Intrinsic value of BioMarin Pharmaceutical Inc. - BMRN

Previous Close

$82.95

  Intrinsic Value

$3.96

stock screener

  Rating & Target

str. sell

-95%

Previous close

$82.95

 
Intrinsic value

$3.96

 
Up/down potential

-95%

 
Rating

str. sell

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

STOCK VALUATION INPUT DATA

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

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  25.51
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,117
  1,521
  1,556
  1,596
  1,641
  1,690
  1,745
  1,804
  1,869
  1,938
  2,012
  2,092
  2,177
  2,267
  2,363
  2,465
  2,573
  2,688
  2,809
  2,936
  3,071
  3,214
  3,364
  3,522
  3,689
  3,864
  4,049
  4,244
  4,449
  4,664
  4,891
Variable operating expenses, $m
 
  1,536
  1,569
  1,607
  1,649
  1,696
  1,748
  1,804
  1,865
  1,931
  2,001
  1,982
  2,062
  2,148
  2,239
  2,336
  2,438
  2,546
  2,661
  2,782
  2,910
  3,045
  3,187
  3,337
  3,495
  3,661
  3,836
  4,021
  4,215
  4,419
  4,633
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
  1,920
  1,536
  1,569
  1,607
  1,649
  1,696
  1,748
  1,804
  1,865
  1,931
  2,001
  1,982
  2,062
  2,148
  2,239
  2,336
  2,438
  2,546
  2,661
  2,782
  2,910
  3,045
  3,187
  3,337
  3,495
  3,661
  3,836
  4,021
  4,215
  4,419
  4,633
Operating income, $m
  -803
  -15
  -13
  -11
  -9
  -6
  -3
  0
  3
  7
  11
  110
  115
  119
  124
  130
  135
  142
  148
  155
  162
  169
  177
  185
  194
  203
  213
  223
  234
  246
  257
EBITDA, $m
  -706
  156
  160
  164
  169
  174
  180
  186
  192
  199
  207
  215
  224
  233
  243
  254
  265
  277
  289
  302
  316
  331
  346
  362
  380
  398
  417
  437
  458
  480
  503
Interest expense (income), $m
  9
  45
  46
  48
  50
  53
  55
  58
  61
  65
  68
  72
  76
  81
  86
  91
  96
  102
  108
  114
  121
  128
  136
  143
  152
  161
  170
  180
  190
  201
  212
Earnings before tax, $m
  -831
  -60
  -59
  -59
  -59
  -58
  -58
  -58
  -58
  -57
  -57
  38
  38
  39
  39
  39
  39
  40
  40
  40
  41
  41
  42
  42
  42
  43
  43
  44
  44
  45
  45
Tax expense, $m
  -201
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  10
  10
  10
  10
  11
  11
  11
  11
  11
  11
  11
  11
  11
  11
  12
  12
  12
  12
  12
  12
Net income, $m
  -630
  -60
  -59
  -59
  -59
  -58
  -58
  -58
  -58
  -57
  -57
  28
  28
  28
  28
  29
  29
  29
  29
  30
  30
  30
  30
  31
  31
  31
  32
  32
  32
  33
  33

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  790
  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
  4,024
  3,940
  4,031
  4,134
  4,250
  4,379
  4,521
  4,675
  4,841
  5,021
  5,214
  5,420
  5,640
  5,874
  6,123
  6,387
  6,667
  6,963
  7,276
  7,607
  7,957
  8,326
  8,715
  9,125
  9,557
  10,012
  10,491
  10,995
  11,525
  12,084
  12,671
Adjusted assets (=assets-cash), $m
  3,234
  3,940
  4,031
  4,134
  4,250
  4,379
  4,521
  4,675
  4,841
  5,021
  5,214
  5,420
  5,640
  5,874
  6,123
  6,387
  6,667
  6,963
  7,276
  7,607
  7,957
  8,326
  8,715
  9,125
  9,557
  10,012
  10,491
  10,995
  11,525
  12,084
  12,671
Revenue / Adjusted assets
  0.345
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
  0.386
Average production assets, $m
  1,370
  1,299
  1,329
  1,363
  1,401
  1,444
  1,490
  1,541
  1,596
  1,655
  1,719
  1,787
  1,859
  1,936
  2,018
  2,105
  2,198
  2,295
  2,399
  2,508
  2,623
  2,745
  2,873
  3,008
  3,150
  3,300
  3,458
  3,624
  3,799
  3,983
  4,177
Working capital, $m
  983
  458
  468
  480
  494
  509
  525
  543
  562
  583
  606
  630
  655
  682
  711
  742
  775
  809
  845
  884
  924
  967
  1,013
  1,060
  1,110
  1,163
  1,219
  1,277
  1,339
  1,404
  1,472
Total debt, $m
  683
  857
  891
  930
  974
  1,022
  1,076
  1,134
  1,196
  1,264
  1,337
  1,414
  1,497
  1,586
  1,680
  1,779
  1,885
  1,996
  2,114
  2,239
  2,371
  2,510
  2,657
  2,811
  2,974
  3,146
  3,326
  3,516
  3,716
  3,927
  4,148
Total liabilities, $m
  1,257
  1,485
  1,520
  1,559
  1,602
  1,651
  1,704
  1,762
  1,825
  1,893
  1,966
  2,043
  2,126
  2,214
  2,308
  2,408
  2,513
  2,625
  2,743
  2,868
  3,000
  3,139
  3,285
  3,440
  3,603
  3,774
  3,955
  4,145
  4,345
  4,556
  4,777
Total equity, $m
  2,766
  2,455
  2,511
  2,576
  2,648
  2,728
  2,816
  2,912
  3,016
  3,128
  3,248
  3,376
  3,513
  3,659
  3,814
  3,979
  4,153
  4,338
  4,533
  4,739
  4,957
  5,187
  5,429
  5,685
  5,954
  6,237
  6,536
  6,850
  7,180
  7,528
  7,894
Total liabilities and equity, $m
  4,023
  3,940
  4,031
  4,135
  4,250
  4,379
  4,520
  4,674
  4,841
  5,021
  5,214
  5,419
  5,639
  5,873
  6,122
  6,387
  6,666
  6,963
  7,276
  7,607
  7,957
  8,326
  8,714
  9,125
  9,557
  10,011
  10,491
  10,995
  11,525
  12,084
  12,671
Debt-to-equity ratio
  0.247
  0.350
  0.350
  0.360
  0.370
  0.370
  0.380
  0.390
  0.400
  0.400
  0.410
  0.420
  0.430
  0.430
  0.440
  0.450
  0.450
  0.460
  0.470
  0.470
  0.480
  0.480
  0.490
  0.490
  0.500
  0.500
  0.510
  0.510
  0.520
  0.520
  0.530
Adjusted equity ratio
  0.618
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623
  0.623

