Intrinsic value of bluebird bio, Inc. - BLUE

Previous Close

$99.43

  Intrinsic Value

$7.46

stock screener

  Rating & Target

str. sell

-93%

Previous close

$99.43

 
Intrinsic value

$7.46

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of BLUE 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 5.5

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  88
  136
  203
  295
  416
  572
  768
  1,009
  1,298
  1,639
  2,035
  2,489
  3,000
  3,569
  4,196
  4,881
  5,623
  6,420
  7,271
  8,175
  9,130
  10,136
  11,192
  12,297
  13,451
  14,655
  15,908
  17,212
  18,568
  19,978
Variable operating expenses, $m
  899
  1,375
  2,044
  2,955
  4,159
  5,708
  7,654
  10,042
  12,915
  16,306
  20,218
  24,719
  29,794
  35,449
  41,682
  48,486
  55,852
  63,768
  72,220
  81,197
  90,686
  100,678
  111,165
  122,142
  133,608
  145,564
  158,015
  170,969
  184,439
  198,439
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
  899
  1,375
  2,044
  2,955
  4,159
  5,708
  7,654
  10,042
  12,915
  16,306
  20,218
  24,719
  29,794
  35,449
  41,682
  48,486
  55,852
  63,768
  72,220
  81,197
  90,686
  100,678
  111,165
  122,142
  133,608
  145,564
  158,015
  170,969
  184,439
  198,439
Operating income, $m
  -811
  -1,239
  -1,841
  -2,660
  -3,743
  -5,136
  -6,886
  -9,034
  -11,617
  -14,667
  -18,183
  -22,230
  -26,795
  -31,880
  -37,486
  -43,605
  -50,229
  -57,348
  -64,949
  -73,022
  -81,556
  -90,542
  -99,973
  -109,845
  -120,157
  -130,909
  -142,106
  -153,757
  -165,870
  -178,461
EBITDA, $m
  -760
  -1,174
  -1,756
  -2,548
  -3,595
  -4,943
  -6,634
  -8,711
  -11,209
  -14,158
  -17,581
  -21,495
  -25,909
  -30,826
  -36,246
  -42,163
  -48,568
  -55,451
  -62,802
  -70,608
  -78,859
  -87,548
  -96,667
  -106,213
  -116,183
  -126,580
  -137,407
  -148,672
  -160,385
  -172,559
Interest expense (income), $m
  0
  8
  20
  36
  60
  92
  134
  189
  257
  341
  443
  562
  700
  859
  1,037
  1,236
  1,456
  1,695
  1,954
  2,233
  2,530
  2,846
  3,180
  3,532
  3,901
  4,287
  4,690
  5,111
  5,549
  6,005
  6,479
Earnings before tax, $m
  -819
  -1,259
  -1,877
  -2,720
  -3,835
  -5,271
  -7,075
  -9,291
  -11,959
  -15,110
  -18,745
  -22,930
  -27,654
  -32,918
  -38,722
  -45,061
  -51,924
  -59,302
  -67,182
  -75,553
  -84,403
  -93,722
  -103,505
  -113,746
  -124,444
  -135,599
  -147,218
  -159,306
  -171,875
  -184,940
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
  -819
  -1,259
  -1,877
  -2,720
  -3,835
  -5,271
  -7,075
  -9,291
  -11,959
  -15,110
  -18,745
  -22,930
  -27,654
  -32,918
  -38,722
  -45,061
  -51,924
  -59,302
  -67,182
  -75,553
  -84,403
  -93,722
  -103,505
  -113,746
  -124,444
  -135,599
  -147,218
  -159,306
  -171,875
  -184,940

