Intrinsic value of Premier - PINC

Previous Close

$34.17

  Intrinsic Value

$60.33

stock screener

  Rating & Target

str. buy

+77%

Previous close

$34.17

 
Intrinsic value

$60.33

 
Up/down potential

+77%

 
Rating

str. buy

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 2017), $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 4.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  25.11
  33.90
  31.01
  28.41
  26.07
  23.96
  22.07
  20.36
  18.82
  17.44
  16.20
  15.08
  14.07
  13.16
  12.35
  11.61
  10.95
  10.36
  9.82
  9.34
  8.90
  8.51
  8.16
  7.85
  7.56
  7.31
  7.07
  6.87
  6.68
  6.51
  6.36
Revenue, $m
  1,455
  1,948
  2,552
  3,278
  4,132
  5,122
  6,252
  7,525
  8,941
  10,501
  12,202
  14,041
  16,017
  18,125
  20,362
  22,727
  25,215
  27,827
  30,559
  33,413
  36,388
  39,485
  42,708
  46,059
  49,542
  53,161
  56,922
  60,831
  64,895
  69,121
  73,518
Variable operating expenses, $m
 
  269
  325
  391
  469
  560
  664
  780
  910
  1,053
  1,209
  1,287
  1,468
  1,661
  1,866
  2,083
  2,311
  2,551
  2,801
  3,063
  3,335
  3,619
  3,915
  4,222
  4,541
  4,873
  5,218
  5,576
  5,948
  6,336
  6,739
Fixed operating expenses, $m
 
  754
  773
  793
  812
  833
  854
  875
  897
  919
  942
  966
  990
  1,015
  1,040
  1,066
  1,093
  1,120
  1,148
  1,177
  1,206
  1,236
  1,267
  1,299
  1,331
  1,365
  1,399
  1,434
  1,469
  1,506
  1,544
Total operating expenses, $m
  932
  1,023
  1,098
  1,184
  1,281
  1,393
  1,518
  1,655
  1,807
  1,972
  2,151
  2,253
  2,458
  2,676
  2,906
  3,149
  3,404
  3,671
  3,949
  4,240
  4,541
  4,855
  5,182
  5,521
  5,872
  6,238
  6,617
  7,010
  7,417
  7,842
  8,283
Operating income, $m
  523
  925
  1,454
  2,094
  2,850
  3,729
  4,735
  5,870
  7,134
  8,528
  10,050
  11,788
  13,559
  15,449
  17,456
  19,578
  21,811
  24,156
  26,610
  29,173
  31,846
  34,630
  37,526
  40,539
  43,670
  46,924
  50,306
  53,822
  57,477
  61,279
  65,235
EBITDA, $m
  630
  1,070
  1,618
  2,277
  3,058
  3,965
  5,003
  6,174
  7,478
  8,917
  10,487
  12,186
  14,013
  15,963
  18,033
  20,222
  22,526
  24,945
  27,476
  30,120
  32,878
  35,749
  38,737
  41,844
  45,074
  48,431
  51,919
  55,546
  59,317
  63,239
  67,320
Interest expense (income), $m
  0
  113
  71
  102
  139
  182
  233
  290
  355
  427
  506
  593
  687
  787
  894
  1,008
  1,129
  1,255
  1,388
  1,527
  1,672
  1,824
  1,981
  2,145
  2,316
  2,493
  2,677
  2,869
  3,068
  3,275
  3,490
Earnings before tax, $m
  531
  812
  1,383
  1,992
  2,711
  3,547
  4,502
  5,579
  6,779
  8,101
  9,544
  11,195
  12,872
  14,662
  16,562
  18,569
  20,683
  22,901
  25,222
  27,646
  30,174
  32,806
  35,545
  38,393
  41,354
  44,430
  47,628
  50,953
  54,409
  58,005
  61,746
Tax expense, $m
  82
  219
  373
  538
  732
  958
  1,216
  1,506
  1,830
  2,187
  2,577
  3,023
  3,475
  3,959
  4,472
  5,014
  5,584
  6,183
  6,810
  7,464
  8,147
  8,858
  9,597
  10,366
  11,165
  11,996
  12,860
  13,757
  14,691
  15,661
  16,671
Net income, $m
  113
  593
  1,010
  1,454
  1,979
  2,589
  3,286
  4,073
  4,949
  5,914
  6,967
  8,173
  9,397
  10,703
  12,090
  13,556
  15,098
  16,717
  18,412
  20,182
  22,027
  23,948
  25,948
  28,027
  30,188
  32,434
  34,769
  37,196
  39,719
  42,343
  45,074

