Intrinsic value of AngioDynamics - ANGO

Previous Close

$21.12

  Intrinsic Value

$8.09

stock screener

  Rating & Target

str. sell

-62%

Previous close

$21.12

 
Intrinsic value

$8.09

 
Up/down potential

-62%

 
Rating

str. sell

We calculate the intrinsic value of ANGO 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 0.8

 

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
  351
  359
  368
  379
  390
  403
  417
  432
  448
  465
  483
  503
  524
  546
  569
  594
  621
  649
  678
  709
  742
  777
  813
  852
  892
  935
  980
  1,027
  1,077
  1,129
Variable operating expenses, $m
  352
  359
  367
  376
  386
  397
  409
  422
  435
  450
  417
  434
  452
  471
  491
  513
  536
  560
  585
  612
  641
  671
  702
  735
  770
  807
  846
  887
  930
  975
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
  352
  359
  367
  376
  386
  397
  409
  422
  435
  450
  417
  434
  452
  471
  491
  513
  536
  560
  585
  612
  641
  671
  702
  735
  770
  807
  846
  887
  930
  975
Operating income, $m
  -1
  0
  1
  3
  4
  6
  8
  10
  12
  14
  66
  69
  72
  75
  78
  81
  85
  89
  93
  97
  102
  106
  111
  117
  122
  128
  134
  141
  147
  154
EBITDA, $m
  61
  62
  64
  66
  68
  70
  72
  75
  78
  80
  84
  87
  91
  95
  99
  103
  108
  112
  117
  123
  129
  135
  141
  148
  155
  162
  170
  178
  187
  196
Interest expense (income), $m
  3
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
Earnings before tax, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  3
  5
  7
  58
  60
  63
  65
  68
  71
  74
  77
  80
  84
  88
  91
  96
  100
  105
  109
  114
  120
  125
  131
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
Net income, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  2
  4
  5
  42
  44
  46
  48
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  80
  84
  87
  92
  96

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
  697
  713
  731
  752
  774
  799
  827
  856
  888
  922
  958
  997
  1,039
  1,083
  1,129
  1,179
  1,231
  1,287
  1,345
  1,407
  1,472
  1,541
  1,614
  1,690
  1,771
  1,855
  1,944
  2,038
  2,137
  2,241
Adjusted assets (=assets-cash), $m
  697
  713
  731
  752
  774
  799
  827
  856
  888
  922
  958
  997
  1,039
  1,083
  1,129
  1,179
  1,231
  1,287
  1,345
  1,407
  1,472
  1,541
  1,614
  1,690
  1,771
  1,855
  1,944
  2,038
  2,137
  2,241
Revenue / Adjusted assets
  0.504
  0.504
  0.503
  0.504
  0.504
  0.504
  0.504
  0.505
  0.505
  0.504
  0.504
  0.505
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
  0.504
Average production assets, $m
  300
  306
  314
  323
  333
  344
  355
  368
  382
  396
  412
  429
  447
  466
  486
  507
  529
  553
  578
  605
  633
  663
  694
  727
  761
  798
  836
  876
  919
  963
Working capital, $m
  41
  42
  43
  44
  46
  47
  49
  50
  52
  54
  57
  59
  61
  64
  67
  70
  73
  76
  79
  83
  87
  91
  95
  100
  104
  109
  115
  120
  126
  132
Total debt, $m
  95
  98
  103
  107
  113
  118
  125
  132
  139
  147
  155
  164
  174
  184
  195
  206
  218
  231
  245
  259
  274
  290
  307
  324
  343
  362
  383
  405
  427
  451
Total liabilities, $m
  161
  165
  169
  174
  179
  185
  191
  198
  205
  213
  221
  230
  240
  250
  261
  272
  284
  297
  311
  325
  340
  356
  373
  390
  409
  429
  449
  471
  494
  518
Total equity, $m
  536
  548
  562
  578
  596
  615
  636
  658
  683
  709
  737
  767
  799
  833
  869
  907
  947
  990
  1,035
  1,082
  1,132
  1,185
  1,241
  1,300
  1,362
  1,427
  1,495
  1,567
  1,643
  1,723
Total liabilities and equity, $m
  697
  713
  731
  752
  775
  800
  827
  856
  888
  922
  958
  997
  1,039
  1,083
  1,130
  1,179
  1,231
  1,287
  1,346
  1,407
  1,472
  1,541
  1,614
  1,690
  1,771
  1,856
  1,944
  2,038
  2,137
  2,241
Debt-to-equity ratio
  0.180
  0.180
  0.180
  0.190
  0.190
  0.190
  0.200
  0.200
  0.200
  0.210
  0.210
  0.210
  0.220
  0.220
  0.220
  0.230
  0.230
  0.230
  0.240
  0.240
  0.240
  0.240
  0.250
  0.250
  0.250
  0.250
  0.260
  0.260
  0.260
  0.260
Adjusted equity ratio
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  2
  4
  5
  42
  44
  46
  48
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  80
  84
  87
  92
  96
Depreciation, amort., depletion, $m
  62
  62
  63
  63
  63
  64
  64
  65
  65
  66
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
  37
  39
  41
Funds from operations, $m
  56
  57
  59
  60
  62
  64
  65
  67
  69
  71
  60
  62
  65
  68
  70
  73
  76
  80
  83
  87
  91
  95
  99
  104
  109
  114
  119
  125
  131
  137
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
Cash from operations, $m
  55
  56
  57
  59
  60
  62
  64
  65
  67
  69
  58
  60
  62
  65
  68
  70
  73
  77
  80
  83
  87
  91
  95
  100
  104
  109
  114
  119
  125
  131
Maintenance CAPEX, $m
  -13
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -37
  -39
New CAPEX, $m
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -45
Cash from investing activities, $m
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -63
  -66
  -69
  -72
  -76
  -79
  -84
Free cash flow, $m
  36
  36
  36
  37
  37
  37
  37
  38
  38
  38
  25
  26
  26
  27
  28
  28
  29
  30
  31
  32
  33
  34
  36
  37
  38
  40
  42
  43
  45
  47
Issuance/(repayment) of debt, $m
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
Issuance/(repurchase) of shares, $m
  17
  17
  18
  19
  19
  19
  20
  20
  21
  21
  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  
  20
  21
  22
  24
  24
  25
  26
  27
  28
  29
  8
  9
  10
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
Total cash flow (excl. dividends), $m
  57
  58
  59
  60
  61
  62
  64
  65
  66
  67
  34
  35
  36
  37
  38
  40
  41
  43
  45
  46
  48
  50
  52
  55
  57
  60
  62
  65
  68
  71
Retained Cash Flow (-), $m
  -17
  -17
  -18
  -19
  -19
  -19
  -21
  -23
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -76
  -80
Prev. year cash balance distribution, $m
  18
  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
  58
  40
  41
  41
  42
  43
  43
  42
  42
  41
  6
  5
  4
  3
  2
  2
  1
  0
  0
  -1
  -2
  -3
  -3
  -4
  -5
  -6
  -6
  -7
  -8
  -9
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
  55
  37
  35
  34
  33
  31
  29
  26
  24
  21
  3
  2
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  97.7
  95.6
  93.4
  91.3
  89.2
  87.3
  85.4
  83.5
  81.7
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0
  80.0

