Intrinsic value of Regeneron Pharmaceuticals - REGN

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$517.33

  Intrinsic Value

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  Value-price divergence*

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$517.33

 
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*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 54.9

 

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
  11.70
  11.03
  10.43
  9.88
  9.40
  8.96
  8.56
  8.20
  7.88
  7.60
  7.34
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.91
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
Revenue, $m
  4,860
  5,429
  6,027
  6,656
  7,314
  8,001
  8,718
  9,464
  10,240
  11,048
  11,887
  12,759
  13,665
  14,607
  15,586
  16,604
  17,663
  18,766
  19,914
  21,110
  22,356
  23,656
  25,013
  26,428
  27,907
  29,451
  31,065
  32,753
  34,518
  36,365
  38,298
Variable operating expenses, $m
 
  3,800
  4,219
  4,659
  5,120
  5,601
  6,102
  6,625
  7,168
  7,733
  8,321
  8,931
  9,566
  10,225
  10,910
  11,623
  12,364
  13,136
  13,940
  14,777
  15,649
  16,559
  17,509
  18,500
  19,535
  20,616
  21,746
  22,927
  24,163
  25,456
  26,809
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
  3,800
  4,219
  4,659
  5,120
  5,601
  6,102
  6,625
  7,168
  7,733
  8,321
  8,931
  9,566
  10,225
  10,910
  11,623
  12,364
  13,136
  13,940
  14,777
  15,649
  16,559
  17,509
  18,500
  19,535
  20,616
  21,746
  22,927
  24,163
  25,456
  26,809
Operating income, $m
  1,331
  1,629
  1,808
  1,997
  2,194
  2,400
  2,615
  2,839
  3,072
  3,314
  3,566
  3,828
  4,100
  4,382
  4,676
  4,981
  5,299
  5,630
  5,974
  6,333
  6,707
  7,097
  7,504
  7,928
  8,372
  8,835
  9,320
  9,826
  10,355
  10,910
  11,489
EBITDA, $m
  1,436
  1,746
  1,938
  2,141
  2,352
  2,573
  2,804
  3,044
  3,293
  3,553
  3,823
  4,103
  4,395
  4,698
  5,012
  5,340
  5,681
  6,035
  6,404
  6,789
  7,190
  7,608
  8,044
  8,499
  8,975
  9,471
  9,991
  10,533
  11,101
  11,695
  12,317
Interest expense (income), $m
  5
  12
  22
  32
  43
  55
  67
  79
  92
  105
  119
  134
  149
  164
  181
  198
  215
  233
  252
  272
  293
  314
  337
  360
  385
  410
  437
  465
  494
  524
  556
Earnings before tax, $m
  1,330
  1,616
  1,786
  1,964
  2,151
  2,346
  2,549
  2,760
  2,980
  3,209
  3,447
  3,694
  3,951
  4,218
  4,495
  4,784
  5,084
  5,396
  5,722
  6,061
  6,414
  6,782
  7,167
  7,568
  7,987
  8,425
  8,883
  9,361
  9,862
  10,385
  10,933
Tax expense, $m
  434
  436
  482
  530
  581
  633
  688
  745
  805
  866
  931
  997
  1,067
  1,139
  1,214
  1,292
  1,373
  1,457
  1,545
  1,636
  1,732
  1,831
  1,935
  2,043
  2,157
  2,275
  2,398
  2,528
  2,663
  2,804
  2,952
Net income, $m
  896
  1,180
  1,304
  1,434
  1,570
  1,712
  1,861
  2,015
  2,176
  2,343
  2,516
  2,697
  2,884
  3,079
  3,281
  3,492
  3,711
  3,939
  4,177
  4,424
  4,682
  4,951
  5,232
  5,525
  5,831
  6,150
  6,484
  6,834
  7,199
  7,581
  7,981

