Intrinsic value of Charles River Laboratories International - CRL

Previous Close

$89.70

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$89.70

 
Intrinsic value

$171.21

 
Up/down potential

+91%

 
Rating

str. buy

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

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

We calculate the intrinsic value of CRL 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 4.3

 

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, %
  23.33
  31.90
  29.21
  26.79
  24.61
  22.65
  20.88
  19.30
  17.87
  16.58
  15.42
  14.38
  13.44
  12.60
  11.84
  11.15
  10.54
  9.98
  9.49
  9.04
  8.63
  8.27
  7.94
  7.65
  7.38
  7.15
  6.93
  6.74
  6.56
  6.41
  6.27
Revenue, $m
  1,681
  2,217
  2,865
  3,632
  4,526
  5,551
  6,711
  8,006
  9,436
  11,001
  12,697
  14,523
  16,475
  18,550
  20,746
  23,060
  25,490
  28,035
  30,695
  33,469
  36,359
  39,366
  42,493
  45,743
  49,121
  52,631
  56,278
  60,071
  64,014
  68,116
  72,384
Variable operating expenses, $m
 
  1,857
  2,377
  2,992
  3,709
  4,532
  5,462
  6,500
  7,648
  8,903
  10,263
  11,649
  13,215
  14,880
  16,641
  18,497
  20,446
  22,488
  24,621
  26,846
  29,164
  31,576
  34,084
  36,691
  39,401
  42,216
  45,142
  48,184
  51,347
  54,637
  58,061
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
  1,444
  1,857
  2,377
  2,992
  3,709
  4,532
  5,462
  6,500
  7,648
  8,903
  10,263
  11,649
  13,215
  14,880
  16,641
  18,497
  20,446
  22,488
  24,621
  26,846
  29,164
  31,576
  34,084
  36,691
  39,401
  42,216
  45,142
  48,184
  51,347
  54,637
  58,061
Operating income, $m
  237
  360
  488
  640
  817
  1,020
  1,249
  1,505
  1,788
  2,098
  2,434
  2,874
  3,260
  3,671
  4,105
  4,563
  5,044
  5,548
  6,074
  6,623
  7,195
  7,790
  8,408
  9,051
  9,720
  10,414
  11,136
  11,887
  12,667
  13,478
  14,323
EBITDA, $m
  364
  545
  704
  893
  1,112
  1,364
  1,649
  1,967
  2,319
  2,703
  3,120
  3,569
  4,049
  4,559
  5,098
  5,667
  6,264
  6,889
  7,543
  8,225
  8,935
  9,674
  10,442
  11,241
  12,071
  12,933
  13,830
  14,762
  15,731
  16,739
  17,788
Interest expense (income), $m
  23
  42
  63
  88
  117
  152
  191
  236
  285
  340
  401
  466
  536
  611
  691
  775
  864
  958
  1,056
  1,158
  1,265
  1,376
  1,491
  1,612
  1,736
  1,866
  2,001
  2,142
  2,287
  2,439
  2,597
Earnings before tax, $m
  223
  318
  425
  552
  700
  868
  1,058
  1,270
  1,503
  1,758
  2,033
  2,408
  2,724
  3,060
  3,414
  3,788
  4,180
  4,590
  5,018
  5,465
  5,930
  6,414
  6,917
  7,440
  7,983
  8,548
  9,135
  9,745
  10,379
  11,039
  11,726
Tax expense, $m
  67
  86
  115
  149
  189
  234
  286
  343
  406
  475
  549
  650
  735
  826
  922
  1,023
  1,129
  1,239
  1,355
  1,476
  1,601
  1,732
  1,868
  2,009
  2,156
  2,308
  2,466
  2,631
  2,802
  2,981
  3,166
Net income, $m
  155
  232
  310
  403
  511
  634
  772
  927
  1,097
  1,283
  1,484
  1,758
  1,988
  2,233
  2,492
  2,765
  3,051
  3,351
  3,663
  3,989
  4,329
  4,682
  5,049
  5,431
  5,828
  6,240
  6,668
  7,114
  7,577
  8,059
  8,560

