Intrinsic value of Atrion - ATRI

Previous Close

$725.01

  Intrinsic Value

$380.16

stock screener

  Rating & Target

sell

-48%

Previous close

$725.01

 
Intrinsic value

$380.16

 
Up/down potential

-48%

 
Rating

sell

We calculate the intrinsic value of ATRI 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 1.3

 

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, %
  7.40
  7.16
  6.94
  6.75
  6.57
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
Revenue, $m
  157
  169
  180
  193
  205
  218
  232
  246
  261
  277
  293
  310
  327
  346
  365
  385
  406
  428
  451
  475
  500
  526
  554
  583
  613
  645
  678
  713
  749
  788
Variable operating expenses, $m
  43
  46
  49
  52
  55
  59
  62
  66
  70
  74
  77
  82
  86
  91
  96
  102
  107
  113
  119
  125
  132
  139
  146
  154
  162
  170
  179
  188
  198
  208
Fixed operating expenses, $m
  67
  69
  70
  72
  74
  75
  77
  79
  80
  82
  84
  86
  88
  90
  91
  93
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  121
  124
  127
Total operating expenses, $m
  110
  115
  119
  124
  129
  134
  139
  145
  150
  156
  161
  168
  174
  181
  187
  195
  203
  211
  219
  227
  236
  246
  255
  265
  276
  286
  298
  309
  322
  335
Operating income, $m
  47
  54
  61
  69
  76
  84
  93
  102
  111
  120
  132
  142
  153
  165
  177
  190
  203
  217
  232
  247
  264
  281
  299
  317
  337
  358
  380
  403
  427
  453
EBITDA, $m
  57
  64
  72
  80
  89
  97
  107
  116
  126
  137
  148
  159
  171
  184
  197
  211
  225
  241
  257
  273
  291
  310
  329
  349
  371
  393
  417
  442
  468
  496
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
Earnings before tax, $m
  47
  54
  61
  68
  76
  84
  92
  101
  110
  120
  131
  141
  152
  164
  176
  188
  201
  215
  230
  245
  261
  278
  296
  315
  334
  355
  376
  399
  423
  448
Tax expense, $m
  13
  15
  16
  18
  21
  23
  25
  27
  30
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  66
  71
  75
  80
  85
  90
  96
  102
  108
  114
  121
Net income, $m
  34
  39
  45
  50
  55
  61
  67
  74
  80
  87
  95
  103
  111
  119
  128
  137
  147
  157
  168
  179
  191
  203
  216
  230
  244
  259
  275
  291
  309
  327

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
  158
  170
  181
  194
  206
  220
  233
  248
  263
  278
  294
  311
  329
  347
  367
  387
  408
  430
  453
  477
  502
  529
  557
  586
  616
  648
  681
  716
  753
  791
Adjusted assets (=assets-cash), $m
  158
  170
  181
  194
  206
  220
  233
  248
  263
  278
  294
  311
  329
  347
  367
  387
  408
  430
  453
  477
  502
  529
  557
  586
  616
  648
  681
  716
  753
  791
Revenue / Adjusted assets
  0.994
  0.994
  0.994
  0.995
  0.995
  0.991
  0.996
  0.992
  0.992
  0.996
  0.997
  0.997
  0.994
  0.997
  0.995
  0.995
  0.995
  0.995
  0.996
  0.996
  0.996
  0.994
  0.995
  0.995
  0.995
  0.995
  0.996
  0.996
  0.995
  0.996
Average production assets, $m
  77
  82
  88
  94
  100
  106
  113
  120
  127
  135
  143
  151
  159
  168
  178
  187
  198
  208
  220
  231
  243
  256
  270
  284
  298
  314
  330
  347
  365
  384
Working capital, $m
  43
  46
  49
  52
  56
  59
  63
  67
  71
  75
  80
  84
  89
  94
  99
  105
  110
  116
  123
  129
  136
  143
  151
  158
  167
  175
  184
  194
  204
  214
Total debt, $m
  1
  3
  4
  6
  8
  9
  11
  13
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  40
  43
  46
  50
  54
  57
  61
  65
  70
  74
  79
  84
Total liabilities, $m
  21
  22
  24
  25
  27
  29
  31
  32
  34
  36
  39
  41
  43
  46
  48
  51
  53
  56
  59
  63
  66
  69
  73
  77
  81
  85
  89
  94
  99
  104
Total equity, $m
  138
  147
  158
  168
  179
  191
  203
  215
  228
  242
  256
  271
  286
  302
  319
  336
  355
  374
  394
  415
  437
  460
  484
  509
  535
  563
  592
  622
  654
  688
Total liabilities and equity, $m
  159
  169
  182
  193
  206
  220
  234
  247
  262
  278
  295
  312
  329
  348
  367
  387
  408
  430
  453
  478
  503
  529
  557
  586
  616
  648
  681
  716
  753
  792
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.040
  0.040
  0.050
  0.060
  0.060
  0.070
  0.070
  0.070
  0.080
  0.080
  0.090
  0.090
  0.090
  0.100
  0.100
  0.100
  0.100
  0.110
  0.110
  0.110
  0.110
  0.110
  0.120
  0.120
  0.120
  0.120
  0.120
Adjusted equity ratio
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869
  0.869

