Intrinsic value of Premier - PINC

Previous Close

$33.65

  Intrinsic Value

$15.08

stock screener

  Rating & Target

str. sell

-55%

  Value-price divergence*

+14%

Previous close

$33.65

 
Intrinsic value

$15.08

 
Up/down potential

-55%

 
Rating

str. sell

 
Value-price divergence*

+14%

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

We calculate the intrinsic value of PINC 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 4.6

 

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, %
  15.49
  27.10
  24.89
  22.90
  21.11
  19.50
  18.05
  16.74
  15.57
  14.51
  13.56
  12.71
  11.94
  11.24
  10.62
  10.06
  9.55
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.76
  6.59
  6.43
  6.29
  6.16
  6.04
Revenue, $m
  1,163
  1,478
  1,846
  2,269
  2,748
  3,284
  3,876
  4,525
  5,230
  5,989
  6,801
  7,666
  8,580
  9,545
  10,558
  11,620
  12,730
  13,888
  15,094
  16,349
  17,655
  19,012
  20,422
  21,888
  23,411
  24,994
  26,641
  28,353
  30,135
  31,990
  33,923
Variable operating expenses, $m
 
  1,073
  1,327
  1,619
  1,949
  2,319
  2,727
  3,175
  3,661
  4,185
  4,745
  5,287
  5,918
  6,584
  7,283
  8,015
  8,780
  9,579
  10,411
  11,277
  12,177
  13,113
  14,086
  15,097
  16,148
  17,240
  18,375
  19,556
  20,785
  22,065
  23,398
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
  897
  1,073
  1,327
  1,619
  1,949
  2,319
  2,727
  3,175
  3,661
  4,185
  4,745
  5,287
  5,918
  6,584
  7,283
  8,015
  8,780
  9,579
  10,411
  11,277
  12,177
  13,113
  14,086
  15,097
  16,148
  17,240
  18,375
  19,556
  20,785
  22,065
  23,398
Operating income, $m
  266
  405
  519
  650
  799
  965
  1,149
  1,350
  1,569
  1,804
  2,056
  2,378
  2,662
  2,961
  3,276
  3,605
  3,950
  4,309
  4,683
  5,073
  5,478
  5,899
  6,336
  6,791
  7,264
  7,755
  8,266
  8,797
  9,350
  9,925
  10,525
EBITDA, $m
  350
  492
  614
  755
  914
  1,092
  1,289
  1,505
  1,739
  1,992
  2,262
  2,549
  2,854
  3,174
  3,511
  3,864
  4,233
  4,619
  5,020
  5,437
  5,871
  6,323
  6,792
  7,279
  7,786
  8,312
  8,860
  9,429
  10,022
  10,639
  11,281
Interest expense (income), $m
  2
  110
  52
  70
  91
  115
  142
  172
  205
  240
  278
  319
  362
  408
  457
  508
  561
  617
  675
  736
  799
  864
  932
  1,003
  1,077
  1,153
  1,233
  1,316
  1,402
  1,491
  1,584
Earnings before tax, $m
  285
  294
  467
  580
  707
  850
  1,007
  1,178
  1,364
  1,564
  1,778
  2,059
  2,300
  2,553
  2,819
  3,098
  3,389
  3,692
  4,008
  4,337
  4,679
  5,034
  5,404
  5,788
  6,187
  6,601
  7,033
  7,481
  7,948
  8,434
  8,940
Tax expense, $m
  50
  79
  126
  157
  191
  229
  272
  318
  368
  422
  480
  556
  621
  689
  761
  836
  915
  997
  1,082
  1,171
  1,263
  1,359
  1,459
  1,563
  1,670
  1,782
  1,899
  2,020
  2,146
  2,277
  2,414
Net income, $m
  42
  215
  341
  423
  516
  620
  735
  860
  996
  1,142
  1,298
  1,503
  1,679
  1,864
  2,058
  2,261
  2,474
  2,695
  2,926
  3,166
  3,416
  3,675
  3,945
  4,225
  4,516
  4,819
  5,134
  5,461
  5,802
  6,157
  6,527

