Intrinsic value of MKS Instruments - MKSI

Previous Close

$105.15

  Intrinsic Value

$356.02

stock screener

  Rating & Target

str. buy

+239%

Previous close

$105.15

 
Intrinsic value

$356.02

 
Up/down potential

+239%

 
Rating

str. buy

We calculate the intrinsic value of MKSI 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 5.7

 

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, %
  59.09
  47.50
  43.25
  39.43
  35.98
  32.88
  30.10
  27.59
  25.33
  23.29
  21.47
  19.82
  18.34
  17.00
  15.80
  14.72
  13.75
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.22
  7.00
Revenue, $m
  1,295
  1,910
  2,736
  3,815
  5,188
  6,894
  8,968
  11,442
  14,341
  17,681
  21,477
  25,733
  30,452
  35,629
  41,260
  47,334
  53,843
  60,776
  68,122
  75,874
  84,023
  92,566
  101,499
  110,822
  120,537
  130,650
  141,169
  152,104
  163,468
  175,278
  187,550
Variable operating expenses, $m
 
  1,513
  2,143
  2,964
  4,009
  5,309
  6,889
  8,773
  10,980
  13,523
  16,414
  19,596
  23,189
  27,132
  31,420
  36,046
  41,002
  46,282
  51,876
  57,779
  63,985
  70,491
  77,293
  84,393
  91,791
  99,493
  107,503
  115,830
  124,484
  133,477
  142,823
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
  1,138
  1,513
  2,143
  2,964
  4,009
  5,309
  6,889
  8,773
  10,980
  13,523
  16,414
  19,596
  23,189
  27,132
  31,420
  36,046
  41,002
  46,282
  51,876
  57,779
  63,985
  70,491
  77,293
  84,393
  91,791
  99,493
  107,503
  115,830
  124,484
  133,477
  142,823
Operating income, $m
  157
  397
  594
  851
  1,178
  1,585
  2,080
  2,670
  3,361
  4,158
  5,063
  6,137
  7,262
  8,497
  9,840
  11,288
  12,841
  14,494
  16,246
  18,095
  20,038
  22,075
  24,206
  26,429
  28,746
  31,158
  33,666
  36,274
  38,984
  41,801
  44,727
EBITDA, $m
  223
  501
  718
  1,001
  1,361
  1,808
  2,352
  3,001
  3,761
  4,638
  5,633
  6,749
  7,987
  9,345
  10,822
  12,415
  14,122
  15,941
  17,868
  19,901
  22,038
  24,279
  26,622
  29,067
  31,615
  34,268
  37,027
  39,895
  42,876
  45,973
  49,192
Interest expense (income), $m
  21
  41
  73
  115
  170
  241
  328
  434
  560
  709
  879
  1,073
  1,291
  1,532
  1,797
  2,085
  2,395
  2,728
  3,083
  3,458
  3,855
  4,271
  4,708
  5,165
  5,641
  6,138
  6,655
  7,193
  7,752
  8,333
  8,937
Earnings before tax, $m
  128
  355
  521
  736
  1,008
  1,345
  1,752
  2,236
  2,801
  3,449
  4,184
  5,063
  5,971
  6,965
  8,043
  9,204
  10,445
  11,766
  13,163
  14,636
  16,183
  17,804
  19,498
  21,264
  23,105
  25,020
  27,011
  29,081
  31,232
  33,467
  35,790
Tax expense, $m
  23
  96
  141
  199
  272
  363
  473
  604
  756
  931
  1,130
  1,367
  1,612
  1,880
  2,172
  2,485
  2,820
  3,177
  3,554
  3,952
  4,370
  4,807
  5,264
  5,741
  6,238
  6,755
  7,293
  7,852
  8,433
  9,036
  9,663
Net income, $m
  105
  259
  380
  537
  736
  982
  1,279
  1,632
  2,045
  2,518
  3,054
  3,696
  4,359
  5,084
  5,871
  6,719
  7,625
  8,589
  9,609
  10,684
  11,814
  12,997
  14,233
  15,523
  16,866
  18,264
  19,718
  21,229
  22,799
  24,431
  26,127

