Intrinsic value of Abaxis - ABAX

Previous Close

$83.28

  Intrinsic Value

$23.22

stock screener

  Rating & Target

str. sell

-72%

Previous close

$83.28

 
Intrinsic value

$23.22

 
Up/down potential

-72%

 
Rating

str. sell

We calculate the intrinsic value of ABAX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  3.80
  3.92
  4.03
  4.13
  4.21
  4.29
  4.36
  4.43
  4.48
  4.54
  4.58
  4.62
  4.66
  4.69
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
Revenue, $m
  236
  245
  255
  265
  276
  288
  301
  314
  328
  343
  359
  375
  393
  411
  431
  451
  473
  496
  519
  545
  571
  599
  628
  659
  691
  725
  761
  798
  838
  879
Variable operating expenses, $m
  186
  193
  201
  209
  218
  227
  237
  248
  259
  270
  283
  296
  309
  324
  339
  355
  372
  390
  409
  429
  450
  472
  495
  519
  544
  571
  599
  629
  660
  692
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
  186
  193
  201
  209
  218
  227
  237
  248
  259
  270
  283
  296
  309
  324
  339
  355
  372
  390
  409
  429
  450
  472
  495
  519
  544
  571
  599
  629
  660
  692
Operating income, $m
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  80
  83
  87
  92
  96
  100
  105
  110
  116
  121
  127
  133
  140
  147
  154
  162
  170
  178
  187
EBITDA, $m
  53
  55
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
  89
  93
  98
  102
  107
  112
  118
  123
  129
  136
  142
  149
  156
  164
  172
  181
  190
  199
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
Earnings before tax, $m
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  75
  79
  82
  86
  90
  94
  98
  103
  108
  113
  118
  124
  130
  136
  143
  150
  157
  165
  173
  181
Tax expense, $m
  13
  14
  15
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  30
  32
  33
  35
  37
  39
  40
  42
  44
  47
  49
Net income, $m
  36
  38
  39
  41
  43
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
  75
  79
  82
  86
  91
  95
  99
  104
  109
  115
  120
  126
  132

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  203
  211
  220
  229
  239
  249
  260
  271
  283
  296
  310
  324
  339
  355
  372
  390
  408
  428
  449
  470
  493
  517
  542
  569
  597
  626
  657
  689
  723
  759
Adjusted assets (=assets-cash), $m
  203
  211
  220
  229
  239
  249
  260
  271
  283
  296
  310
  324
  339
  355
  372
  390
  408
  428
  449
  470
  493
  517
  542
  569
  597
  626
  657
  689
  723
  759
Revenue / Adjusted assets
  1.163
  1.161
  1.159
  1.157
  1.155
  1.157
  1.158
  1.159
  1.159
  1.159
  1.158
  1.157
  1.159
  1.158
  1.159
  1.156
  1.159
  1.159
  1.156
  1.160
  1.158
  1.159
  1.159
  1.158
  1.157
  1.158
  1.158
  1.158
  1.159
  1.158
Average production assets, $m
  33
  34
  36
  37
  39
  40
  42
  44
  46
  48
  50
  53
  55
  58
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
  97
  102
  107
  112
  117
  123
Working capital, $m
  33
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
  76
  79
  83
  87
  92
  96
  101
  106
  111
  116
  122
Total debt, $m
  2
  3
  5
  7
  9
  11
  13
  15
  18
  20
  23
  26
  29
  32
  35
  39
  43
  47
  51
  55
  60
  65
  70
  75
  81
  86
  93
  99
  106
  113
Total liabilities, $m
  41
  43
  44
  46
  48
  50
  52
  55
  57
  60
  62
  65
  68
  71
  75
  78
  82
  86
  90
  95
  99
  104
  109
  114
  120
  126
  132
  139
  145
  153
Total equity, $m
  163
  169
  176
  183
  191
  199
  208
  217
  226
  237
  248
  259
  271
  284
  297
  311
  326
  342
  358
  376
  394
  413
  433
  455
  477
  500
  525
  551
  578
  607
Total liabilities and equity, $m
  204
  212
  220
  229
  239
  249
  260
  272
  283
  297
  310
  324
  339
  355
  372
  389
  408
  428
  448
  471
  493
  517
  542
  569
  597
  626
  657
  690
  723
  760
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.040
  0.050
  0.050
  0.060
  0.070
  0.080
  0.090
  0.090
  0.100
  0.110
  0.110
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.160
  0.160
  0.160
  0.170
  0.170
  0.180
  0.180
  0.180
  0.190
Adjusted equity ratio
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799
  0.799

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  36
  38
  39
  41
  43
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
  75
  79
  82
  86
  91
  95
  99
  104
  109
  115
  120
  126
  132
Depreciation, amort., depletion, $m
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
Funds from operations, $m
  40
  41
  43
  45
  46
  48
  50
  53
  55
  57
  60
  63
  65
  68
  72
  75
  78
  82
  86
  90
  94
  99
  104
  109
  114
  119
  125
  131
  138
  144
Change in working capital, $m
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
Cash from operations, $m
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  75
  79
  83
  87
  91
  95
  100
  104
  109
  115
  120
  126
  132
  139
Maintenance CAPEX, $m
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
Cash from investing activities, $m
  -4
  -4
  -4
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
Free cash flow, $m
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  76
  79
  83
  87
  91
  96
  100
  105
  110
  116
  121
Issuance/(repayment) of debt, $m
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Total cash flow (excl. dividends), $m
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  77
  80
  84
  88
  92
  97
  101
  106
  111
  117
  122
  128
Retained Cash Flow (-), $m
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
Prev. year cash balance distribution, $m
  109
  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
  11
  11
  12
  12
  12
  13
  14
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  32
  34
  36
  38
  39
Cash available for distribution, $m
  139
  31
  32
  33
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  50
  53
  55
  57
  60
  63
  66
  69
  72
  75
  79
  83
  87
  91
  95
  100
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
  133
  28
  28
  27
  26
  25
  25
  24
  23
  21
  20
  19
  18
  16
  15
  13
  12
  11
  9
  8
  7
  6
  5
  4
  3
  2
  2
  1
  1
  1
Current shareholders' claim on cash, %
  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

