Intrinsic value of Albany Molecular Research - AMRI

Previous Close

$21.70

  Intrinsic Value

$40.05

stock screener

  Rating & Target

str. buy

+85%

  Value-price divergence*

-81%

Previous close

$21.70

 
Intrinsic value

$40.05

 
Up/down potential

+85%

 
Rating

str. buy

 
Value-price divergence*

-81%

*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 0.9

 

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
  54.70
  49.73
  45.26
  41.23
  37.61
  34.35
  31.41
  28.77
  26.39
  24.25
  22.33
  20.60
  19.04
  17.63
  16.37
  15.23
  14.21
  13.29
  12.46
  11.71
  11.04
  10.44
  9.89
  9.40
  8.96
  8.57
  8.21
  7.89
  7.60
  7.34
Revenue, $m
  570
  882
  1,320
  1,918
  2,709
  3,727
  5,007
  6,580
  8,474
  10,710
  13,308
  16,280
  19,633
  23,370
  27,491
  31,991
  36,864
  42,102
  47,697
  53,640
  59,923
  66,540
  73,486
  80,757
  88,352
  96,272
  104,520
  113,103
  122,027
  131,302
  140,941
Variable operating expenses, $m
 
  841
  1,248
  1,802
  2,535
  3,480
  4,667
  6,126
  7,882
  9,957
  12,366
  15,099
  18,209
  21,675
  25,497
  29,671
  34,190
  39,049
  44,238
  49,750
  55,577
  61,714
  68,156
  74,900
  81,944
  89,290
  96,940
  104,900
  113,177
  121,779
  130,719
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
  841
  1,248
  1,802
  2,535
  3,480
  4,667
  6,126
  7,882
  9,957
  12,366
  15,099
  18,209
  21,675
  25,497
  29,671
  34,190
  39,049
  44,238
  49,750
  55,577
  61,714
  68,156
  74,900
  81,944
  89,290
  96,940
  104,900
  113,177
  121,779
  130,719
Operating income, $m
  -19
  41
  73
  116
  173
  247
  340
  454
  591
  754
  942
  1,181
  1,424
  1,695
  1,994
  2,320
  2,674
  3,054
  3,459
  3,890
  4,346
  4,826
  5,330
  5,857
  6,408
  6,982
  7,580
  8,203
  8,850
  9,523
  10,222
EBITDA, $m
  32
  118
  177
  257
  362
  499
  670
  881
  1,134
  1,433
  1,781
  2,179
  2,627
  3,128
  3,679
  4,281
  4,933
  5,634
  6,383
  7,178
  8,019
  8,905
  9,834
  10,807
  11,824
  12,884
  13,988
  15,136
  16,330
  17,572
  18,862
Interest expense (income), $m
  21
  25
  44
  72
  110
  159
  223
  304
  403
  522
  663
  826
  1,013
  1,224
  1,459
  1,719
  2,002
  2,308
  2,638
  2,990
  3,364
  3,759
  4,175
  4,612
  5,070
  5,548
  6,046
  6,565
  7,105
  7,666
  8,250
Earnings before tax, $m
  -60
  16
  28
  44
  64
  88
  117
  150
  189
  232
  279
  354
  411
  471
  535
  602
  672
  745
  821
  900
  982
  1,067
  1,154
  1,245
  1,338
  1,435
  1,534
  1,638
  1,745
  1,856
  1,972
Tax expense, $m
  10
  4
  8
  12
  17
  24
  31
  41
  51
  63
  75
  96
  111
  127
  144
  162
  181
  201
  222
  243
  265
  288
  312
  336
  361
  387
  414
  442
  471
  501
  532
Net income, $m
  -70
  12
  21
  32
  47
  64
  85
  110
  138
  169
  204
  259
  300
  344
  390
  439
  491
  544
  600
  657
  717
  779
  843
  909
  977
  1,047
  1,120
  1,196
  1,274
  1,355
  1,439

