Intrinsic value of Dentsply Sirona - XRAY

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$63.84

  Intrinsic Value

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  Value-price divergence*

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$63.84

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

We calculate the intrinsic value of XRAY 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 15.1

 

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, %
  40.05
  48.60
  44.24
  40.32
  36.78
  33.61
  30.75
  28.17
  25.85
  23.77
  21.89
  20.20
  18.68
  17.31
  16.08
  14.97
  13.98
  13.08
  12.27
  11.54
  10.89
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.54
  7.28
  7.05
Revenue, $m
  3,745
  5,565
  8,027
  11,263
  15,406
  20,584
  26,912
  34,494
  43,412
  53,730
  65,492
  78,723
  93,431
  109,607
  127,235
  146,287
  166,734
  188,541
  211,677
  236,114
  261,826
  288,796
  317,013
  346,475
  377,187
  409,164
  442,430
  477,014
  512,959
  550,312
  589,129
Variable operating expenses, $m
 
  4,497
  6,223
  8,492
  11,396
  15,026
  19,463
  24,778
  31,030
  38,264
  46,510
  55,190
  65,501
  76,842
  89,200
  102,557
  116,892
  132,180
  148,400
  165,532
  183,558
  202,465
  222,248
  242,902
  264,434
  286,852
  310,173
  334,420
  359,619
  385,806
  413,019
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
  3,291
  4,497
  6,223
  8,492
  11,396
  15,026
  19,463
  24,778
  31,030
  38,264
  46,510
  55,190
  65,501
  76,842
  89,200
  102,557
  116,892
  132,180
  148,400
  165,532
  183,558
  202,465
  222,248
  242,902
  264,434
  286,852
  310,173
  334,420
  359,619
  385,806
  413,019
Operating income, $m
  455
  1,068
  1,804
  2,772
  4,010
  5,558
  7,450
  9,716
  12,382
  15,466
  18,983
  23,533
  27,929
  32,765
  38,035
  43,730
  49,842
  56,361
  63,277
  70,582
  78,268
  86,330
  94,765
  103,572
  112,753
  122,312
  132,256
  142,595
  153,340
  164,506
  176,109
EBITDA, $m
  727
  1,801
  2,598
  3,646
  4,987
  6,663
  8,712
  11,166
  14,053
  17,393
  21,200
  25,483
  30,244
  35,481
  41,187
  47,354
  53,973
  61,032
  68,521
  76,432
  84,755
  93,485
  102,619
  112,156
  122,098
  132,449
  143,217
  154,413
  166,048
  178,140
  190,705
Interest expense (income), $m
  37
  53
  113
  195
  302
  439
  610
  820
  1,071
  1,366
  1,708
  2,097
  2,535
  3,022
  3,557
  4,141
  4,771
  5,448
  6,170
  6,936
  7,745
  8,596
  9,489
  10,423
  11,398
  12,415
  13,473
  14,574
  15,719
  16,909
  18,146
Earnings before tax, $m
  441
  1,015
  1,691
  2,577
  3,708
  5,119
  6,839
  8,896
  11,311
  14,100
  17,275
  21,436
  25,395
  29,743
  34,477
  39,589
  45,071
  50,913
  57,107
  63,646
  70,523
  77,734
  85,277
  93,150
  101,355
  109,898
  118,783
  128,020
  137,621
  147,597
  157,964
Tax expense, $m
  10
  274
  457
  696
  1,001
  1,382
  1,847
  2,402
  3,054
  3,807
  4,664
  5,788
  6,857
  8,031
  9,309
  10,689
  12,169
  13,746
  15,419
  17,184
  19,041
  20,988
  23,025
  25,150
  27,366
  29,672
  32,071
  34,566
  37,158
  39,851
  42,650
Net income, $m
  430
  741
  1,235
  1,881
  2,707
  3,737
  4,993
  6,494
  8,257
  10,293
  12,611
  15,648
  18,538
  21,713
  25,168
  28,900
  32,902
  37,166
  41,688
  46,462
  51,482
  56,746
  62,252
  67,999
  73,989
  80,225
  86,712
  93,455
  100,463
  107,746
  115,314

