Intrinsic value of ANI Pharmaceuticals - ANIP

Previous Close

$48.54

  Intrinsic Value

$222.84

stock screener

  Rating & Target

str. buy

+359%

  Value-price divergence*

+1104%

Previous close

$48.54

 
Intrinsic value

$222.84

 
Up/down potential

+359%

 
Rating

str. buy

 
Value-price divergence*

+1104%

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

We calculate the intrinsic value of ANIP 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 0.6

 

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, %
  69.74
  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
  129
  206
  319
  477
  692
  976
  1,342
  1,802
  2,365
  3,044
  3,845
  4,774
  5,837
  7,035
  8,371
  9,842
  11,449
  13,188
  15,057
  17,053
  19,173
  21,414
  23,773
  26,249
  28,841
  31,549
  34,372
  37,312
  40,371
  43,551
  46,857
Variable operating expenses, $m
 
  120
  185
  277
  401
  566
  778
  1,044
  1,371
  1,764
  2,228
  2,766
  3,382
  4,077
  4,850
  5,703
  6,634
  7,642
  8,725
  9,882
  11,110
  12,408
  13,775
  15,210
  16,712
  18,281
  19,917
  21,620
  23,393
  25,236
  27,151
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
  109
  120
  185
  277
  401
  566
  778
  1,044
  1,371
  1,764
  2,228
  2,766
  3,382
  4,077
  4,850
  5,703
  6,634
  7,642
  8,725
  9,882
  11,110
  12,408
  13,775
  15,210
  16,712
  18,281
  19,917
  21,620
  23,393
  25,236
  27,151
Operating income, $m
  20
  87
  134
  200
  291
  410
  564
  757
  995
  1,280
  1,617
  2,008
  2,455
  2,959
  3,520
  4,139
  4,815
  5,546
  6,332
  7,172
  8,063
  9,006
  9,998
  11,039
  12,129
  13,268
  14,455
  15,692
  16,978
  18,316
  19,706
EBITDA, $m
  42
  108
  166
  249
  361
  509
  700
  940
  1,234
  1,588
  2,006
  2,491
  3,045
  3,671
  4,367
  5,135
  5,974
  6,881
  7,856
  8,898
  10,004
  11,173
  12,404
  13,696
  15,048
  16,461
  17,934
  19,468
  21,064
  22,723
  24,448
Interest expense (income), $m
  4
  4
  7
  12
  19
  28
  39
  55
  74
  97
  125
  158
  197
  241
  291
  346
  407
  474
  546
  624
  707
  795
  888
  986
  1,088
  1,196
  1,308
  1,425
  1,547
  1,674
  1,806
Earnings before tax, $m
  9
  82
  126
  188
  272
  383
  525
  703
  921
  1,183
  1,491
  1,849
  2,258
  2,718
  3,229
  3,793
  4,408
  5,072
  5,786
  6,548
  7,357
  8,211
  9,110
  10,054
  11,041
  12,072
  13,147
  14,266
  15,431
  16,641
  17,899
Tax expense, $m
  5
  22
  34
  51
  73
  103
  142
  190
  249
  319
  403
  499
  610
  734
  872
  1,024
  1,190
  1,370
  1,562
  1,768
  1,986
  2,217
  2,460
  2,714
  2,981
  3,259
  3,550
  3,852
  4,166
  4,493
  4,833
Net income, $m
  4
  60
  92
  137
  199
  279
  383
  513
  672
  863
  1,089
  1,350
  1,648
  1,984
  2,357
  2,769
  3,218
  3,703
  4,224
  4,780
  5,370
  5,994
  6,650
  7,339
  8,060
  8,813
  9,597
  10,414
  11,264
  12,148
  13,067

