Intrinsic value of Regeneron Pharmaceuticals - REGN

Previous Close

$440.94

  Intrinsic Value

$259.95

stock screener

  Rating & Target

sell

-41%

  Value-price divergence*

+44%

Previous close

$440.94

 
Intrinsic value

$259.95

 
Up/down potential

-41%

 
Rating

sell

 
Value-price divergence*

+44%

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

We calculate the intrinsic value of REGN 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 46.5

 

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, %
  18.42
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
Revenue, $m
  4,860
  5,890
  7,044
  8,320
  9,719
  11,238
  12,874
  14,627
  16,491
  18,466
  20,548
  22,736
  25,029
  27,425
  29,926
  32,531
  35,243
  38,063
  40,995
  44,041
  47,207
  50,497
  53,917
  57,473
  61,172
  65,021
  69,028
  73,202
  77,552
  82,087
  86,818
Variable operating expenses, $m
 
  4,123
  4,931
  5,824
  6,803
  7,866
  9,012
  10,239
  11,544
  12,926
  14,384
  15,915
  17,520
  19,198
  20,948
  22,772
  24,670
  26,644
  28,696
  30,829
  33,045
  35,348
  37,742
  40,231
  42,820
  45,515
  48,320
  51,242
  54,286
  57,461
  60,772
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
  3,530
  4,123
  4,931
  5,824
  6,803
  7,866
  9,012
  10,239
  11,544
  12,926
  14,384
  15,915
  17,520
  19,198
  20,948
  22,772
  24,670
  26,644
  28,696
  30,829
  33,045
  35,348
  37,742
  40,231
  42,820
  45,515
  48,320
  51,242
  54,286
  57,461
  60,772
Operating income, $m
  1,331
  1,767
  2,113
  2,496
  2,916
  3,371
  3,862
  4,388
  4,947
  5,540
  6,164
  6,821
  7,509
  8,228
  8,978
  9,759
  10,573
  11,419
  12,298
  13,212
  14,162
  15,149
  16,175
  17,242
  18,352
  19,506
  20,708
  21,961
  23,266
  24,626
  26,045
EBITDA, $m
  1,436
  1,894
  2,265
  2,676
  3,126
  3,614
  4,140
  4,704
  5,304
  5,939
  6,608
  7,312
  8,049
  8,820
  9,624
  10,462
  11,334
  12,241
  13,184
  14,164
  15,182
  16,240
  17,340
  18,483
  19,673
  20,911
  22,199
  23,542
  24,941
  26,399
  27,921
Interest expense (income), $m
  5
  12
  30
  50
  72
  96
  122
  151
  181
  213
  247
  283
  321
  361
  402
  445
  490
  537
  586
  636
  689
  743
  800
  859
  921
  985
  1,051
  1,120
  1,192
  1,267
  1,346
Earnings before tax, $m
  1,330
  1,755
  2,083
  2,446
  2,844
  3,275
  3,740
  4,237
  4,766
  5,327
  5,917
  6,538
  7,188
  7,867
  8,576
  9,314
  10,083
  10,882
  11,713
  12,576
  13,473
  14,406
  15,375
  16,383
  17,431
  18,522
  19,657
  20,840
  22,073
  23,359
  24,700
Tax expense, $m
  434
  474
  562
  660
  768
  884
  1,010
  1,144
  1,287
  1,438
  1,598
  1,765
  1,941
  2,124
  2,315
  2,515
  2,722
  2,938
  3,162
  3,396
  3,638
  3,890
  4,151
  4,423
  4,706
  5,001
  5,308
  5,627
  5,960
  6,307
  6,669
Net income, $m
  896
  1,281
  1,521
  1,786
  2,076
  2,391
  2,730
  3,093
  3,479
  3,888
  4,320
  4,772
  5,247
  5,743
  6,260
  6,799
  7,360
  7,944
  8,550
  9,181
  9,836
  10,516
  11,224
  11,959
  12,725
  13,521
  14,350
  15,214
  16,114
  17,052
  18,031