AngioDynamics, Inc. designs, manufactures and sells a range of medical, surgical and diagnostic devices used by professional healthcare providers for vascular access, for the treatment of peripheral vascular disease and for use in oncology and surgical settings. The Company's devices are used in minimally invasive, image-guided procedures. The Company offers products within three product groupings: Peripheral Vascular, Vascular Access and Oncology/Surgery. The Company's Peripheral Vascular products include Fluid Management, Venous, Thrombus Management, as well as other core products. The Company's BioFlo products incorporate Endexo Technology into the manufacturing and design of its Vascular Access products. Its Oncology/Surgery product offerings include its Microwave Ablation products, Radiofrequency Ablation (RFA) and its NanoKnife product lines.

FINANCIAL RATIOS  of  AngioDynamics (ANGO)

Valuation Ratios
P/E Ratio 155.6
Price to Sales 2.2
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 13.9
Price to Free Cash Flow 14.7
Growth Rates
Sales Growth Rate -1.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -25.4%
Financial Strength
Quick Ratio 10
Current Ratio 0
LT Debt to Equity 17.7%
Total Debt to Equity 18.6%
Interest Coverage 4
Management Effectiveness
Return On Assets 0.9%
Ret/ On Assets - 3 Yr. Avg. 0.2%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. -2.1%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. -2.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 50.3%
Gross Margin - 3 Yr. Avg. 49.6%
EBITDA Margin 10.9%
EBITDA Margin - 3 Yr. Avg. 8.6%
Operating Margin 3.7%
Oper. Margin - 3 Yr. Avg. 1.1%
Pre-Tax Margin 2.9%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin 1.4%
Net Profit Margin - 3 Yr. Avg. -3.9%
Effective Tax Rate 50%
Eff/ Tax Rate - 3 Yr. Avg. -418.1%
Payout Ratio 0%

ANGO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANGO stock intrinsic value calculation we used $344.285 million for the last fiscal year's total revenue generated by AngioDynamics. The default revenue input number comes from 0001 income statement of AngioDynamics. 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 ANGO 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 ANGO is calculated based on our internal credit rating of AngioDynamics, 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 AngioDynamics.
    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 ANGO stock the variable cost ratio is equal to 100.6%.

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 ANGO 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 AngioDynamics.

Corporate tax rate of 27% is the nominal tax rate for AngioDynamics. 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 ANGO 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 ANGO are equal to 85.3%.

Life of production assets of 23.4 years is the average useful life of capital assets used in AngioDynamics 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 ANGO is equal to 11.7%. 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 - $542.595 million for AngioDynamics - 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 36.884 million for AngioDynamics 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 AngioDynamics at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ Can AngioDynamics Inc (NASDAQ:ANGO) Improve Its Returns?   [Nov-13-18 02:54PM  Simply Wall St.]
▶ AngioDynamics (ANGO) Lags Q1 Earnings Estimates   [Sep-27-18 08:25AM  Zacks]
▶ AngioDynamics: Fiscal 1Q Earnings Snapshot   [07:21AM  Associated Press]
▶ AngioDynamics expands oncology business with acquisition of Houston co.   [08:16AM  American City Business Journals]
▶ New Strong Sell Stocks for September 7th   [Sep-07-18 07:45AM  Zacks]
▶ New Strong Sell Stocks for August 21st   [Aug-21-18 06:44AM  Zacks]
▶ Medical device company settles US case over false claims   [Jul-19-18 10:37AM  Associated Press]
▶ AngioDynamics: Fiscal 4Q Earnings Snapshot   [07:12AM  Associated Press]
▶ Earnings Preview For AngioDynamics   [Jul-10-18 02:33PM  Benzinga]
▶ AngioDynamics to Present at Two Investor Conferences in May   [Apr-10-18 04:01PM  Business Wire]
▶ AngioDynamics misses 3Q revenue forecasts   [07:12AM  Associated Press]
▶ Bet on These 5 PEG-Ratio Based GARP Picks   [Jan-09-18 07:42AM  Zacks]
▶ AngioDynamics misses Street 2Q forecasts   [07:11AM  Associated Press]
▶ AngioDynamics misses Street 1Q forecasts   [Sep-28-17 09:41PM  Associated Press]

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