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  121
  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
  2,712
  3,416
  4,414
  5,597
  6,974
  8,554
  10,340
  12,336
  14,539
  16,950
  19,564
  22,377
  25,385
  28,583
  31,966
  35,532
  39,276
  43,198
  47,296
  51,570
  56,023
  60,656
  65,474
  70,482
  75,687
  81,095
  86,716
  92,559
  98,634
  104,955
  111,532
Adjusted assets (=assets-cash), $m
  2,591
  3,416
  4,414
  5,597
  6,974
  8,554
  10,340
  12,336
  14,539
  16,950
  19,564
  22,377
  25,385
  28,583
  31,966
  35,532
  39,276
  43,198
  47,296
  51,570
  56,023
  60,656
  65,474
  70,482
  75,687
  81,095
  86,716
  92,559
  98,634
  104,955
  111,532
Revenue / Adjusted assets
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
  0.649
Average production assets, $m
  1,055
  1,390
  1,796
  2,277
  2,838
  3,481
  4,208
  5,020
  5,916
  6,897
  7,961
  9,106
  10,330
  11,631
  13,008
  14,459
  15,982
  17,578
  19,246
  20,985
  22,797
  24,682
  26,643
  28,681
  30,799
  32,999
  35,287
  37,664
  40,137
  42,708
  45,385
Working capital, $m
  227
  175
  226
  287
  358
  439
  530
  632
  745
  869
  1,003
  1,147
  1,302
  1,465
  1,639
  1,822
  2,014
  2,215
  2,425
  2,644
  2,872
  3,110
  3,357
  3,614
  3,881
  4,158
  4,446
  4,746
  5,057
  5,381
  5,718
Total debt, $m
  1,235
  1,796
  2,507
  3,351
  4,333
  5,459
  6,733
  8,155
  9,727
  11,445
  13,309
  15,315
  17,459
  19,740
  22,152
  24,694
  27,364
  30,160
  33,082
  36,129
  39,304
  42,608
  46,043
  49,614
  53,325
  57,181
  61,188
  65,354
  69,686
  74,193
  78,882
Total liabilities, $m
  1,875
  2,436
  3,147
  3,991
  4,973
  6,099
  7,373
  8,795
  10,367
  12,085
  13,949
  15,955
  18,099
  20,380
  22,792
  25,334
  28,004
  30,800
  33,722
  36,769
  39,944
  43,248
  46,683
  50,254
  53,965
  57,821
  61,828
  65,994
  70,326
  74,833
  79,522
Total equity, $m
  837
  981
  1,267
  1,606
  2,002
  2,455
  2,968
  3,540
  4,173
  4,865
  5,615
  6,422
  7,285
  8,203
  9,174
  10,198
  11,272
  12,398
  13,574
  14,801
  16,078
  17,408
  18,791
  20,228
  21,722
  23,274
  24,887
  26,564
  28,308
  30,122
  32,010
Total liabilities and equity, $m
  2,712
  3,417
  4,414
  5,597
  6,975
  8,554
  10,341
  12,335
  14,540
  16,950
  19,564
  22,377
  25,384
  28,583
  31,966
  35,532
  39,276
  43,198
  47,296
  51,570
  56,022
  60,656
  65,474
  70,482
  75,687
  81,095
  86,715
  92,558
  98,634
  104,955
  111,532
Debt-to-equity ratio
  1.476
  1.830
  1.980
  2.090
  2.160
  2.220
  2.270
  2.300
  2.330
  2.350
  2.370
  2.380
  2.400
  2.410
  2.410
  2.420
  2.430
  2.430
  2.440
  2.440
  2.440
  2.450
  2.450
  2.450
  2.450
  2.460
  2.460
  2.460
  2.460
  2.460
  2.460
Adjusted equity ratio
  0.276
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287
  0.287