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
  1,600
  2,472
  3,697
  5,364
  7,568
  10,404
  13,965
  18,337
  23,595
  29,803
  37,009
  45,247
  54,537
  64,889
  76,297
  88,752
  102,235
  116,724
  132,197
  148,628
  165,998
  184,288
  203,483
  223,577
  244,564
  266,449
  289,240
  312,952
  337,608
  363,234
Adjusted assets (=assets-cash), $m
  1,600
  2,472
  3,697
  5,364
  7,568
  10,404
  13,965
  18,337
  23,595
  29,803
  37,009
  45,247
  54,537
  64,889
  76,297
  88,752
  102,235
  116,724
  132,197
  148,628
  165,998
  184,288
  203,483
  223,577
  244,564
  266,449
  289,240
  312,952
  337,608
  363,234
Revenue / Adjusted assets
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
  0.055
Average production assets, $m
  380
  586
  877
  1,272
  1,795
  2,468
  3,313
  4,350
  5,597
  7,070
  8,779
  10,733
  12,937
  15,393
  18,099
  21,053
  24,252
  27,689
  31,359
  35,257
  39,377
  43,716
  48,269
  53,036
  58,014
  63,206
  68,612
  74,237
  80,086
  86,165
Working capital, $m
  -180
  -279
  -417
  -605
  -853
  -1,173
  -1,575
  -2,068
  -2,660
  -3,360
  -4,173
  -5,102
  -6,149
  -7,316
  -8,603
  -10,007
  -11,527
  -13,161
  -14,905
  -16,758
  -18,716
  -20,778
  -22,943
  -25,208
  -27,575
  -30,042
  -32,612
  -35,285
  -38,065
  -40,955
Total debt, $m
  365
  676
  1,112
  1,705
  2,490
  3,499
  4,767
  6,324
  8,196
  10,405
  12,971
  15,903
  19,211
  22,896
  26,957
  31,391
  36,191
  41,349
  46,858
  52,707
  58,891
  65,402
  72,236
  79,389
  86,860
  94,651
  102,765
  111,207
  119,984
  129,107
Total liabilities, $m
  570
  880
  1,316
  1,910
  2,694
  3,704
  4,972
  6,528
  8,400
  10,610
  13,175
  16,108
  19,415
  23,100
  27,162
  31,596
  36,396
  41,554
  47,062
  52,912
  59,095
  65,606
  72,440
  79,593
  87,065
  94,856
  102,969
  111,411
  120,188
  129,311
Total equity, $m
  1,030
  1,592
  2,381
  3,454
  4,874
  6,700
  8,994
  11,809
  15,195
  19,193
  23,834
  29,139
  35,122
  41,788
  49,136
  57,156
  65,839
  75,171
  85,135
  95,717
  106,903
  118,681
  131,043
  143,983
  157,499
  171,593
  186,270
  201,541
  217,420
  233,923
Total liabilities and equity, $m
  1,600
  2,472
  3,697
  5,364
  7,568
  10,404
  13,966
  18,337
  23,595
  29,803
  37,009
  45,247
  54,537
  64,888
  76,298
  88,752
  102,235
  116,725
  132,197
  148,629
  165,998
  184,287
  203,483
  223,576
  244,564
  266,449
  289,239
  312,952
  337,608
  363,234
Debt-to-equity ratio
  0.350
  0.420
  0.470
  0.490
  0.510
  0.520
  0.530
  0.540
  0.540
  0.540
  0.540
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
  0.550
Adjusted equity ratio
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644
  0.644

