Intrinsic value of Alexandria Real Estate Equities - ARE

Previous Close

$131.16

  Intrinsic Value

$13.07

stock screener

  Rating & Target

str. sell

-90%

Previous close

$131.16

 
Intrinsic value

$13.07

 
Up/down potential

-90%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as ARE.

We calculate the intrinsic value of ARE 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 12.3

 

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, %
  9.37
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
Revenue, $m
  922
  1,114
  1,328
  1,564
  1,823
  2,103
  2,404
  2,726
  3,068
  3,430
  3,812
  4,212
  4,632
  5,070
  5,527
  6,003
  6,499
  7,014
  7,550
  8,106
  8,685
  9,286
  9,910
  10,560
  11,236
  11,939
  12,672
  13,435
  14,230
  15,059
  15,924
Variable operating expenses, $m
 
  801
  955
  1,125
  1,310
  1,512
  1,728
  1,960
  2,206
  2,466
  2,741
  3,029
  3,330
  3,645
  3,974
  4,317
  4,673
  5,043
  5,428
  5,828
  6,244
  6,676
  7,126
  7,593
  8,079
  8,584
  9,111
  9,660
  10,231
  10,828
  11,450
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
  868
  801
  955
  1,125
  1,310
  1,512
  1,728
  1,960
  2,206
  2,466
  2,741
  3,029
  3,330
  3,645
  3,974
  4,317
  4,673
  5,043
  5,428
  5,828
  6,244
  6,676
  7,126
  7,593
  8,079
  8,584
  9,111
  9,660
  10,231
  10,828
  11,450
Operating income, $m
  54
  313
  373
  440
  512
  591
  675
  766
  862
  964
  1,071
  1,184
  1,302
  1,425
  1,553
  1,687
  1,826
  1,971
  2,121
  2,278
  2,440
  2,609
  2,785
  2,967
  3,157
  3,355
  3,561
  3,775
  3,999
  4,232
  4,475
EBITDA, $m
  367
  691
  824
  970
  1,131
  1,305
  1,491
  1,691
  1,904
  2,128
  2,365
  2,614
  2,874
  3,146
  3,429
  3,725
  4,032
  4,352
  4,684
  5,029
  5,388
  5,761
  6,149
  6,552
  6,971
  7,408
  7,862
  8,335
  8,829
  9,343
  9,880
Interest expense (income), $m
  85
  146
  186
  230
  280
  333
  391
  454
  521
  592
  667
  746
  829
  917
  1,008
  1,103
  1,201
  1,304
  1,411
  1,523
  1,638
  1,758
  1,883
  2,013
  2,148
  2,288
  2,434
  2,586
  2,745
  2,910
  3,082
Earnings before tax, $m
  -50
  167
  187
  209
  233
  258
  284
  312
  341
  372
  404
  437
  472
  508
  546
  584
  625
  667
  710
  755
  802
  851
  902
  955
  1,010
  1,067
  1,127
  1,189
  1,254
  1,322
  1,393
Tax expense, $m
  0
  45
  51
  56
  63
  70
  77
  84
  92
  100
  109
  118
  127
  137
  147
  158
  169
  180
  192
  204
  217
  230
  243
  258
  273
  288
  304
  321
  339
  357
  376
Net income, $m
  -66
  122
  137
  153
  170
  188
  207
  228
  249
  272
  295
  319
  345
  371
  398
  427
  456
  487
  518
  551
  586
  621
  658
  697
  737
  779
  822
  868
  915
  965
  1,017

