Intrinsic value of Agios Pharmaceuticals, Inc. - AGIO

Previous Close

$46.77

  Intrinsic Value

$2.84

stock screener

  Rating & Target

str. sell

-94%

Previous close

$46.77

 
Intrinsic value

$2.84

 
Up/down potential

-94%

 
Rating

str. sell

We calculate the intrinsic value of AGIO 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 0001), $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 2.7

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  150
  232
  348
  504
  711
  978
  1,313
  1,724
  2,218
  2,801
  3,479
  4,253
  5,127
  6,100
  7,172
  8,343
  9,610
  10,972
  12,426
  13,971
  15,604
  17,323
  19,127
  21,016
  22,989
  25,046
  27,189
  29,418
  31,735
  34,144
Variable operating expenses, $m
  274
  422
  629
  912
  1,286
  1,767
  2,371
  3,113
  4,005
  5,058
  6,277
  7,675
  9,251
  11,006
  12,942
  15,054
  17,341
  19,799
  22,423
  25,210
  28,157
  31,259
  34,515
  37,923
  41,483
  45,195
  49,061
  53,083
  57,265
  61,612
Fixed operating expenses, $m
  297
  304
  311
  317
  324
  332
  339
  346
  354
  362
  370
  378
  386
  395
  403
  412
  421
  431
  440
  450
  460
  470
  480
  491
  501
  512
  524
  535
  547
  559
Total operating expenses, $m
  571
  726
  940
  1,229
  1,610
  2,099
  2,710
  3,459
  4,359
  5,420
  6,647
  8,053
  9,637
  11,401
  13,345
  15,466
  17,762
  20,230
  22,863
  25,660
  28,617
  31,729
  34,995
  38,414
  41,984
  45,707
  49,585
  53,618
  57,812
  62,171
Operating income, $m
  -421
  -493
  -593
  -725
  -899
  -1,121
  -1,397
  -1,735
  -2,141
  -2,618
  -3,168
  -3,799
  -4,510
  -5,302
  -6,173
  -7,124
  -8,152
  -9,257
  -10,437
  -11,689
  -13,012
  -14,406
  -15,867
  -17,397
  -18,995
  -20,661
  -22,396
  -24,201
  -26,077
  -28,027
EBITDA, $m
  -411
  -479
  -572
  -697
  -860
  -1,068
  -1,327
  -1,644
  -2,023
  -2,470
  -2,988
  -3,579
  -4,245
  -4,986
  -5,801
  -6,691
  -7,654
  -8,689
  -9,793
  -10,965
  -12,204
  -13,508
  -14,877
  -16,309
  -17,804
  -19,364
  -20,988
  -22,677
  -24,433
  -26,258
Interest expense (income), $m
  0
  0
  6
  14
  25
  40
  61
  87
  120
  160
  209
  266
  333
  409
  495
  590
  696
  811
  935
  1,069
  1,212
  1,364
  1,525
  1,694
  1,871
  2,057
  2,251
  2,453
  2,663
  2,882
  3,110
Earnings before tax, $m
  -421
  -499
  -606
  -750
  -939
  -1,181
  -1,484
  -1,855
  -2,301
  -2,827
  -3,434
  -4,132
  -4,919
  -5,796
  -6,763
  -7,819
  -8,963
  -10,193
  -11,506
  -12,901
  -14,376
  -15,930
  -17,561
  -19,268
  -21,052
  -22,912
  -24,849
  -26,864
  -28,959
  -31,137
Tax expense, $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
Net income, $m
  -421
  -499
  -606
  -750
  -939
  -1,181
  -1,484
  -1,855
  -2,301
  -2,827
  -3,434
  -4,132
  -4,919
  -5,796
  -6,763
  -7,819
  -8,963
  -10,193
  -11,506
  -12,901
  -14,376
  -15,930
  -17,561
  -19,268
  -21,052
  -22,912
  -24,849
  -26,864
  -28,959
  -31,137