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -819
  -1,259
  -1,877
  -2,720
  -3,835
  -5,271
  -7,075
  -9,291
  -11,959
  -15,110
  -18,745
  -22,930
  -27,654
  -32,918
  -38,722
  -45,061
  -51,924
  -59,302
  -67,182
  -75,553
  -84,403
  -93,722
  -103,505
  -113,746
  -124,444
  -135,599
  -147,218
  -159,306
  -171,875
  -184,940
Depreciation, amort., depletion, $m
  51
  65
  85
  112
  148
  194
  252
  323
  408
  509
  601
  735
  886
  1,054
  1,240
  1,442
  1,661
  1,896
  2,148
  2,415
  2,697
  2,994
  3,306
  3,633
  3,974
  4,329
  4,699
  5,085
  5,485
  5,902
Funds from operations, $m
  -768
  -1,194
  -1,793
  -2,608
  -3,687
  -5,077
  -6,823
  -8,969
  -11,551
  -14,601
  -18,143
  -22,195
  -26,767
  -31,864
  -37,482
  -43,619
  -50,263
  -57,406
  -65,034
  -73,138
  -81,706
  -90,728
  -100,199
  -110,114
  -120,470
  -131,270
  -142,518
  -154,221
  -166,390
  -179,038
Change in working capital, $m
  -68
  -98
  -138
  -188
  -248
  -320
  -402
  -493
  -593
  -700
  -812
  -929
  -1,048
  -1,167
  -1,286
  -1,404
  -1,520
  -1,634
  -1,744
  -1,853
  -1,958
  -2,062
  -2,164
  -2,266
  -2,366
  -2,467
  -2,570
  -2,674
  -2,780
  -2,889
Cash from operations, $m
  -701
  -1,096
  -1,655
  -2,420
  -3,439
  -4,757
  -6,422
  -8,476
  -10,958
  -13,901
  -17,331
  -21,267
  -25,720
  -30,696
  -36,196
  -42,214
  -48,743
  -55,772
  -63,290
  -71,285
  -79,747
  -88,666
  -98,035
  -107,848
  -118,104
  -128,803
  -139,948
  -151,548
  -163,610
  -176,149
Maintenance CAPEX, $m
  -16
  -26
  -40
  -60
  -87
  -123
  -169
  -227
  -298
  -383
  -484
  -601
  -735
  -886
  -1,054
  -1,240
  -1,442
  -1,661
  -1,896
  -2,148
  -2,415
  -2,697
  -2,994
  -3,306
  -3,633
  -3,974
  -4,329
  -4,699
  -5,085
  -5,485
New CAPEX, $m
  -142
  -207
  -291
  -395
  -523
  -673
  -845
  -1,037
  -1,247
  -1,473
  -1,709
  -1,954
  -2,204
  -2,455
  -2,706
  -2,954
  -3,198
  -3,437
  -3,670
  -3,898
  -4,120
  -4,339
  -4,554
  -4,766
  -4,979
  -5,191
  -5,406
  -5,625
  -5,849
  -6,079
Cash from investing activities, $m
  -158
  -233
  -331
  -455
  -610
  -796
  -1,014
  -1,264
  -1,545
  -1,856
  -2,193
  -2,555
  -2,939
  -3,341
  -3,760
  -4,194
  -4,640
  -5,098
  -5,566
  -6,046
  -6,535
  -7,036
  -7,548
  -8,072
  -8,612
  -9,165
  -9,735
  -10,324
  -10,934
  -11,564
Free cash flow, $m
  -859
  -1,329
  -1,985
  -2,876
  -4,049
  -5,553
  -7,436
  -9,740
  -12,503
  -15,757
  -19,524
  -23,822
  -28,659
  -34,038
  -39,957
  -46,408
  -53,383
  -60,870
  -68,857
  -77,331
  -86,282
  -95,702
  -105,582
  -115,921
  -126,715
  -137,968
  -149,684
  -161,872
  -174,543
  -187,713
Issuance/(repayment) of debt, $m
  212
  310
  436
  593
  785
  1,010
  1,268
  1,556
  1,872
  2,210
  2,565
  2,933
  3,308
  3,685
  4,062
  4,434
  4,800
  5,158
  5,508
  5,850
  6,184
  6,511
  6,834
  7,153
  7,472
  7,791
  8,114
  8,442
  8,777
  9,123
Issuance/(repurchase) of shares, $m
  1,203
  1,821
  2,666
  3,794
  5,254
  7,097
  9,368
  12,107
  15,345
  19,107
  23,385
  28,236
  33,637
  39,584
  46,069
  53,081
  60,607
  68,633
  77,146
  86,135
  95,589
  105,501
  115,867
  126,686
  137,960
  149,693
  161,895
  174,577
  187,754
  201,443
Cash from financing (excl. dividends), $m  
  1,415
  2,131
  3,102
  4,387
  6,039
  8,107
  10,636
  13,663
  17,217
  21,317
  25,950
  31,169
  36,945
  43,269
  50,131
  57,515
  65,407
  73,791
  82,654
  91,985
  101,773
  112,012
  122,701
  133,839
  145,432
  157,484
  170,009
  183,019
  196,531
  210,566
Total cash flow (excl. dividends), $m
  556
  802
  1,117
  1,511
  1,990
  2,554
  3,201
  3,924
  4,714
  5,560
  6,426
  7,346
  8,285
  9,231
  10,174
  11,107
  12,024
  12,921
  13,798
  14,653
  15,490
  16,310
  17,119
  17,919
  18,716
  19,516
  20,325
  21,146
  21,987
  22,853
Retained Cash Flow (-), $m
  -1,203
  -1,821
  -2,666
  -3,794
  -5,254
  -7,097
  -9,368
  -12,107
  -15,345
  -19,107
  -23,385
  -28,236
  -33,637
  -39,584
  -46,069
  -53,081
  -60,607
  -68,633
  -77,146
  -86,135
  -95,589
  -105,501
  -115,867
  -126,686
  -137,960
  -149,693
  -161,895
  -174,577
  -187,754
  -201,443
Prev. year cash balance distribution, $m
  1,239
  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
  591
  -1,018
  -1,549
  -2,282
  -3,264
  -4,543
  -6,168
  -8,183
  -10,631
  -13,547
  -16,959
  -20,889
  -25,351
  -30,353
  -35,895
  -41,975
  -48,583
  -55,712
  -63,349
  -71,481
  -80,099
  -89,191
  -98,749
  -108,767
  -119,243
  -130,177
  -141,570
  -153,430
  -165,766
  -178,590
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
  567
  -932
  -1,348
  -1,879
  -2,530
  -3,297
  -4,167
  -5,115
  -6,107
  -7,102
  -8,054
  -8,914
  -9,639
  -10,190
  -10,538
  -10,667
  -10,571
  -10,260
  -9,754
  -9,083
  -8,285
  -7,400
  -6,472
  -5,540
  -4,639
  -3,798
  -3,039
  -2,374
  -1,809
  -1,345
Current shareholders' claim on cash, %
  60.9
  37.8
  24.0
  15.5
  10.1
  6.7
  4.5
  3.1
  2.1
  1.5
  1.1
  0.7
  0.5
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

