Intrinsic value of Alnylam Pharmaceuticals, Inc. - ALNY

Previous Close

$70.03

  Intrinsic Value

$2.31

stock screener

  Rating & Target

str. sell

-97%

Previous close

$70.03

 
Intrinsic value

$2.31

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of ALNY 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 7.4

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  77
  78
  80
  83
  85
  88
  91
  94
  97
  101
  105
  110
  114
  119
  124
  129
  135
  141
  148
  154
  162
  169
  177
  186
  194
  204
  213
  224
  235
  246
Variable operating expenses, $m
  501
  512
  524
  538
  554
  570
  589
  609
  630
  653
  645
  671
  699
  729
  760
  794
  829
  866
  906
  947
  991
  1,038
  1,086
  1,138
  1,192
  1,249
  1,309
  1,372
  1,439
  1,509
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
  501
  512
  524
  538
  554
  570
  589
  609
  630
  653
  645
  671
  699
  729
  760
  794
  829
  866
  906
  947
  991
  1,038
  1,086
  1,138
  1,192
  1,249
  1,309
  1,372
  1,439
  1,509
Operating income, $m
  -425
  -434
  -444
  -456
  -468
  -483
  -498
  -515
  -532
  -552
  -540
  -562
  -585
  -610
  -636
  -664
  -694
  -725
  -758
  -793
  -830
  -868
  -909
  -952
  -998
  -1,045
  -1,096
  -1,148
  -1,204
  -1,263
EBITDA, $m
  -384
  -393
  -403
  -414
  -427
  -441
  -456
  -472
  -489
  -508
  -528
  -550
  -573
  -597
  -623
  -650
  -679
  -709
  -742
  -776
  -812
  -849
  -889
  -932
  -976
  -1,023
  -1,072
  -1,123
  -1,178
  -1,235
Interest expense (income), $m
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  15
  16
  17
  19
  20
  22
  23
  25
  27
  29
  31
  33
Earnings before tax, $m
  -426
  -436
  -446
  -458
  -472
  -486
  -502
  -519
  -538
  -558
  -547
  -570
  -594
  -619
  -647
  -676
  -706
  -738
  -773
  -809
  -847
  -887
  -929
  -974
  -1,021
  -1,070
  -1,122
  -1,177
  -1,235
  -1,296
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
  -426
  -436
  -446
  -458
  -472
  -486
  -502
  -519
  -538
  -558
  -547
  -570
  -594
  -619
  -647
  -676
  -706
  -738
  -773
  -809
  -847
  -887
  -929
  -974
  -1,021
  -1,070
  -1,122
  -1,177
  -1,235
  -1,296

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
  683
  699
  717
  737
  759
  784
  810
  839
  870
  904
  940
  978
  1,018
  1,061
  1,107
  1,156
  1,207
  1,261
  1,319
  1,379
  1,443
  1,511
  1,582
  1,657
  1,736
  1,819
  1,906
  1,998
  2,095
  2,197
Adjusted assets (=assets-cash), $m
  683
  699
  717
  737
  759
  784
  810
  839
  870
  904
  940
  978
  1,018
  1,061
  1,107
  1,156
  1,207
  1,261
  1,319
  1,379
  1,443
  1,511
  1,582
  1,657
  1,736
  1,819
  1,906
  1,998
  2,095
  2,197
Revenue / Adjusted assets
  0.113
  0.112
  0.112
  0.113
  0.112
  0.112
  0.112
  0.112
  0.111
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
  0.112
Average production assets, $m
  256
  262
  269
  276
  285
  294
  304
  315
  327
  339
  353
  367
  382
  398
  415
  434
  453
  473
  495
  518
  542
  567
  594
  622
  651
  682
  715
  750
  786
  824
Working capital, $m
  -64
  -66
  -67
  -69
  -71
  -74
  -76
  -79
  -82
  -85
  -88
  -92
  -96
  -100
  -104
  -109
  -113
  -119
  -124
  -130
  -136
  -142
  -149
  -156
  -163
  -171
  -179
  -188
  -197
  -206
Total debt, $m
  35
  42
  49
  57
  66
  76
  87
  99
  111
  125
  140
  155
  172
  189
  208
  228
  248
  271
  294
  319
  345
  372
  401
  431
  464
  497
  533
  570
  610
  651
Total liabilities, $m
  278
  284
  292
  300
  309
  319
  330
  342
  354
  368
  382
  398
  414
  432
  451
  470
  491
  513
  537
  561
  587
  615
  644
  674
  706
  740
  776
  813
  853
  894
Total equity, $m
  405
  414
  425
  437
  450
  465
  481
  498
  516
  536
  557
  580
  604
  629
  657
  685
  716
  748
  782
  818
  856
  896
  938
  982
  1,029
  1,078
  1,130
  1,185
  1,242
  1,303
Total liabilities and equity, $m
  683
  698
  717
  737
  759
  784
  811
  840
  870
  904
  939
  978
  1,018
  1,061
  1,108
  1,155
  1,207
  1,261
  1,319
  1,379
  1,443
  1,511
  1,582
  1,656
  1,735
  1,818
  1,906
  1,998
  2,095
  2,197
Debt-to-equity ratio
  0.090
  0.100
  0.110
  0.130
  0.150
  0.160
  0.180
  0.200
  0.220
  0.230
  0.250
  0.270
  0.280
  0.300
  0.320
  0.330
  0.350
  0.360
  0.380
  0.390
  0.400
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
Adjusted equity ratio
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593
  0.593