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  157
  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
  2,508
  3,147
  4,123
  5,295
  6,675
  8,275
  10,100
  12,157
  14,445
  16,964
  19,712
  22,684
  25,875
  29,281
  32,896
  36,715
  40,736
  44,954
  49,368
  53,978
  58,784
  63,789
  68,996
  74,409
  80,035
  85,882
  91,958
  98,273
  104,838
  111,666
  118,769
Adjusted assets (=assets-cash), $m
  2,351
  3,147
  4,123
  5,295
  6,675
  8,275
  10,100
  12,157
  14,445
  16,964
  19,712
  22,684
  25,875
  29,281
  32,896
  36,715
  40,736
  44,954
  49,368
  53,978
  58,784
  63,789
  68,996
  74,409
  80,035
  85,882
  91,958
  98,273
  104,838
  111,666
  118,769
Revenue / Adjusted assets
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
  0.619
Average production assets, $m
  449
  602
  789
  1,013
  1,277
  1,583
  1,932
  2,325
  2,763
  3,245
  3,770
  4,339
  4,949
  5,601
  6,292
  7,023
  7,792
  8,598
  9,443
  10,324
  11,244
  12,201
  13,197
  14,232
  15,308
  16,427
  17,589
  18,797
  20,053
  21,358
  22,717
Working capital, $m
  -163
  -123
  -161
  -206
  -260
  -323
  -394
  -474
  -563
  -662
  -769
  -885
  -1,009
  -1,142
  -1,283
  -1,432
  -1,589
  -1,753
  -1,925
  -2,105
  -2,292
  -2,488
  -2,691
  -2,902
  -3,121
  -3,349
  -3,586
  -3,832
  -4,088
  -4,355
  -4,632
Total debt, $m
  3,373
  2,036
  2,914
  3,968
  5,211
  6,650
  8,293
  10,144
  12,203
  14,471
  16,944
  19,618
  22,490
  25,556
  28,809
  32,247
  35,865
  39,662
  43,635
  47,783
  52,109
  56,613
  61,299
  66,171
  71,235
  76,497
  81,965
  87,649
  93,557
  99,702
  106,095
Total liabilities, $m
  4,170
  2,833
  3,711
  4,765
  6,008
  7,447
  9,090
  10,941
  13,000
  15,268
  17,741
  20,415
  23,287
  26,353
  29,606
  33,044
  36,662
  40,459
  44,432
  48,580
  52,906
  57,410
  62,096
  66,968
  72,032
  77,294
  82,762
  88,446
  94,354
  100,499
  106,892
Total equity, $m
  -1,662
  315
  412
  529
  668
  827
  1,010
  1,216
  1,444
  1,696
  1,971
  2,268
  2,587
  2,928
  3,290
  3,672
  4,074
  4,495
  4,937
  5,398
  5,878
  6,379
  6,900
  7,441
  8,004
  8,588
  9,196
  9,827
  10,484
  11,167
  11,877
Total liabilities and equity, $m
  2,508
  3,148
  4,123
  5,294
  6,676
  8,274
  10,100
  12,157
  14,444
  16,964
  19,712
  22,683
  25,874
  29,281
  32,896
  36,716
  40,736
  44,954
  49,369
  53,978
  58,784
  63,789
  68,996
  74,409
  80,036
  85,882
  91,958
  98,273
  104,838
  111,666
  118,769
Debt-to-equity ratio
  -2.029
  6.470
  7.070
  7.490
  7.810
  8.040
  8.210
  8.340
  8.450
  8.530
  8.600
  8.650
  8.690
  8.730
  8.760
  8.780
  8.800
  8.820
  8.840
  8.850
  8.860
  8.880
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.920
  8.930
  8.930
Adjusted equity ratio
  -0.774
  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
  113
  593
  1,010
  1,454
  1,979
  2,589
  3,286
  4,073
  4,949
  5,914
  6,967
  8,173
  9,397
  10,703
  12,090
  13,556
  15,098
  16,717
  18,412
  20,182
  22,027
  23,948
  25,948
  28,027
  30,188
  32,434
  34,769
  37,196
  39,719
  42,343
  45,074
Depreciation, amort., depletion, $m
  107
  146
  163
  184
  208
  236
  268
  304
  344
  388
  437
  398
  454