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
  6,628
  7,359
  8,127
  8,930
  9,769
  10,644
  11,555
  12,503
  13,489
  14,514
  15,579
  16,685
  17,835
  19,030
  20,274
  21,567
  22,913
  24,315
  25,775
  27,297
  28,884
  30,540
  32,269
  34,074
  35,960
  37,931
  39,991
  42,147
  44,402
  46,762
Adjusted assets (=assets-cash), $m
  5,934
  6,628
  7,359
  8,127
  8,930
  9,769
  10,644
  11,555
  12,503
  13,489
  14,514
  15,579
  16,685
  17,835
  19,030
  20,274
  21,567
  22,913
  24,315
  25,775
  27,297
  28,884
  30,540
  32,269
  34,074
  35,960
  37,931
  39,991
  42,147
  44,402
  46,762
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
  2,052
  2,278
  2,516
  2,765
  3,024
  3,295
  3,577
  3,871
  4,176
  4,493
  4,823
  5,165
  5,521
  5,891
  6,276
  6,677
  7,093
  7,527
  7,980
  8,451
  8,942
  9,455
  9,990
  10,549
  11,132
  11,743
  12,381
  13,048
  13,746
  14,477
Working capital, $m
  1,939
  1,145
  1,272
  1,404
  1,543
  1,688
  1,839
  1,997
  2,161
  2,331
  2,508
  2,692
  2,883
  3,082
  3,289
  3,503
  3,727
  3,960
  4,202
  4,454
  4,717
  4,991
  5,278
  5,576
  5,888
  6,214
  6,555
  6,911
  7,283
  7,673
  8,081
Total debt, $m
  479
  633
  928
  1,238
  1,563
  1,902
  2,255
  2,623
  3,006
  3,405
  3,819
  4,249
  4,696
  5,160
  5,643
  6,146
  6,668
  7,212
  7,778
  8,368
  8,983
  9,624
  10,293
  10,992
  11,721
  12,483
  13,279
  14,112
  14,982
  15,893
  16,847
Total liabilities, $m
  2,524
  2,678
  2,973
  3,283
  3,608
  3,947
  4,300
  4,668
  5,051
  5,450
  5,864
  6,294
  6,741
  7,205
  7,688
  8,191
  8,713
  9,257
  9,823
  10,413
  11,028
  11,669
  12,338
  13,037
  13,766
  14,528
  15,324
  16,157
  17,027
  17,938
  18,892
Total equity, $m
  4,449
  3,950
  4,386
  4,844
  5,322
  5,822
  6,344
  6,887
  7,452
  8,040
  8,650
  9,285
  9,944
  10,630
  11,342
  12,083
  12,854
  13,656
  14,492
  15,362
  16,269
  17,215
  18,202
  19,232
  20,308
  21,432
  22,607
  23,835
  25,119
  26,464
  27,870
Total liabilities and equity, $m
  6,973
  6,628
  7,359
  8,127
  8,930
  9,769
  10,644
  11,555
  12,503
  13,490
  14,514
  15,579
  16,685
  17,835
  19,030
  20,274
  21,567
  22,913
  24,315
  25,775
  27,297
  28,884
  30,540
  32,269
  34,074
  35,960
  37,931
  39,992
  42,146
  44,402
  46,762
Debt-to-equity ratio
  0.108
  0.160
  0.210
  0.260
  0.290
  0.330
  0.360
  0.380
  0.400
  0.420
  0.440
  0.460
  0.470
  0.490
  0.500
  0.510
  0.520
  0.530
  0.540
  0.540
  0.550
  0.560
  0.570
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
  0.600
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
  1,180
  1,304
  1,434
  1,570
  1,712
  1,861
  2,015
  2,176
  2,343
  2,516
  2,697
  2,884
  3,079
  3,281
  3,492
  3,711
  3,939
  4,177
  4,424
  4,682
  4,951
  5,232
  5,525
  5,831
  6,150
  6,484
  6,834
  7,199
  7,581
  7,981
Depreciation, amort., depletion, $m
  105
  117
  130
  144
  158
  173
  188
  204
  221
  239
  257
  276
  295
  316
  337
  359
  382
  405
  430
  456
  483
  511
  540
  571
  603
  636
  671
  707
  746
  785
  827
Funds from operations, $m
  1,701
  1,297
  1,434
  1,578
  1,728
  1,885
  2,049
  2,219
  2,397
  2,581
  2,773
  2,972
  3,179
  3,394
  3,618
  3,851
  4,093
  4,345
  4,607
  4,880
  5,165
  5,462
  5,772
  6,096
  6,433
  6,786
  7,155
  7,541
  7,945
  8,367
  8,808
Change in working capital, $m
  228
  120
  126
  133
  139
  145
  151
  157
  164
  170
  177
  184
  191
  199
  207
  215
  224
  233
  242
  252
  263
  274
  286
  299
  312
  326
  341
  356
  372
  390
  408
Cash from operations, $m
  1,473
  1,422
  1,308
  1,445
  1,589
  1,740
  1,898
  2,062
  2,233
  2,411
  2,596
  2,788
  2,988
  3,196
  3,412
  3,636
  3,869
  4,112
  4,365
  4,628
  4,902
  5,188
  5,486
  5,797
  6,122
  6,461
  6,815
  7,185
  7,572
  7,977
  8,401
Maintenance CAPEX, $m
  0
  -105
  -117
  -130
  -144
  -158
  -173
  -188
  -204
  -221
  -239
  -257
  -276
  -295
  -316
  -337
  -359
  -382
  -405
  -430
  -456
  -483
  -511
  -540
  -571
  -603
  -636
  -671
  -707
  -746
  -785
New CAPEX, $m
  -512
  -214
  -226
  -238
  -249
  -260
  -271
  -282
  -294
  -305
  -317
  -330
  -343
  -356
  -370
  -385
  -400
  -417
  -434
  -452
  -471
  -491
  -513
  -535
  -559
  -584
  -610
  -638
  -667
  -698
  -731
Cash from investing activities, $m
  -1,047
  -319
  -343
  -368
  -393
  -418
  -444
  -470
  -498
  -526
  -556
  -587
  -619
  -651
  -686
  -722
  -759
  -799
  -839
  -882
  -927
  -974
  -1,024
  -1,075
  -1,130
  -1,187
  -1,246
  -1,309
  -1,374
  -1,444
  -1,516
Free cash flow, $m
  426
  1,103
  964
  1,077
  1,197
  1,322
  1,454
  1,592
  1,735
  1,885
  2,040
  2,202
  2,370
  2,545
  2,726
  2,914
  3,110
  3,314
  3,526
  3,746
  3,975
  4,214
  4,462
  4,722
  4,992
  5,274
  5,568
  5,876
  6,197
  6,533
  6,884
Issuance/(repayment) of debt, $m
  -41
  281
  295
  310
  325
  339
  353
  368
  383
  398
  414
  430
  447
  465
  483
  502
  523
  544
  566
  590
  615
  641
  669
  698
  729
  762
  796
  833
  871
  911
  954
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
  281
  295
  310
  325
  339
  353
  368
  383
  398
  414
  430
  447
  465
  483
  502
  523
  544
  566
  590
  615
  641
  669
  698
  729
  762
  796
  833
  871
  911
  954
Total cash flow (excl. dividends), $m
  -274
  1,384
  1,259
  1,387
  1,521
  1,661
  1,807
  1,960
  2,118
  2,283
  2,454
  2,632
  2,817
  3,009
  3,209
  3,417
  3,633
  3,858
  4,092
  4,336
  4,590
  4,855
  5,131
  5,420
  5,721
  6,036
  6,365
  6,709
  7,068
  7,444
  7,838
Retained Cash Flow (-), $m
  -794
  -413
  -436
  -457
  -479
  -500
  -521
  -543
  -565
  -588
  -611
  -635
  -659
  -685
  -713
  -741
  -771
  -802
  -835
  -870
  -907
  -946
  -987
  -1,030
  -1,076
  -1,124
  -1,175
  -1,228
  -1,285
  -1,344
  -1,407
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
 