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  267
  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
  1,855
  2,358
  2,944
  3,619
  4,383
  5,237
  6,182
  7,218
  8,341
  9,552
  10,848
  12,226
  13,685
  15,223
  16,840
  18,533
  20,303
  22,150
  24,073
  26,076
  28,158
  30,322
  32,572
  34,909
  37,338
  39,864
  42,489
  45,220
  48,062
  51,021
  54,104
Adjusted assets (=assets-cash), $m
  1,588
  2,358
  2,944
  3,619
  4,383
  5,237
  6,182
  7,218
  8,341
  9,552
  10,848
  12,226
  13,685
  15,223
  16,840
  18,533
  20,303
  22,150
  24,073
  26,076
  28,158
  30,322
  32,572
  34,909
  37,338
  39,864
  42,489
  45,220
  48,062
  51,021
  54,104
Revenue / Adjusted assets
  0.732
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
  0.627
Average production assets, $m
  259
  330
  412
  506
  613
  732
  864
  1,009
  1,166
  1,336
  1,517
  1,709
  1,913
  2,129
  2,355
  2,591
  2,839
  3,097
  3,366
  3,646
  3,937
  4,240
  4,554
  4,881
  5,221
  5,574
  5,941
  6,323
  6,720
  7,134
  7,565
Working capital, $m
  137
  -148
  -185
  -227
  -275
  -328
  -388
  -453
  -523
  -599
  -680
  -767
  -858
  -955
  -1,056
  -1,162
  -1,273
  -1,389
  -1,509
  -1,635
  -1,765
  -1,901
  -2,042
  -2,189
  -2,341
  -2,499
  -2,664
  -2,835
  -3,014
  -3,199
  -3,392
Total debt, $m
  3,157
  1,473
  2,001
  2,608
  3,295
  4,064
  4,915
  5,847
  6,858
  7,948
  9,114
  10,354
  11,667
  13,052
  14,507
  16,031
  17,624
  19,286
  21,017
  22,819
  24,693
  26,641
  28,666
  30,769
  32,956
  35,228
  37,591
  40,049
  42,607
  45,270
  48,044
Total liabilities, $m
  3,807
  2,122
  2,650
  3,257
  3,944
  4,713
  5,564
  6,496
  7,507
  8,597
  9,763
  11,003
  12,316
  13,701
  15,156
  16,680
  18,273
  19,935
  21,666
  23,468
  25,342
  27,290
  29,315
  31,418
  33,605
  35,877
  38,240
  40,698
  43,256
  45,919
  48,693
Total equity, $m
  -1,951
  236
  294
  362
  438
  524
  618
  722
  834
  955
  1,085
  1,223
  1,368
  1,522
  1,684
  1,853
  2,030
  2,215
  2,407
  2,608
  2,816
  3,032
  3,257
  3,491
  3,734
  3,986
  4,249
  4,522
  4,806
  5,102
  5,410
Total liabilities and equity, $m
  1,856
  2,358
  2,944
  3,619
  4,382
  5,237
  6,182
  7,218
  8,341
  9,552
  10,848
  12,226
  13,684
  15,223
  16,840
  18,533
  20,303
  22,150
  24,073
  26,076
  28,158
  30,322
  32,572
  34,909
  37,339
  39,863
  42,489
  45,220
  48,062
  51,021
  54,103
Debt-to-equity ratio
  -1.618
  6.250
  6.800
  7.210
  7.520
  7.760
  7.950
  8.100
  8.220
  8.320
  8.400
  8.470
  8.530
  8.570
  8.610
  8.650
  8.680
  8.710
  8.730
  8.750
  8.770
  8.790
  8.800
  8.810
  8.830
  8.840
  8.850
  8.860
  8.860
  8.870
  8.880
Adjusted equity ratio
  -1.397
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  42
  215
  341
  423
  516
  620
  735
  860
  996
  1,142
  1,298
  1,503
  1,679
  1,864
  2,058
  2,261
  2,474
  2,695
  2,926
  3,166
  3,416
  3,675
  3,945
  4,225
  4,516
  4,819
  5,134
  5,461
  5,802
  6,157
  6,527
Depreciation, amort., depletion, $m
  84
  87
  95
  104
  115
  127
  140
  155
  170
  187