  514
  577
  644
  715
  789
  866
  947
  1,032
  1,119
  1,211
  1,306
  1,404
  1,507
  1,614
  1,724
  1,840
  1,959
  2,084
Funds from operations, $m
  363
  739
  1,173
  1,638
  2,187
  2,825
  3,554
  4,377
  5,293
  6,302
  7,404
  8,571
  9,851
  11,217
  12,667
  14,200
  15,813
  17,506
  19,278
  21,129
  23,058
  25,068
  27,159
  29,333
  31,593
  33,941
  36,382
  38,920
  41,558
  44,303
  47,159
Change in working capital, $m
  -29
  -31
  -38
  -46
  -54
  -62
  -71
  -80
  -89
  -98
  -107
  -116
  -124
  -133
  -141
  -149
  -157
  -165
  -172
  -180
  -187
  -195
  -203
  -211
  -219
  -228
  -237
  -246
  -256
  -266
  -277
Cash from operations, $m
  392
  770
  1,211
  1,683
  2,241
  2,887
  3,626
  4,457
  5,382
  6,401
  7,511
  8,687
  9,975
  11,350
  12,808
  14,349
  15,970
  17,671
  19,450
  21,309
  23,246
  25,263
  27,362
  29,544
  31,812
  34,169
  36,619
  39,166
  41,815
  44,569
  47,436
Maintenance CAPEX, $m
  0
  -41
  -55
  -72
  -93
  -117
  -145
  -177
  -213
  -253
  -298
  -346
  -398
  -454
  -514
  -577
  -644
  -715
  -789
  -866
  -947
  -1,032
  -1,119
  -1,211
  -1,306
  -1,404
  -1,507
  -1,614
  -1,724
  -1,840
  -1,959
New CAPEX, $m
  -71
  -153
  -187
  -224
  -264
  -306
  -349
  -393
  -438
  -482
  -526
  -568
  -610
  -651
  -691
  -731
  -769
  -807
  -844
  -882
  -919
  -957
  -996
  -1,035
  -1,076
  -1,118
  -1,162
  -1,208
  -1,256
  -1,306
  -1,359
Cash from investing activities, $m
  -465
  -194
  -242
  -296
  -357
  -423
  -494
  -570
  -651
  -735
  -824
  -914
  -1,008
  -1,105
  -1,205
  -1,308
  -1,413
  -1,522
  -1,633
  -1,748
  -1,866
  -1,989
  -2,115
  -2,246
  -2,382
  -2,522
  -2,669
  -2,822
  -2,980
  -3,146
  -3,318
Free cash flow, $m
  -73
  576
  969
  1,387
  1,884
  2,464
  3,131
  3,887
  4,731
  5,665
  6,687
  7,772
  8,967
  10,244
  11,603
  13,041
  14,557
  16,149
  17,817
  19,561
  21,379
  23,274
  25,246
  27,298
  29,430
  31,647
  33,950
  36,345
  38,834
  41,424
  44,117
Issuance/(repayment) of debt, $m
  201
  -1,180
  878
  1,054
  1,242
  1,439
  1,643
  1,851
  2,059
  2,267
  2,473
  2,675
  2,872
  3,065
  3,253
  3,438
  3,618
  3,796
  3,973
  4,149
  4,326
  4,504
  4,686
  4,872
  5,064
  5,262
  5,468
  5,683
  5,909
  6,145
  6,393
Issuance/(repurchase) of shares, $m
  -112
  1,384
  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  
  -19
  204
  878
  1,054
  1,242
  1,439
  1,643
  1,851
  2,059
  2,267
  2,473
  2,675
  2,872
  3,065
  3,253
  3,438
  3,618
  3,796
  3,973
  4,149
  4,326
  4,504
  4,686
  4,872
  5,064
  5,262
  5,468
  5,683
  5,909
  6,145
  6,393
Total cash flow (excl. dividends), $m
  -92
  779
  1,847
  2,441
  3,126
  3,904
  4,774
  5,737
  6,791
  7,933
  9,160
  10,447
  11,839
  13,309
  14,856
  16,479
  18,175
  19,946
  21,790
  23,709
  25,705
  27,778
  29,932
  32,170
  34,494
  36,909
  39,418
  42,028
  44,743
  47,568
  50,510
Retained Cash Flow (-), $m
  -289
  -1,977
  -98
  -117
  -138
  -160
  -183
  -206
  -229
  -252
  -275
  -297
  -319
  -341
  -361
  -382
  -402
  -422
  -441
  -461
  -481
  -500
  -521
  -541
  -563
  -585
  -608
  -631
  -657
  -683
  -710
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
 