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
  588
  908
  1,357
  1,970
  2,779
  3,820
  5,128
  6,733
  8,664
  10,943
  13,589
  16,614
  20,025
  23,826
  28,015
  32,589
  37,539
  42,860
  48,541
  54,574
  60,952
  67,668
  74,717
  82,095
  89,801
  97,837
  106,205
  114,912
  123,965
  133,375
Adjusted assets (=assets-cash), $m
  588
  908
  1,357
  1,970
  2,779
  3,820
  5,128
  6,733
  8,664
  10,943
  13,589
  16,614
  20,025
  23,826
  28,015
  32,589
  37,539
  42,860
  48,541
  54,574
  60,952
  67,668
  74,717
  82,095
  89,801
  97,837
  106,205
  114,912
  123,965
  133,375
Revenue / Adjusted assets
  0.255
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
  0.256
Average production assets, $m
  39
  60
  90
  131
  184
  253
  340
  446
  574
  726
  901
  1,102
  1,328
  1,580
  1,858
  2,161
  2,489
  2,842
  3,218
  3,619
  4,041
  4,487
  4,954
  5,443
  5,954
  6,487
  7,042
  7,619
  8,219
  8,843
Working capital, $m
  -104
  -161
  -240
  -349
  -492
  -677
  -908
  -1,193
  -1,535
  -1,939
  -2,407
  -2,943
  -3,548
  -4,221
  -4,963
  -5,773
  -6,650
  -7,593
  -8,599
  -9,668
  -10,798
  -11,988
  -13,236
  -14,543
  -15,908
  -17,332
  -18,814
  -20,357
  -21,961
  -23,628
Total debt, $m
  103
  252
  462
  747
  1,124
  1,609
  2,219
  2,967
  3,866
  4,929
  6,162
  7,571
  9,161
  10,932
  12,884
  15,015
  17,322
  19,802
  22,449
  25,261
  28,233
  31,362
  34,647
  38,085
  41,676
  45,421
  49,321
  53,378
  57,597
  61,982
Total liabilities, $m
  274
  423
  633
  918
  1,295
  1,780
  2,390
  3,138
  4,037
  5,100
  6,333
  7,742
  9,332
  11,103
  13,055
  15,186
  17,493
  19,973
  22,620
  25,432
  28,404
  31,533
  34,818
  38,256
  41,847
  45,592
  49,492
  53,549
  57,768
  62,153
Total equity, $m
  314
  485
  725
  1,052
  1,484
  2,040
  2,738
  3,596
  4,627
  5,844
  7,257
  8,872
  10,694
  12,723
  14,960
  17,402
  20,046
  22,887
  25,921
  29,143
  32,549
  36,135
  39,899
  43,838
  47,954
  52,245
  56,714
  61,363
  66,198
  71,222
Total liabilities and equity, $m
  588
  908
  1,358
  1,970
  2,779
  3,820
  5,128
  6,734
  8,664
  10,944
  13,590
  16,614
  20,026
  23,826
  28,015
  32,588
  37,539
  42,860
  48,541
  54,575
  60,953
  67,668
  74,717
  82,094
  89,801
  97,837
  106,206
  114,912
  123,966
  133,375
Debt-to-equity ratio
  0.330
  0.520
  0.640
  0.710
  0.760
  0.790
  0.810
  0.830
  0.840
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
Adjusted equity ratio
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534
  0.534

