Intrinsic value of bluebird bio - BLUE

Previous Close

$143.30

  Intrinsic Value

$4.73

stock screener

  Rating & Target

str. sell

-97%

  Value-price divergence*

-163%

Previous close

$143.30

 
Intrinsic value

$4.73

 
Up/down potential

-97%

 
Rating

str. sell

 
Value-price divergence*

-163%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 2016), $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 6.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -57.14
  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
  6
  10
  15
  22
  32
  45
  62
  84
  110
  142
  179
  222
  271
  327
  389
  458
  533
  613
  700
  793
  892
  996
  1,106
  1,221
  1,341
  1,467
  1,599
  1,735
  1,878
  2,026
  2,179
Variable operating expenses, $m
 
  124
  191
  285
  413
  582
  799
  1,072
  1,408
  1,811
  2,287
  2,839
  3,470
  4,183
  4,977
  5,852
  6,807
  7,841
  8,953
  10,139
  11,400
  12,732
  14,135
  15,607
  17,148
  18,758
  20,437
  22,185
  24,003
  25,895
  27,860
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
  274
  124
  191
  285
  413
  582
  799
  1,072
  1,408
  1,811
  2,287
  2,839
  3,470
  4,183
  4,977
  5,852
  6,807
  7,841
  8,953
  10,139
  11,400
  12,732
  14,135
  15,607
  17,148
  18,758
  20,437
  22,185
  24,003
  25,895
  27,860
Operating income, $m
  -268
  -114
  -176
  -263
  -381
  -536
  -737
  -989
  -1,298
  -1,670
  -2,108
  -2,617
  -3,199
  -3,856
  -4,588
  -5,394
  -6,275
  -7,228
  -8,252
  -9,346
  -10,508
  -11,736
  -13,029
  -14,386
  -15,807
  -17,291
  -18,838
  -20,449
  -22,126
  -23,869
  -25,681
EBITDA, $m
  -258
  -98
  -152
  -228
  -330
  -466
  -640
  -859
  -1,128
  -1,452
  -1,834
  -2,277
  -2,784
  -3,356
  -3,993
  -4,695
  -5,462
  -6,291
  -7,183
  -8,135
  -9,146
  -10,215
  -11,341
  -12,522
  -13,759
  -15,050
  -16,397
  -17,799
  -19,259
  -20,776
  -22,353
Interest expense (income), $m
  0
  4
  10
  18
  29
  44
  64
  89
  121
  161
  208
  264
  329
  403
  487
  580
  683
  796
  917
  1,048
  1,187
  1,335
  1,492
  1,657
  1,830
  2,011
  2,200
  2,398
  2,603
  2,817
  3,039
Earnings before tax, $m
  -264
  -119
  -186
  -280
  -409
  -580
  -801
  -1,078
  -1,419
  -1,830
  -2,317
  -2,881
  -3,528
  -4,259
  -5,075
  -5,975
  -6,958
  -8,024
  -9,170
  -10,394
  -11,695
  -13,071
  -14,521
  -16,043
  -17,637
  -19,302
  -21,038
  -22,847
  -24,729
  -26,686
  -28,720
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
  0
Net income, $m
  -264
  -119
  -186
  -280
  -409
  -580
  -801
  -1,078
  -1,419
  -1,830
  -2,317
  -2,881
  -3,528
  -4,259
  -5,075
  -5,975
  -6,958
  -8,024
  -9,170
  -10,394
  -11,695
  -13,071
  -14,521
  -16,043
  -17,637
  -19,302
  -21,038
  -22,847
  -24,729
  -26,686
  -28,720