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  418
  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
  2,212
  2,646
  3,790
  5,284
  7,185
  9,548
  12,422
  15,848
  19,862
  24,489
  29,746
  35,641
  42,177
  49,348
  57,147
  65,560
  74,575
  84,177
  94,352
  105,088
  116,376
  128,208
  140,580
  153,493
  166,949
  180,956
  195,525
  210,670
  226,410
  242,767
  259,765
Adjusted assets (=assets-cash), $m
  1,794
  2,646
  3,790
  5,284
  7,185
  9,548
  12,422
  15,848
  19,862
  24,489
  29,746
  35,641
  42,177
  49,348
  57,147
  65,560
  74,575
  84,177
  94,352
  105,088
  116,376
  128,208
  140,580
  153,493
  166,949
  180,956
  195,525
  210,670
  226,410
  242,767
  259,765
Revenue / Adjusted assets
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
  0.722
Average production assets, $m
  348
  514
  736
  1,026
  1,396
  1,854
  2,413
  3,078
  3,858
  4,756
  5,777
  6,922
  8,191
  9,584
  11,099
  12,733
  14,484
  16,349
  18,325
  20,410
  22,602
  24,900
  27,303
  29,811
  32,425
  35,145
  37,975
  40,916
  43,973
  47,150
  50,451
Working capital, $m
  762
  523
  750
  1,045
  1,421
  1,889
  2,457
  3,135
  3,929
  4,845
  5,885
  7,051
  8,344
  9,762
  11,305
  12,970
  14,753
  16,653
  18,665
  20,789
  23,022
  25,363
  27,811
  30,365
  33,027
  35,798
  38,680
  41,677
  44,790
  48,026
  51,389
Total debt, $m
  612
  1,057
  1,670
  2,469
  3,486
  4,750
  6,288
  8,121
  10,268
  12,744
  15,556
  18,710
  22,207
  26,043
  30,215
  34,717
  39,540
  44,677
  50,120
  55,864
  61,903
  68,233
  74,852
  81,761
  88,960
  96,454
  104,248
  112,351
  120,772
  129,522
  138,616
Total liabilities, $m
  970
  1,415
  2,028
  2,827
  3,844
  5,108
  6,646
  8,479
  10,626
  13,102
  15,914
  19,068
  22,565
  26,401
  30,573
  35,075
  39,898
  45,035
  50,478
  56,222
  62,261
  68,591
  75,210
  82,119
  89,318
  96,812
  104,606
  112,709
  121,130
  129,880
  138,974
Total equity, $m
  1,242
  1,230
  1,762
  2,457
  3,341
  4,440
  5,776
  7,369
  9,236
  11,387
  13,832
  16,573
  19,612
  22,947
  26,573
  30,485
  34,677
  39,142
  43,874
  48,866
  54,115
  59,617
  65,370
  71,374
  77,631
  84,145
  90,919
  97,962
  105,281
  112,887
  120,791
Total liabilities and equity, $m
  2,212
  2,645
  3,790
  5,284
  7,185
  9,548
  12,422
  15,848
  19,862
  24,489
  29,746
  35,641
  42,177
  49,348
  57,146
  65,560
  74,575
  84,177
  94,352
  105,088
  116,376
  128,208
  140,580
  153,493
  166,949
  180,957
  195,525
  210,671
  226,411
  242,767
  259,765
Debt-to-equity ratio
  0.493
  0.860
  0.950
  1.000
  1.040
  1.070
  1.090
  1.100
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.140
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
  1.150
Adjusted equity ratio
  0.462
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465
  0.465