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -421
  -499
  -606
  -750
  -939
  -1,181
  -1,484
  -1,855
  -2,301
  -2,827
  -3,434
  -4,132
  -4,919
  -5,796
  -6,763
  -7,819
  -8,963
  -10,193
  -11,506
  -12,901
  -14,376
  -15,930
  -17,561
  -19,268
  -21,052
  -22,912
  -24,849
  -26,864
  -28,959
  -31,137
Depreciation, amort., depletion, $m
  10
  14
  20
  29
  39
  53
  70
  92
  117
  148
  180
  220
  266
  316
  372
  432
  498
  568
  644
  724
  808
  897
  991
  1,089
  1,191
  1,297
  1,408
  1,524
  1,644
  1,769
Funds from operations, $m
  -411
  -484
  -586
  -722
  -900
  -1,128
  -1,414
  -1,764
  -2,184
  -2,679
  -3,254
  -3,912
  -4,654
  -5,480
  -6,392
  -7,387
  -8,465
  -9,624
  -10,862
  -12,177
  -13,568
  -15,033
  -16,570
  -18,180
  -19,861
  -21,614
  -23,440
  -25,340
  -27,315
  -29,368
Change in working capital, $m
  -39
  -57
  -80
  -108
  -143
  -184
  -232
  -284
  -342
  -404
  -469
  -536
  -604
  -673
  -742
  -810
  -877
  -942
  -1,006
  -1,069
  -1,130
  -1,190
  -1,249
  -1,307
  -1,365
  -1,424
  -1,483
  -1,542
  -1,604
  -1,667
Cash from operations, $m
  -372
  -428
  -506
  -613
  -757
  -944
  -1,182
  -1,479
  -1,842
  -2,275
  -2,786
  -3,376
  -4,049
  -4,807
  -5,650
  -6,577
  -7,588
  -8,682
  -9,856
  -11,109
  -12,438
  -13,843
  -15,322
  -16,873
  -18,496
  -20,191
  -21,958
  -23,798
  -25,712
  -27,701
Maintenance CAPEX, $m
  -5
  -8
  -12
  -18
  -26
  -37
  -51
  -68
  -89
  -115
  -145
  -180
  -220
  -266
  -316
  -372
  -432
  -498
  -568
  -644
  -724
  -808
  -897
  -991
  -1,089
  -1,191
  -1,297
  -1,408
  -1,524
  -1,644
New CAPEX, $m
  -15
  -21
  -30
  -41
  -54
  -69
  -87
  -106
  -128
  -151
  -175
  -201
  -226
  -252
  -278
  -303
  -328
  -353
  -377
  -400
  -423
  -445
  -467
  -489
  -511
  -533
  -555
  -577
  -600
  -624
Cash from investing activities, $m
  -20
  -29
  -42
  -59
  -80
  -106
  -138
  -174
  -217
  -266
  -320
  -381
  -446
  -518
  -594
  -675
  -760
  -851
  -945
  -1,044
  -1,147
  -1,253
  -1,364
  -1,480
  -1,600
  -1,724
  -1,852
  -1,985
  -2,124
  -2,268
Free cash flow, $m
  -391
  -457
  -548
  -672
  -837
  -1,050
  -1,320
  -1,654
  -2,059
  -2,541
  -3,106
  -3,757
  -4,496
  -5,324
  -6,243
  -7,252
  -8,349
  -9,532
  -10,801
  -12,152
  -13,585
  -15,097
  -16,686
  -18,353
  -20,095
  -21,914
  -23,810
  -25,783
  -27,836
  -29,969
Issuance/(repayment) of debt, $m
  103
  149
  210
  285
  377
  485
  609
  748
  900
  1,062
  1,233
  1,410
  1,590
  1,771
  1,952
  2,131
  2,307
  2,479
  2,647
  2,812
  2,972
  3,130
  3,285
  3,438
  3,591
  3,745
  3,900
  4,057
  4,219
  4,385
Issuance/(repurchase) of shares, $m
  539
  670
  846
  1,077
  1,372
  1,738
  2,183
  2,712
  3,332
  4,044
  4,847
  5,747
  6,741
  7,826
  9,000
  10,262
  11,607
  13,034
  14,540
  16,123
  17,782
  19,516
  21,325
  23,208
  25,167
  27,203
  29,318
  31,513
  33,794
  36,162
Cash from financing (excl. dividends), $m  
  642
  819
  1,056
  1,362
  1,749
  2,223
  2,792
  3,460
  4,232
  5,106
  6,080
  7,157
  8,331
  9,597
  10,952
  12,393
  13,914
  15,513
  17,187
  18,935
  20,754
  22,646
  24,610
  26,646
  28,758
  30,948
  33,218
  35,570
  38,013
  40,547
Total cash flow (excl. dividends), $m
  250
  362
  508
  691
  912
  1,173
  1,472
  1,807
  2,173
  2,565
  2,974
  3,400
  3,835
  4,273
  4,709
  5,141
  5,565
  5,981
  6,386
  6,782
  7,170
  7,549
  7,923
  8,294
  8,663
  9,033
  9,407
  9,788
  10,177
  10,578
Retained Cash Flow (-), $m
  -539
  -670
  -846
  -1,077
  -1,372
  -1,738
  -2,183
  -2,712
  -3,332
  -4,044
  -4,847
  -5,747
  -6,741
  -7,826
  -9,000
  -10,262
  -11,607
  -13,034
  -14,540
  -16,123
  -17,782
  -19,516
  -21,325
  -23,208
  -25,167
  -27,203
  -29,318
  -31,513
  -33,794
  -36,162
Prev. year cash balance distribution, $m
  492
  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
  204
  -307
  -338
  -387
  -460
  -564
  -710
  -905
  -1,159
  -1,479
  -1,873
  -2,347
  -2,906
  -3,553
  -4,291
  -5,121
  -6,042
  -7,053
  -8,154
  -9,341
  -10,613
  -11,967
  -13,402
  -14,915
  -16,504
  -18,170
  -19,910
  -21,726
  -23,617
  -25,584
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
  195
  -281
  -294
  -318
  -356
  -410
  -480
  -566
  -666
  -775
  -890
  -1,002
  -1,105
  -1,193
  -1,260
  -1,301
  -1,315
  -1,299
  -1,255
  -1,187
  -1,098
  -993
  -878
  -760
  -642
  -530
  -427
  -336
  -258
  -193
Current shareholders' claim on cash, %
  59.1
  38.4
  26.7
  19.4
  14.6
  11.3
  8.9
  7.1
  5.8
  4.7
  3.9
  3.3
  2.7
  2.3
  2.0
  1.7
  1.4
  1.2
  1.1
  0.9
  0.8
  0.7
  0.6
  0.5
  0.5
  0.4
  0.4
  0.3
  0.3
  0.2