bluebird bio, Inc. is a clinical-stage biotechnology company. The Company is focused on developing gene therapies for severe diseases and cancer. With its lentiviral-based gene therapy and gene editing capabilities, it has built an integrated product platform with various applications in these areas. The Company's clinical programs in severe genetic diseases include its LentiGlobin product candidate to treat transfusion-dependent b-thalassemia and to treat severe sickle cell disease (SCD) and its Lenti-D product candidate to treat cerebral adrenoleukodystrophy (CALD). Its programs in oncology focuses on developing T cell-based immunotherapies, including chimeric antigen receptor (CAR) and T cell receptor (TCR) T cell therapies. bb2121, its lead product candidate in oncology, is a CAR T cell product candidate for the treatment of multiple myeloma. It also has discovery research programs utilizing megaTALs/homing endonuclease gene editing technologies for use across its pipeline.

FINANCIAL RATIOS  of  bluebird bio, Inc. (BLUE)

Valuation Ratios
P/E Ratio -15.3
Price to Sales 674.3
Price to Book 4.7
Price to Tangible Book
Price to Cash Flow -21.3
Price to Free Cash Flow -18.6
Growth Rates
Sales Growth Rate -57.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 300%
Cap. Spend. - 3 Yr. Gr. Rate 25.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 13.8%
Total Debt to Equity 13.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -24.9%
Ret/ On Assets - 3 Yr. Avg. -19.6%
Return On Total Capital -27.8%
Ret/ On T. Cap. - 3 Yr. Avg. -22.3%
Return On Equity -30.7%
Return On Equity - 3 Yr. Avg. -23.6%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -4233.3%
EBITDA Margin - 3 Yr. Avg. -1868.1%
Operating Margin -4466.7%
Oper. Margin - 3 Yr. Avg. -1972.6%
Pre-Tax Margin -4400%
Pre-Tax Margin - 3 Yr. Avg. -1945.6%
Net Profit Margin -4400%
Net Profit Margin - 3 Yr. Avg. -1929.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 6.6%
Payout Ratio 0%

BLUE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BLUE stock intrinsic value calculation we used $55 million for the last fiscal year's total revenue generated by bluebird bio, Inc.. The default revenue input number comes from 0001 income statement of bluebird bio, 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 BLUE stock valuation model: a) initial revenue growth rate of 60% 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 BLUE is calculated based on our internal credit rating of bluebird bio, 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 bluebird bio, 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 BLUE stock the variable cost ratio is equal to 1038.2%.

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 BLUE 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 bluebird bio, Inc..

Corporate tax rate of 27% is the nominal tax rate for bluebird bio, 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 BLUE 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 BLUE are equal to 431.3%.

Life of production assets of 14.6 years is the average useful life of capital assets used in bluebird bio, 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 BLUE is equal to -205%. 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 - $1885.07 million for bluebird bio, 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 54.923 million for bluebird bio, 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 bluebird bio, Inc. at the current share price and the inputted number of shares is $5.5 billion.

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