  205
  171
  191
  213
  235
  259
  284
  310
  337
  365
  394
  424
  455
  488
  522
  557
  594
  632
  672
  713
  756
Funds from operations, $m
  375
  302
  436
  528
  632
  747
  875
  1,015
  1,166
  1,329
  1,504
  1,674
  1,870
  2,077
  2,293
  2,520
  2,758
  3,005
  3,262
  3,531
  3,809
  4,099
  4,400
  4,713
  5,038
  5,376
  5,728
  6,094
  6,474
  6,870
  7,283
Change in working capital, $m
  4
  -32
  -37
  -42
  -48
  -54
  -59
  -65
  -70
  -76
  -81
  -86
  -91
  -96
  -101
  -106
  -111
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -152
  -158
  -165
  -171
  -178
  -186
  -193
Cash from operations, $m
  371
  333
  473
  570
  679
  801
  934
  1,080
  1,237
  1,405
  1,585
  1,761
  1,962
  2,173
  2,395
  2,627
  2,868
  3,121
  3,383
  3,656
  3,940
  4,235
  4,541
  4,860
  5,191
  5,535
  5,892
  6,265
  6,652
  7,056
  7,476
Maintenance CAPEX, $m
  0
  -26
  -33
  -41
  -51
  -61
  -73
  -86
  -101
  -117
  -134
  -152
  -171
  -191
  -213
  -235
  -259
  -284
  -310
  -337
  -365
  -394
  -424
  -455
  -488
  -522
  -557
  -594
  -632
  -672
  -713
New CAPEX, $m
  -77
  -71
  -82
  -94
  -107
  -119
  -132
  -145
  -157
  -169
  -181
  -193
  -204
  -215
  -226
  -237
  -247
  -258
  -269
  -280
  -291
  -303
  -315
  -327
  -340
  -353
  -367
  -382
  -397
  -414
  -431
Cash from investing activities, $m
  -160
  -97
  -115
  -135
  -158
  -180
  -205
  -231
  -258
  -286
  -315
  -345
  -375
  -406
  -439
  -472
  -506
  -542
  -579
  -617
  -656
  -697
  -739
  -782
  -828
  -875
  -924
  -976
  -1,029
  -1,086
  -1,144
Free cash flow, $m
  211
  237
  358
  435
  522
  620
  729
  849
  979
  1,119
  1,270
  1,416
  1,587
  1,767
  1,956
  2,154
  2,362
  2,579
  2,804
  3,040
  3,284
  3,538
  3,803
  4,077
  4,363
  4,660
  4,968
  5,289
  5,623
  5,970
  6,332
Issuance/(repayment) of debt, $m
  -13
  -1,684
  528
  607
  688
  769
  851
  932
  1,011
  1,090
  1,166
  1,240
  1,313
  1,385
  1,455
  1,524
  1,593
  1,662
  1,731
  1,802
  1,874
  1,948
  2,024
  2,104
  2,186
  2,273
  2,363
  2,458
  2,558
  2,663
  2,774
Issuance/(repurchase) of shares, $m
  6
  1,972
  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  
  -110
  288
  528
  607
  688
  769
  851
  932
  1,011
  1,090
  1,166
  1,240
  1,313
  1,385
  1,455
  1,524
  1,593
  1,662
  1,731
  1,802
  1,874
  1,948
  2,024
  2,104
  2,186
  2,273
  2,363
  2,458
  2,558
  2,663
  2,774
Total cash flow (excl. dividends), $m
  102
  524
  886
  1,042
  1,210
  1,389
  1,580
  1,780
  1,990
  2,209
  2,436
  2,657
  2,900
  3,151
  3,411
  3,678
  3,955
  4,240
  4,536
  4,842
  5,158
  5,486
  5,827
  6,181
  6,549
  6,932
  7,331
  7,747
  8,181
  8,633
  9,106
Retained Cash Flow (-), $m
  -1,167
  -2,187
  -59
  -67
  -76
  -85
  -95
  -104
  -112
  -121
  -130
  -138
  -146
  -154
  -162
  -169
  -177
  -185
  -192
  -200
  -208
  -216
  -225
  -234
  -243
  -253
  -263
  -273
  -284
  -296
  -308
Prev. year cash balance distribution, $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 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
 
