Intrinsic value of BioScrip, Inc. - BIOS

Previous Close

$2.22

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$2.22

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of BIOS 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 0.3

 

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, %
  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
  833
  853
  874
  899
  926
  956
  989
  1,024
  1,062
  1,103
  1,146
  1,193
  1,242
  1,295
  1,351
  1,410
  1,473
  1,539
  1,609
  1,683
  1,761
  1,843
  1,930
  2,021
  2,118
  2,219
  2,326
  2,438
  2,556
  2,680
Variable operating expenses, $m
  843
  863
  885
  910
  937
  967
  1,000
  1,036
  1,074
  1,115
  1,156
  1,203
  1,253
  1,306
  1,363
  1,422
  1,486
  1,552
  1,623
  1,698
  1,776
  1,859
  1,947
  2,039
  2,136
  2,238
  2,346
  2,459
  2,578
  2,703
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
  843
  863
  885
  910
  937
  967
  1,000
  1,036
  1,074
  1,115
  1,156
  1,203
  1,253
  1,306
  1,363
  1,422
  1,486
  1,552
  1,623
  1,698
  1,776
  1,859
  1,947
  2,039
  2,136
  2,238
  2,346
  2,459
  2,578
  2,703
Operating income, $m
  -10
  -10
  -10
  -11
  -11
  -11
  -11
  -12
  -12
  -12
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
EBITDA, $m
  8
  8
  8
  9
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
Interest expense (income), $m
  35
  54
  39
  40
  42
  44
  46
  48
  50
  53
  56
  59
  62
  66
  69
  73
  77
  82
  86
  91
  96
  102
  108
  114
  120
  127
  134
  142
  150
  158
  167
Earnings before tax, $m
  -64
  -49
  -51
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -69
  -72
  -76
  -80
  -85
  -90
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -146
  -154
  -162
  -171
  -180
  -190
Tax expense, $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
Net income, $m
  -64
  -49
  -51
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -69
  -72
  -76
  -80
  -85
  -90
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -146
  -154
  -162
  -171
  -180
  -190

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
  615
  629
  645
  663
  684
  706
  730
  756
  784
  814
  846
  880
  917
  956
  997
  1,041
  1,087
  1,136
  1,187
  1,242
  1,300
  1,360
  1,424
  1,492
  1,563
  1,638
  1,716
  1,799
  1,886
  1,978
Adjusted assets (=assets-cash), $m
  615
  629
  645
  663
  684
  706
  730
  756
  784
  814
  846
  880
  917
  956
  997
  1,041
  1,087
  1,136
  1,187
  1,242
  1,300
  1,360
  1,424
  1,492
  1,563
  1,638
  1,716
  1,799
  1,886
  1,978
Revenue / Adjusted assets
  1.354
  1.356
  1.355
  1.356
  1.354
  1.354
  1.355
  1.354
  1.355
  1.355
  1.355
  1.356
  1.354
  1.355
  1.355
  1.354
  1.355
  1.355
  1.356
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
  1.355
Average production assets, $m
  230
  235
  241
  248
  256
  264
  273
  283
  293
  304
  316
  329
  343
  357
  373
  389
  406
  425
  444
  465
  486
  509
  533
  558
  584
  612
  642
  673
  705
  740
Working capital, $m
  39
  40
  41
  42
  44
  45
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  76
  79
  83
  87
  91
  95
  100
  104
  109
  115
  120
  126
Total debt, $m
  346
  359
  374
  390
  408
  428
  449
  473
  498
  525
  554
  585
  618
  653
  690
  729
  771
  815
  861
  911
  962
  1,017
  1,075
  1,135
  1,199
  1,267
  1,337
  1,412
  1,490
  1,573
Total liabilities, $m
  554
  566
  581
  597
  615
  635
  657
  680
  705
  732
  761
  792
  825
  860
  897
  937
  978
  1,022
  1,069
  1,118
  1,170
  1,224
  1,282
  1,343
  1,407
  1,474
  1,545
  1,619
  1,698
  1,780
Total equity, $m
  62
  63
  65
  66
  68
  71
  73
  76
  78
  81
  85
  88
  92
  96
  100
  104
  109
  114
  119
  124
  130
  136
  142
  149
  156
  164
  172
  180
  189
  198
Total liabilities and equity, $m
  616
  629
  646
  663
  683
  706
  730
  756
  783
  813
  846
  880
  917
  956
  997
  1,041
  1,087
  1,136
  1,188
  1,242
  1,300
  1,360
  1,424
  1,492
  1,563
  1,638
  1,717
  1,799
  1,887
  1,978
Debt-to-equity ratio
  5.630
  5.710
  5.790
  5.880
  5.970
  6.060
  6.160
  6.260
  6.360
  6.450
  6.550
  6.650
  6.740
  6.830
  6.920
  7.010
  7.090
  7.180
  7.250
  7.330
  7.410
  7.480
  7.540
  7.610
  7.670
  7.730
  7.790
  7.850
  7.900
  7.950
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -64
  -49
  -51
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -69
  -72
  -76
  -80
  -85
  -90
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -146
  -154
  -162
  -171
  -180
  -190
Depreciation, amort., depletion, $m
  18
  18
  19
  19
  20
  20
  21
  21
  22
  23
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  37
  38
  40
  42
  44
  46
  49
Funds from operations, $m
  -46
  -31
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -51
  -54
  -57
  -60
  -64
  -68
  -72
  -76
  -81
  -85
  -90
  -96
  -101
  -107
  -113
  -120
  -127
  -134
  -142
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
Cash from operations, $m
  -47
  -32
  -33
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -63
  -67
  -71
  -75
  -79
  -84
  -89
  -94
  -100
  -106
  -112
  -118
  -125
  -132
  -139
  -147
Maintenance CAPEX, $m
  -15
  -15
  -15
  -16
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -44
  -46
New CAPEX, $m
  -4
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -33
  -34
Cash from investing activities, $m
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -53
  -55
  -57
  -60
  -64
  -66
  -69
  -73
  -77
  -80
Free cash flow, $m
  -66
  -52
  -54
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -87
  -91
  -97
  -102
  -108
  -114
  -120
  -127
  -134
  -141
  -149
  -157
  -166
  -175
  -184
  -195
  -205
  -216
  -228
Issuance/(repayment) of debt, $m
  -134
  13
  15
  16
  18
  20
  22
  23
  25
  27
  29
  31
  33
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  64
  67
  71
  75
  78
  82
Issuance/(repurchase) of shares, $m
  210
  50
  52
  54
  56
  59
  62
  65
  68
  71
  72
  76
  80
  84
  89
  94
  99
  105
  110
  117
  123
  130
  137
  145
  153
  161
  170
  179
  189
  199
Cash from financing (excl. dividends), $m  
  76
  63
  67
  70
  74
  79
  84
  88
  93
  98
  101
  107
  113
  119
  126
  133
  141
  149
  157
  166
  175
  185
  195
  206
  217
  228
  241
  254
  267
  281
Total cash flow (excl. dividends), $m
  10
  11
  12
  13
  15
  16
  17
  18
  19
  20
  19
  20
  21
  23
  24
  26
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  51
  54
Retained Cash Flow (-), $m
  -210
  -50
  -52
  -54
  -56
  -59
  -62
  -65
  -68
  -71
  -72
  -76
  -80
  -84
  -89
  -94
  -99
  -105
  -110
  -117
  -123
  -130
  -137
  -145
  -153
  -161
  -170
  -179
  -189
  -199
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
  -200
  -39
  -40
  -41
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
  -80
  -85
  -89
  -94
  -100
  -105
  -111
  -117
  -124
  -131
  -138
  -146
Discount rate, %
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
  -173
  -29
  -25
  -21
  -17
  -14
  -12
  -9
  -7
  -6
  -4
  -3
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  27.5
  15.0
  8.2
  4.4
  2.4
  1.3
  0.7
  0.4
  0.2
  0.1
  0.1
  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
  0.0
  0.0
  0.0