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  385
  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
  11,528
  16,762
  24,178
  33,925
  46,405
  61,999
  81,061
  103,897
  130,758
  161,838
  197,266
  237,119
  281,418
  330,142
  383,237
  440,624
  502,210
  567,894
  637,582
  711,185
  788,631
  869,866
  954,858
  1,043,599
  1,136,106
  1,232,423
  1,332,619
  1,436,791
  1,545,058
  1,657,565
  1,774,484
Adjusted assets (=assets-cash), $m
  11,143
  16,762
  24,178
  33,925
  46,405
  61,999
  81,061
  103,897
  130,758
  161,838
  197,266
  237,119
  281,418
  330,142
  383,237
  440,624
  502,210
  567,894
  637,582
  711,185
  788,631
  869,866
  954,858
  1,043,599
  1,136,106
  1,232,423
  1,332,619
  1,436,791
  1,545,058
  1,657,565
  1,774,484
Revenue / Adjusted assets
  0.336
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
  0.332
Average production assets, $m
  2,059
  3,061
  4,415
  6,195
  8,473
  11,321
  14,802
  18,972
  23,876
  29,552
  36,021
  43,298
  51,387
  60,284
  69,979
  80,458
  91,703
  103,698
  116,422
  129,862
  144,004
  158,838
  174,357
  190,561
  207,453
  225,040
  243,336
  262,358
  282,128
  302,671
  324,021
Working capital, $m
  943
  1,080
  1,557
  2,185
  2,989
  3,993
  5,221
  6,692
  8,422
  10,424
  12,706
  15,272
  18,126
  21,264
  24,684
  28,380
  32,346
  36,577
  41,065
  45,806
  50,794
  56,026
  61,501
  67,216
  73,174
  79,378
  85,831
  92,541
  99,514
  106,760
  114,291
Total debt, $m
  1,532
  3,232
  5,561
  8,622
  12,540
  17,437
  23,422
  30,593
  39,027
  48,786
  59,911
  72,424
  86,334
  101,634
  118,305
  136,325
  155,663
  176,288
  198,170
  221,281
  245,599
  271,107
  297,794
  325,659
  354,706
  384,950
  416,411
  449,121
  483,117
  518,445
  555,157
Total liabilities, $m
  3,413
  5,263
  7,592
  10,653
  14,571
  19,468
  25,453
  32,624
  41,058
  50,817
  61,942
  74,455
  88,365
  103,665
  120,336
  138,356
  157,694
  178,319
  200,201
  223,312
  247,630
  273,138
  299,825
  327,690
  356,737
  386,981
  418,442
  451,152
  485,148
  520,476
  557,188
Total equity, $m
  8,114
  11,499
  16,586
  23,273
  31,834
  42,532
  55,608
  71,273
  89,700
  111,021
  135,325
  162,663
  193,052
  226,477
  262,901
  302,268
  344,516
  389,576
  437,381
  487,873
  541,001
  596,728
  655,033
  715,909
  779,369
  845,442
  914,177
  985,638
  1,059,909
  1,137,090
  1,217,296
Total liabilities and equity, $m
  11,527
  16,762
  24,178
  33,926
  46,405
  62,000
  81,061
  103,897
  130,758
  161,838
  197,267
  237,118
  281,417
  330,142
  383,237
  440,624
  502,210
  567,895
  637,582
  711,185
  788,631
  869,866
  954,858
  1,043,599
  1,136,106
  1,232,423
  1,332,619
  1,436,790
  1,545,057
  1,657,566
  1,774,484
Debt-to-equity ratio
  0.189
  0.280
  0.340
  0.370
  0.390
  0.410
  0.420
  0.430
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
  0.460
Adjusted equity ratio
  0.694
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686
  0.686

