Intrinsic value of Dentsply Sirona - XRAY

Previous Close

$53.48

  Intrinsic Value

$35.97

stock screener

  Rating & Target

sell

-33%

  Value-price divergence*

-33%

Previous close

$53.48

 
Intrinsic value

$35.97

 
Up/down potential

-33%

 
Rating

sell

 
Value-price divergence*

-33%

*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 12.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  40.05
  16.60
  15.44
  14.40
  13.46
  12.61
  11.85
  11.16
  10.55
  9.99
  9.49
  9.04
  8.64
  8.28
  7.95
  7.65
  7.39
  7.15
  6.93
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.67
  5.61
  5.55
Revenue, $m
  3,745
  4,367
  5,041
  5,767
  6,543
  7,368
  8,241
  9,161
  10,127
  11,139
  12,197
  13,300
  14,449
  15,645
  16,888
  18,181
  19,524
  20,920
  22,371
  23,879
  25,447
  27,078
  28,775
  30,543
  32,384
  34,303
  36,304
  38,391
  40,570
  42,844
  45,221
Variable operating expenses, $m
 
  3,657
  4,129
  4,638
  5,182
  5,760
  6,372
  7,017
  7,695
  8,404
  9,146
  9,324
  10,130
  10,968
  11,840
  12,746
  13,688
  14,666
  15,683
  16,740
  17,840
  18,983
  20,174
  21,413
  22,703
  24,049
  25,451
  26,915
  28,442
  30,037
  31,703
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
  3,657
  4,129
  4,638
  5,182
  5,760
  6,372
  7,017
  7,695
  8,404
  9,146
  9,324
  10,130
  10,968
  11,840
  12,746
  13,688
  14,666
  15,683
  16,740
  17,840
  18,983
  20,174
  21,413
  22,703
  24,049
  25,451
  26,915
  28,442
  30,037
  31,703
Operating income, $m
  455
  710
  912
  1,129
  1,361
  1,607
  1,868
  2,143
  2,432
  2,735
  3,051
  3,976
  4,319
  4,677
  5,048
  5,435
  5,836
  6,254
  6,687
  7,138
  7,607
  8,094
  8,602
  9,130
  9,681
  10,254
  10,852
  11,476
  12,128
  12,808
  13,518
EBITDA, $m
  727
  1,414
  1,632
  1,867
  2,118
  2,385
  2,668
  2,965
  3,278
  3,606
  3,948
  4,305
  4,677
  5,064
  5,467
  5,885
  6,320
  6,772
  7,241
  7,730
  8,237
  8,765
  9,315
  9,887
  10,483
  11,104
  11,752
  12,427
  13,133
  13,869
  14,638
Interest expense (income), $m
  37
  53
  72
  94
  117
  141
  167
  195
  224
  255
  287
  320
  355
  392
  430
  469
  510
  552
  597
  643
  690
  740
  792
  845
  901
  960
  1,020
  1,084
  1,150
  1,219
  1,291
Earnings before tax, $m
  441
  657
  839
  1,035
  1,244
  1,466
  1,701
  1,948
  2,208
  2,480
  2,764
  3,655
  3,964
  4,285
  4,619
  4,966
  5,326
  5,701
  6,091
  6,496
  6,917
  7,354
  7,810
  8,285
  8,779
  9,295
  9,832
  10,393
  10,978
  11,589
  12,227
Tax expense, $m
  10
  177
  227
  279
  336
  396
  459
  526
  596
  670
  746
  987
  1,070
  1,157
  1,247
  1,341
  1,438
  1,539
  1,644
  1,754
  1,867
  1,986
  2,109
  2,237
  2,370
  2,510
  2,655
  2,806
  2,964
  3,129
  3,301
Net income, $m
  430
  480
  613
  755
  908
  1,070
  1,242
  1,422
  1,612
  1,810
  2,018
  2,668
  2,894
  3,128
  3,372
  3,625
  3,888
  4,162
  4,446
  4,742
  5,049
  5,369
  5,702
  6,048
  6,409
  6,785
  7,177
  7,587
  8,014
  8,460
  8,926

