Intrinsic value of Anthem - ANTM

Previous Close

$264.97

  Intrinsic Value

$389.02

stock screener

  Rating & Target

buy

+47%

Previous close

$264.97

 
Intrinsic value

$389.02

 
Up/down potential

+47%

 
Rating

buy

Our model is not good at valuating stocks of financial companies, such as ANTM.

We calculate the intrinsic value of ANTM 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 2017), $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 68.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.17
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
Revenue, $m
  95,531
  101,254
  107,219
  113,439
  119,930
  126,705
  133,781
  141,174
  148,902
  156,981
  165,432
  174,275
  183,530
  193,220
  203,367
  213,996
  225,132
  236,802
  249,033
  261,854
  275,297
  289,393
  304,177
  319,682
  335,947
  353,009
  370,911
  389,693
  409,402
  430,085
Variable operating expenses, $m
  89,440
  94,632
  100,044
  105,689
  111,578
  117,726
  124,146
  130,854
  137,865
  145,196
  150,104
  158,128
  166,525
  175,317
  184,524
  194,169
  204,273
  214,861
  225,959
  237,593
  249,790
  262,580
  275,994
  290,062
  304,820
  320,302
  336,544
  353,587
  371,470
  390,236
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
  89,440
  94,632
  100,044
  105,689
  111,578
  117,726
  124,146
  130,854
  137,865
  145,196
  150,104
  158,128
  166,525
  175,317
  184,524
  194,169
  204,273
  214,861
  225,959
  237,593
  249,790
  262,580
  275,994
  290,062
  304,820
  320,302
  336,544
  353,587
  371,470
  390,236
Operating income, $m
  6,091
  6,621
  7,174
  7,751
  8,352
  8,980
  9,635
  10,320
  11,036
  11,785
  15,328
  16,147
  17,005
  17,902
  18,843
  19,827
  20,859
  21,940
  23,074
  24,262
  25,507
  26,813
  28,183
  29,620
  31,127
  32,707
  34,366
  36,106
  37,933
  39,849
EBITDA, $m
  11,889
  12,601
  13,344
  14,118
  14,926
  15,769
  16,650
  17,570
  18,531
  19,537
  20,589
  21,689
  22,841
  24,047
  25,310
  26,633
  28,018
  29,471
  30,993
  32,589
  34,262
  36,016
  37,856
  39,786
  41,810
  43,933
  46,161
  48,499
  50,952
  53,525
Interest expense (income), $m
  595
  1,009
  1,153
  1,300
  1,453
  1,613
  1,779
  1,953
  2,135
  2,325
  2,524
  2,731
  2,948
  3,176
  3,413
  3,662
  3,923
  4,196
  4,482
  4,782
  5,096
  5,425
  5,771
  6,133
  6,513
  6,911
  7,329
  7,767
  8,227
  8,710
  9,216
Earnings before tax, $m
  5,082
  5,469
  5,875
  6,298
  6,739
  7,200
  7,682
  8,185
  8,711
  9,261
  12,597
  13,199
  13,829
  14,489
  15,180
  15,905
  16,663
  17,458
  18,292
  19,166
  20,082
  21,042
  22,050
  23,107
  24,215
  25,379
  26,599
  27,879
  29,223
  30,633
Tax expense, $m
  1,372
  1,477
  1,586
  1,700
  1,820
  1,944
  2,074
  2,210
  2,352
  2,501
  3,401
  3,564
  3,734
  3,912
  4,099
  4,294
  4,499
  4,714
  4,939
  5,175
  5,422
  5,681
  5,954
  6,239
  6,538
  6,852
  7,182
  7,527
  7,890
  8,271
Net income, $m
  3,710
  3,992
  4,288
  4,597
  4,920
  5,256
  5,608
  5,975
  6,359
  6,761
  9,196
  9,635
  10,095
  10,577
  11,082
  11,610
  12,164
  12,745
  13,353
  13,991
  14,660
  15,361
  16,097
  16,868
  17,677
  18,526
  19,417
  20,352
  21,333
  22,362