Agios Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company's therapeutic areas of focus are cancer and rare genetic metabolic disorders, which are a group of over 600 rare genetic diseases caused by mutations, or defects, of single metabolic genes. The Company's cancer product candidates are enasidenib and ivosidenib (AG-120), which target mutated isocitrate dehydrogenase 2 (IDH2) and isocitrate dehydrogenase 1 (IDH1), respectively, and AG-881, which targets both mutated IDH1 and mutated IDH2. These mutations are found in a range of hematological malignancies and solid tumors. The lead product candidate in its rare genetic metabolic disorder (RGD), programs, AG-348, targets pyruvate kinase-R for the treatment of pyruvate kinase deficiency. Pyruvate kinase deficiency is a rare disorder that often results in severe hemolytic anemia due to inherited mutations in the pyruvate kinase enzyme within red blood cells.

FINANCIAL RATIOS  of  Agios Pharmaceuticals, Inc. (AGIO)

Valuation Ratios
P/E Ratio -10
Price to Sales 28.2
Price to Book 5.5
Price to Tangible Book
Price to Cash Flow 50.6
Price to Free Cash Flow 68.1
Growth Rates
Sales Growth Rate 18.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate 58.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -38.1%
Ret/ On Assets - 3 Yr. Avg. -26.5%
Return On Total Capital -56.3%
Ret/ On T. Cap. - 3 Yr. Avg. -35.5%
Return On Equity -56.3%
Return On Equity - 3 Yr. Avg. -35.5%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -274.3%
EBITDA Margin - 3 Yr. Avg. -183.6%
Operating Margin -287.1%
Oper. Margin - 3 Yr. Avg. -190.6%
Pre-Tax Margin -282.9%
Pre-Tax Margin - 3 Yr. Avg. -188.6%
Net Profit Margin -282.9%
Net Profit Margin - 3 Yr. Avg. -188.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AGIO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AGIO stock intrinsic value calculation we used $94 million for the last fiscal year's total revenue generated by Agios Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of Agios Pharmaceuticals, Inc.. 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 AGIO stock valuation model: a) initial revenue growth rate of 60% 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 AGIO is calculated based on our internal credit rating of Agios Pharmaceuticals, Inc., 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 Agios Pharmaceuticals, Inc..
    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 AGIO stock the variable cost ratio is equal to 183%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $291 million in the base year in the intrinsic value calculation for AGIO 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 Agios Pharmaceuticals, Inc..

Corporate tax rate of 27% is the nominal tax rate for Agios Pharmaceuticals, Inc.. 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 AGIO 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 AGIO are equal to 25.9%.

Life of production assets of 3.4 years is the average useful life of capital assets used in Agios Pharmaceuticals, Inc. 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 AGIO is equal to -69.2%. 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 - $687.537 million for Agios Pharmaceuticals, Inc. - 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 58.453 million for Agios Pharmaceuticals, Inc. 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 Agios Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $2.7 billion.

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