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  125
  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
  10,355
  12,375
  14,754
  17,380
  20,251
  23,362
  26,710
  30,288
  34,092
  38,115
  42,354
  46,805
  51,466
  56,336
  61,415
  66,706
  72,211
  77,936
  83,886
  90,070
  96,495
  103,174
  110,116
  117,335
  124,845
  132,661
  140,799
  149,276
  158,111
  167,324
  176,936
Adjusted assets (=assets-cash), $m
  10,230
  12,375
  14,754
  17,380
  20,251
  23,362
  26,710
  30,288
  34,092
  38,115
  42,354
  46,805
  51,466
  56,336
  61,415
  66,706
  72,211
  77,936
  83,886
  90,070
  96,495
  103,174
  110,116
  117,335
  124,845
  132,661
  140,799
  149,276
  158,111
  167,324
  176,936
Revenue / Adjusted assets
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
  0.090
Average production assets, $m
  8,294
  10,018
  11,944
  14,070
  16,394
  18,913
  21,623
  24,520
  27,599
  30,856
  34,288
  37,891
  41,664
  45,607
  49,718
  54,001
  58,458
  63,093
  67,910
  72,916
  78,118
  83,524
  89,145
  94,989
  101,068
  107,396
  113,984
  120,846
  127,999
  135,457
  143,238
Working capital, $m
  0
  -151
  -181
  -213
  -248
  -286
  -327
  -371
  -417
  -467
  -518
  -573
  -630
  -690
  -752
  -816
  -884
  -954
  -1,027
  -1,102
  -1,181
  -1,263
  -1,348
  -1,436
  -1,528
  -1,624
  -1,723
  -1,827
  -1,935
  -2,048
  -2,166
Total debt, $m
  4,164
  5,313
  6,584
  7,986
  9,519
  11,180
  12,968
  14,879
  16,910
  19,058
  21,322
  23,699
  26,188
  28,788
  31,501
  34,326
  37,266
  40,323
  43,500
  46,802
  50,234
  53,800
  57,507
  61,362
  65,372
  69,546
  73,891
  78,418
  83,136
  88,056
  93,189
Total liabilities, $m
  5,459
  6,608
  7,879
  9,281
  10,814
  12,475
  14,263
  16,174
  18,205
  20,353
  22,617
  24,994
  27,483
  30,083
  32,796
  35,621
  38,561
  41,618
  44,795
  48,097
  51,529
  55,095
  58,802
  62,657
  66,667
  70,841
  75,186
  79,713
  84,431
  89,351
  94,484
Total equity, $m
  4,896
  5,767
  6,875
  8,099
  9,437
  10,887
  12,447
  14,114
  15,887
  17,762
  19,737
  21,811
  23,983
  26,252
  28,619
  31,085
  33,650
  36,318
  39,091
  41,972
  44,967
  48,079
  51,314
  54,678
  58,178
  61,820
  65,612
  69,563
  73,680
  77,973
  82,452
Total liabilities and equity, $m
  10,355
  12,375
  14,754
  17,380
  20,251
  23,362
  26,710
  30,288
  34,092
  38,115
  42,354
  46,805
  51,466
  56,335
  61,415
  66,706
  72,211
  77,936
  83,886
  90,069
  96,496
  103,174
  110,116
  117,335
  124,845
  132,661
  140,798
  149,276
  158,111
  167,324
  176,936
Debt-to-equity ratio
  0.850
  0.920
  0.960
  0.990
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.120
  1.120
  1.120
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.130
Adjusted equity ratio
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466
  0.466