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  27
  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
  323
  473
  731
  1,094
  1,587
  2,239
  3,078
  4,132
  5,425
  6,981
  8,818
  10,950
  13,387
  16,136
  19,199
  22,574
  26,259
  30,248
  34,535
  39,113
  43,975
  49,114
  54,525
  60,205
  66,150
  72,360
  78,835
  85,578
  92,594
  99,889
  107,471
Adjusted assets (=assets-cash), $m
  296
  473
  731
  1,094
  1,587
  2,239
  3,078
  4,132
  5,425
  6,981
  8,818
  10,950
  13,387
  16,136
  19,199
  22,574
  26,259
  30,248
  34,535
  39,113
  43,975
  49,114
  54,525
  60,205
  66,150
  72,360
  78,835
  85,578
  92,594
  99,889
  107,471
Revenue / Adjusted assets
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
  0.436
Average production assets, $m
  131
  209
  323
  483
  700
  988
  1,358
  1,823
  2,394
  3,080
  3,891
  4,831
  5,907
  7,120
  8,471
  9,960
  11,586
  13,347
  15,238
  17,258
  19,403
  21,671
  24,058
  26,564
  29,187
  31,927
  34,784
  37,760
  40,855
  44,074
  47,420
Working capital, $m
  71
  70
  109
  163
  236
  333
  458
  614
  807
  1,038
  1,311
  1,628
  1,990
  2,399
  2,854
  3,356
  3,904
  4,497
  5,135
  5,815
  6,538
  7,302
  8,107
  8,951
  9,835
  10,758
  11,721
  12,723
  13,766
  14,851
  15,978
Total debt, $m
  121
  213
  346
  533
  789
  1,126
  1,559
  2,104
  2,773
  3,577
  4,527
  5,629
  6,889
  8,310
  9,894
  11,639
  13,544
  15,606
  17,823
  20,190
  22,703
  25,360
  28,158
  31,094
  34,168
  37,378
  40,725
  44,212
  47,839
  51,610
  55,530
Total liabilities, $m
  153
  245
  378
  565
  821
  1,158
  1,591
  2,136
  2,805
  3,609
  4,559
  5,661
  6,921
  8,342
  9,926
  11,671
  13,576
  15,638
  17,855
  20,222
  22,735
  25,392
  28,190
  31,126
  34,200
  37,410
  40,757
  44,244
  47,871
  51,642
  55,562
Total equity, $m
  170
  229
  353
  528
  767
  1,081
  1,487
  1,996
  2,620
  3,372
  4,259
  5,289
  6,466
  7,794
  9,273
  10,903
  12,683
  14,610
  16,681
  18,892
  21,240
  23,722
  26,336
  29,079
  31,950
  34,950
  38,077
  41,334
  44,723
  48,246
  51,908
Total liabilities and equity, $m
  323
  474
  731
  1,093
  1,588
  2,239
  3,078
  4,132
  5,425
  6,981
  8,818
  10,950
  13,387
  16,136
  19,199
  22,574
  26,259
  30,248
  34,536
  39,114
  43,975
  49,114
  54,526
  60,205
  66,150
  72,360
  78,834
  85,578
  92,594
  99,888
  107,470
Debt-to-equity ratio
  0.712
  0.930
  0.980
  1.010
  1.030
  1.040
  1.050
  1.050
  1.060
  1.060
  1.060
  1.060
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
  1.070
Adjusted equity ratio
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483
  0.483