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
  73,542
  77,947
  82,539
  87,328
  92,325
  97,541
  102,988
  108,679
  114,628
  120,848
  127,354
  134,161
  141,286
  148,745
  156,557
  164,739
  173,312
  182,295
  191,711
  201,581
  211,930
  222,782
  234,162
  246,099
  258,619
  271,755
  285,535
  299,995
  315,167
  331,089
Adjusted assets (=assets-cash), $m
  73,542
  77,947
  82,539
  87,328
  92,325
  97,541
  102,988
  108,679
  114,628
  120,848
  127,354
  134,161
  141,286
  148,745
  156,557
  164,739
  173,312
  182,295
  191,711
  201,581
  211,930
  222,782
  234,162
  246,099
  258,619
  271,755
  285,535
  299,995
  315,167
  331,089
Revenue / Adjusted assets
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
  1.299
Average production assets, $m
  30,379
  32,199
  34,096
  36,074
  38,138
  40,292
  42,542
  44,893
  47,351
  49,920
  52,607
  55,419
  58,363
  61,444
  64,671
  68,051
  71,592
  75,303
  79,192
  83,270
  87,545
  92,027
  96,728
  101,659
  106,831
  112,257
  117,950
  123,922
  130,190
  136,767
Working capital, $m
  -14,425
  -15,289
  -16,190
  -17,129
  -18,109
  -19,133
  -20,201
  -21,317
  -22,484
  -23,704
  -24,980
  -26,316
  -27,713
  -29,176
  -30,708
  -32,313
  -33,995
  -35,757
  -37,604
  -39,540
  -41,570
  -43,698
  -45,931
  -48,272
  -50,728
  -53,304
  -56,007
  -58,844
  -61,820
  -64,943
Total debt, $m
  21,344
  24,066
  26,904
  29,864
  32,952
  36,175
  39,541
  43,059
  46,735
  50,579
  54,599
  58,806
  63,209
  67,819
  72,647
  77,704
  83,001
  88,553
  94,372
  100,472
  106,868
  113,574
  120,607
  127,984
  135,722
  143,839
  152,356
  161,292
  170,668
  180,508
Total liabilities, $m
  45,449
  48,172
  51,009
  53,969
  57,057
  60,280
  63,647
  67,164
  70,840
  74,684
  78,705
  82,911
  87,315
  91,924
  96,752
  101,809
  107,107
  112,658
  118,477
  124,577
  130,973
  137,679
  144,712
  152,089
  159,827
  167,944
  176,461
  185,397
  194,773
  204,613
Total equity, $m
  28,093
  29,776
  31,530
  33,359
  35,268
  37,261
  39,341
  41,515
  43,788
  46,164
  48,649
  51,249
  53,971
  56,821
  59,805
  62,930
  66,205
  69,637
  73,234
  77,004
  80,957
  85,103
  89,450
  94,010
  98,793
  103,810
  109,075
  114,598
  120,394
  126,476
Total liabilities and equity, $m
  73,542
  77,948
  82,539
  87,328
  92,325
  97,541
  102,988
  108,679
  114,628
  120,848
  127,354
  134,160
  141,286
  148,745
  156,557
  164,739
  173,312
  182,295
  191,711
  201,581
  211,930
  222,782
  234,162
  246,099
  258,620
  271,754
  285,536
  299,995
  315,167
  331,089
Debt-to-equity ratio
  0.760
  0.810
  0.850
  0.900
  0.930
  0.970
  1.010
  1.040
  1.070
  1.100
  1.120
  1.150
  1.170
  1.190
  1.210
  1.230
  1.250
  1.270
  1.290
  1.300
  1.320
  1.330
  1.350
  1.360
  1.370
  1.390
  1.400
  1.410
  1.420
  1.430
Adjusted equity ratio
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382
  0.382