  -1,662
  827
  974
  1,133
  1,304
  1,485
  1,677
  1,878
  2,088
  2,306
  2,519
  2,754
  2,997
  3,249
  3,509
  3,778
  4,056
  4,343
  4,641
  4,950
  5,270
  5,602
  5,947
  6,306
  6,680
  7,068
  7,474
  7,896
  8,337
  8,798
Discount rate, %
 
  14.30
  15.02
  15.77
  16.55
  17.38
  18.25
  19.16
  20.12
  21.13
  22.18
  23.29
  24.46
  25.68
  26.96
  28.31
  29.73
  31.22
  32.78
  34.41
  36.14
  37.94
  39.84
  41.83
  43.92
  46.12
  48.42
  50.85
  53.39
  56.06
  58.86
PV of cash for distribution, $m
 
  -1,454
  625
  628
  614
  585
  543
  491
  433
  372
  311
  252
  199
  154
  115
  83
  59
  40
  26
  17
  10
  6
  4
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Premier, Inc., together with its subsidiaries, operates as a healthcare improvement company in the United States. The company operates through two segments, Supply Chain Services and Performance Services. The Supply Chain Services segment offers its members with access to a range of products and services, including medical and surgical products, pharmaceuticals, laboratory supplies, capital equipment, information technology, facilities and construction, and food and nutritional products, as well as purchased services, such as clinical engineering and document shredding services; and software-as-a-service informatics products. This segment also engages in the specialty pharmacy business, which provides traditional pharmacy dispensing and specialty pharmacy services; direct sourcing business; and in the provision of ASCEND Collaborative service for members to receive group purchasing programs, tiers, and prices, as well as provides managed services. The Performance Services segment offers PremierConnect, an integrated technology platform for continuous performance improvement; and performance improvement collaborative, advisory, and insurance services. This segment provides various PremierConnect domains comprising PremierConnect Quality & Regulatory domain for identifying and targeting quality improvement areas; PremierConnect Safety domain to enhance patient safety; PremierConnect Supply Chain & ERP domain for lowering supply chain costs; PremierConnect Operations domain, which optimizes labor management with integrated financial reporting and budgeting; PremierConnect Population Health domain that provide population and provider insights from measuring and benchmarking acute and ambulatory clinical performance; and PremierConnect Enterprise, which integrates member's custom data into a hosted and integrated data warehouse and analytics platform. Premier, Inc. is headquartered in Charlotte, North Carolina.

FINANCIAL RATIOS  of  Premier (PINC)

Valuation Ratios
P/E Ratio 113.9
Price to Sales 4.1
Price to Book -2.5
Price to Tangible Book
Price to Cash Flow 12.9
Price to Free Cash Flow 16.3
Growth Rates
Sales Growth Rate 15.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.5%
Cap. Spend. - 3 Yr. Gr. Rate 12.9%
Financial Strength
Quick Ratio 53
Current Ratio 0
LT Debt to Equity -161.6%
Total Debt to Equity -161.8%
Interest Coverage 144
Management Effectiveness
Return On Assets 2.6%
Ret/ On Assets - 3 Yr. Avg. 2.8%
Return On Total Capital 3.8%
Ret/ On T. Cap. - 3 Yr. Avg. 4.3%
Return On Equity -1.7%
Return On Equity - 3 Yr. Avg. -1.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 60.7%
Gross Margin - 3 Yr. Avg. 62.5%
EBITDA Margin 31.9%
EBITDA Margin - 3 Yr. Avg. 36%
Operating Margin 22.9%
Oper. Margin - 3 Yr. Avg. 27.5%
Pre-Tax Margin 24.5%
Pre-Tax Margin - 3 Yr. Avg. 30.3%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 17.5%
Eff/ Tax Rate - 3 Yr. Avg. 12.8%
Payout Ratio 0%

PINC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PINC stock intrinsic value calculation we used $1163 million for the last fiscal year's total revenue generated by Premier. The default revenue input number comes from 2016 income statement of Premier. 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 PINC stock valuation model: a) initial revenue growth rate of 27.1% 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 14.3%, whose default value for PINC is calculated based on our internal credit rating of Premier, 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 Premier.
    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 PINC stock the variable cost ratio is equal to 73.6%.

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 PINC 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 Premier.

Corporate tax rate of 27% is the nominal tax rate for Premier. 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 PINC 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 PINC are equal to 22.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Premier 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 PINC is equal to -10%. 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 - $-1951 million for Premier - 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 136.551 million for Premier 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 Premier at the current share price and the inputted number of shares is $4.6 billion.

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COMPANY NEWS

▶ University Health System Partners with Premier Inc.   [Aug-16-17 08:30AM  Business Wire]
▶ Premier Inc. Enhances Environmental Stewardship Program   [Jul-24-17 10:20AM  Business Wire]
▶ Premier CEO Seeks Incremental Health Care Fixes   [Jul-20-17 01:15PM  Bloomberg Video]
▶ Merck and Premier Inc. Expand Collaboration   [09:09AM  Market Realist]
▶ Bioventus expands market access for surgical products with new contract   [11:00AM  American City Business Journals]
▶ McLaren Health Care Expands Partnership with Premier Inc.   [May-31-17 10:24AM  Business Wire]
▶ Premier Inc. to Host 2017 Investor Day on May 24   [May-10-17 08:43AM  Business Wire]
▶ Premier Inc. reports 3Q loss   [May-08-17 04:10PM  Associated Press]
▶ Is Premier Inc (PINC) A Good Stock To Buy?   [03:02AM  at Insider Monkey]
▶ Welch Capitals Must-Buy Healthcare Stocks   [Nov-02-16 05:22PM  at Insider Monkey]
▶ Premier CEO: Channel your inner super power for success   [Oct-20-16 02:10PM  at bizjournals.com]
▶ Premier Inc. and Banner Health Expand Partnership   [Oct-05-16 08:28AM  Business Wire]
Stock chart of PINC Financial statements of PINC
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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