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -630
  -60
  -59
  -59
  -59
  -58
  -58
  -58
  -58
  -57
  -57
  28
  28
  28
  28
  29
  29
  29
  29
  30
  30
  30
  30
  31
  31
  31
  32
  32
  32
  33
  33
Depreciation, amort., depletion, $m
  97
  171
  173
  175
  177
  180
  183
  186
  189
  192
  196
  105
  109
  114
  119
  124
  129
  135
  141
  148
  154
  161
  169
  177
  185
  194
  203
  213
  223
  234
  246
Funds from operations, $m
  -388
  112
  114
  116
  119
  121
  124
  128
  131
  135
  139
  133
  137
  142
  147
  152
  158
  164
  170
  177
  184
  191
  199
  208
  216
  225
  235
  245
  256
  267
  279
Change in working capital, $m
  -160
  9
  11
  12
  14
  15
  16
  18
  19
  21
  22
  24
  26
  27
  29
  31
  33
  34
  36
  38
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  68
Cash from operations, $m
  -228
  103
  103
  104
  105
  106
  108
  110
  112
  114
  116
  109
  112
  115
  118
  122
  126
  130
  134
  139
  143
  149
  154
  160
  166
  173
  179
  187
  194
  202
  211
Maintenance CAPEX, $m
  0
  -75
  -76
  -78
  -80
  -82
  -85
  -88
  -91
  -94
  -97
  -101
  -105
  -109
  -114
  -119
  -124
  -129
  -135
  -141
  -148
  -154
  -161
  -169
  -177
  -185
  -194
  -203
  -213
  -223
  -234
New CAPEX, $m
  -148
  -25
  -30
  -34
  -38
  -42
  -47
  -51
  -55
  -59
  -64
  -68
  -73
  -77
  -82
  -87
  -92
  -98
  -103
  -109
  -115
  -122
  -128
  -135
  -142
  -150
  -158
  -166
  -175
  -184
  -194
Cash from investing activities, $m
  -484
  -100
  -106
  -112
  -118
  -124
  -132
  -139
  -146
  -153
  -161
  -169
  -178
  -186
  -196
  -206
  -216
  -227
  -238
  -250
  -263
  -276
  -289
  -304
  -319
  -335
  -352
  -369
  -388
  -407
  -428
Free cash flow, $m
  -712
  2
  -3
  -8
  -13
  -19
  -24
  -29
  -34
  -39
  -44
  -60
  -66
  -72
  -78
  -84
  -91
  -97
  -104
  -112
  -119
  -127
  -136
  -144
  -153
  -163
  -173
  -183
  -194
  -205
  -217
Issuance/(repayment) of debt, $m
  0
  26
  34
  39
  44
  49
  53
  58
  63
  68
  73
  78
  83
  88
  94
  100
  106
  112
  118
  125
  132
  139
  147
  155
  163
  172
  181
  190
  200
  210
  221
Issuance/(repurchase) of shares, $m
  787
  107
  116
  124
  131
  139
  146
  154
  162
  169
  177
  101
  109
  118
  127
  136
  146
  156
  166
  177
  188
  200
  212
  225
  238
  252
  267
  282
  298
  315
  333
Cash from financing (excl. dividends), $m  
  727
  133
  150
  163
  175
  188
  199
  212
  225
  237
  250
  179
  192
  206
  221
  236
  252
  268
  284
  302
  320
  339
  359
  380
  401
  424
  448
  472
  498
  525
  554
Total cash flow (excl. dividends), $m
  11
  136
  147
  154
  162
  169
  176
  183
  190
  198
  205
  118
  126
  134
  143
  151
  161
  170
  180
  190
  200
  212
  223
  235
  248
  261
  275
  289
  304
  320
  337
Retained Cash Flow (-), $m
  -365
  -107
  -116
  -124
  -131
  -139
  -146
  -154
  -162
  -169
  -177
  -128
  -137
  -146
  -155
  -165
  -174
  -185
  -195
  -206
  -218
  -230
  -242
  -255
  -269
  -283
  -298
  -314
  -331
  -348
  -366
Prev. year cash balance distribution, $m
 