BioScrip, Inc. is engaged in providing infusion solutions. The Company partners with physicians, hospital systems, skilled nursing facilities, healthcare payors and pharmaceutical manufacturers to provide patients access to post-acute care services. The Company operates through Infusion Services segment. The Company operates through approximately 70 service locations in over 30 states. The Company offers home infusion services to provide clinical management services and the delivery of prescription medications. The Company provides services in coordination with, and under the direction of, the patient's physician. The Company's multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to the patient's specific needs. Its platform provides service capabilities to deliver clinical management services that offer patients a community-based and home-based care environment.

FINANCIAL RATIOS  of  BioScrip, Inc. (BIOS)

Valuation Ratios
P/E Ratio -6.2
Price to Sales 0.3
Price to Book 6.5
Price to Tangible Book
Price to Cash Flow -6.1
Price to Free Cash Flow -4.9
Growth Rates
Sales Growth Rate -4.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.7%
Cap. Spend. - 3 Yr. Gr. Rate -17.4%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 1082.5%
Total Debt to Equity 1130%
Interest Coverage 0
Management Effectiveness
Return On Assets -0.8%
Ret/ On Assets - 3 Yr. Avg. -17.6%
Return On Total Capital -9.4%
Ret/ On T. Cap. - 3 Yr. Avg. -29.2%
Return On Equity -381.8%
Return On Equity - 3 Yr. Avg. -244.9%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 28.4%
Gross Margin - 3 Yr. Avg. 27.4%
EBITDA Margin 2.7%
EBITDA Margin - 3 Yr. Avg. -11.2%
Operating Margin 0.2%
Oper. Margin - 3 Yr. Avg. -13.3%
Pre-Tax Margin -3.4%
Pre-Tax Margin - 3 Yr. Avg. -17.2%
Net Profit Margin -4.5%
Net Profit Margin - 3 Yr. Avg. -17%
Effective Tax Rate -6.3%
Eff/ Tax Rate - 3 Yr. Avg. -2.5%
Payout Ratio 0%

BIOS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BIOS stock intrinsic value calculation we used $817 million for the last fiscal year's total revenue generated by BioScrip, Inc.. The default revenue input number comes from 0001 income statement of BioScrip, 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 BIOS 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 15.8%, whose default value for BIOS is calculated based on our internal credit rating of BioScrip, 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 BioScrip, 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 BIOS stock the variable cost ratio is equal to 101.2%.

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 BIOS 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 11.2% for BioScrip, Inc..

Corporate tax rate of 27% is the nominal tax rate for BioScrip, 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 BIOS 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 BIOS are equal to 27.6%.

Life of production assets of 15.2 years is the average useful life of capital assets used in BioScrip, 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 BIOS is equal to 4.7%. 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 - $-84.752 million for BioScrip, 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 128.040 million for BioScrip, 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 BioScrip, Inc. at the current share price and the inputted number of shares is $0.3 billion.

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