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  155
  232
  310
  403
  511
  634
  772
  927
  1,097
  1,283
  1,484
  1,758
  1,988
  2,233
  2,492
  2,765
  3,051
  3,351
  3,663
  3,989
  4,329
  4,682
  5,049
  5,431
  5,828
  6,240
  6,668
  7,114
  7,577
  8,059
  8,560
Depreciation, amort., depletion, $m
  127
  185
  216
  253
  295
  345
  400
  462
  530
  605
  687
  695
  789
  888
  993
  1,104
  1,220
  1,342
  1,469
  1,602
  1,740
  1,884
  2,034
  2,189
  2,351
  2,519
  2,694
  2,875
  3,064
  3,260
  3,465
Funds from operations, $m
  268
  417
  526
  656
  806
  978
  1,172
  1,389
  1,628
  1,888
  2,171
  2,453
  2,777
  3,121
  3,485
  3,869
  4,271
  4,692
  5,132
  5,591
  6,069
  6,566
  7,083
  7,621
  8,179
  8,759
  9,362
  9,989
  10,641
  11,319
  12,025
Change in working capital, $m
  -30
  42
  51
  61
  71
  81
  92
  102
  113
  124
  134
  144
  154
  164
  173
  183
  192
  201
  210
  219
  228
  238
  247
  257
  267
  277
  288
  300
  312
  324
  337
Cash from operations, $m
  298
  470
  475
  595
  736
  897
  1,081
  1,287
  1,515
  1,765
  2,037
  2,309
  2,623
  2,957
  3,312
  3,686
  4,079
  4,491
  4,922
  5,372
  5,841
  6,329
  6,836
  7,364
  7,912
  8,482
  9,074
  9,689
  10,329
  10,995
  11,688
Maintenance CAPEX, $m
  0
  -80
  -106
  -137
  -174
  -217
  -266
  -321
  -383
  -452
  -527
  -608
  -695
  -789
  -888
  -993
  -1,104
  -1,220
  -1,342
  -1,469
  -1,602
  -1,740
  -1,884
  -2,034
  -2,189
  -2,351
  -2,519
  -2,694
  -2,875
  -3,064
  -3,260
New CAPEX, $m
  -55
  -336
  -406
  -481
  -560
  -643
  -727
  -812
  -897
  -981
  -1,064
  -1,145
  -1,224
  -1,301
  -1,377
  -1,451
  -1,524
  -1,596
  -1,667
  -1,739
  -1,812
  -1,885
  -1,961
  -2,038
  -2,118
  -2,201
  -2,287
  -2,378
  -2,472
  -2,572
  -2,677
Cash from investing activities, $m
  -686
  -416
  -512
  -618
  -734
  -860
  -993
  -1,133
  -1,280
  -1,433
  -1,591
  -1,753
  -1,919
  -2,090
  -2,265
  -2,444
  -2,628
  -2,816
  -3,009
  -3,208
  -3,414
  -3,625
  -3,845
  -4,072
  -4,307
  -4,552
  -4,806
  -5,072
  -5,347
  -5,636
  -5,937
Free cash flow, $m
  -388
  54
  -37
  -23
  1
  38
  88
  153
  235
  332
  446
  556
  704
  868
  1,047
  1,242
  1,452
  1,676
  1,913
  2,164
  2,427
  2,703
  2,991
  3,292
  3,605
  3,930
  4,268
  4,618
  4,982
  5,359
  5,751
Issuance/(repayment) of debt, $m
  388
  588
  712
  843
  982
  1,126
  1,274
  1,423
  1,571
  1,719
  1,864
  2,006
  2,145
  2,280
  2,412
  2,542
  2,670
  2,796
  2,922
  3,048
  3,175
  3,304
  3,435
  3,571
  3,711
  3,856
  4,008
  4,166
  4,332
  4,506
  4,690
Issuance/(repurchase) of shares, $m
  11
  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  
  391
  588
  712
  843
  982
  1,126
  1,274
  1,423
  1,571
  1,719
  1,864
  2,006
  2,145
  2,280
  2,412
  2,542
  2,670
  2,796
  2,922
  3,048
  3,175
  3,304
  3,435
  3,571
  3,711
  3,856
  4,008
  4,166
  4,332
  4,506
  4,690
Total cash flow (excl. dividends), $m
  0
  642
  675
  820
  983
  1,164
  1,362
  1,576
  1,806
  2,051
  2,310
  2,562
  2,848
  3,148
  3,460
  3,784
  4,122
  4,472
  4,835
  5,211
  5,602
  6,007
  6,427
  6,863
  7,316
  7,786
  8,275
  8,784
  9,314
  9,866
  10,441
Retained Cash Flow (-), $m
  -104
  -238
  -286
  -339
  -395
  -453
  -513
  -573
  -633
  -692
  -750
  -807
  -863
  -918
  -971
  -1,023
  -1,075
  -1,125
  -1,176
  -1,227
  -1,278
  -1,330
  -1,383
  -1,437
  -1,494
  -1,552
  -1,613
  -1,677
  -1,744
  -1,814
  -1,888
Prev. year cash balance distribution, $m
 
  94
  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
 
  498
  388
  481
  588
  711
  849
  1,003
  1,173
  1,359
  1,560
  1,755
  1,985
  2,230
  2,489
  2,761
  3,047
  3,346
  3,659
  3,985
  4,324
  4,677
  5,044
  5,425
  5,822
  6,234
  6,662
  7,107
  7,570
  8,052
  8,553
Discount rate, %
 
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
 
  463
  334
  379
  421
  459
  491
  513
  526
  528
  519
  494
  466
  431
  391
  346
  300
  254
  211
  170
  134
  103
  78
  57
  40
  28
  19
  12
  8
  5
  3
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