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -426
  -436
  -446
  -458
  -472
  -486
  -502
  -519
  -538
  -558
  -547
  -570
  -594
  -619
  -647
  -676
  -706
  -738
  -773
  -809
  -847
  -887
  -929
  -974
  -1,021
  -1,070
  -1,122
  -1,177
  -1,235
  -1,296
Depreciation, amort., depletion, $m
  41
  41
  41
  41
  42
  42
  42
  43
  43
  43
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
Funds from operations, $m
  -386
  -395
  -405
  -417
  -430
  -444
  -460
  -477
  -495
  -514
  -535
  -557
  -581
  -606
  -633
  -661
  -691
  -723
  -756
  -791
  -829
  -868
  -910
  -953
  -999
  -1,048
  -1,099
  -1,152
  -1,209
  -1,268
Change in working capital, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
Cash from operations, $m
  -384
  -393
  -404
  -415
  -428
  -442
  -457
  -474
  -492
  -511
  -532
  -554
  -577
  -602
  -628
  -657
  -686
  -718
  -751
  -786
  -823
  -862
  -903
  -946
  -992
  -1,040
  -1,090
  -1,144
  -1,200
  -1,258
Maintenance CAPEX, $m
  -8
  -9
  -9
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
New CAPEX, $m
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
Cash from investing activities, $m
  -13
  -15
  -16
  -17
  -17
  -18
  -20
  -21
  -22
  -24
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -38
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -61
  -64
Free cash flow, $m
  -398
  -408
  -419
  -432
  -445
  -461
  -477
  -495
  -514
  -534
  -556
  -580
  -605
  -631
  -659
  -689
  -720
  -753
  -788
  -825
  -864
  -905
  -948
  -994
  -1,042
  -1,093
  -1,146
  -1,202
  -1,261
  -1,323
Issuance/(repayment) of debt, $m
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  36
  37
  39
  41
Issuance/(repurchase) of shares, $m
  434
  445
  457
  470
  485
  501
  518
  536
  556
  577
  568
  592
  618
  645
  674
  704
  737
  771
  807
  845
  885
  927
  971
  1,018
  1,068
  1,120
  1,174
  1,232
  1,292
  1,356
Cash from financing (excl. dividends), $m  
  439
  451
  464
  478
  494
  511
  529
  548
  569
  591
  583
  608
  635
  663
  693
  724
  758
  793
  830
  870
  911
  954
  1,000
  1,048
  1,100
  1,154
  1,210
  1,269
  1,331
  1,397
Total cash flow (excl. dividends), $m
  41
  44
  45
  47
  48
  50
  52
  53
  55
  57
  26
  28
  30
  32
  33
  35
  38
  40
  42
  44
  47
  49
  52
  55
  58
  61
  64
  67
  71
  74
Retained Cash Flow (-), $m
  -434
  -445
  -457
  -470
  -485
  -501
  -518
  -536
  -556
  -577
  -568
  -592
  -618
  -645
  -674
  -704
  -737
  -771
  -807
  -845
  -885
  -927
  -971
  -1,018
  -1,068
  -1,120
  -1,174
  -1,232
  -1,292
  -1,356
Prev. year cash balance distribution, $m
  905
  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
  512
  -401
  -412
  -423
  -436
  -451
  -466
  -483
  -501
  -521
  -542
  -564
  -588
  -613
  -640
  -669
  -699
  -731
  -765
  -800
  -838
  -878
  -919
  -964
  -1,010
  -1,059
  -1,110
  -1,165
  -1,221
  -1,281
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
  491
  -367
  -358
  -349
  -338
  -327
  -315
  -302
  -288
  -273
  -257
  -241
  -224
  -206
  -188
  -170
  -152
  -135
  -118
  -102
  -87
  -73
  -60
  -49
  -39
  -31
  -24
  -18
  -13
  -10
Current shareholders' claim on cash, %
  84.0
  70.4
  59.0
  49.5
  41.4
  34.7
  29.0
  24.3
  20.3
  17.0
  14.3
  12.1
  10.2
  8.6
  7.2
  6.1
  5.1
  4.3
  3.6
  3.1
  2.6
  2.2
  1.8
  1.5
  1.3
  1.1
  0.9
  0.8
  0.6
  0.5