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,710
  3,992
  4,288
  4,597
  4,920
  5,256
  5,608
  5,975
  6,359
  6,761
  9,196
  9,635
  10,095
  10,577
  11,082
  11,610
  12,164
  12,745
  13,353
  13,991
  14,660
  15,361
  16,097
  16,868
  17,677
  18,526
  19,417
  20,352
  21,333
  22,362
Depreciation, amort., depletion, $m
  5,798
  5,980
  6,170
  6,367
  6,574
  6,789
  7,014
  7,249
  7,495
  7,752
  5,261
  5,542
  5,836
  6,144
  6,467
  6,805
  7,159
  7,530
  7,919
  8,327
  8,754
  9,203
  9,673
  10,166
  10,683
  11,226
  11,795
  12,392
  13,019
  13,677
Funds from operations, $m
  9,508
  9,972
  10,458
  10,965
  11,493
  12,045
  12,622
  13,224
  13,854
  14,513
  14,456
  15,177
  15,932
  16,721
  17,549
  18,415
  19,323
  20,275
  21,272
  22,318
  23,414
  24,564
  25,769
  27,034
  28,360
  29,752
  31,212
  32,744
  34,352
  36,039
Change in working capital, $m
  -829
  -864
  -901
  -939
  -980
  -1,023
  -1,068
  -1,116
  -1,167
  -1,220
  -1,276
  -1,335
  -1,398
  -1,463
  -1,532
  -1,605
  -1,682
  -1,762
  -1,847
  -1,936
  -2,030
  -2,129
  -2,232
  -2,341
  -2,456
  -2,576
  -2,703
  -2,836
  -2,976
  -3,123
Cash from operations, $m
  10,337
  10,836
  11,359
  11,904
  12,474
  13,069
  13,690
  14,341
  15,021
  15,733
  15,732
  16,512
  17,329
  18,185
  19,081
  20,020
  21,005
  22,037
  23,119
  24,254
  25,444
  26,692
  28,002
  29,375
  30,816
  32,328
  33,915
  35,580
  37,328
  39,162
Maintenance CAPEX, $m
  -2,864
  -3,038
  -3,220
  -3,410
  -3,607
  -3,814
  -4,029
  -4,254
  -4,489
  -4,735
  -4,992
  -5,261
  -5,542
  -5,836
  -6,144
  -6,467
  -6,805
  -7,159
  -7,530
  -7,919
  -8,327
  -8,754
  -9,203
  -9,673
  -10,166
  -10,683
  -11,226
  -11,795
  -12,392
  -13,019
New CAPEX, $m
  -1,740
  -1,820
  -1,897
  -1,978
  -2,064
  -2,155
  -2,250
  -2,351
  -2,457
  -2,569
  -2,687
  -2,812
  -2,943
  -3,081
  -3,227
  -3,380
  -3,541
  -3,711
  -3,889
  -4,077
  -4,275
  -4,483
  -4,701
  -4,931
  -5,172
  -5,426
  -5,693
  -5,973
  -6,267
  -6,577
Cash from investing activities, $m
  -4,604
  -4,858
  -5,117
  -5,388
  -5,671
  -5,969
  -6,279
  -6,605
  -6,946
  -7,304
  -7,679
  -8,073
  -8,485
  -8,917
  -9,371
  -9,847
  -10,346
  -10,870
  -11,419
  -11,996
  -12,602
  -13,237
  -13,904
  -14,604
  -15,338
  -16,109
  -16,919
  -17,768
  -18,659
  -19,596
Free cash flow, $m
  5,734
  5,979
  6,242
  6,516
  6,802
  7,100
  7,411
  7,736
  8,074
  8,428
  8,053
  8,440
  8,844
  9,267
  9,710
  10,173
  10,659
  11,167
  11,699
  12,257
  12,842
  13,455
  14,098
  14,772
  15,478
  16,219
  16,997
  17,812
  18,668
  19,566
Issuance/(repayment) of debt, $m
  2,659
  2,722
  2,838
  2,960
  3,088
  3,223
  3,366
  3,517
  3,676
  3,844
  4,021
  4,207
  4,403
  4,610
  4,828
  5,057
  5,298
  5,552
  5,819
  6,100
  6,395
  6,706
  7,033
  7,377
  7,738
  8,118
  8,517
  8,936
  9,377
  9,840
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  
  2,659
  2,722
  2,838
  2,960
  3,088
  3,223
  3,366
  3,517
  3,676
  3,844
  4,021
  4,207
  4,403
  4,610
  4,828
  5,057
  5,298
  5,552
  5,819
  6,100
  6,395
  6,706
  7,033
  7,377
  7,738
  8,118
  8,517
  8,936
  9,377
  9,840
Total cash flow (excl. dividends), $m
  8,392
  8,701
  9,080
  9,476
  9,890
  10,324
  10,777
  11,253
  11,751
  12,272
  12,074
  12,647
  13,247
  13,877
  14,537
  15,230
  15,957
  16,719
  17,518
  18,357
  19,238
  20,161
  21,131
  22,148
  23,216
  24,337
  25,513
  26,748
  28,045
  29,405
Retained Cash Flow (-), $m
  -1,590
  -1,683
  -1,754
  -1,829
  -1,909
  -1,992
  -2,081
  -2,174
  -2,272
  -2,376
  -2,485
  -2,600
  -2,722
  -2,849
  -2,984
  -3,126
  -3,275
  -3,432
  -3,597
  -3,771
  -3,953
  -4,145
  -4,347
  -4,560
  -4,783
  -5,018
  -5,264
  -5,523
  -5,796
  -6,082
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
  180
  191
  203
  214
  227
  240
  253
  268
  282
  298
  314
  331
  349
  367
  386
  407
  428
  450
  474
  498
  524
  551
  579
  608
  639
  672
  706
  742
  779
  819
Cash available for distribution, $m
  6,802
  7,018
  7,326
  7,646
  7,981
  8,331
  8,697
  9,079
  9,478
  9,896
  9,588
  10,046
  10,525
  11,027
  11,553
  12,104
  12,682
  13,287
  13,922
  14,587
  15,284
  16,016
  16,784
  17,589
  18,433
  19,319
  20,249
  21,225
  22,249
  23,323
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
  6,522
  6,425
  6,375
  6,296
  6,187
  6,046
  5,875
  5,674
  5,445
  5,188
  4,553
  4,287
  4,002
  3,702
  3,392
  3,076
  2,759
  2,447
  2,144
  1,854
  1,581
  1,329
  1,100
  896
  717
  564
  435
  328
  243
  176
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

Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.