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  704
  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
  1,118
  686
  1,059
  1,584
  2,299
  3,243
  4,459
  5,985
  7,859
  10,112
  12,773
  15,861
  19,391
  23,373
  27,809
  32,699
  38,037
  43,815
  50,025
  56,656
  63,698
  71,142
  78,980
  87,207
  95,819
  104,813
  114,192
  123,960
  134,122
  144,689
  155,672
Adjusted assets (=assets-cash), $m
  414
  686
  1,059
  1,584
  2,299
  3,243
  4,459
  5,985
  7,859
  10,112
  12,773
  15,861
  19,391
  23,373
  27,809
  32,699
  38,037
  43,815
  50,025
  56,656
  63,698
  71,142
  78,980
  87,207
  95,819
  104,813
  114,192
  123,960
  134,122
  144,689
  155,672
Revenue / Adjusted assets
  0.014
  0.015
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
  0.014
Average production assets, $m
  142
  227
  351
  525
  762
  1,075
  1,477
  1,983
  2,604
  3,351
  4,232
  5,255
  6,425
  7,744
  9,214
  10,834
  12,603
  14,518
  16,575
  18,772
  21,105
  23,572
  26,169
  28,895
  31,748
  34,729
  37,836
  41,073
  44,440
  47,941
  51,580
Working capital, $m
  649
  -88
  -136
  -203
  -295
  -416
  -572
  -768
  -1,009
  -1,298
  -1,639
  -2,036
  -2,489
  -3,000
  -3,569
  -4,197
  -4,882
  -5,623
  -6,420
  -7,271
  -8,175
  -9,130
  -10,136
  -11,192
  -12,297
  -13,452
  -14,655
  -15,909
  -17,213
  -18,569
  -19,979
Total debt, $m
  120
  283
  508
  823
  1,253
  1,820
  2,551
  3,468
  4,594
  5,949
  7,547
  9,403
  11,525
  13,918
  16,584
  19,523
  22,731
  26,204
  29,936
  33,921
  38,153
  42,627
  47,338
  52,283
  57,458
  62,864
  68,501
  74,371
  80,479
  86,829
  93,430
Total liabilities, $m
  249
  412
  637
  952
  1,382
  1,949
  2,680
  3,597
  4,723
  6,078
  7,676
  9,532
  11,654
  14,047
  16,713
  19,652
  22,860
  26,333
  30,065
  34,050
  38,282
  42,756
  47,467
  52,412
  57,587
  62,993
  68,630
  74,500
  80,608
  86,958
  93,559
Total equity, $m
  869
  274
  423
  632
  917
  1,294
  1,779
  2,388
  3,136
  4,035
  5,096
  6,328
  7,737
  9,326
  11,096
  13,047
  15,177
  17,482
  19,960
  22,606
  25,415
  28,386
  31,513
  34,796
  38,232
  41,820
  45,563
  49,460
  53,515
  57,731
  62,113
Total liabilities and equity, $m
  1,118
  686
  1,060
  1,584
  2,299
  3,243
  4,459
  5,985
  7,859
  10,113
  12,772
  15,860
  19,391
  23,373
  27,809
  32,699
  38,037
  43,815
  50,025
  56,656
  63,697
  71,142
  78,980
  87,208
  95,819
  104,813
  114,193
  123,960
  134,123
  144,689
  155,672
Debt-to-equity ratio
  0.138
  1.030
  1.200
  1.300
  1.370
  1.410
  1.430
  1.450
  1.470
  1.470
  1.480
  1.490
  1.490
  1.490
  1.490
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
Adjusted equity ratio
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399
  0.399