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  34
  39
  45
  50
  55
  61
  67
  74
  80
  87
  95
  103
  111
  119
  128
  137
  147
  157
  168
  179
  191
  203
  216
  230
  244
  259
  275
  291
  309
  327
Depreciation, amort., depletion, $m
  10
  10
  11
  12
  12
  13
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  43
Funds from operations, $m
  44
  50
  56
  62
  68
  74
  81
  88
  96
  104
  112
  120
  129
  138
  148
  158
  169
  181
  193
  205
  218
  232
  246
  262
  278
  294
  312
  330
  350
  370
Change in working capital, $m
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
Cash from operations, $m
  41
  47
  52
  58
  64
  71
  78
  85
  92
  99
  107
  115
  124
  133
  143
  153
  164
  175
  186
  198
  211
  225
  239
  254
  269
  286
  303
  321
  340
  360
Maintenance CAPEX, $m
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
New CAPEX, $m
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
Cash from investing activities, $m
  -13
  -14
  -15
  -16
  -17
  -17
  -19
  -20
  -20
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -37
  -38
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -57
  -60
Free cash flow, $m
  28
  33
  37
  42
  48
  53
  59
  65
  71
  78
  84
  91
  99
  107
  115
  123
  132
  142
  152
  162
  173
  185
  197
  209
  223
  237
  251
  267
  283
  300
Issuance/(repayment) of debt, $m
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
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  
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
Total cash flow (excl. dividends), $m
  30
  34
  39
  44
  49
  55
  61
  67
  73
  80
  86
  93
  101
  109
  117
  126
  135
  145
  155
  165
  176
  188
  200
  213
  227
  241
  256
  272
  288
  305
Retained Cash Flow (-), $m
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -12
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
Prev. year cash balance distribution, $m
  56
  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
  76
  24
  29
  33
  38
  43
  49
  54
  60
  66
  72
  79
  86
  93
  100
  108
  117
  126
  135
  144
  154
  165
  176
  188
  200
  213
  227
  241
  256
  272
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
  73
  22
  25
  28
  30
  32
  33
  34
  34
  35
  34
  34
  33
  31
  30
  28
  25
  23
  21
  18
  16
  14
  12
  10
  8
  6
  5
  4
  3
  2
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

Atrion Corporation (Atrion) is engaged in developing and manufacturing products, primarily for medical applications. The Company's medical products range from fluid delivery devices to ophthalmic and cardiovascular products. Its fluid delivery products include valves that promote infection control and needle safety. It has developed a range of valves designed to fill, hold and release controlled amounts of fluids or gasses on demand for use in various intubation, intravenous, catheter and other applications in areas, such as anesthesia and oncology. Its cardiovascular product, MPS2 Myocardial Protection System (MPS2), is the system used in open-heart surgery that delivers fluids and medications, mixes critical drugs and controls temperature, pressure and other variables. The Company manufactures specialized medical devices that disinfect contact lenses. Its other medical and non-medical product lines consist of instrumentation and associated disposables.

FINANCIAL RATIOS  of  Atrion (ATRI)

Valuation Ratios
P/E Ratio 47.1
Price to Sales 9.2
Price to Book 8.1
Price to Tangible Book
Price to Cash Flow 35.7
Price to Free Cash Flow 50.8
Growth Rates
Sales Growth Rate -2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 22.2%
Cap. Spend. - 3 Yr. Gr. Rate 1.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 16.2%
Ret/ On Assets - 3 Yr. Avg. 16.6%
Return On Total Capital 18.2%
Ret/ On T. Cap. - 3 Yr. Avg. 18.9%
Return On Equity 18.2%
Return On Equity - 3 Yr. Avg. 18.9%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 47.6%
Gross Margin - 3 Yr. Avg. 48.4%
EBITDA Margin 33.6%
EBITDA Margin - 3 Yr. Avg. 34.7%
Operating Margin 27.3%
Oper. Margin - 3 Yr. Avg. 28.6%
Pre-Tax Margin 27.3%
Pre-Tax Margin - 3 Yr. Avg. 28.4%
Net Profit Margin 19.6%
Net Profit Margin - 3 Yr. Avg. 19.8%
Effective Tax Rate 28.2%
Eff/ Tax Rate - 3 Yr. Avg. 30.3%
Payout Ratio 25%