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  430
  741
  1,235
  1,881
  2,707
  3,737
  4,993
  6,494
  8,257
  10,293
  12,611
  15,648
  18,538
  21,713
  25,168
  28,900
  32,902
  37,166
  41,688
  46,462
  51,482
  56,746
  62,252
  67,999
  73,989
  80,225
  86,712
  93,455
  100,463
  107,746
  115,314
Depreciation, amort., depletion, $m
  272
  733
  794
  874
  977
  1,105
  1,262
  1,450
  1,671
  1,926
  2,218
  1,950
  2,315
  2,715
  3,152
  3,624
  4,131
  4,671
  5,244
  5,850
  6,487
  7,155
  7,854
  8,584
  9,345
  10,137
  10,961
  11,818
  12,708
  13,634
  14,596
Funds from operations, $m
  520
  1,474
  2,029
  2,756
  3,684
  4,842
  6,255
  7,944
  9,928
  12,220
  14,829
  17,599
  20,853
  24,428
  28,321
  32,524
  37,032
  41,837
  46,932
  52,311
  57,969
  63,901
  70,106
  76,583
  83,334
  90,362
  97,673
  105,273
  113,171
  121,379
  129,909
Change in working capital, $m
  -43
  353
  478
  628
  804
  1,004
  1,228
  1,471
  1,730
  2,002
  2,282
  2,567
  2,853
  3,138
  3,420
  3,696
  3,967
  4,231
  4,488
  4,741
  4,988
  5,232
  5,474
  5,716
  5,958
  6,204
  6,453
  6,709
  6,973
  7,246
  7,530
Cash from operations, $m
  563
  2,020
  1,551
  2,128
  2,880
  3,838
  5,027
  6,473
  8,198
  10,218
  12,547
  15,032
  18,000
  21,290
  24,901
  28,828
  33,066
  37,607
  42,444
  47,571
  52,980
  58,669
  64,632
  70,867
  77,376
  84,159
  91,219
  98,563
  106,198
  114,133
  122,379
Maintenance CAPEX, $m
  0
  -93
  -138
  -199
  -279
  -382
  -510
  -667
  -855
  -1,076
  -1,331
  -1,623
  -1,950
  -2,315
  -2,715
  -3,152
  -3,624
  -4,131
  -4,671
  -5,244
  -5,850
  -6,487
  -7,155
  -7,854
  -8,584
  -9,345
  -10,137
  -10,961
  -11,818
  -12,708
  -13,634
New CAPEX, $m
  -126
  -1,002
  -1,354
  -1,780
  -2,279
  -2,848
  -3,481
  -4,170
  -4,905
  -5,675
  -6,469
  -7,277
  -8,089
  -8,897
  -9,695
  -10,479
  -11,245
  -11,994
  -12,725
  -13,440
  -14,142
  -14,833
  -15,519
  -16,204
  -16,892
  -17,587
  -18,296
  -19,022
  -19,770
  -20,544
  -21,349
Cash from investing activities, $m
  60
  -1,095
  -1,492
  -1,979
  -2,558
  -3,230
  -3,991
  -4,837
  -5,760
  -6,751
  -7,800
  -8,900
  -10,039
  -11,212
  -12,410
  -13,631
  -14,869
  -16,125
  -17,396
  -18,684
  -19,992
  -21,320
  -22,674
  -24,058
  -25,476
  -26,932
  -28,433
  -29,983
  -31,588
  -33,252
  -34,983
Free cash flow, $m
  623
  926
  59
  149
  323
  608
  1,036
  1,637
  2,438
  3,467
  4,746
  6,132
  7,960
  10,078
  12,490
  15,197
  18,196
  21,482
  25,048
  28,886
  32,989
  37,349
  41,957
  46,809
  51,900
  57,226
  62,786
  68,581
  74,611
  80,881
  87,395
Issuance/(repayment) of debt, $m
  299
  1,721
  2,329
  3,061
  3,918
  4,897
  5,985
  7,170
  8,434
  9,759
  11,125
  12,514
  13,910
  15,299
  16,672
  18,020
  19,338
  20,625
  21,882
  23,111
  24,318
  25,508
  26,687
  27,865
  29,047
  30,244
  31,462
  32,710
  33,996
  35,327
  36,712
Issuance/(repurchase) of shares, $m
  -773
  738
  2,700
  3,477
  4,320
  5,193
  6,055
  6,858
  7,554
  8,094
  8,433
  8,693
  8,519
  8,047
  7,261
  6,151
  4,714
  2,953
  876
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -461
  2,459
  5,029
  6,538
  8,238
  10,090
  12,040
  14,028
  15,988
  17,853
  19,558
  21,207
  22,429
  23,346
  23,933
  24,171
  24,052
  23,578
  22,758
  23,111
  24,318
  25,508
  26,687
  27,865
  29,047
  30,244
  31,462
  32,710
  33,996
  35,327
  36,712
Total cash flow (excl. dividends), $m
  164
  2,647
  2,388
  3,210
  4,241
  5,505
  7,022
  8,807
  10,873
  13,226
  15,871
  18,646
  21,870
  25,378
  29,162
  33,217
  37,534
  42,107
  46,930
  51,998
  57,307
  62,856
  68,645
  74,674
  80,947
  87,470
  94,248
  101,290
  108,607
  116,208
  124,108
Retained Cash Flow (-), $m
  -5,776
  -3,769
  -5,087
  -6,687
  -8,561
  -10,698
  -13,077
  -15,665
  -18,427
  -21,320
  -24,304
  -27,339
  -30,389
  -33,425
  -36,423
  -39,367
  -42,248
  -45,060
  -47,806
  -50,492
  -53,128
  -55,727
  -58,304
  -60,876
  -63,460
  -66,073
  -68,735
  -71,461
  -74,271
  -77,180
  -80,206
Prev. year cash balance distribution, $m
 
