Intrinsic value of ANI Pharmaceuticals - ANIP

Previous Close

$51.99

  Intrinsic Value

$24.96

stock screener

  Rating & Target

str. sell

-52%

Previous close

$51.99

 
Intrinsic value

$24.96

 
Up/down potential

-52%

 
Rating

str. 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 0.6

 

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, %
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
Revenue, $m
  187
  197
  208
  219
  231
  243
  256
  270
  284
  299
  315
  331
  348
  366
  385
  404
  425
  447
  469
  493
  518
  545
  572
  601
  631
  663
  697
  732
  769
  807
Variable operating expenses, $m
  153
  160
  167
  175
  184
  192
  201
  210
  220
  231
  218
  230
  241
  254
  267
  281
  295
  310
  326
  342
  360
  378
  397
  417
  438
  460
  484
  508
  533
  560
Fixed operating expenses, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
Total operating expenses, $m
  156
  163
  170
  178
  187
  195
  204
  214
  224
  235
  222
  234
  245
  258
  271
  285
  299
  314
  331
  347
  365
  383
  402
  422
  443
  465
  489
  514
  539
  566
Operating income, $m
  31
  34
  37
  41
  44
  48
  52
  56
  60
  65
  92
  97
  102
  108
  114
  119
  126
  132
  139
  146
  154
  162
  170
  179
  188
  198
  208
  218
  230
  241
EBITDA, $m
  70
  74
  78
  82
  87
  92
  97
  102
  107
  113
  119
  125
  132
  139
  146
  154
  162
  170
  179
  188
  198
  208
  218
  230
  241
  254
  267
  280
  294
  309
Interest expense (income), $m
  4
  15
  16
  17
  18
  19
  21
  22
  23
  24
  26
  27
  29
  31
  32
  34
  36
  38
  40
  42
  44
  47
  49
  52
  55
  58
  61
  64
  67
  71
  75
Earnings before tax, $m
  16
  18
  20
  22
  25
  27
  30
  33
  36
  39
  65
  68
  72
  76
  79
  84
  88
  92
  97
  102
  107
  112
  118
  124
  130
  137
  144
  151
  159
  167
Tax expense, $m
  4
  5
  5
  6
  7
  7
  8
  9
  10
  10
  18
  18
  19
  20
  21
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
Net income, $m
  12
  13
  15
  16
  18
  20
  22
  24
  26
  28
  47
  50
  52
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
  91
  95
  100
  105
  110
  116
  122

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
  434
  458
  483
  510
  537
  566
  596
  628
  661
  695
  731
  769
  809
  851
  895
  940
  989
  1,039
  1,092
  1,147
  1,205
  1,267
  1,331
  1,398
  1,468
  1,542
  1,620
  1,702
  1,787
  1,877
Adjusted assets (=assets-cash), $m
  434
  458
  483
  510
  537
  566
  596
  628
  661
  695
  731
  769
  809
  851
  895
  940
  989
  1,039
  1,092
  1,147
  1,205
  1,267
  1,331
  1,398
  1,468
  1,542
  1,620
  1,702
  1,787
  1,877
Revenue / Adjusted assets
  0.431
  0.430
  0.431
  0.429
  0.430
  0.429
  0.430
  0.430
  0.430
  0.430
  0.431
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.429
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
Average production assets, $m
  125
  131
  139
  146
  154
  162
  171
  180
  189
  199
  210
  221
  232
  244
  257
  270
  284
  298
  313
  329
  346
  363
  382
  401
  421
  442
  465
  488
  513
  538
Working capital, $m
  63
  66
  70
  74
  78
  82
  86
  91
  96
  101
  106
  111
  117
  123
  130
  136
  143
  151
  158
  166
  175
  184
  193
  203
  213
  224
  235
  247
  259
  272
Total debt, $m
  215
  228
  243
  258
  274
  290
  308
  326
  345
  365
  386
  408
  430
  455
  480
  506
  534
  563
  593
  625
  659
  694
  731
  770
  810
  853
  898
  945
  994
  1,046
Total liabilities, $m
  250
  264
  278
  294
  309
  326
  343
  362
  381
  400
  421
  443
  466
  490
  515
  542
  569
  598
  629
  661
  694
  730
  766
  805
  846
  888
  933
  980
  1,030
  1,081
Total equity, $m
  184
  194
  205
  216
  228
  240
  253
  266
  280
  295
  310
  326
  343
  361
  379
  399
  419
  440
  463
  486
  511
  537
  564
  593
  623
  654
  687
  722
  758
  796
Total liabilities and equity, $m
  434
  458
  483
  510
  537
  566
  596
  628
  661
  695
  731
  769
  809
  851
  894
  941
  988
  1,038
  1,092
  1,147
  1,205
  1,267
  1,330
  1,398
  1,469
  1,542
  1,620
  1,702
  1,788
  1,877
Debt-to-equity ratio
  1.170
  1.180
  1.180
  1.190
  1.200
  1.210
  1.220
  1.220
  1.230
  1.240
  1.240
  1.250
  1.250
  1.260
  1.260
  1.270
  1.270
  1.280
  1.280
  1.290
  1.290
  1.290
  1.300
  1.300
  1.300
  1.300
  1.310
  1.310
  1.310
  1.310
Adjusted equity ratio
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424
  0.424