  -1,198
  1,750
  2,324
  2,988
  3,744
  4,592
  5,532
  6,562
  7,681
  8,886
  10,150
  11,520
  12,969
  14,495
  16,097
  17,773
  19,524
  21,349
  23,248
  25,224
  27,278
  29,412
  31,628
  33,931
  36,324
  38,811
  41,397
  44,086
  46,886
  49,800
Discount rate, %
 
  14.20
  14.91
  15.66
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
  25.50
  26.78
  28.12
  29.52
  31.00
  32.55
  34.17
  35.88
  37.68
  39.56
  41.54
  43.62
  45.80
  48.09
  50.49
  53.02
  55.67
  58.45
PV of cash for distribution, $m
 
  -1,049
  1,325
  1,502
  1,626
  1,689
  1,690
  1,634
  1,528
  1,383
  1,214
  1,029
  848
  677
  523
  392
  283
  198
  134
  87
  55
  33
  19
  11
  6
  3
  1
  1
  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. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,900 United States hospitals and health systems and approximately 150,000 other providers and organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

FINANCIAL RATIOS  of  Premier (PINC)

Valuation Ratios
P/E Ratio 42.1
Price to Sales 3.3
Price to Book -2.9
Price to Tangible Book
Price to Cash Flow 12.1
Price to Free Cash Flow 14.8
Growth Rates
Sales Growth Rate 25.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.8%
Cap. Spend. - 3 Yr. Gr. Rate 4.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity -189.2%
Total Debt to Equity -202.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.2%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital 7.7%
Ret/ On T. Cap. - 3 Yr. Avg. 5.3%
Return On Equity -6.3%
Return On Equity - 3 Yr. Avg. -3.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 53.3%
Gross Margin - 3 Yr. Avg. 58.2%
EBITDA Margin 43.8%
EBITDA Margin - 3 Yr. Avg. 36%
Operating Margin 35.9%
Oper. Margin - 3 Yr. Avg. 28.4%
Pre-Tax Margin 36.5%
Pre-Tax Margin - 3 Yr. Avg. 29.3%
Net Profit Margin 7.8%
Net Profit Margin - 3 Yr. Avg. 5.1%
Effective Tax Rate 15.4%
Eff/ Tax Rate - 3 Yr. Avg. 15.4%
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 $1455 million for the last fiscal year's total revenue generated by Premier. The default revenue input number comes from 2017 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 33.9% 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 14.2%, 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 15.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $736 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 30.9%.

Life of production assets of 10.9 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 -6.3%. 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 - $-1662 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 139.596 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 $4.8 billion.

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COMPANY NEWS

▶ Amid Durham HQ relocation, Parata inks agreement with Premier   [Sep-29-17 05:20PM  American City Business Journals]
▶ On heels of ECU deal, Vidant inks agreement with Premier   [Sep-27-17 08:25AM  American City Business Journals]
▶ Premier Inc. to Present at September Investor Conferences   [Aug-23-17 09:45AM  Business Wire]
▶ Premier Inc. reports 4Q loss   [Aug-21-17 09:33PM  Associated Press]
▶ 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]
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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