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
  12,996
  15,003
  17,162
  19,472
  21,927
  24,526
  27,264
  30,140
  33,152
  36,299
  39,582
  43,002
  46,561
  50,262
  54,109
  58,107
  62,261
  66,579
  71,067
  75,734
  80,589
  85,641
  90,902
  96,381
  102,092
  108,047
  114,259
  120,743
  127,513
  134,585
Adjusted assets (=assets-cash), $m
  11,143
  12,996
  15,003
  17,162
  19,472
  21,927
  24,526
  27,264
  30,140
  33,152
  36,299
  39,582
  43,002
  46,561
  50,262
  54,109
  58,107
  62,261
  66,579
  71,067
  75,734
  80,589
  85,641
  90,902
  96,381
  102,092
  108,047
  114,259
  120,743
  127,513
  134,585
Revenue / Adjusted assets
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
Average production assets, $m
  2,059
  2,402
  2,772
  3,172
  3,598
  4,052
  4,532
  5,038
  5,570
  6,126
  6,708
  7,315
  7,947
  8,605
  9,288
  9,999
  10,738
  11,506
  12,304
  13,133
  13,996
  14,893
  15,826
  16,799
  17,811
  18,867
  19,967
  21,115
  22,313
  23,564
  24,871
Working capital, $m
  943
  677
  781
  894
  1,014
  1,142
  1,277
  1,420
  1,570
  1,727
  1,890
  2,061
  2,240
  2,425
  2,618
  2,818
  3,026
  3,243
  3,467
  3,701
  3,944
  4,197
  4,460
  4,734
  5,020
  5,317
  5,627
  5,951
  6,288
  6,641
  7,009
Total debt, $m
  1,532
  2,069
  2,679
  3,335
  4,037
  4,784
  5,574
  6,406
  7,281
  8,196
  9,153
  10,151
  11,191
  12,273
  13,398
  14,567
  15,783
  17,045
  18,358
  19,722
  21,141
  22,617
  24,153
  25,752
  27,418
  29,154
  30,964
  32,853
  34,824
  36,882
  39,032
Total liabilities, $m
  3,413
  3,951
  4,561
  5,217
  5,919
  6,666
  7,456
  8,288
  9,163
  10,078
  11,035
  12,033
  13,073
  14,155
  15,280
  16,449
  17,665
  18,927
  20,240
  21,604
  23,023
  24,499
  26,035
  27,634
  29,300
  31,036
  32,846
  34,735
  36,706
  38,764
  40,914
Total equity, $m
  8,114
  9,045
  10,442
  11,945
  13,552
  15,261
  17,070
  18,976
  20,977
  23,074
  25,264
  27,549
  29,930
  32,407
  34,983
  37,660
  40,443
  43,334
  46,339
  49,463
  52,711
  56,090
  59,606
  63,268
  67,081
  71,056
  75,201
  79,524
  84,037
  88,749
  93,671
Total liabilities and equity, $m
  11,527
  12,996
  15,003
  17,162
  19,471
  21,927
  24,526
  27,264
  30,140
  33,152
  36,299
  39,582
  43,003
  46,562
  50,263
  54,109
  58,108
  62,261
  66,579
  71,067
  75,734
  80,589
  85,641
  90,902
  96,381
  102,092
  108,047
  114,259
  120,743
  127,513
  134,585
Debt-to-equity ratio
  0.189
  0.230
  0.260
  0.280
  0.300
  0.310
  0.330
  0.340
  0.350
  0.360
  0.360
  0.370
  0.370
  0.380
  0.380
  0.390
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.420
  0.420
Adjusted equity ratio
  0.694
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696
  0.696