  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 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
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1,506
  4,179
  7,129
  10,340
  13,798
  17,488
  21,396
  25,513
  29,829
  34,335
  39,028
  43,902
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
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  232
  531
  737
  858
  904
  891
  832
  744
  640
  531
  426
  331
Current shareholders' claim on cash, %
  100
  95.1
  84.4
  75.9
  69.0
  63.4
  58.9
  55.2
  52.2
  49.8
  47.8
  46.2
  45.0
  44.0
  43.2
  42.7
  42.3
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1
  42.1

DENTSPLY International Inc. designs, develops, manufactures, and markets various consumable dental products for the professional dental market in the United States and internationally. The company provides dental consumable products, including dental anesthetics, prophylaxis paste, dental sealants, impression materials, restorative materials, tooth whiteners, and topical fluoride; and small equipment products comprising dental handpieces, intraoral curing light systems, dental diagnostic systems, and ultrasonic scalers and polishers. It also offers dental laboratory products, such as dental prosthetics that include artificial teeth, precious metal dental alloys, dental ceramics, and crown and bridge materials, as well as computer aided design and machining ceramic systems, and porcelain furnaces. In addition, the company provides dental specialty products, which include endodontic instruments and materials, implants and related products, 3D digital scanning and treatment planning software, and dental and orthodontic appliances and accessories. Further, it offers consumable medical device products, such as urology catheters, various surgical products, medical drills, and other products. The company markets and sells its dental products through distributors, dealers, and importers to dentists, dental hygienists, dental assistants, dental laboratories, and dental schools; and medical products directly, as well as through distributors to urologists, urology nurses, and general practitioners. DENTSPLY International Inc. was founded in 1899 and is headquartered in York, Pennsylvania.