FINANCIAL RATIOS  of  Anthem (ANTM)

Valuation Ratios
P/E Ratio 28.3
Price to Sales 0.8
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 21.8
Price to Free Cash Flow 26.7
Growth Rates
Sales Growth Rate 7.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.5%
Cap. Spend. - 3 Yr. Gr. Rate -2%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 57.2%
Total Debt to Equity 62.7%
Interest Coverage 9
Management Effectiveness
Return On Assets 4.4%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 6.4%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 10.5%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 7.1%
EBITDA Margin - 3 Yr. Avg. 7.6%
Operating Margin 6.2%
Oper. Margin - 3 Yr. Avg. 6.5%
Pre-Tax Margin 5.4%
Pre-Tax Margin - 3 Yr. Avg. 5.7%
Net Profit Margin 2.9%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 45.8%
Eff/ Tax Rate - 3 Yr. Avg. 44%
Payout Ratio 27.7%

ANTM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ANTM stock intrinsic value calculation we used $90039 million for the last fiscal year's total revenue generated by Anthem. The default revenue input number comes from 2017 income statement of Anthem. 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 ANTM stock valuation model: a) initial revenue growth rate of 6.1% 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 ANTM is calculated based on our internal credit rating of Anthem, 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 Anthem.
    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 ANTM stock the variable cost ratio is equal to 93.8%.

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 ANTM 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 Anthem.

Corporate tax rate of 27% is the nominal tax rate for Anthem. 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 ANTM stock is equal to 0.2%.

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 ANTM are equal to 31.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Anthem 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 ANTM is equal to -15.1%. 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 - $26503 million for Anthem - 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 257 million for Anthem 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 Anthem at the current share price and the inputted number of shares is $68.1 billion.

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COMPANY NEWS

▶ BBQ and Bill Frist highlight Nashville's latest Inc. 5000 honorees   [Aug-15-18 02:24PM  American City Business Journals]
▶ The Deals Keep Coming for IBM   [07:45AM  Motley Fool]
▶ Anthem, Inc. to Host Earnings Call   [06:30AM  ACCESSWIRE]
▶ Anthem's Q2 Earnings Preview   [Jul-24-18 02:33PM  Benzinga]
▶ Blue Cross of MN names Anthem exec CEO   [Jun-28-18 12:50PM  American City Business Journals]
▶ Is Anthem Inc (NYSE:ANTM) A Buy At Its Current PE Ratio?   [Jun-25-18 11:43AM  Simply Wall St.]
▶ 5 Excellent Dividend Growth Stocks to Evade Trade Fears   [Jun-18-18 02:15PM  InvestorPlace]
▶ Add These 7 GARP Stocks to Your Kitty for Maximum Returns   [Jun-13-18 01:25PM  InvestorPlace]
▶ Social Security will be insolvent by 2034, Medicare much sooner   [Jun-06-18 01:04PM  Yahoo Finance Video]
▶ Anthem Announces Appearance at Upcoming Conference   [May-30-18 04:05PM  Business Wire]
▶ Add These 5 GARP Stocks to Your Kitty for Maximum Returns   [May-29-18 02:20PM  InvestorPlace]
▶ Freedom Health's new CEO has plans for organic growth   [07:23AM  American City Business Journals]
▶ Anthem's Tampa-based subsidiaries name new CEO and CFO   [May-25-18 02:03PM  American City Business Journals]
▶ Bill Frist's health care company sold to Anthem   [May-23-18 04:00PM  American City Business Journals]
▶ Anthem, Inc. to Acquire Aspire Health   [07:00AM  Business Wire]
▶ Health Insurance Industry Outlook - May 2018   [May-17-18 03:34PM  Zacks]
▶ Amazon ditches Google ads, expanding Alexa into the health space   [May-11-18 11:04AM  Yahoo Finance Video]
▶ Why Kiran Patel is backing a Tampa company developing cancer treatments   [May-02-18 02:58PM  American City Business Journals]
▶ Buffett: Todd Combs is spending most of his time on health care   [Apr-30-18 04:06PM  Yahoo Finance Video]
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