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,039
  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
  6,973
  7,192
  8,600
  10,159
  11,867
  13,721
  15,720
  17,859
  20,136
  22,547
  25,089
  27,761
  30,560
  33,486
  36,540
  39,721
  43,032
  46,475
  50,055
  53,774
  57,640
  61,657
  65,833
  70,175
  74,691
  79,391
  84,284
  89,380
  94,691
  100,228
  106,005
Adjusted assets (=assets-cash), $m
  5,934
  7,192
  8,600
  10,159
  11,867
  13,721
  15,720
  17,859
  20,136
  22,547
  25,089
  27,761
  30,560
  33,486
  36,540
  39,721
  43,032
  46,475
  50,055
  53,774
  57,640
  61,657
  65,833
  70,175
  74,691
  79,391
  84,284
  89,380
  94,691
  100,228
  106,005
Revenue / Adjusted assets
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
  0.819
Average production assets, $m
  1,839
  2,227
  2,662
  3,145
  3,674
  4,248
  4,867
  5,529
  6,234
  6,980
  7,767
  8,594
  9,461
  10,367
  11,312
  12,297
  13,322
  14,388
  15,496
  16,648
  17,844
  19,088
  20,381
  21,725
  23,123
  24,578
  26,093
  27,670
  29,315
  31,029
  32,817
Working capital, $m
  1,939
  1,243
  1,486
  1,756
  2,051
  2,371
  2,717
  3,086
  3,480
  3,896
  4,336
  4,797
  5,281
  5,787
  6,314
  6,864
  7,436
  8,031
  8,650
  9,293
  9,961
  10,655
  11,377
  12,127
  12,907
  13,719
  14,565
  15,446
  16,363
  17,320
  18,319
Total debt, $m
  479
  861
  1,430
  2,059
  2,749
  3,498
  4,306
  5,170
  6,090
  7,064
  8,091
  9,170
  10,301
  11,484
  12,717
  14,002
  15,340
  16,731
  18,177
  19,680
  21,241
  22,864
  24,551
  26,306
  28,130
  30,029
  32,006
  34,065
  36,210
  38,447
  40,781
Total liabilities, $m
  2,524
  2,906
  3,475
  4,104
  4,794
  5,543
  6,351
  7,215
  8,135
  9,109
  10,136
  11,215
  12,346
  13,529
  14,762
  16,047
  17,385
  18,776
  20,222
  21,725
  23,286
  24,909
  26,596
  28,351
  30,175
  32,074
  34,051
  36,110
  38,255
  40,492
  42,826
Total equity, $m
  4,449
  4,286
  5,126
  6,055
  7,072
  8,178
  9,369
  10,644
  12,001
  13,438
  14,953
  16,545
  18,214
  19,958
  21,778
  23,674
  25,647
  27,699
  29,832
  32,050
  34,353
  36,748
  39,236
  41,824
  44,516
  47,317
  50,233
  53,270
  56,436
  59,736
  63,179
Total liabilities and equity, $m
  6,973
  7,192
  8,601
  10,159
  11,866
  13,721
  15,720
  17,859
  20,136
  22,547
  25,089
  27,760
  30,560
  33,487
  36,540
  39,721
  43,032
  46,475
  50,054
  53,775
  57,639
  61,657
  65,832
  70,175
  74,691
  79,391
  84,284
  89,380
  94,691
  100,228
  106,005
Debt-to-equity ratio
  0.108
  0.200
  0.280
  0.340
  0.390
  0.430
  0.460
  0.490
  0.510
  0.530
  0.540
  0.550
  0.570
  0.580
  0.580
  0.590
  0.600
  0.600
  0.610
  0.610
  0.620
  0.620
  0.630
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.640
  0.650
Adjusted equity ratio
  0.575
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596
  0.596