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  12
  13
  15
  16
  18
  20
  22
  24
  26
  28
  47
  50
  52
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
  91
  95
  100
  105
  110
  116
  122
Depreciation, amort., depletion, $m
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  27
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
Funds from operations, $m
  50
  53
  55
  58
  61
  64
  67
  70
  73
  77
  74
  78
  82
  86
  90
  95
  100
  105
  110
  116
  122
  128
  135
  141
  148
  156
  164
  172
  181
  190
Change in working capital, $m
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
Cash from operations, $m
  47
  49
  52
  54
  57
  60
  62
  65
  68
  72
  69
  72
  76
  80
  84
  88
  93
  98
  103
  108
  113
  119
  125
  132
  138
  145
  153
  160
  168
  177
Maintenance CAPEX, $m
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -59
  -62
  -65
New CAPEX, $m
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
Cash from investing activities, $m
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -38
  -39
  -41
  -44
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -64
  -67
  -71
  -74
  -78
  -82
  -87
  -91
Free cash flow, $m
  26
  27
  28
  29
  30
  32
  33
  35
  36
  38
  33
  35
  37
  39
  41
  43
  45
  47
  50
  52
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
Issuance/(repayment) of debt, $m
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  52
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  
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  52
Total cash flow (excl. dividends), $m
  39
  41
  42
  44
  46
  48
  50
  53
  55
  58
  54
  57
  60
  63
  66
  69
  73
  76
  80
  84
  89
  93
  98
  103
  108
  113
  119
  125
  131
  138
Retained Cash Flow (-), $m
  -9
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -35
  -36
  -38
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
  29
  30
  32
  33
  35
  36
  38
  39
  41
  43
  39
  41
  43
  45
  47
  50
  52
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
  90
  95
  100
Discount rate, %
  6.90
  7.25
  7.61
  7.99
  8.39
  8.81
  9.25
  9.71
  10.19
  10.70
  11.24
  11.80
  12.39
  13.01
  13.66
  14.34
  15.06
  15.81
  16.61
  17.44
  18.31
  19.22
  20.18
  21.19
  22.25
  23.37
  24.53
  25.76
  27.05
  28.40
PV of cash for distribution, $m
  27
  26
  25
  24
  23
  22
  20
  19
  17
  16
  12
  11
  9
  8
  7
  6
  5
  4
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
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

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 (ANIP)

Valuation Ratios
P/E Ratio 150.8
Price to Sales 4.7
Price to Book 3.5
Price to Tangible Book
Price to Cash Flow 22.3
Price to Free Cash Flow 27.4
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 $176.842 million for the last fiscal year's total revenue generated by ANI Pharmaceuticals. The default revenue input number comes from 0001 income statement of ANI Pharmaceuticals. 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 5.6% 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 6.9%, whose default value for ANIP is calculated based on our internal credit rating of ANI Pharmaceuticals, 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.
    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 82.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3 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 7.5% for ANI Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for ANI Pharmaceuticals. 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 66.7%.

Life of production assets of 7.9 years is the average useful life of capital assets used in ANI Pharmaceuticals 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 33.7%. 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 - $174.756 million for ANI Pharmaceuticals - 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 11.786 million for ANI Pharmaceuticals 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 at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

▶ ANI: 3Q Earnings Snapshot   [09:12AM  Associated Press]
▶ ANI: 2Q Earnings Snapshot   [09:00AM  Associated Press]
▶ 4 Undervalued MedTech Stocks to Consider Amid Volatility   [Jun-19-18 12:25PM  InvestorPlace]
▶ ANI: 1Q Earnings Snapshot   [May-08-18 09:34AM  Associated Press]
▶ ANI Acquires 23 ANDAs from IDT Australia, Ltd.   [Apr-04-18 08:30AM  PR Newswire]
▶ ANI reports 4Q loss   [09:03AM  Associated Press]
▶ Top-Rated Stocks: ANI Pharmaceuticals Sees Composite Rating Climb To 97   [Jan-03-18 03:00AM  Investor's Business Daily]
▶ Is It The Right Time To Buy ANI Pharmaceuticals Inc (ANIP)?   [Dec-04-17 11:30AM  Simply Wall St.]
▶ Stocks To Watch: ANI Pharmaceuticals Sees Relative Strength Rating Rise To 93   [Nov-29-17 03:00AM  Investor's Business Daily]
▶ ANI posts 3Q profit   [Nov-02-17 09:11AM  Associated Press]
▶ 3 Small, Profitable Biotechs With Fantastic Growth   [Oct-24-17 07:33AM  Motley Fool]

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