Intrinsic value of ANI Pharmaceuticals, Inc. - ANIP

Previous Close

$70.54

  Intrinsic Value

$42.17

stock screener

  Rating & Target

sell

-40%

Previous close

$70.54

 
Intrinsic value

$42.17

 
Up/down potential

-40%

 
Rating

sell

We calculate the intrinsic value of ANIP 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, %
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
Revenue, $m
  244
  291
  343
  399
  461
  527
  597
  672
  752
  835
  923
  1,015
  1,111
  1,211
  1,315
  1,424
  1,537
  1,654
  1,776
  1,903
  2,034
  2,171
  2,314
  2,462
  2,616
  2,776
  2,943
  3,118
  3,299
  3,489
Variable operating expenses, $m
  177
  210
  247
  287
  330
  377
  427
  481
  537
  596
  655
  720
  788
  859
  933
  1,010
  1,090
  1,173
  1,260
  1,349
  1,443
  1,540
  1,641
  1,746
  1,855
  1,969
  2,087
  2,211
  2,340
  2,474
Fixed operating expenses, $m
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
  28
  28
  29
  29
  30
  31
  31
  32
  33
  33
  34
  35
  36
  36
Total operating expenses, $m
  196
  230
  267
  308
  351
  399
  449
  504
  560
  620
  679
  745
  813
  885
  959
  1,037
  1,118
  1,201
  1,289
  1,378
  1,473
  1,571
  1,672
  1,778
  1,888
  2,002
  2,121
  2,246
  2,376
  2,510
Operating income, $m
  48
  61
  76
  92
  109
  128
  148
  169
  192
  215
  244
  270
  298
  326
  356
  387
  419
  453
  488
  524
  562
  601
  641
  684
  728
  774
  822
  872
  924
  978
EBITDA, $m
  74
  92
  112
  133
  156
  181
  208
  236
  266
  298
  331
  366
  402
  440
  480
  521
  564
  608
  654
  703
  753
  805
  859
  915
  973
  1,034
  1,098
  1,164
  1,233
  1,305
Interest expense (income), $m
  4
  14
  18
  22
  27
  32
  37
  43
  49
  56
  63
  70
  78
  86
  95
  104
  113
  123
  133
  143
  154
  165
  177
  189
  202
  215
  229
  243
  258
  274
  290
Earnings before tax, $m
  34
  43
  54
  65
  77
  91
  105
  120
  136
  152
  174
  192
  211
  231
  252
  274
  297
  320
  344
  370
  396
  424
  452
  482
  513
  545
  579
  614
  650
  688
Tax expense, $m
  9
  12
  14
  18
  21
  24
  28
  32
  37
  41
  47
  52
  57
  62
  68
  74
  80
  86
  93
  100
  107
  114
  122
  130
  138
  147
  156
  166
  176
  186
Net income, $m
  25
  31
  39
  47
  56
  66
  76
  87
  99
  111
  127
  140
  154
  169
  184
  200
  216
  234
  251
  270
  289
  309
  330
  352
  374
  398
  422
  448
  475
  503