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  60
  92
  137
  199
  279
  383
  513
  672
  863
  1,089
  1,350
  1,648
  1,984
  2,357
  2,769
  3,218
  3,703
  4,224
  4,780
  5,370
  5,994
  6,650
  7,339
  8,060
  8,813
  9,597
  10,414
  11,264
  12,148
  13,067
Depreciation, amort., depletion, $m
  22
  21
  32
  48
  70
  99
  136
  183
  240
  308
  389
  483
  591
  712
  847
  996
  1,159
  1,335
  1,524
  1,726
  1,940
  2,167
  2,406
  2,656
  2,919
  3,193
  3,478
  3,776
  4,086
  4,407
  4,742
Funds from operations, $m
  17
  81
  125
  186
  269
  378
  519
  696
  912
  1,172
  1,478
  1,833
  2,239
  2,696
  3,205
  3,765
  4,376
  5,037
  5,748
  6,506
  7,311
  8,161
  9,056
  9,996
  10,979
  12,005
  13,076
  14,190
  15,350
  16,555
  17,809
Change in working capital, $m
  -10
  26
  38
  54
  73
  97
  125
  157
  192
  231
  273
  317
  362
  409
  455
  502
  548
  593
  637
  681
  723
  764
  805
  844
  884
  923
  963
  1,003
  1,043
  1,085
  1,127
Cash from operations, $m
  27
  55
  86
  132
  196
  281
  394
  539
  720
  940
  1,205
  1,516
  1,876
  2,287
  2,749
  3,263
  3,828
  4,444
  5,110
  5,825
  6,588
  7,397
  8,252
  9,151
  10,095
  11,082
  12,113
  13,188
  14,307
  15,471
  16,681
Maintenance CAPEX, $m
  0
  -13
  -21
  -32
  -48
  -70
  -99
  -136
  -182
  -239
  -308
  -389
  -483
  -591
  -712
  -847
  -996
  -1,159
  -1,335
  -1,524
  -1,726
  -1,940
  -2,167
  -2,406
  -2,656
  -2,919
  -3,193
  -3,478
  -3,776
  -4,086
  -4,407
New CAPEX, $m
  -5
  -78
  -114
  -160
  -218
  -288
  -370
  -465
  -571
  -686
  -810
  -941
  -1,075
  -1,213
  -1,351
  -1,489
  -1,626
  -1,760
  -1,892
  -2,020
  -2,145
  -2,268
  -2,388
  -2,506
  -2,623
  -2,740
  -2,857
  -2,975
  -3,096
  -3,219
  -3,345
Cash from investing activities, $m
  -154
  -91
  -135
  -192
  -266
  -358
  -469
  -601
  -753
  -925
  -1,118
  -1,330
  -1,558
  -1,804
  -2,063
  -2,336
  -2,622
  -2,919
  -3,227
  -3,544
  -3,871
  -4,208
  -4,555
  -4,912
  -5,279
  -5,659
  -6,050
  -6,453
  -6,872
  -7,305
  -7,752
Free cash flow, $m
  -127
  -37
  -48
  -60
  -70
  -76
  -75
  -62
  -33
  15
  87
  186
  318
  484
  686
  927
  1,206
  1,526
  1,884
  2,282
  2,717
  3,189
  3,697
  4,239
  4,815
  5,423
  6,063
  6,734
  7,435
  8,167
  8,928
Issuance/(repayment) of debt, $m
  0
  92
  133
  187
  255
  337
  434
  545
  669
  804
  950
  1,102
  1,260
  1,421
  1,583
  1,745
  1,905
  2,062
  2,216
  2,367
  2,513
  2,657
  2,798
  2,936
  3,074
  3,210
  3,348
  3,486
  3,627
  3,771
  3,920
Issuance/(repurchase) of shares, $m
  -1
  26
  32
  38
  40
  36
  22
  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  
  -1
  118
  165
  225
  295
  373
  456
  545
  669
  804
  950
  1,102
  1,260
  1,421
  1,583
  1,745
  1,905
  2,062
  2,216
  2,367
  2,513
  2,657
  2,798
  2,936
  3,074
  3,210
  3,348
  3,486
  3,627
  3,771
  3,920
Total cash flow (excl. dividends), $m
  -127
  81
  117
  165
  224
  296
  381
  483
  635
  819
  1,036
  1,289
  1,578
  1,905
  2,269
  2,672
  3,111
  3,588
  4,101
  4,648
  5,230
  5,846
  6,495
  7,176
  7,889
  8,634
  9,411
  10,220
  11,062
  11,938
  12,848
Retained Cash Flow (-), $m
  -10
  -86
  -125
  -175
  -238
  -315
  -405
  -509
  -625
  -751
  -887
  -1,030
  -1,177
  -1,328
  -1,479
  -1,630
  -1,780
  -1,927
  -2,071
  -2,211
  -2,348
  -2,482
  -2,614
  -2,743
  -2,871
  -2,999
  -3,127
  -3,257
  -3,389
  -3,523
  -3,662
Prev. year cash balance distribution, $m
 