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  105
  259
  380
  537
  736
  982
  1,279
  1,632
  2,045
  2,518
  3,054
  3,696
  4,359
  5,084
  5,871
  6,719
  7,625
  8,589
  9,609
  10,684
  11,814
  12,997
  14,233
  15,523
  16,866
  18,264
  19,718
  21,229
  22,799
  24,431
  26,127
Depreciation, amort., depletion, $m
  66
  104
  124
  150
  182
  223
  272
  331
  400
  480
  570
  613
  725
  848
  982
  1,127
  1,282
  1,447
  1,622
  1,806
  2,000
  2,204
  2,416
  2,638
  2,869
  3,110
  3,361
  3,621
  3,891
  4,173
  4,465
Funds from operations, $m
  158
  364
  504
  687
  918
  1,205
  1,551
  1,964
  2,445
  2,998
  3,624
  4,309
  5,084
  5,932
  6,853
  7,845
  8,907
  10,036
  11,231
  12,491
  13,814
  15,201
  16,649
  18,161
  19,736
  21,375
  23,079
  24,850
  26,691
  28,604
  30,592
Change in working capital, $m
  -22
  169
  226
  296
  376
  467
  568
  678
  794
  915
  1,040
  1,166
  1,293
  1,419
  1,543
  1,664
  1,783
  1,899
  2,013
  2,124
  2,233
  2,341
  2,448
  2,554
  2,662
  2,771
  2,882
  2,996
  3,114
  3,236
  3,363
Cash from operations, $m
  180
  195
  278
  391
  542
  737
  983
  1,286
  1,651
  2,082
  2,584
  3,143
  3,791
  4,514
  5,311
  6,181
  7,123
  8,136
  9,218
  10,367
  11,581
  12,860
  14,202
  15,607
  17,074
  18,603
  20,197
  21,854
  23,577
  25,368
  27,229
Maintenance CAPEX, $m
  0
  -31
  -45
  -65
  -91
  -123
  -164
  -213
  -272
  -341
  -421
  -511
  -613
  -725
  -848
  -982
  -1,127
  -1,282
  -1,447
  -1,622
  -1,806
  -2,000
  -2,204
  -2,416
  -2,638
  -2,869
  -3,110
  -3,361
  -3,621
  -3,891
  -4,173
New CAPEX, $m
  -19
  -166
  -222
  -290
  -369
  -459
  -558
  -666
  -780
  -899
  -1,021
  -1,145
  -1,269
  -1,393
  -1,515
  -1,634
  -1,751
  -1,865
  -1,976
  -2,085
  -2,192
  -2,298
  -2,403
  -2,508
  -2,613
  -2,720
  -2,830
  -2,941
  -3,057
  -3,177
  -3,301
Cash from investing activities, $m
  -727
  -197
  -267
  -355
  -460
  -582
  -722
  -879
  -1,052
  -1,240
  -1,442
  -1,656
  -1,882
  -2,118
  -2,363
  -2,616
  -2,878
  -3,147
  -3,423
  -3,707
  -3,998
  -4,298
  -4,607
  -4,924
  -5,251
  -5,589
  -5,940
  -6,302
  -6,678
  -7,068
  -7,474
Free cash flow, $m
  -547
  -2
  10
  36
  82
  155
  261
  407
  599
  842
  1,142
  1,486
  1,909
  2,396
  2,948
  3,565
  4,246
  4,990
  5,795
  6,660
  7,583
  8,562
  9,595
  10,682
  11,822
  13,014
  14,257
  15,552
  16,899
  18,300
  19,755
Issuance/(repayment) of debt, $m
  598
  456
  612
  799
  1,017
  1,264
  1,537
  1,833
  2,147
  2,475
  2,812
  3,154
  3,497
  3,837
  4,172
  4,501
  4,823
  5,137
  5,444
  5,744
  6,039
  6,330
  6,619
  6,908
  7,199
  7,494
  7,794
  8,103
  8,421
  8,751
  9,094
Issuance/(repurchase) of shares, $m
  -3
  136
  152
  158
  148
  117
  57
  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  
  590
  592
  764
  957
  1,165
  1,381
  1,594
  1,833
  2,147
  2,475
  2,812
  3,154
  3,497
  3,837
  4,172
  4,501
  4,823
  5,137
  5,444
  5,744
  6,039
  6,330
  6,619
  6,908
  7,199
  7,494
  7,794
  8,103
  8,421
  8,751
  9,094
Total cash flow (excl. dividends), $m
  37
  591
  774
  993
  1,247
  1,536
  1,855
  2,240
  2,746
  3,318
  3,955
  4,640
  5,406
  6,233
  7,120
  8,066
  9,069
  10,127
  11,239
  12,404
  13,622
  14,892
  16,215
  17,591
  19,021
  20,507
  22,051
  23,655
  25,320
  27,051
  28,849
Retained Cash Flow (-), $m
  -81
  -395
  -532
  -695
  -884
  -1,099
  -1,336
  -1,593
  -1,867
  -2,152
  -2,444
  -2,741
  -3,039
  -3,335
  -3,626
  -3,912
  -4,192
  -4,465
  -4,731
  -4,992
  -5,249
  -5,502
  -5,753
  -6,004
  -6,257
  -6,513
  -6,775
  -7,043
  -7,319
  -7,606
  -7,904
Prev. year cash balance distribution, $m
 