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -66
  122
  137
  153
  170
  188
  207
  228
  249
  272
  295
  319
  345
  371
  398
  427
  456
  487
  518
  551
  586
  621
  658
  697
  737
  779
  822
  868
  915
  965
  1,017
Depreciation, amort., depletion, $m
  313
  378
  451
  531
  619
  714
  816
  925
  1,041
  1,164
  1,294
  1,430
  1,572
  1,721
  1,876
  2,038
  2,206
  2,381
  2,563
  2,752
  2,948
  3,152
  3,364
  3,584
  3,814
  4,053
  4,301
  4,560
  4,830
  5,112
  5,405
Funds from operations, $m
  299
  500
  587
  684
  788
  902
  1,023
  1,153
  1,291
  1,436
  1,589
  1,749
  1,917
  2,092
  2,274
  2,464
  2,662
  2,868
  3,081
  3,303
  3,534
  3,773
  4,022
  4,281
  4,551
  4,832
  5,124
  5,428
  5,746
  6,077
  6,422
Change in working capital, $m
  -94
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -47
  -49
  -52
  -54
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -88
  -92
  -96
  -100
  -104
  -108
  -113
  -118
Cash from operations, $m
  393
  526
  616
  716
  824
  940
  1,064
  1,197
  1,337
  1,485
  1,641
  1,804
  1,974
  2,152
  2,337
  2,529
  2,729
  2,938
  3,154
  3,379
  3,612
  3,855
  4,107
  4,370
  4,643
  4,927
  5,223
  5,532
  5,854
  6,189
  6,540
Maintenance CAPEX, $m
  0
  -313
  -378
  -451
  -531
  -619
  -714
  -816
  -925
  -1,041
  -1,164
  -1,294
  -1,430
  -1,572
  -1,721
  -1,876
  -2,038
  -2,206
  -2,381
  -2,563
  -2,752
  -2,948
  -3,152
  -3,364
  -3,584
  -3,814
  -4,053
  -4,301
  -4,560
  -4,830
  -5,112
New CAPEX, $m
  -1,560
  -1,725
  -1,926
  -2,126
  -2,324
  -2,519
  -2,710
  -2,897
  -3,079
  -3,257
  -3,432
  -3,603
  -3,773
  -3,942
  -4,112
  -4,283
  -4,457
  -4,634
  -4,817
  -5,006
  -5,202
  -5,406
  -5,620
  -5,844
  -6,080
  -6,327
  -6,588
  -6,863
  -7,153
  -7,458
  -7,781
Cash from investing activities, $m
  -1,497
  -2,038
  -2,304
  -2,577
  -2,855
  -3,138
  -3,424
  -3,713
  -4,004
  -4,298
  -4,596
  -4,897
  -5,203
  -5,514
  -5,833
  -6,159
  -6,495
  -6,840
  -7,198
  -7,569
  -7,954
  -8,354
  -8,772
  -9,208
  -9,664
  -10,141
  -10,641
  -11,164
  -11,713
  -12,288
  -12,893
Free cash flow, $m
  -1,104
  -1,512
  -1,687
  -1,861
  -2,031
  -2,198
  -2,359
  -2,516
  -2,667
  -2,813
  -2,955
  -3,094
  -3,229
  -3,363
  -3,496
  -3,630
  -3,765
  -3,903
  -4,044
  -4,190
  -4,341
  -4,499
  -4,665
  -4,838
  -5,021
  -5,214
  -5,417
  -5,632
  -5,859
  -6,099
  -6,353
Issuance/(repayment) of debt, $m
  6
  1,149
  1,270
  1,402
  1,533
  1,662
  1,788
  1,911
  2,031
  2,148
  2,264
  2,377
  2,489
  2,601
  2,712
  2,825
  2,940
  3,057
  3,177
  3,302
  3,431
  3,566
  3,707
  3,855
  4,010
  4,174
  4,346
  4,527
  4,718
  4,920
  5,133
Issuance/(repurchase) of shares, $m
  1,225
  874
  972
  1,071
  1,168
  1,262
  1,353
  1,440
  1,523
  1,603
  1,680
  1,755
  1,827
  1,898
  1,969
  2,039
  2,109
  2,181
  2,254
  2,330
  2,409
  2,491
  2,577
  2,667
  2,763
  2,863
  2,970
  3,082
  3,202
  3,328
  3,462
Cash from financing (excl. dividends), $m  
  1,369
  2,023
  2,242
  2,473
  2,701
  2,924
  3,141
  3,351
  3,554
  3,751
  3,944
  4,132
  4,316
  4,499
  4,681
  4,864
  5,049
  5,238
  5,431
  5,632
  5,840
  6,057
  6,284
  6,522
  6,773
  7,037
  7,316
  7,609
  7,920
  8,248
  8,595
Total cash flow (excl. dividends), $m
  263
  512
  555
  612
  670
  726
  781
  835
  887
  938
  989
  1,038
  1,087
  1,136
  1,185
  1,234
  1,284
  1,335
  1,388
  1,442
  1,499
  1,558
  1,619
  1,684
  1,752
  1,823
  1,898
  1,977
  2,061
  2,149
  2,242
Retained Cash Flow (-), $m
  -921
  -996
  -1,108
  -1,224
  -1,338
  -1,450
  -1,560
  -1,667
  -1,772
  -1,875
  -1,975
  -2,074
  -2,172
  -2,269
  -2,367
  -2,465
  -2,565
  -2,668
  -2,773
  -2,882
  -2,994
  -3,112
  -3,235
  -3,364
  -3,500
  -3,642
  -3,792
  -3,950
  -4,117
  -4,293
  -4,479
Prev. year cash balance distribution, $m
 
  125
  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
 
  -359
  -554
  -611
  -668
  -724
  -779
  -833
  -885
  -936
  -987
  -1,036
  -1,085
  -1,134
  -1,182
  -1,231
  -1,281
  -1,332
  -1,385
  -1,439
  -1,496
  -1,554
  -1,616
  -1,680
  -1,748
  -1,819
  -1,894
  -1,973
  -2,057
  -2,144
  -2,237
Discount rate, %
 
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
 
  -332
  -469
  -471
  -465
  -450
  -429
  -401
  -370
  -335
  -298
  -261
  -225
  -190
  -158
  -129
  -103
  -81
  -62
  -47
  -35
  -25
  -17
  -12
  -8
  -5
  -3
  -2
  -1
  -1
  0
Current shareholders' claim on cash, %
  100
  93.2
  87.3
  82.2
  77.8
  73.8
  70.3
  67.2
  64.5
  62.0
  59.7
  57.7
  55.8
  54.1
  52.5
  51.1
  49.7
  48.5
  47.3
  46.2
  45.2
  44.2
  43.3
  42.4
  41.6
  40.8
  40.0
  39.3
  38.6
  37.9
  37.2

Alexandria Real Estate Equities, Inc. is a real estate investment (REIT). The Company is engaged in the business of providing space for lease to the life science and technology industries. It focuses on collaborative life science and technology campuses. It develops urban cluster campuses and ecosystems. As of December 31, 2016, the Company had 199 properties in North America. As of December 31, 2016, its asset base in North America consisted of 25.2 million square feet, including 19.9 million rentable square feet/foot (RSF) of operating properties, and development and redevelopment of under construction or pre-construction, as well as 5.3 million square feet of future ground-up development projects. Its properties are located in various areas, including Greater Boston, San Francisco, New York City, San Diego, Seattle, Maryland and Research Triangle Park. Its properties include Alexandria Technology Square, Alexandria Park at 128 and Alexandria Technology Center-Gateway.