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
  520
  620
  731
  851
  982
  1,123
  1,273
  1,433
  1,602
  1,781
  1,968
  2,164
  2,368
  2,582
  2,804
  3,036
  3,277
  3,527
  3,787
  4,057
  4,338
  4,630
  4,933
  5,249
  5,577
  5,920
  6,276
  6,647
  7,035
  7,439
Adjusted assets (=assets-cash), $m
  520
  620
  731
  851
  982
  1,123
  1,273
  1,433
  1,602
  1,781
  1,968
  2,164
  2,368
  2,582
  2,804
  3,036
  3,277
  3,527
  3,787
  4,057
  4,338
  4,630
  4,933
  5,249
  5,577
  5,920
  6,276
  6,647
  7,035
  7,439
Revenue / Adjusted assets
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
Average production assets, $m
  167
  199
  235
  274
  316
  361
  409
  460
  515
  572
  632
  695
  761
  830
  901
  975
  1,053
  1,133
  1,217
  1,303
  1,394
  1,487
  1,585
  1,686
  1,792
  1,902
  2,016
  2,136
  2,260
  2,390
Working capital, $m
  66
  79
  93
  109
  125
  143
  162
  183
  204
  227
  251
  276
  302
  329
  358
  387
  418
  450
  483
  518
  553
  591
  629
  670
  711
  755
  801
  848
  897
  949
Total debt, $m
  232
  286
  346
  411
  482
  558
  640
  727
  818
  915
  1,016
  1,122
  1,233
  1,349
  1,470
  1,595
  1,726
  1,861
  2,002
  2,149
  2,301
  2,459
  2,623
  2,795
  2,973
  3,158
  3,351
  3,553
  3,763
  3,982
Total liabilities, $m
  282
  336
  396
  461
  532
  609
  690
  777
  869
  965
  1,067
  1,173
  1,284
  1,399
  1,520
  1,645
  1,776
  1,912
  2,052
  2,199
  2,351
  2,509
  2,674
  2,845
  3,023
  3,208
  3,402
  3,603
  3,813
  4,032
Total equity, $m
  238
  284
  335
  390
  450
  514
  583
  656
  734
  816
  901
  991
  1,085
  1,183
  1,284
  1,390
  1,501
  1,615
  1,734
  1,858
  1,987
  2,120
  2,259
  2,404
  2,554
  2,711
  2,874
  3,045
  3,222
  3,407
Total liabilities and equity, $m
  520
  620
  731
  851
  982
  1,123
  1,273
  1,433
  1,603
  1,781
  1,968
  2,164
  2,369
  2,582
  2,804
  3,035
  3,277
  3,527
  3,786
  4,057
  4,338
  4,629
  4,933
  5,249
  5,577
  5,919
  6,276
  6,648
  7,035
  7,439
Debt-to-equity ratio
  0.970
  1.010
  1.030
  1.050
  1.070
  1.090
  1.100
  1.110
  1.110
  1.120
  1.130
  1.130
  1.140
  1.140
  1.140
  1.150
  1.150
  1.150
  1.150
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.160
  1.170
  1.170
  1.170
  1.170
Adjusted equity ratio
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458
  0.458

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  25
  31
  39
  47
  56
  66
  76
  87
  99
  111
  127
  140
  154
  169
  184
  200
  216
  234
  251
  270
  289
  309
  330
  352
  374
  398
  422
  448
  475
  503
Depreciation, amort., depletion, $m
  27
  31
  36
  41
  47
  53
  60
  67
  74
  82
  87
  95
  104
  114
  123
  134
  144
  155
  167
  179
  191
  204
  217
  231
  245
  261
  276
  293
  310
  327
Funds from operations, $m
  51
  63
  75
  89
  103
  119
  136
  154
  173
  193
  213
  236
  259
  283
  308
  334
  361
  389
  418
  448
  480
  513
  547
  583
  620
  658
  699
  741
  784
  830
Change in working capital, $m
  11
  13
  14
  15
  17
  18
  19
  20
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  33
  34
  36
  37
  39
  40
  42
  44
  45
  47
  49
  52
Cash from operations, $m
  40
  50
  61
  73
  87
  101
  117
  134
  152
  171
  190
  211
  232
  255
  279
  304
  330
  357
  385
  414
  444
  476
  508
  542
  578
  615
  653
  693
  735
  778
Maintenance CAPEX, $m
  -19
  -23
  -27
  -32
  -37
  -43
  -49
  -56
  -63
  -71
  -78
  -87
  -95
  -104
  -114
  -123
  -134
  -144
  -155
  -167
  -179
  -191
  -204
  -217
  -231
  -245
  -261
  -276
  -293
  -310
New CAPEX, $m
  -29
  -32
  -35
  -39
  -42
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -71
  -74
  -77
  -80
  -84
  -87
  -90
  -94
  -98
  -101
  -106
  -110
  -115
  -119
  -124
  -130
Cash from investing activities, $m
  -48
  -55
  -62
  -71
  -79
  -88
  -97
  -107
  -117
  -128
  -138
  -150
  -161
  -173
  -185
  -197
  -211
  -224
  -239
  -254
  -269
  -285
  -302
  -318
  -337
  -355
  -376
  -395
  -417
  -440
Free cash flow, $m
  -8
  -5
  -2
  2
  7
  13
  19
  27
  34
  43
  51
  61
  71
  82
  94
  106
  119
  132
  146
  161
  176
  191
  207
  224
  241
  259
  278
  298
  318
  339
Issuance/(repayment) of debt, $m
  49
  54
  60
  65
  71
  76
  82
  87
  92
  97
  101
  106
  111
  116
  121
  125
  130
  136
  141
  146
  152
  158
  165
  171
  178
  185
  193
  201
  210
  219
Issuance/(repurchase) of shares, $m
  16
  14
  11
  8
  3
  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  
  65
  68
  71
  73
  74
  76
  82
  87
  92
  97
  101
  106
  111
  116
  121
  125
  130
  136
  141
  146
  152
  158
  165
  171
  178
  185
  193
  201
  210
  219
Total cash flow (excl. dividends), $m
  57
  63
  70
  76
  82
  89
  101
  113
  126
  140
  153
  167
  182
  198
  215
  232
  250
  268
  287
  307
  328
  349
  372
  395
  419
  445
  471
  499
  528
  558
Retained Cash Flow (-), $m
  -41
  -46
  -51
  -55
  -60
  -64
  -69
  -73
  -77
  -82
  -86
  -90
  -94
  -98
  -102
  -106
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -150
  -157
  -163
  -170
  -177
  -185
Prev. year cash balance distribution, $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 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
  16
  18
  19
  20
  22
  25
  32
  40
  49
  58
  67
  77
  89
  100
  113
  126
  139
  153
  168
  183
  199
  216
  233
  250
  269
  288
  308
  329
  350
  373
Discount rate, %
  4.90
  5.15
  5.40
  5.67
  5.96
  6.25
  6.57
  6.89
  7.24
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.19
  10.70
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
PV of cash for distribution, $m
  15
  16
  16
  16
  16
  17
  21
  23
  26
  28
  29
  29
  30
  29
  28
  27
  25
  23
  20
  18
  15
  13
  11
  9
  7
  5
  4
  3
  2
  2
Current shareholders' claim on cash, %
  98.1
  96.7
  95.8
  95.3
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1
  95.1