  407
  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
 
  603
  242
  298
  363
  437
  519
  647
  880
  1,166
  1,510
  1,899
  2,367
  2,898
  3,494
  4,154
  4,877
  5,662
  6,507
  7,411
  8,373
  9,390
  10,461
  11,586
  12,764
  13,994
  15,277
  16,612
  18,001
  19,445
  20,945
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
 
  578
  222
  259
  299
  339
  377
  437
  550
  670
  792
  902
  1,010
  1,102
  1,173
  1,219
  1,239
  1,232
  1,198
  1,141
  1,064
  971
  868
  759
  650
  544
  446
  357
  279
  212
  158
Current shareholders' claim on cash, %
  100
  96.6
  94.1
  92.3
  91.1
  90.4
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1
  90.1

MKS Instruments, Inc. is a global provider of instruments, subsystems and process control solutions that measures, controls, powers, delivers, monitors and analyzes critical parameters of advanced manufacturing processes. The Company operates through two segments, including the Vacuum & Analysis segment and the Light & Motion segment. The Vacuum & Analysis segment provides a range of instruments, components, subsystems and software, which are derived from its core competencies in pressure measurement and control, flow measurement and control, gas and vapor delivery, gas composition analysis, residual gas analysis, leak detection, control and information technology, ozone generation and delivery, radio frequency (RF) and direct current (DC) power, reactive gas generation and vacuum technology. The Light & Motion segment provides a range of instruments, components and subsystems, which are derived from its core competencies in lasers, photonics and optics.

FINANCIAL RATIOS  of  MKS Instruments (MKSI)

Valuation Ratios
P/E Ratio 53.7
Price to Sales 4.4
Price to Book 4.5
Price to Tangible Book
Price to Cash Flow 31.4
Price to Free Cash Flow 35.1
Growth Rates
Sales Growth Rate 59.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 58.3%
Cap. Spend. - 3 Yr. Gr. Rate 9.6%
Financial Strength
Quick Ratio 38
Current Ratio 0.2
LT Debt to Equity 48.4%
Total Debt to Equity 49.3%
Interest Coverage 7
Management Effectiveness
Return On Assets 7%
Ret/ On Assets - 3 Yr. Avg. 8.8%
Return On Total Capital 7%
Ret/ On T. Cap. - 3 Yr. Avg. 9.6%
Return On Equity 8.7%
Return On Equity - 3 Yr. Avg. 10.2%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 43.7%
Gross Margin - 3 Yr. Avg. 43.9%
EBITDA Margin 16.6%
EBITDA Margin - 3 Yr. Avg. 19.6%
Operating Margin 12.1%
Oper. Margin - 3 Yr. Avg. 16.2%
Pre-Tax Margin 9.9%
Pre-Tax Margin - 3 Yr. Avg. 15.6%
Net Profit Margin 8.1%
Net Profit Margin - 3 Yr. Avg. 12.6%
Effective Tax Rate 18%
Eff/ Tax Rate - 3 Yr. Avg. 18.6%
Payout Ratio 34.3%