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  430
  480
  613
  755
  908
  1,070
  1,242
  1,422
  1,612
  1,810
  2,018
  2,668
  2,894
  3,128
  3,372
  3,625
  3,888
  4,162
  4,446
  4,742
  5,049
  5,369
  5,702
  6,048
  6,409
  6,785
  7,177
  7,587
  8,014
  8,460
  8,926
Depreciation, amort., depletion, $m
  272
  703
  720
  738
  757
  778
  799
  822
  846
  871
  897
  329
  358
  388
  418
  450
  484
  518
  554
  592
  630
  671
  713
  757
  802
  850
  899
  951
  1,005
  1,061
  1,120
Funds from operations, $m
  520
  1,183
  1,333
  1,494
  1,665
  1,848
  2,041
  2,244
  2,458
  2,681
  2,915
  2,998
  3,252
  3,516
  3,790
  4,076
  4,372
  4,680
  5,000
  5,333
  5,680
  6,040
  6,414
  6,805
  7,211
  7,635
  8,077
  8,538
  9,019
  9,521
  10,046
Change in working capital, $m
  -43
  96
  105
  112
  120
  128
  135
  143
  150
  157
  164
  171
  178
  185
  193
  200
  208
  216
  225
  234
  243
  253
  263
  274
  285
  297
  310
  324
  338
  353
  368
Cash from operations, $m
  563
  1,087
  1,228
  1,381
  1,545
  1,720
  1,906
  2,102
  2,308
  2,525
  2,751
  2,827
  3,074
  3,330
  3,597
  3,875
  4,164
  4,464
  4,776
  5,100
  5,436
  5,787
  6,151
  6,531
  6,926
  7,337
  7,767
  8,214
  8,681
  9,169
  9,678
Maintenance CAPEX, $m
  0
  -93
  -108
  -125
  -143
  -162
  -183
  -204
  -227
  -251
  -276
  -302
  -329
  -358
  -388
  -418
  -450
  -484
  -518
  -554
  -592
  -630
  -671
  -713
  -757
  -802
  -850
  -899
  -951
  -1,005
  -1,061
New CAPEX, $m
  -126
  -343
  -371
  -399
  -427
  -454
  -480
  -506
  -531
  -557
  -582
  -607
  -632
  -658
  -684
  -711
  -739
  -768
  -798
  -829
  -862
  -897
  -934
  -972
  -1,013
  -1,055
  -1,100
  -1,148
  -1,198
  -1,251
  -1,307
Cash from investing activities, $m
  60
  -436
  -479
  -524
  -570
  -616
  -663
  -710
  -758
  -808
  -858
  -909
  -961
  -1,016
  -1,072
  -1,129
  -1,189
  -1,252
  -1,316
  -1,383
  -1,454
  -1,527
  -1,605
  -1,685
  -1,770
  -1,857
  -1,950
  -2,047
  -2,149
  -2,256
  -2,368
Free cash flow, $m
  623
  651
  749
  857
  975
  1,104
  1,243
  1,392
  1,550
  1,717
  1,893
  1,918
  2,112
  2,315
  2,526
  2,746
  2,975
  3,212
  3,459
  3,716
  3,982
  4,259
  4,547
  4,846
  5,156
  5,480
  5,816
  6,167
  6,532
  6,912
  7,309
Issuance/(repayment) of debt, $m
  299
  558
  610
  657
  702
  746
  790
  832
  874
  916
  957
  998
  1,040
  1,082
  1,125
  1,169
  1,215
  1,263
  1,313
  1,364
  1,419
  1,476
  1,536
  1,599
  1,666
  1,736
  1,810
  1,888
  1,971
  2,058
  2,150
Issuance/(repurchase) of shares, $m
  -773
  815
  784
  748
  699
  639
  567
  484
  390
  286
  173
  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  
  -461
  1,373
  1,394
  1,405
  1,401
  1,385
  1,357
  1,316
  1,264
  1,202
  1,130
  998
  1,040
  1,082
  1,125
  1,169
  1,215
  1,263
  1,313
  1,364
  1,419
  1,476
  1,536
  1,599
  1,666
  1,736
  1,810
  1,888
  1,971
  2,058
  2,150
Total cash flow (excl. dividends), $m
  164
  2,025
  2,143
  2,261
  2,377
  2,490
  2,600
  2,708
  2,814
  2,919
  3,023
  2,916
  3,152
  3,397
  3,651
  3,915
  4,190
  4,475
  4,772
  5,080
  5,401
  5,735
  6,083
  6,445
  6,822
  7,216
  7,627
  8,055
  8,503
  8,971
  9,459
Retained Cash Flow (-), $m
  -5,776
  -1,295
  -1,397
  -1,503
  -1,607
  -1,709
  -1,808
  -1,906
  -2,002
  -2,096
  -2,191
  -2,285
  -2,380
  -2,477
  -2,576
  -2,677
  -2,782
  -2,891
  -3,005
  -3,124
  -3,248
  -3,379
  -3,516
  -3,661
  -3,814
  -3,975
  -4,145
  -4,324
  -4,513
  -4,712
  -4,922
Prev. year cash balance distribution, $m
 
  364
  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
 
  1,093
  747
  758
  769
  780
  791
  802
  812
  822
  833
  631
  771
  920
  1,075
  1,238
  1,407
  1,584
  1,767
  1,957
  2,153
  2,356
  2,566
  2,784
  3,008
  3,241
  3,482
  3,732
  3,990
  4,259
  4,537
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
 
  1,048
  683
  660
  634
  605
  574
  542
  508
  472
  437
  300
  329
  350
  361
  363
  358
  345
  325
  301
  274
  244
  213
  182
  153
  126
  102
  80
  62
  46
  34
Current shareholders' claim on cash, %
  100
  93.7
  88.7
  84.8
  81.7
  79.3
  77.5
  76.1
  75.1
  74.4
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1
  74.1

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 28.6
Price to Sales 3.3
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 21.9
Price to Free Cash Flow 28.2
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 16.6% 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 15.5%. 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 $12.6 billion.

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COMPANY NEWS

▶ Discussing Dentsply Sironas Recent Stock Performance   [Aug-17-17 10:37AM  Market Realist]
▶ Dentsply Sironas Technologies Segment Sales Declined in 2Q17   [Aug-16-17 10:37AM  Market Realist]
▶ Dentsply Sironas 2Q17 Results: Key Highlights   [07:37AM  Market Realist]
▶ The Biggest Loser: Dentsply Sirona Drops 8.4%   [Aug-09-17 04:27PM  Barrons.com]
▶ Dentsply reports 2Q loss   [11:41AM  Associated Press]
▶ Dentsply Sirona Declares Quarterly Cash Dividend   [Jun-28-17 05:09PM  GlobeNewswire]
▶ 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]
Stock chart of XRAY Financial statements 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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