ANI Pharmaceuticals, Inc. is an integrated specialty pharmaceutical company. The Company is engaged in developing, manufacturing and marketing branded and generic prescription pharmaceuticals. The Company focuses on areas, including controlled substances, anti-cancer (oncolytics), hormones and steroids, and complex formulations. It also performs contract manufacturing for other pharmaceutical companies. Its products include both branded and generic pharmaceuticals. Its generic products include Erythromycin Ethylsuccinate, Esterified Estrogen with Methyltestosterone (EEMT), Etodolac Fenofibrate, Flecainide, Fluvoxamine, Hydrocortisone Enema, Methazolamide, Metoclopramide Syrup Nilutamide, Nimodipine, Opium Tincture, Oxycodone Capsules, Oxycodone Oral Solution, Propafenone and Vancomycin. Its branded products include Cortenema, Inderal LA, Lithobid, Reglan and Vancocin. Its pharmaceutical manufacturing facilities are located in Baudette, Minnesota.

FINANCIAL RATIOS  of  ANI Pharmaceuticals, Inc. (ANIP)

Valuation Ratios
P/E Ratio 204.6
Price to Sales 6.3
Price to Book 4.8
Price to Tangible Book
Price to Cash Flow 30.3
Price to Free Cash Flow 37.2
Growth Rates
Sales Growth Rate 69.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 150%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 71.2%
Total Debt to Equity 71.2%
Interest Coverage 3
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 9.1%
Return On Total Capital 1.4%
Ret/ On T. Cap. - 3 Yr. Avg. 9.1%
Return On Equity 2.4%
Return On Equity - 3 Yr. Avg. 14.8%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 62%
Gross Margin - 3 Yr. Avg. 75.5%
EBITDA Margin 27.1%
EBITDA Margin - 3 Yr. Avg. 37.2%
Operating Margin 15.5%
Oper. Margin - 3 Yr. Avg. 31.1%
Pre-Tax Margin 7%
Pre-Tax Margin - 3 Yr. Avg. 23.3%
Net Profit Margin 3.1%
Net Profit Margin - 3 Yr. Avg. 24.9%
Effective Tax Rate 55.6%
Eff/ Tax Rate - 3 Yr. Avg. 11.6%
Payout Ratio 0%

ANIP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANIP stock intrinsic value calculation we used $202 million for the last fiscal year's total revenue generated by ANI Pharmaceuticals, Inc.. The default revenue input number comes from 0001 income statement of ANI 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 ANIP stock valuation model: a) initial revenue growth rate of 20.8% 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 4.9%, whose default value for ANIP is calculated based on our internal credit rating of ANI 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 ANI 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 ANIP stock the variable cost ratio is equal to 72.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $19 million in the base year in the intrinsic value calculation for ANIP 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 7.7% for ANI Pharmaceuticals, Inc..

Corporate tax rate of 27% is the nominal tax rate for ANI 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 ANIP 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 ANIP are equal to 68.5%.

Life of production assets of 7.3 years is the average useful life of capital assets used in ANI 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 ANIP is equal to 27.2%. 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 - $197.263 million for ANI 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 11.862 million for ANI 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 ANI Pharmaceuticals, Inc. at the current share price and the inputted number of shares is $0.8 billion.

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