  561
  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
 
  590
  31
  31
  30
  30
  30
  29
  29
  29
  28
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  565
  29
  27
  25
  23
  22
  20
  18
  16
  15
  -5
  -5
  -4
  -4
  -4
  -4
  -3
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  100
  99.1
  98.2
  97.2
  96.2
  95.2
  94.2
  93.2
  92.2
  91.2
  90.1
  89.6
  89.0
  88.4
  87.8
  87.2
  86.5
  85.9
  85.2
  84.6
  83.9
  83.2
  82.6
  81.9
  81.2
  80.5
  79.8
  79.1
  78.5
  77.8
  77.1

BioMarin Pharmaceutical Inc. is a biotechnology company. The Company develops and commercializes pharmaceuticals for various diseases and medical conditions. As of December 31, 2016, the Company's therapy portfolio consisted of five products, and multiple clinical and pre-clinical product candidates. Its commercial products include Aldurazyme (laronidase) for Mucopolysaccharidosis I (MPS I), Firdapse (amifampridine phosphate) for Lambert Eaton Myasthenic Syndrome (LEMS), Kuvan (sapropterin dihydrochloride) for phenylketonuria (PKU), Naglazyme (galsulfase) for Mucopolysaccharidosis VI (MPS VI) and Vimizim (elosulfase alpha) for Mucopolysaccharidosis IV Type A (MPS IV A). The Company is conducting clinical trials on various product candidates for the treatment of various diseases. Its clinical product candidates include Brineura, pegvaliase, vosoritide, BMN 270 and BMN 250.

FINANCIAL RATIOS  of  BioMarin Pharmaceutical Inc. (BMRN)

Valuation Ratios
P/E Ratio -22.7
Price to Sales 12.8
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow -62.8
Price to Free Cash Flow -38.1
Growth Rates
Sales Growth Rate 25.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -35.1%
Cap. Spend. - 3 Yr. Gr. Rate 17.9%
Financial Strength
Quick Ratio 36
Current Ratio 0.1
LT Debt to Equity 23.9%
Total Debt to Equity 24.7%
Interest Coverage -91
Management Effectiveness
Return On Assets -16.1%
Ret/ On Assets - 3 Yr. Avg. -8.9%
Return On Total Capital -19.3%
Ret/ On T. Cap. - 3 Yr. Avg. -10.8%
Return On Equity -24.4%
Return On Equity - 3 Yr. Avg. -14.2%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 81.2%
Gross Margin - 3 Yr. Avg. 82.6%
EBITDA Margin -64.9%
EBITDA Margin - 3 Yr. Avg. -28.5%
Operating Margin -71.9%
Oper. Margin - 3 Yr. Avg. -32.3%
Pre-Tax Margin -74.4%
Pre-Tax Margin - 3 Yr. Avg. -36.2%
Net Profit Margin -56.4%
Net Profit Margin - 3 Yr. Avg. -31.2%
Effective Tax Rate 24.2%
Eff/ Tax Rate - 3 Yr. Avg. 2%
Payout Ratio 0%

BMRN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BMRN stock intrinsic value calculation we used $1491 million for the last fiscal year's total revenue generated by BioMarin Pharmaceutical Inc.. The default revenue input number comes from 2016 income statement of BioMarin Pharmaceutical Inc.. 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 BMRN stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for BMRN is calculated based on our internal credit rating of BioMarin Pharmaceutical Inc., 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 BioMarin Pharmaceutical Inc..
    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 BMRN stock the variable cost ratio is equal to 101.1%.

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 BMRN stock. These expenses increase with the level of inflation in subsequent years.

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

Corporate tax rate of 27% is the nominal tax rate for BioMarin Pharmaceutical Inc.. 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 BMRN 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 BMRN are equal to 85.4%.

Life of production assets of 17 years is the average useful life of capital assets used in BioMarin Pharmaceutical Inc. 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 BMRN is equal to 30.1%. 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 - $2967.94 million for BioMarin Pharmaceutical Inc. - 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 178.356 million for BioMarin Pharmaceutical Inc. 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 BioMarin Pharmaceutical Inc. at the current share price and the inputted number of shares is $14.8 billion.

RELATED COMPANIES Price Int.Val. Rating
FOLD Amicus Therape 12.40 0.16  str.sell
SRPT Sarepta Therap 156.10 3.58  str.sell
SGMO Sangamo Therap 11.72 2.23  str.sell