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  896
  1,281
  1,521
  1,786
  2,076
  2,391
  2,730
  3,093
  3,479
  3,888
  4,320
  4,772
  5,247
  5,743
  6,260
  6,799
  7,360
  7,944
  8,550
  9,181
  9,836
  10,516
  11,224
  11,959
  12,725
  13,521
  14,350
  15,214
  16,114
  17,052
  18,031
Depreciation, amort., depletion, $m
  105
  127
  152
  180
  210
  243
  278
  316
  356
  399
  444
  491
  541
  592
  646
  703
  761
  822
  885
  951
  1,020
  1,091
  1,165
  1,241
  1,321
  1,404
  1,491
  1,581
  1,675
  1,773
  1,875
Funds from operations, $m
  1,701
  1,408
  1,673
  1,965
  2,286
  2,634
  3,008
  3,409
  3,836
  4,287
  4,763
  5,264
  5,788
  6,335
  6,907
  7,502
  8,122
  8,766
  9,436
  10,132
  10,855
  11,607
  12,388
  13,201
  14,046
  14,925
  15,841
  16,795
  17,789
  18,825
  19,906
Change in working capital, $m
  228
  217
  243
  269
  295
  320
  345
  370
  393
  417
  439
  462
  484
  506
  528
  550
  572
  595
  619
  643
  668
  694
  722
  750
  780
  812
  846
  881
  918
  957
  998
Cash from operations, $m
  1,473
  1,191
  1,429
  1,696
  1,991
  2,313
  2,663
  3,039
  3,442
  3,871
  4,324
  4,802
  5,304
  5,830
  6,379
  6,952
  7,550
  8,171
  8,817
  9,489
  10,187
  10,913
  11,667
  12,450
  13,265
  14,113
  14,995
  15,914
  16,871
  17,868
  18,908
Maintenance CAPEX, $m
  0
  -105
  -127
  -152
  -180
  -210
  -243
  -278
  -316
  -356
  -399
  -444
  -491
  -541
  -592
  -646
  -703
  -761
  -822
  -885
  -951
  -1,020
  -1,091
  -1,165
  -1,241
  -1,321
  -1,404
  -1,491
  -1,581
  -1,675
  -1,773
New CAPEX, $m
  -512
  -388
  -436
  -482
  -529
  -574
  -619
  -662
  -705
  -746
  -787
  -827
  -867
  -906
  -945
  -985
  -1,025
  -1,066
  -1,108
  -1,152
  -1,197
  -1,244
  -1,293
  -1,344
  -1,398
  -1,455
  -1,515
  -1,578
  -1,644
  -1,714
  -1,788
Cash from investing activities, $m
  -1,047
  -493
  -563
  -634
  -709
  -784
  -862
  -940
  -1,021
  -1,102
  -1,186
  -1,271
  -1,358
  -1,447
  -1,537
  -1,631
  -1,728
  -1,827
  -1,930
  -2,037
  -2,148
  -2,264
  -2,384
  -2,509
  -2,639
  -2,776
  -2,919
  -3,069
  -3,225
  -3,389
  -3,561
Free cash flow, $m
  426
  698
  866
  1,061
  1,282
  1,529
  1,801
  2,099
  2,421
  2,768
  3,138
  3,531
  3,946
  4,383
  4,842
  5,321
  5,822
  6,344
  6,887
  7,452
  8,039
  8,649
  9,283
  9,942
  10,626
  11,337
  12,076
  12,845
  13,646
  14,479
  15,347
Issuance/(repayment) of debt, $m
  -41
  509
  569
  630
  690
  749
  807
  864
  920
  974
  1,027
  1,079
  1,131
  1,182
  1,234
  1,285
  1,338
  1,391
  1,446
  1,503
  1,562
  1,623
  1,687
  1,754
  1,825
  1,899
  1,977
  2,059
  2,146
  2,237
  2,334
Issuance/(repurchase) of shares, $m
  127
  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  
  -700
  509
  569
  630
  690
  749
  807
  864
  920
  974
  1,027
  1,079
  1,131
  1,182
  1,234
  1,285
  1,338
  1,391
  1,446
  1,503
  1,562
  1,623
  1,687
  1,754
  1,825
  1,899
  1,977
  2,059
  2,146
  2,237
  2,334
Total cash flow (excl. dividends), $m
  -274
  1,206
  1,435
  1,691
  1,972
  2,278
  2,609
  2,963
  3,341
  3,742
  4,165
  4,610
  5,077
  5,565
  6,075
  6,606
  7,159
  7,735
  8,333
  8,955
  9,601
  10,272
  10,970
  11,696
  12,450
  13,236
  14,053
  14,904
  15,791
  16,716
  17,680
Retained Cash Flow (-), $m
  -794
  -749
  -839
  -929
  -1,018
  -1,105
  -1,191
  -1,275
  -1,357
  -1,437
  -1,515
  -1,592
  -1,668
  -1,744
  -1,820
  -1,896
  -1,973
  -2,052
  -2,133
  -2,217
  -2,304
  -2,394
  -2,489
  -2,588
  -2,692
  -2,801
  -2,916
  -3,037
  -3,165
  -3,300
  -3,443
Prev. year cash balance distribution, $m
 
  912
  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
 
  1,369
  596
  762
  954
  1,173
  1,418
  1,688
  1,984
  2,305
  2,650
  3,018
  3,409
  3,821
  4,255
  4,710
  5,186
  5,683
  6,200
  6,738
  7,297
  7,878
  8,481
  9,108
  9,759
  10,435
  11,137
  11,867
  12,626
  13,415
  14,238
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
 
  1,312
  545
  663
  786
  909
  1,029
  1,141
  1,240
  1,324
  1,389
  1,433
  1,455
  1,453
  1,429
  1,383
  1,318
  1,236
  1,142
  1,037
  927
  815
  704
  597
  497
  406
  325
  255
  195
  146
  107
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

Regeneron Pharmaceuticals, Inc. is a biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. The Company commercializes medicines for eye diseases, high low-density lipoprotein (LDL) cholesterol, and an inflammatory condition and have product candidates in development in other areas, including rheumatoid arthritis, asthma, atopic dermatitis, pain, cancer, and infectious diseases. The Company's marketed products include EYLEA (aflibercept) Injection, Praluent (alirocumab) Injection, ARCALYST (rilonacept) Injection for Subcutaneous Use, Kevzara (sarilumab) Solution for Subcutaneous Injection and ZALTRAP (ziv-aflibercept) Injection for Intravenous Infusion. As of December 31, 2016, the Company had 16 product candidates in clinical development, which consisted of a Trap-based clinical program and 15 fully human monoclonal antibody product candidates.