FINANCIAL RATIOS  of  Dentsply Sirona (XRAY)

Valuation Ratios
P/E Ratio 34.2
Price to Sales 3.9
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 26.1
Price to Free Cash Flow 33.6
Growth Rates
Sales Growth Rate 40.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75%
Cap. Spend. - 3 Yr. Gr. Rate 4.5%
Financial Strength
Quick Ratio 18
Current Ratio 0
LT Debt to Equity 18.6%
Total Debt to Equity 18.9%
Interest Coverage 13
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 6.5%
Ret/ On T. Cap. - 3 Yr. Avg. 7.4%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 53.4%
Gross Margin - 3 Yr. Avg. 55%
EBITDA Margin 20%
EBITDA Margin - 3 Yr. Avg. 19.6%
Operating Margin 12.1%
Oper. Margin - 3 Yr. Avg. 13.8%
Pre-Tax Margin 11.8%
Pre-Tax Margin - 3 Yr. Avg. 12.6%
Net Profit Margin 11.5%
Net Profit Margin - 3 Yr. Avg. 10.6%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 15.2%
Payout Ratio 15.1%

XRAY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XRAY stock intrinsic value calculation we used $3745 million for the last fiscal year's total revenue generated by Dentsply Sirona. The default revenue input number comes from 2016 income statement of Dentsply Sirona. 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 XRAY stock valuation model: a) initial revenue growth rate of 48.6% 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 XRAY is calculated based on our internal credit rating of Dentsply Sirona, 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 Dentsply Sirona.
    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 XRAY stock the variable cost ratio is equal to 86%.

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 XRAY 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 Dentsply Sirona.

Corporate tax rate of 27% is the nominal tax rate for Dentsply Sirona. 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 XRAY 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 XRAY are equal to 55%.

Life of production assets of 22.2 years is the average useful life of capital assets used in Dentsply Sirona 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 XRAY is equal to 19.4%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $8114 million for Dentsply Sirona - 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 235.814 million for Dentsply Sirona 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 Dentsply Sirona at the current share price and the inputted number of shares is $15.1 billion.


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COMPANY NEWS

▶ Dentsply Sirona Declares Quarterly Cash Dividend   [Jun-22-17 05:11PM  GlobeNewswire]
▶ Healthcare Companies Analyst Ratings: May 2226, 2017   [Jun-01-17 07:37AM  Market Realist]
▶ The 3 Best Dental Stocks to Buy in 2017   [May-26-17 01:28PM  Motley Fool]
▶ What Analysts Recommend for Dentsply Sirona after Its 1Q17   [May-16-17 07:36AM  Market Realist]
▶ A Look at Dentsply Sironas 2017 Guidance   [May-15-17 10:37AM  Market Realist]
▶ What Dragged Down Technology Business Sales in 1Q17?   [May-12-17 06:05PM  Market Realist]
▶ Dentsply misses Street 1Q forecasts   [06:36AM  Associated Press]
▶ Dentsply Sirona Expected to Leap in EPS   [May-08-17 04:54PM  GuruFocus.com]
▶ 5 Key Takeaways From Danaher Corporation's Earnings   [May-04-17 02:35PM  Motley Fool]
▶ Can this non-Trump play keep climbing?   [05:11PM  CNBC Videos]
▶ New Strong Sell Stocks for February 28th   [Feb-28-17 10:12AM  Zacks]
▶ Bullish and Bearish Reversals in the Market   [Feb-27-17 02:33PM  TheStreet.com]
▶ Dentsply Sirona Declares Quarterly Cash Dividend   [Dec-15-16 02:25PM  GlobeNewswire]
▶ Hedge Funds Are Dumping Parker-Hannifin Corp (PH)   [Dec-01-16 09:56AM  at Insider Monkey]
▶ Is DENTSPLY International Inc. (XRAY) A Good Stock To Buy?   [Nov-25-16 10:01PM  at Insider Monkey]
▶ Why Patterson Companies, Inc. Is Plunging Today   [Nov-22-16 12:23PM  at Motley Fool]
▶ Post Earnings Coverage as DENTSPLY Sales Surge 49%   [Nov-15-16 08:15AM  Accesswire]
Stock chart of XRAY Financial statements of XRAY Annual reports of XRAY
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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