Abaxis, Inc. is a developer, manufacturer and marketer of portable blood analysis systems that are used in medical specialties in human or veterinary patient care to provide clinicians with blood constituent measurements. The Company markets and sells its products around the world through independent distributors and direct sales force. The Company's segments are the medical market and the veterinary market. The Company's medical market products include Piccolo chemistry analyzers and consumable products. The Company develops, manufactures and sells the Piccolo Xpress chemistry analyzer for use in human patient care to provide clinicians with blood constituent measurements. The Company's veterinary market product offerings include VetScan chemistry analyzers and veterinary reagent discs, VetScan hematology instruments and related reagent kits, VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests.

FINANCIAL RATIOS  of  Abaxis (ABAX)

Valuation Ratios
P/E Ratio 56.9
Price to Sales 8.3
Price to Book 7.1
Price to Tangible Book
Price to Cash Flow 56.9
Price to Free Cash Flow 81.6
Growth Rates
Sales Growth Rate 3.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate 10.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 11.4%
Ret/ On Assets - 3 Yr. Avg. 11.5%
Return On Total Capital 13.1%
Ret/ On T. Cap. - 3 Yr. Avg. 13.4%
Return On Equity 13.1%
Return On Equity - 3 Yr. Avg. 13.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 55.5%
Gross Margin - 3 Yr. Avg. 55.1%
EBITDA Margin 25.6%
EBITDA Margin - 3 Yr. Avg. 23.5%
Operating Margin 19.4%
Oper. Margin - 3 Yr. Avg. 19.2%
Pre-Tax Margin 22.5%
Pre-Tax Margin - 3 Yr. Avg. 20.1%
Net Profit Margin 14.5%
Net Profit Margin - 3 Yr. Avg. 14.1%
Effective Tax Rate 35.3%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio 36.4%

ABAX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ABAX stock intrinsic value calculation we used $227 million for the last fiscal year's total revenue generated by Abaxis. The default revenue input number comes from 2017 income statement of Abaxis. 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 ABAX stock valuation model: a) initial revenue growth rate of 3.8% 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 ABAX is calculated based on our internal credit rating of Abaxis, 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 Abaxis.
    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 ABAX stock the variable cost ratio is equal to 78.8%.

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 ABAX 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 5.4% for Abaxis.

Corporate tax rate of 27% is the nominal tax rate for Abaxis. 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 ABAX stock is equal to 4.7%.

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 ABAX are equal to 14%.

Life of production assets of 10 years is the average useful life of capital assets used in Abaxis 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 ABAX is equal to 13.9%. 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 - $266 million for Abaxis - 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 23 million for Abaxis 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 Abaxis at the current share price and the inputted number of shares is $1.9 billion.

RELATED COMPANIES Price Int.Val. Rating
IDXX IDEXX Laborato 237.92 63.40  str.sell
ABT Abbott Laborat 61.78 80.26  buy
HSIC Henry Schein 74.08 72.45  hold
HSKA Heska 107.68 19.47  str.sell
TMO Thermo Fisher 208.80 95.38  str.sell
PRCP Perceptron 11.68 0.78  str.sell

COMPANY NEWS

▶ Top Ranked Momentum Stocks to Buy for July 9th   [Jul-09-18 09:40AM  Zacks]
▶ Abaxis Inc (NASDAQ:ABAX): What Are The Future Prospects?   [Jun-21-18 07:36AM  Simply Wall St.]
▶ Abaxis Inc (NASDAQ:ABAX): Poised For Long-Term Success?   [May-27-18 04:41PM  Simply Wall St.]
▶ WeissLaw LLP Investigates Abaxis Inc.   [May-17-18 05:34PM  PR Newswire]
▶ Company News For May 17, 2018   [10:23AM  Zacks]
▶ Zoetis to Buy Abaxis for $2 Billion   [11:32AM  Investopedia]
▶ [$$] Zoetis to Buy Abaxis for $2 Billion   [08:41AM  The Wall Street Journal]
▶ Abaxis: Fiscal 4Q Earnings Snapshot   [Apr-26-18 07:59PM  Associated Press]
▶ A Preview Of Abaxis Q4 Earnings   [08:15AM  Benzinga]
▶ What Happened in the Stock Market Today   [Jan-26-18 05:04PM  Motley Fool]
▶ Abaxis beats 3Q profit forecasts   [Jan-25-18 04:43PM  Associated Press]
▶ Earnings Preview For Abaxis   [10:47AM  Benzinga]
▶ ETFs with exposure to ABAXIS, Inc. : December 27, 2017   [Dec-27-17 10:55AM  Capital Cube]
▶ New Strong Sell Stocks for December 7th   [Dec-07-17 09:01AM  Zacks]
▶ ETFs with exposure to ABAXIS, Inc. : December 6, 2017   [Dec-06-17 11:54AM  Capital Cube]
▶ ETFs with exposure to ABAXIS, Inc. : October 26, 2017   [Oct-26-17 10:09AM  Capital Cube]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.