MKSI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MKSI stock intrinsic value calculation we used $1295 million for the last fiscal year's total revenue generated by MKS Instruments. The default revenue input number comes from 2016 income statement of MKS Instruments. 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 MKSI stock valuation model: a) initial revenue growth rate of 47.5% 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 MKSI is calculated based on our internal credit rating of MKS Instruments, 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 MKS Instruments.
    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 MKSI stock the variable cost ratio is equal to 80.7%.

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 MKSI 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 6.9% for MKS Instruments.

Corporate tax rate of 27% is the nominal tax rate for MKS Instruments. 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 MKSI 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 MKSI are equal to 26.9%.

Life of production assets of 11.3 years is the average useful life of capital assets used in MKS Instruments 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 MKSI is equal to 27.4%. 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 - $1242 million for MKS Instruments - 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 54.303 million for MKS Instruments 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 MKS Instruments at the current share price and the inputted number of shares is $5.7 billion.

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COMPANY NEWS

▶ MKS Instruments Announces Upcoming Investor Events   [Nov-16-17 09:00AM  GlobeNewswire]
▶ MKS Instruments Increases Quarterly Cash Dividend   [Oct-31-17 09:00AM  GlobeNewswire]
▶ MKS Instruments Crushes Third-Quarter Estimates, Stock Rises   [Oct-24-17 05:55PM  Investor's Business Daily]
▶ MKS Instruments beats Street 3Q forecasts   [04:59PM  Associated Press]
▶ In the Chips: 10 Experts Share Semiconductor Buys   [Oct-11-17 10:35AM  Investopedia]
▶ Does MKS Instruments Incs (MKSI) PE Ratio Warrant A Buy?   [Oct-01-17 11:42AM  Simply Wall St.]
▶ MKS Instruments Announces Upgrade from S&P Global Ratings   [Sep-26-17 04:10PM  GlobeNewswire]
▶ MKS Instruments Announces Upcoming Investor Events   [Aug-23-17 09:00AM  GlobeNewswire]
▶ 3 Big Stocks with Huge Growth Prospects   [Jul-31-17 05:04PM  Zacks]
▶ MKS Instruments Announces Upcoming Investor Events   [Jul-27-17 09:00AM  GlobeNewswire]
▶ Texas Instruments, AMD Cheered For Earnings, But Stocks Fade   [Jul-26-17 04:49PM  Investor's Business Daily]
▶ MKS Instruments meets 2Q profit forecasts   [Jul-25-17 10:03PM  Associated Press]
▶ Two Top Chipmakers Top Views, Guide Up, Near Buys   [05:39PM  Investor's Business Daily]
▶ Why MKS Instruments Is One To Keep An Eye On   [Jul-18-17 05:18AM  Investor's Business Daily]
▶ MKS Instruments Initiated At Buy; Chip Gear Mergers Heat Up   [Jul-06-17 04:28PM  Investor's Business Daily]
▶ Top Ranked Growth Stocks to Buy for June 22nd   [Jun-22-17 10:10AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for June 8th   [Jun-08-17 11:02AM  Zacks]
▶ 5 Stocks To Buy At The Top   [Jun-02-17 01:39PM  Zacks]
▶ MKS Instruments Announces Upcoming Investor Events   [May-24-17 04:10PM  GlobeNewswire]
▶ 5 Dividend Growth Stocks for Guaranteed Returns   [May-11-17 09:38AM  Zacks]
Financial statements of MKSI
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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