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
  1,792
  2,684
  3,898
  5,505
  7,576
  10,178
  13,375
  17,223
  21,769
  27,049
  33,089
  39,904
  47,500
  55,876
  65,022
  74,927
  85,574
  96,945
  109,024
  121,795
  135,244
  149,361
  164,140
  179,577
  195,675
  212,440
  229,884
  248,022
  266,874
  286,465
Adjusted assets (=assets-cash), $m
  1,158
  1,792
  2,684
  3,898
  5,505
  7,576
  10,178
  13,375
  17,223
  21,769
  27,049
  33,089
  39,904
  47,500
  55,876
  65,022
  74,927
  85,574
  96,945
  109,024
  121,795
  135,244
  149,361
  164,140
  179,577
  195,675
  212,440
  229,884
  248,022
  266,874
  286,465
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
  665
  996
  1,446
  2,042
  2,810
  3,776
  4,962
  6,389
  8,076
  10,034
  12,275
  14,803
  17,621
  20,728
  24,121
  27,796
  31,745
  35,964
  40,445
  45,182
  50,171
  55,408
  60,891
  66,617
  72,589
  78,808
  85,280
  92,008
  99,002
  106,269
Working capital, $m
  217
  312
  467
  679
  959
  1,319
  1,773
  2,329
  3,000
  3,791
  4,711
  5,763
  6,950
  8,273
  9,732
  11,325
  13,050
  14,904
  16,885
  18,989
  21,213
  23,555
  26,014
  28,588
  31,277
  34,080
  37,000
  40,038
  43,197
  46,481
  49,893
Total debt, $m
  641
  1,083
  1,756
  2,673
  3,886
  5,450
  7,414
  9,828
  12,733
  16,165
  20,152
  24,712
  29,857
  35,592
  41,916
  48,822
  56,300
  64,338
  72,924
  82,043
  91,685
  101,839
  112,498
  123,655
  135,310
  147,464
  160,122
  173,292
  186,986
  201,220
  216,011
Total liabilities, $m
  911
  1,353
  2,026
  2,943
  4,156
  5,720
  7,684
  10,098
  13,003
  16,435
  20,422
  24,982
  30,127
  35,862
  42,186
  49,092
  56,570
  64,608
  73,194
  82,313
  91,955
  102,109
  112,768
  123,925
  135,580
  147,734
  160,392
  173,562
  187,256
  201,490
  216,281
Total equity, $m
  299
  439
  657
  955
  1,349
  1,856
  2,494
  3,277
  4,220
  5,333
  6,627
  8,107
  9,776
  11,637
  13,690
  15,930
  18,357
  20,966
  23,752
  26,711
  29,840
  33,135
  36,594
  40,214
  43,996
  47,940
  52,048
  56,322
  60,765
  65,384
  70,184
Total liabilities and equity, $m
  1,210
  1,792
  2,683
  3,898
  5,505
  7,576
  10,178
  13,375
  17,223
  21,768
  27,049
  33,089
  39,903
  47,499
  55,876
  65,022
  74,927
  85,574
  96,946
  109,024
  121,795
  135,244
  149,362
  164,139
  179,576
  195,674
  212,440
  229,884
  248,021
  266,874
  286,465
Debt-to-equity ratio
  2.144
  2.470
  2.670
  2.800
  2.880
  2.940
  2.970
  3.000
  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
  3.080
  3.080
  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
  12
  21
  32
  47
  64
  85
  110
  138
  169
  204
  259
  300
  344
  390
  439
  491
  544
  600
  657
  717
  779
  843
  909
  977
  1,047
  1,120
  1,196
  1,274
  1,355
  1,439
Depreciation, amort., depletion, $m
  51
  77
  104
  141
  189
  252
  330
  426
  543
  680
  839
  998
  1,203
  1,433
  1,685
  1,961
  2,260
  2,581
  2,924
  3,288
  3,673
  4,079
  4,505
  4,950
  5,416
  5,902
  6,407
  6,933
  7,480
  8,049
  8,640
Funds from operations, $m
  42
  89
  125
  173
  236
  316
  415
  536
  680
  849
  1,043
  1,257
  1,503
  1,776
  2,075
  2,400
  2,750
  3,125
  3,524
  3,945
  4,390
  4,858
  5,347
  5,859
  6,393
  6,949
  7,527
  8,129
  8,754
  9,404
  10,079
Change in working capital, $m
  15
  110
  155
  212
  280
  361
  453
  557
  670
  792
  920
  1,052
  1,187
  1,323
  1,459
  1,593
  1,725
  1,854
  1,981
  2,104
  2,224
  2,342
  2,459
  2,574
  2,689
  2,804
  2,920
  3,038
  3,159
  3,283
  3,412
Cash from operations, $m
  27
  -21
  -31
  -39
  -44
  -45
  -38
  -21
  10
  57
  123
  205
  316
  453
  617
  807
  1,025
  1,271
  1,543
  1,842
  2,166
  2,515
  2,889
  3,285
  3,704
  4,145
  4,607
  5,091
  5,595
  6,121
  6,667
Maintenance CAPEX, $m
  0
  -35
  -54
  -81
  -118
  -166
  -228
  -307
  -403
  -519
  -657
  -816
  -998
  -1,203
  -1,433
  -1,685
  -1,961
  -2,260
  -2,581
  -2,924
  -3,288
  -3,673
  -4,079
  -4,505
  -4,950
  -5,416
  -5,902
  -6,407
  -6,933
  -7,480
  -8,049
New CAPEX, $m
  -52
  -235
  -331
  -451
  -596
  -768
  -965
  -1,186
  -1,428
  -1,686
  -1,959
  -2,241
  -2,528
  -2,818
  -3,107
  -3,393
  -3,674
  -3,950
  -4,218
  -4,481
  -4,738
  -4,989
  -5,237
  -5,482
  -5,727
  -5,972
  -6,219
  -6,471
  -6,729
  -6,994
  -7,268
Cash from investing activities, $m
  -193
  -270
  -385
  -532
  -714
  -934
  -1,193
  -1,493
  -1,831
  -2,205
  -2,616
  -3,057
  -3,526
  -4,021
  -4,540
  -5,078
  -5,635
  -6,210
  -6,799
  -7,405
  -8,026
  -8,662
  -9,316
  -9,987
  -10,677
  -11,388
  -12,121
  -12,878
  -13,662
  -14,474
  -15,317
Free cash flow, $m
  -166
  -292
  -415
  -570
  -758
  -979
  -1,232
  -1,514
  -1,821
  -2,149
  -2,492
  -2,852
  -3,210
  -3,568
  -3,923
  -4,271
  -4,610
  -4,939
  -5,256
  -5,563
  -5,860
  -6,147
  -6,427
  -6,702
  -6,973
  -7,243
  -7,514
  -7,787
  -8,067
  -8,353
  -8,649
Issuance/(repayment) of debt, $m
  175
  479
  673
  917
  1,213
  1,563
  1,965
  2,414
  2,905
  3,432
  3,986
  4,560
  5,145
  5,735
  6,324
  6,906
  7,478
  8,038
  8,586
  9,120
  9,642
  10,154
  10,658
  11,158
  11,655
  12,154
  12,658
  13,170
  13,694
  14,233
  14,791
Issuance/(repurchase) of shares, $m
  1
  143
  198
  265
  347
  443
  552
  674
  805
  945
  1,090
  1,221
  1,370
  1,517
  1,662
  1,802
  1,936
  2,064
  2,186
  2,302
  2,412
  2,516
  2,616
  2,712
  2,805
  2,897
  2,987
  3,078
  3,170
  3,264
  3,360
Cash from financing (excl. dividends), $m  
  171
  622
  871
  1,182
  1,560
  2,006
  2,517
  3,088
  3,710
  4,377
  5,076
  5,781
  6,515
  7,252
  7,986
  8,708
  9,414
  10,102
  10,772
  11,422
  12,054
  12,670
  13,274
  13,870
  14,460
  15,051
  15,645
  16,248
  16,864
  17,497
  18,151
Total cash flow (excl. dividends), $m
  3
  331
  455
  612
  803
  1,027
  1,285
  1,574
  1,890
  2,228
  2,584
  2,929
  3,305
  3,684
  4,062
  4,436
  4,804
  5,164
  5,515
  5,859
  6,194
  6,523
  6,847
  7,168
  7,487
  7,808
  8,132
  8,461
  8,797
  9,144
  9,502
Retained Cash Flow (-), $m
  -12
  -155
  -218
  -298
  -394
  -507
  -638
  -783
  -943
  -1,114
  -1,294
  -1,480
  -1,670
  -1,861
  -2,052
  -2,241
  -2,427
  -2,608
  -2,786
  -2,959
  -3,129
  -3,295
  -3,459
  -3,621
  -3,782
  -3,944
  -4,108
  -4,274
  -4,444
  -4,619
  -4,800
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
 