  1,882
  824
  930
  1,043
  1,161
  1,286
  1,417
  1,553
  1,695
  1,843
  1,997
  2,157
  2,324
  2,496
  2,676
  2,862
  3,055
  3,256
  3,465
  3,683
  3,909
  4,144
  4,390
  4,645
  4,912
  5,190
  5,480
  5,783
  6,100
  6,431
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
 
  1,805
  754
  809
  858
  900
  933
  957
  971
  974
  966
  949
  921
  884
  838
  786
  727
  665
  600
  534
  468
  404
  344
  288
  237
  191
  151
  118
  89
  67
  48
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., a biopharmaceutical company, discovers, invents, develops, manufactures, and commercializes medicines for the treatment of serious medical conditions worldwide. Its products include EYLEA injection for the treatment of neovascular age-related macular degeneration, diabetic macular edema, and macular edema following retinal vein occlusion; Praluent injection, an adjunct to diet and tolerated statin therapy for the treatment of adults with heterozygous familial hypercholesterolemia or clinical atherosclerotic cardiovascular disease; and ARCALYST injection for the treatment of cryopyrin-associated periodic syndromes, including familial cold auto-inflammatory syndrome and muckle-wells syndrome in adults and children’s. It also markets Kevzara injection for the treatment of rheumatoid arthritis in adults; and ZALTRAP, an injection for intravenous infusion, which is used in combination with 5-fluorouracil, leucovorin, and irinotecan for the treatment of metastatic colorectal cancer. The company also develops EYLEA, trap-based clinical product that is in Phase III study for the treatment of neovascular glaucoma. Regeneron Pharmaceuticals, Inc. has collaboration agreement with Sanofi for the development of antibody-based clinical products comprising Praluent, Sarilumab, Dupixent, REGN2810, REGN3500, and REGN3767; Bayer HealthCare LLC for the development of Nesvacumab/aflibercept, which is used in ophthalmology; and with Teva and Mitsubishi Tanabe Pharma Corporation for developing Fasinumab, an antibody to nerve growth factor, as well as collaboration agreement with Intellia Therapeutics, Inc., to advance CRISPR/Cas gene-editing technology for in vivo therapeutic development. The company was founded in 1988 and is headquartered in Tarrytown, New York.

FINANCIAL RATIOS  of  Regeneron Pharmaceuticals (REGN)

Valuation Ratios
P/E Ratio 61.2
Price to Sales 11.3
Price to Book 12.3
Price to Tangible Book
Price to Cash Flow 37.2
Price to Free Cash Flow 57.1
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 11.7% 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 106.213 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 $54.9 billion.


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COMPANY NEWS

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Stock chart of REGN Financial statements of REGN Annual reports 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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