FINANCIAL RATIOS  of  Alexandria Real Estate Equities (ARE)

Valuation Ratios
P/E Ratio -174.2
Price to Sales 12.5
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 29.3
Price to Free Cash Flow -9.9
Growth Rates
Sales Growth Rate 9.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 91.9%
Cap. Spend. - 3 Yr. Gr. Rate 16.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 85%
Total Debt to Equity 85%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.2%
Ret/ On Assets - 3 Yr. Avg. 1.6%
Return On Total Capital -0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 0.8%
Return On Equity -1.5%
Return On Equity - 3 Yr. Avg. 1.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 69.7%
Gross Margin - 3 Yr. Avg. 69.6%
EBITDA Margin 37.7%
EBITDA Margin - 3 Yr. Avg. 49.9%
Operating Margin 5.9%
Oper. Margin - 3 Yr. Avg. 19.5%
Pre-Tax Margin -5.4%
Pre-Tax Margin - 3 Yr. Avg. 8.5%
Net Profit Margin -7.2%
Net Profit Margin - 3 Yr. Avg. 7.7%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio -398.5%

ARE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ARE stock intrinsic value calculation we used $922 million for the last fiscal year's total revenue generated by Alexandria Real Estate Equities. The default revenue input number comes from 2016 income statement of Alexandria Real Estate Equities. 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 ARE stock valuation model: a) initial revenue growth rate of 20.8% 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 8.2%, whose default value for ARE is calculated based on our internal credit rating of Alexandria Real Estate Equities, 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 Alexandria Real Estate Equities.
    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 ARE stock the variable cost ratio is equal to 71.9%.

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 ARE 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 Alexandria Real Estate Equities.

Corporate tax rate of 27% is the nominal tax rate for Alexandria Real Estate Equities. 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 ARE 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 ARE are equal to 899.5%.

Life of production assets of 26.5 years is the average useful life of capital assets used in Alexandria Real Estate Equities 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 ARE is equal to -13.6%. 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 - $4896 million for Alexandria Real Estate Equities - 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 93.653 million for Alexandria Real Estate Equities 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 Alexandria Real Estate Equities at the current share price and the inputted number of shares is $12.3 billion.

RELATED COMPANIES Price Int.Val. Rating
ALNY Alnylam Pharma 124.86 2.51  str.sell
LLY Eli Lilly 87.89 98.13  hold
ILMN Illumina 214.55 95.84  str.sell
CELG Celgene 108.20 60.77  sell
BMY Bristol-Myers 63.47 19.97  str.sell
AMGN Amgen 177.38 97.61  sell
FGEN FibroGen 44.15 0.49  str.sell
HCP HCP 26.97 2.94  str.sell

COMPANY NEWS

▶ Alexandria RE Equities Trying To Close In On Key Technical Measure   [Dec-11-17 03:00AM  Investor's Business Daily]
▶ 5 Great REITs to Buy Now   [Dec-08-17 05:20PM  Kiplinger]
▶ 2 REIT Picks From Bank Of America   [Dec-04-17 04:18PM  Benzinga]
▶ Is Alexandria Real Estate Equities Inc (ARE) Undervalued?   [Nov-16-17 04:27PM  Simply Wall St.]
▶ Alexandria Real Estate Equities reports 3Q results   [Oct-30-17 05:03PM  Associated Press]
▶ Alexandria Real Estate Equities reports 2Q results   [Jul-31-17 09:41PM  Associated Press]
▶ Developer pushes agtech 'mega campus' forward in Research Triangle Park   [Jul-17-17 12:35PM  American City Business Journals]
▶ Beating the Benchmark   [Jul-13-17 04:04PM  GuruFocus.com]
▶ These 3 Stocks Just Raised Their Dividends   [Jun-15-17 09:40AM  Motley Fool]
▶ Today's Bell Ringer, May 22, 2017   [May-22-17 09:16AM  CNBC Videos]
▶ Alexandria Real Estate Equities reports 1Q results   [May-01-17 04:34PM  Associated Press]
▶ Hearing loss biotech Frequency Therapeutics dials up $32M round   [Apr-11-17 06:15AM  American City Business Journals]
▶ Google life sciences spinoff soaks up huge space (video)   [Mar-24-17 03:11PM  at bizjournals.com]
▶ Google life sciences spinoff soaks up huge space (video)   [03:11PM  American City Business Journals]
Financial statements of ARE
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.