  27
  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
 
  22
  -7
  -10
  -14
  -19
  -24
  -26
  10
  67
  149
  259
  401
  577
  790
  1,041
  1,332
  1,661
  2,030
  2,437
  2,882
  3,364
  3,881
  4,432
  5,017
  5,635
  6,283
  6,963
  7,674
  8,415
  9,186
Discount rate, %
 
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
 
  21
  -6
  -9
  -11
  -13
  -16
  -16
  6
  33
  66
  101
  136
  170
  198
  221
  236
  242
  240
  230
  213
  193
  169
  143
  118
  95
  74
  56
  41
  29
  20
Current shareholders' claim on cash, %
  100
  94.8
  90.9
  88.0
  86.0
  84.8
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3
  84.3

ANI Pharmaceuticals, Inc., a specialty pharmaceutical company, develops, manufactures, and markets branded and generic prescription pharmaceuticals in the United States. The company focuses on producing controlled substances, anti-cancer (oncolytics), hormones and steroids, and complex formulations. It offers Esterified Estrogen with Methyltestosterone for use in treating vasomotor symptoms of menopause; Etodolac used to treat pain caused by osteoarthritis, rheumatoid arthritis, and other conditions; Flecainide for treating arrhythmia; Fluvoxamine for use in treating obsessive-compulsive disorders and social anxiety disorders; Hydrocortisone Enema and Cortenema used to treat ulcerative colitis; and Methazolamide for treating ocular conditions. The company also provides Metoclopramide and Reglan for treating gastroesophageal reflux; Nimodipine that reduces the incidence and severity of ischemic deficits in patients with subarachnoid hemorrhage; Opium Tincture to treat diarrhea; Oxycodone oral solution, which relieves pain; Propafenone used to treat arrhythmia; Lithobid for treating the manic episodes of bipolar disorder; and Vancocin and Vancocin for use in treating C. difficile-associated diarrhea, as well as enterocolitis caused by staphylococcus aureus. In addition, it provides contract manufacturing services for other pharmaceutical companies. The company markets and sells its products through retail pharmacy chains, wholesalers, distributors and mail order pharmacies, and group purchasing organizations. ANI Pharmaceuticals, Inc. is headquartered in Baudette, Minnesota.


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FINANCIAL RATIOS  of  ANI Pharmaceuticals (ANIP)

Valuation Ratios
P/E Ratio 140.8
Price to Sales 4.4
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 20.9
Price to Free Cash Flow 25.6
Growth Rates
Sales Growth Rate 69.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 150%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 71.2%
Total Debt to Equity 71.2%
Interest Coverage 3
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 9.1%
Return On Total Capital 1.4%
Ret/ On T. Cap. - 3 Yr. Avg. 9.1%
Return On Equity 2.4%
Return On Equity - 3 Yr. Avg. 14.8%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 62%
Gross Margin - 3 Yr. Avg. 75.5%
EBITDA Margin 27.1%
EBITDA Margin - 3 Yr. Avg. 37.2%
Operating Margin 15.5%
Oper. Margin - 3 Yr. Avg. 31.1%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 23.3%
Net Profit Margin 3.1%
Net Profit Margin - 3 Yr. Avg. 24.9%
Effective Tax Rate 55.6%
Eff/ Tax Rate - 3 Yr. Avg. 11.6%
Payout Ratio 0%

ANIP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANIP stock intrinsic value calculation we used $129 million for the last fiscal year's total revenue generated by ANI Pharmaceuticals. The default revenue input number comes from 2016 income statement of ANI 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 ANIP 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 5.5%, whose default value for ANIP is calculated based on our internal credit rating of ANI 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 ANI 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 ANIP stock the variable cost ratio is equal to 58.1%.

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 ANIP 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 3.5% for ANI Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for ANI 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 ANIP 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 ANIP are equal to 101.2%.

Life of production assets of 10 years is the average useful life of capital assets used in ANI 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 ANIP is equal to 34.1%. 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 - $170 million for ANI 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 11.402 million for ANI 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 ANI Pharmaceuticals at the current share price and the inputted number of shares is $0.6 billion.

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Stock chart of ANIP Financial statements of ANIP Annual reports of ANIP
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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