical and biotechnology companies; government research entities and non-profit organizations; and agriculture, fine chemicals, contract chemical manufacturing, medical devices, and flavoring and cosmetics businesses. Albany Molecular Research, Inc. was founded in 1991 and is headquartered in Albany, New York.

FINANCIAL RATIOS  of  Albany Molecular Research (AMRI)

Valuation Ratios
P/E Ratio -9.7
Price to Sales 1.2
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 25.1
Price to Free Cash Flow -27.1
Growth Rates
Sales Growth Rate 41.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 136.4%
Cap. Spend. - 3 Yr. Gr. Rate 34.1%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 202%
Total Debt to Equity 214.4%
Interest Coverage -2
Management Effectiveness
Return On Assets -4.4%
Ret/ On Assets - 3 Yr. Avg. -1.2%
Return On Total Capital -8.7%
Ret/ On T. Cap. - 3 Yr. Avg. -3.3%
Return On Equity -23.9%
Return On Equity - 3 Yr. Avg. -8.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 23.3%
Gross Margin - 3 Yr. Avg. 24.5%
EBITDA Margin 2.1%
EBITDA Margin - 3 Yr. Avg. 5.7%
Operating Margin -3.3%
Oper. Margin - 3 Yr. Avg. 0.7%
Pre-Tax Margin -10.5%
Pre-Tax Margin - 3 Yr. Avg. -4.4%
Net Profit Margin -12.3%
Net Profit Margin - 3 Yr. Avg. -4.6%
Effective Tax Rate -16.7%
Eff/ Tax Rate - 3 Yr. Avg. 18.9%
Payout Ratio 0%

AMRI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMRI stock intrinsic value calculation we used $570 million for the last fiscal year's total revenue generated by Albany Molecular Research. The default revenue input number comes from 2016 income statement of Albany Molecular Research. 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 AMRI stock valuation model: a) initial revenue growth rate of 51.6% 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 11%, whose default value for AMRI is calculated based on our internal credit rating of Albany Molecular Research, 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 Albany Molecular Research.
    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 AMRI stock the variable cost ratio is equal to 96.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for AMRI 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 4.1% for Albany Molecular Research.

Corporate tax rate of 27% is the nominal tax rate for Albany Molecular Research. 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 AMRI stock is equal to 0%.

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 AMRI are equal to 75.4%.

Life of production assets of 12.3 years is the average useful life of capital assets used in Albany Molecular Research 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 AMRI is equal to 35.4%. 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 - $299 million for Albany Molecular Research - 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 44.007 million for Albany Molecular Research 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 Albany Molecular Research at the current share price and the inputted number of shares is $0.7 billion.


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COMPANY NEWS

▶ AMRI Receives CMO Leadership Awards for Excellence   [Mar-22-17 08:00AM  PR Newswire]
▶ 3 Biotech Stocks to Buy in March   [Mar-10-17 12:07PM  Motley Fool]
▶ 3 Biotech Stocks to Buy in March   [12:07PM  at Motley Fool]
▶ AMRI to Present at Barclays Global Healthcare Conference   [Mar-03-17 08:00AM  PR Newswire]
▶ Albany Molecular Research 4Q Net Misses Street   [11:00AM  at Investopedia]
▶ Albany Molecular Research posts 4Q loss   [08:28AM  Associated Press]
▶ Is Instructure Inc (INST) A Good Stock to Buy?   [Dec-12-16 06:37PM  at Insider Monkey]
▶ Is Albany Molecular Research, Inc. (AMRI) A Good Stock To Buy?   [Dec-05-16 05:00PM  at Insider Monkey]
▶ AMRI Announces API Supply Agreement with Shire   [Nov-29-16 07:45AM  PR Newswire]
▶ AMRI to Present Two Posters at AAPS 2016   [Nov-14-16 07:45AM  PR Newswire]
▶ AMRI Announces Third Quarter 2016 Results   [07:30AM  PR Newswire]
▶ The Cheapest Stocks in Biotech   [09:07AM  at Motley Fool]
▶ AMRI Licenses CRISPR-Cas9 Gene Editing Technology   [Aug-23-16 04:05PM  PR Newswire]
▶ AMRI to Announce Second Quarter 2016 Results   [Jul-15-16 08:00AM  PR Newswire]
▶ AMRI Completes Acquisition of Euticals   [07:25AM  PR Newswire]
▶ AMRI Clarifies 2016 Revenue Guidance   [10:28AM  PR Newswire]
▶ AMRI Announces First Quarter 2016 Results   [07:35AM  PR Newswire]
▶ Trending Now: AMRI   [08:01AM  Yahoo Finance - Qwiki]
Stock chart of AMRI Financial statements of AMRI
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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