ATRI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATRI stock intrinsic value calculation we used $146.595 million for the last fiscal year's total revenue generated by Atrion. The default revenue input number comes from 0001 income statement of Atrion. 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 ATRI stock valuation model: a) initial revenue growth rate of 7.4% 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 ATRI is calculated based on our internal credit rating of Atrion, 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 Atrion.
    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 ATRI stock the variable cost ratio is equal to 27.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $66 million in the base year in the intrinsic value calculation for ATRI 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 Atrion.

Corporate tax rate of 27% is the nominal tax rate for Atrion. 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 ATRI 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 ATRI are equal to 48.7%.

Life of production assets of 8.9 years is the average useful life of capital assets used in Atrion 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 ATRI 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 - $184.388 million for Atrion - 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 1.852 million for Atrion 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 Atrion at the current share price and the inputted number of shares is $1.3 billion.

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COMPANY NEWS

▶ Atrion Corporation Declares Quarterly Cash Dividend   [Nov-12-18 01:22PM  GlobeNewswire]
▶ Atrion: 3Q Earnings Snapshot   [Nov-09-18 04:34PM  Associated Press]
▶ Atrion Reports Third Quarter Results   [04:30PM  GlobeNewswire]
▶ Does Atrion Corporations (NASDAQ:ATRI) PE Ratio Warrant A Buy?   [Oct-10-18 02:27PM  Simply Wall St.]
▶ Atrion Corporation Increases Quarterly Cash Dividend by 13%   [Aug-14-18 04:30PM  GlobeNewswire]
▶ Atrion: 2Q Earnings Snapshot   [Aug-07-18 05:00PM  Associated Press]
▶ Atrion Reports Second Quarter Results   [04:45PM  GlobeNewswire]
▶ Atrion Corporation Declares Quarterly Cash Dividend   [May-22-18 03:05PM  GlobeNewswire]
▶ Atrion: 1Q Earnings Snapshot   [May-10-18 05:12AM  Associated Press]
▶ Atrion Reports First Quarter Results   [May-09-18 04:30PM  GlobeNewswire]
▶ Atrion posts 4Q profit   [Feb-28-18 05:03AM  Associated Press]
▶ ETFs with exposure to Atrion Corp. : December 18, 2017   [Dec-18-17 02:38PM  Capital Cube]
▶ ETFs with exposure to Atrion Corp. : December 1, 2017   [Dec-01-17 10:26AM  Capital Cube]
▶ Atrion posts 3Q profit   [Nov-08-17 06:51PM  Associated Press]
▶ Atrion Reports Third Quarter Results   [04:30PM  GlobeNewswire]
▶ ETFs with exposure to Atrion Corp. : November 7, 2017   [Nov-07-17 09:41AM  Capital Cube]
▶ ETFs with exposure to Atrion Corp. : October 2, 2017   [Oct-02-17 10:41AM  Capital Cube]
▶ ETFs with exposure to Atrion Corp. : September 13, 2017   [Sep-13-17 05:22PM  Capital Cube]
▶ Atrion Corporation Increases Quarterly Cash Dividend by 14%   [Aug-15-17 04:30PM  GlobeNewswire]
▶ Atrion posts 2Q profit   [Aug-08-17 11:45PM  Associated Press]
▶ Atrion Reports Second Quarter Results   [04:30PM  GlobeNewswire]
▶ ETFs with exposure to Atrion Corp. : June 29, 2017   [Jun-29-17 02:52PM  Capital Cube]
▶ Atrion Corporation Declares Quarterly Cash Dividend   [May-23-17 02:46PM  GlobeNewswire]
▶ ETFs with exposure to Atrion Corp. : May 22, 2017   [May-22-17 01:22PM  Capital Cube]
▶ Atrion posts 1Q profit   [May-10-17 06:08PM  Associated Press]
▶ Atrion Reports First Quarter Results   [04:30PM  GlobeNewswire]
▶ Atrion posts 4Q profit   [05:00AM  Associated Press]
▶ Is MedEquities Realty Trust Inc (MRT) a Good Stock to Buy?   [Dec-12-16 10:08AM  at Insider Monkey]
▶ Atrion Corporation Declares Quarterly Cash Dividend   [Nov-10-16 12:38PM  Marketwired]
▶ Atrion Reports Third Quarter Results   [04:30PM  Marketwired]

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