FINANCIAL RATIOS  of  Regeneron Pharmaceuticals (REGN)

Valuation Ratios
P/E Ratio 52.2
Price to Sales 9.6
Price to Book 10.5
Price to Tangible Book
Price to Cash Flow 31.7
Price to Free Cash Flow 48.6
Growth Rates
Sales Growth Rate 18.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.5%
Cap. Spend. - 3 Yr. Gr. Rate 26.8%
Financial Strength
Quick Ratio 8
Current Ratio 0.1
LT Debt to Equity 7.9%
Total Debt to Equity 10.8%
Interest Coverage 267
Management Effectiveness
Return On Assets 14.3%
Ret/ On Assets - 3 Yr. Avg. 12.7%
Return On Total Capital 20%
Ret/ On T. Cap. - 3 Yr. Avg. 16.8%
Return On Equity 22.1%
Return On Equity - 3 Yr. Avg. 19.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 93.8%
Gross Margin - 3 Yr. Avg. 92.3%
EBITDA Margin 29.6%
EBITDA Margin - 3 Yr. Avg. 30.4%
Operating Margin 27.4%
Oper. Margin - 3 Yr. Avg. 28.5%
Pre-Tax Margin 27.4%
Pre-Tax Margin - 3 Yr. Avg. 28.1%
Net Profit Margin 18.4%
Net Profit Margin - 3 Yr. Avg. 15.3%
Effective Tax Rate 32.6%
Eff/ Tax Rate - 3 Yr. Avg. 45.4%
Payout Ratio 0%

REGN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the REGN stock intrinsic value calculation we used $4860 million for the last fiscal year's total revenue generated by Regeneron Pharmaceuticals. The default revenue input number comes from 2016 income statement of Regeneron Pharmaceuticals. 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 REGN stock valuation model: a) initial revenue growth rate of 21.2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for REGN is calculated based on our internal credit rating of Regeneron Pharmaceuticals, 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 Regeneron Pharmaceuticals.
    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 REGN stock the variable cost ratio is equal to 70%.

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 REGN 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 Regeneron Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Regeneron Pharmaceuticals. 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 REGN 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 REGN are equal to 37.8%.

Life of production assets of 17.5 years is the average useful life of capital assets used in Regeneron Pharmaceuticals 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 REGN is equal to 21.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $4449 million for Regeneron Pharmaceuticals - 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 105.504 million for Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals at the current share price and the inputted number of shares is $46.5 billion.

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COMPANY NEWS

▶ Another Regeneron Bear Is Born   [Oct-20-17 03:57PM  Barrons.com]
▶ Regeneron-Sanofi drug succeeds mid-stage study   [Oct-17-17 12:58PM  Reuters]
▶ Pres Trump believes he has the cure for Obamacare   [Oct-12-17 10:31AM  Yahoo Finance Video]
▶ Dow's Merck Bails On Cholesterol Drug, Prodding Shares Down   [Oct-11-17 05:58PM  Investor's Business Daily]
▶ This Biotech Hit Record High; Could Undercut Regeneron In Eczema   [Oct-10-17 04:57PM  Investor's Business Daily]
▶ [$$] Ruling Goes Regeneron's Way   [Oct-09-17 02:28PM  Barrons.com]
▶ Why Regeneron's Patent Win Is Worse For Amgen Than You Think   [Oct-06-17 05:37PM  Investor's Business Daily]
▶ Regeneron Pops After Judge Tosses Ban On Amgen-Rivaling Med   [Oct-05-17 04:50PM  Investor's Business Daily]
▶ [$$] Appeals Court Rules Against Amgen in Patent Case   [01:51PM  The Wall Street Journal]
▶ Why Amgen is Sliding   [11:13AM  Barrons.com]
▶ Analyst Recommendations for Exelixis in October 2017   [Oct-04-17 02:11PM  Market Realist]
▶ 3 Stocks That Turned $7,000 Into $130,200   [Sep-28-17 07:32PM  Motley Fool]
▶ Galapagos Pops After Eczema Drug Shows Promise Vs. Regeneron   [Sep-27-17 04:03PM  Investor's Business Daily]
▶ [$$] Regeneron's Biggest Long-Term Opportunity   [Sep-19-17 02:59PM  Barrons.com]
▶ Eylea Leads the Retinal Diseases Sector   [10:39AM  Market Realist]
▶ 5 Ways To Play The Biotech Bull Market   [Sep-11-17 07:30PM  Oilprice.com]
▶ Here's Why Regeneron Toppled Despite A Successful Drug Trial   [04:22PM  Investor's Business Daily]
▶ Regeneron: When Good Isn't Good Enough   [03:30PM  Barrons.com]
Financial statements of REGN
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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