  191
  237
  315
  409
  520
  648
  790
  947
  1,114
  1,290
  1,450
  1,636
  1,823
  2,010
  2,195
  2,377
  2,555
  2,729
  2,899
  3,065
  3,228
  3,388
  3,547
  3,705
  3,864
  4,024
  4,187
  4,354
  4,525
  4,702
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
 
  172
  190
  223
  253
  278
  294
  302
  299
  287
  267
  237
  207
  175
  144
  114
  88
  66
  48
  33
  23
  15
  9
  6
  3
  2
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  86.0
  75.1
  66.4
  59.4
  53.7
  49.0
  45.1
  41.8
  39.0
  36.6
  34.5
  32.7
  31.2
  29.8
  28.6
  27.5
  26.5
  25.7
  24.9
  24.2
  23.5
  23.0
  22.4
  21.9
  21.5
  21.1
  20.7
  20.3
  19.9
  19.6

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 -13.3
Price to Sales 1.6
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 34.5
Price to Free Cash Flow -37.2
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 54.7% 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 42.691 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 $0.9 billion.

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COMPANY NEWS

▶ [$$] Carlyle, GTCR to Acquire Contract-Drug Manufacturer   [10:36AM  The Wall Street Journal]
▶ Equity firms in talks to acquire this public company in Albany   [07:55AM  American City Business Journals]
▶ AMRI to Present at Jefferies Healthcare Conference   [Jun-02-17 09:15AM  PR Newswire]
▶ Albany Molecular Research posts 1Q loss   [May-09-17 08:31AM  Associated Press]
▶ AMRI Announces First Quarter 2017 Results   [07:30AM  PR Newswire]
▶ Report: AMRI considering $1 billion sale   [Apr-26-17 04:06PM  American City Business Journals]
▶ 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]
Stock chart of AMRI Financial statements of AMRI Annual reports 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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