Alnylam Pharmaceuticals, Inc. is a biopharmaceutical company. The Company is engaged in the discovery, development and commercialization of ribonucleic acid (RNA) interference (RNAi) therapeutics. The Company is focused on the use of its N-acetylgalactosamine (GalNAc)-conjugate platform for delivery of small interfering RNAs (siRNAs). Its pipeline of investigational RNAi therapeutics focuses on three Strategic Therapeutic Areas (STArs): Genetic Medicines, with multiple product candidates for the treatment of rare diseases; Cardio-Metabolic Diseases, with product candidates directed toward genetically validated, liver-expressed disease targets for unmet needs in cardiovascular and metabolic diseases, and Hepatic Infectious Diseases, with product candidates designed to address the global health challenges of hepatic infectious diseases, beginning with hepatitis B and hepatitis D viral infections. The Company's lead product, Patisiran, is formulated utilizing lipid nanoparticles (LNPs).

FINANCIAL RATIOS  of  Alnylam Pharmaceuticals, Inc. (ALNY)

Valuation Ratios
P/E Ratio -14.7
Price to Sales 128.1
Price to Book 6.5
Price to Tangible Book
Price to Cash Flow -19.5
Price to Free Cash Flow -16.1
Growth Rates
Sales Growth Rate 14.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 400%
Cap. Spend. - 3 Yr. Gr. Rate 74.7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 16.3%
Total Debt to Equity 16.3%
Interest Coverage -409
Management Effectiveness
Return On Assets -30.9%
Ret/ On Assets - 3 Yr. Avg. -34.1%
Return On Total Capital -35.1%
Ret/ On T. Cap. - 3 Yr. Avg. -40.4%
Return On Equity -37.5%
Return On Equity - 3 Yr. Avg. -41.2%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -838.3%
EBITDA Margin - 3 Yr. Avg. -754%
Operating Margin -904.3%
Oper. Margin - 3 Yr. Avg. -806.8%
Pre-Tax Margin -872.3%
Pre-Tax Margin - 3 Yr. Avg. -788.6%
Net Profit Margin -872.3%
Net Profit Margin - 3 Yr. Avg. -761.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 3.4%
Payout Ratio 0%

ALNY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALNY stock intrinsic value calculation we used $75 million for the last fiscal year's total revenue generated by Alnylam Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of Alnylam 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 ALNY stock valuation model: a) initial revenue growth rate of 2% 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 ALNY is calculated based on our internal credit rating of Alnylam 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 Alnylam 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 ALNY stock the variable cost ratio is equal to 656%.

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 ALNY 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 Alnylam Pharmaceuticals, Inc..

Corporate tax rate of 27% is the nominal tax rate for Alnylam 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 ALNY 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 ALNY are equal to 335%.

Life of production assets of 39 years is the average useful life of capital assets used in Alnylam 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 ALNY is equal to -83.9%. 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 - $1301.965 million for Alnylam 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 106.311 million for Alnylam 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 Alnylam Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $7.4 billion.

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