Charles River Laboratories International, Inc., an early-stage contract research company, provides drug discovery and development services worldwide. It operates through three segments: Research Models and Services (RMS), Discovery and Safety Assessment (DSA), and Manufacturing Support (Manufacturing). The RMS segment produces and sells research model strains primarily genetically and microbiologically defined purpose-bred rats and mice for use by researchers. This segment also provides a range of services to assist its clients in supporting the use of research models in research and screening preclinical drug candidates comprising genetically engineered models and services, insourcing solutions, and research animal diagnostic services. The DSA segment offers early and in vivo discovery services for identification of a druggable target through delivery of preclinical drug and therapeutic candidates ready for safety assessment; and safety assessment services, which comprise bioanalysis, pharmacokinetics, drug metabolism, toxicology, and pathology services. The Manufacturing segment provides in vitro methods for conventional and rapid quality control testing of sterile and non-sterile biopharmaceuticals, and consumer products. This segment also offers specialized testing of biologics and devices that are outsourced by pharmaceutical and biotechnology companies; and avian vaccine services that provide specific-pathogen-free fertile chicken eggs and chickens used in the manufacture of live viruses. The company serves pharmaceutical and biotechnology companies, contract research organizations, agricultural and chemical companies, life science and veterinary medicine companies, contract manufacturing organizations, medical device companies, diagnostic and other commercial entities, hospitals, academic institutions, and government agencies. Charles River Laboratories International, Inc. was founded in 1947 and is headquartered in Wilmington, Massachusetts.

FINANCIAL RATIOS  of  Charles River Laboratories International (CRL)

Valuation Ratios
P/E Ratio 27.4
Price to Sales 2.5
Price to Book 5.1
Price to Tangible Book
Price to Cash Flow 14.3
Price to Free Cash Flow 17.5
Growth Rates
Sales Growth Rate 23.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -12.7%
Cap. Spend. - 3 Yr. Gr. Rate 7.1%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 144.3%
Total Debt to Equity 147.6%
Interest Coverage 11
Management Effectiveness
Return On Assets 7.2%
Ret/ On Assets - 3 Yr. Avg. 7.6%
Return On Total Capital 8.5%
Ret/ On T. Cap. - 3 Yr. Avg. 9.2%
Return On Equity 19.7%
Return On Equity - 3 Yr. Avg. 20.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 38.5%
Gross Margin - 3 Yr. Avg. 38%
EBITDA Margin 22.2%
EBITDA Margin - 3 Yr. Avg. 22.1%
Operating Margin 14.1%
Oper. Margin - 3 Yr. Avg. 14.3%
Pre-Tax Margin 13.3%
Pre-Tax Margin - 3 Yr. Avg. 13.8%
Net Profit Margin 9.2%
Net Profit Margin - 3 Yr. Avg. 10%
Effective Tax Rate 30%
Eff/ Tax Rate - 3 Yr. Avg. 26.4%
Payout Ratio 0%

CRL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRL stock intrinsic value calculation we used $1681 million for the last fiscal year's total revenue generated by Charles River Laboratories International. The default revenue input number comes from 2016 income statement of Charles River Laboratories International. 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 CRL stock valuation model: a) initial revenue growth rate of 31.9% 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 7.5%, whose default value for CRL is calculated based on our internal credit rating of Charles River Laboratories International, 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 Charles River Laboratories International.
    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 CRL stock the variable cost ratio is equal to 84.9%.

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 CRL 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 Charles River Laboratories International.

Corporate tax rate of 27% is the nominal tax rate for Charles River Laboratories International. 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 CRL 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 CRL are equal to 62.7%.

Life of production assets of 13.1 years is the average useful life of capital assets used in Charles River Laboratories International 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 CRL is equal to 7.9%. 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 - $837 million for Charles River Laboratories International - 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 47.804 million for Charles River Laboratories International 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 Charles River Laboratories International at the current share price and the inputted number of shares is $4.3 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
CSBR Champions Onco 2.65 0.13  str.sell
LH Laboratory of 140.15 155.73  hold
Q Quintiles IMS 84.28 676.20  str.buy
BASI Bioanalytical 1.22 3.54  str.buy
PRXL PAREXEL Intern 63.83 62.61  hold
MEDP Medpace Holdin 31.71 69.76  str.buy

COMPANY NEWS

▶ Parexel Is Discovering the Drugs of the Future   [Apr-10-17 04:44PM  TheStreet.com]
▶ Charles River Labs settles with feds over NIH billing flap   [Mar-14-17 07:25AM  at bizjournals.com]
▶ Charles River Labs settles with feds over NIH billing flap   [07:25AM  American City Business Journals]
▶ Charles River tops Street 4Q forecasts   [06:48AM  Associated Press]
▶ Charles River CEO: 'Companies that dont grow, die'   [06:50AM  at bizjournals.com]
Stock chart of CRL Financial statements of CRL
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.