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -264
  -119
  -186
  -280
  -409
  -580
  -801
  -1,078
  -1,419
  -1,830
  -2,317
  -2,881
  -3,528
  -4,259
  -5,075
  -5,975
  -6,958
  -8,024
  -9,170
  -10,394
  -11,695
  -13,071
  -14,521
  -16,043
  -17,637
  -19,302
  -21,038
  -22,847
  -24,729
  -26,686
  -28,720
Depreciation, amort., depletion, $m
  10
  16
  24
  35
  50
  71
  97
  129
  169
  217
  274
  339
  415
  500
  594
  699
  813
  937
  1,069
  1,211
  1,362
  1,521
  1,688
  1,864
  2,048
  2,241
  2,441
  2,650
  2,867
  3,093
  3,328
Funds from operations, $m
  -168
  -103
  -162
  -245
  -359
  -510
  -704
  -949
  -1,250
  -1,613
  -2,042
  -2,542
  -3,114
  -3,760
  -4,480
  -5,276
  -6,145
  -7,087
  -8,100
  -9,183
  -10,334
  -11,551
  -12,833
  -14,179
  -15,588
  -17,061
  -18,597
  -20,197
  -21,862
  -23,593
  -25,392
Change in working capital, $m
  22
  -33
  -48
  -67
  -92
  -121
  -156
  -196
  -240
  -289
  -341
  -396
  -453
  -511
  -569
  -628
  -685
  -742
  -797
  -851
  -904
  -955
  -1,006
  -1,056
  -1,105
  -1,154
  -1,204
  -1,254
  -1,304
  -1,356
  -1,410
Cash from operations, $m
  -190
  -70
  -114
  -178
  -267
  -388
  -548
  -753
  -1,009
  -1,324
  -1,701
  -2,145
  -2,660
  -3,249
  -3,911
  -4,648
  -5,460
  -6,345
  -7,303
  -8,332
  -9,430
  -10,595
  -11,827
  -13,123
  -14,483
  -15,907
  -17,393
  -18,943
  -20,557
  -22,237
  -23,982
Maintenance CAPEX, $m
  0
  -9
  -15
  -23
  -34
  -49
  -69
  -95
  -128
  -168
  -216
  -273
  -339
  -415
  -500
  -594
  -699
  -813
  -937
  -1,069
  -1,211
  -1,362
  -1,521
  -1,688
  -1,864
  -2,048
  -2,241
  -2,441
  -2,650
  -2,867
  -3,093
New CAPEX, $m
  -28
  -85
  -124
  -174
  -237
  -313
  -403
  -506
  -621
  -747
  -881
  -1,023
  -1,170
  -1,319
  -1,470
  -1,620
  -1,769
  -1,915
  -2,058
  -2,197
  -2,333
  -2,467
  -2,597
  -2,726
  -2,853
  -2,980
  -3,108
  -3,236
  -3,367
  -3,501
  -3,639
Cash from investing activities, $m
  63
  -94
  -139
  -197
  -271
  -362
  -472
  -601
  -749
  -915
  -1,097
  -1,296
  -1,509
  -1,734
  -1,970
  -2,214
  -2,468
  -2,728
  -2,995
  -3,266
  -3,544
  -3,829
  -4,118
  -4,414
  -4,717
  -5,028
  -5,349
  -5,677
  -6,017
  -6,368
  -6,732
Free cash flow, $m
  -127
  -164
  -253
  -374
  -538
  -750
  -1,020
  -1,354
  -1,758
  -2,238
  -2,798
  -3,442
  -4,169
  -4,982
  -5,880
  -6,863
  -7,928
  -9,073
  -10,297
  -11,598
  -12,974
  -14,423
  -15,945
  -17,537
  -19,201
  -20,935
  -22,742
  -24,621
  -26,574
  -28,605
  -30,714
Issuance/(repayment) of debt, $m
  0
  163
  225
  315
  429
  568
  731
  917
  1,126
  1,354
  1,599
  1,856
  2,122
  2,393
  2,666
  2,939
  3,208
  3,473
  3,732
  3,985
  4,232
  4,474
  4,711
  4,944
  5,175
  5,406
  5,637
  5,870
  6,108
  6,351
  6,601
Issuance/(repurchase) of shares, $m
  242
  227
  335
  490
  694
  957
  1,286
  1,687
  2,167
  2,729
  3,378
  4,113
  4,937
  5,848
  6,845
  7,926
  9,088
  10,329
  11,647
  13,040
  14,505
  16,042
  17,649
  19,326
  21,073
  22,891
  24,780
  26,744
  28,784
  30,902
  33,102
Cash from financing (excl. dividends), $m  
  242
  390
  560
  805
  1,123
  1,525
  2,017
  2,604
  3,293
  4,083
  4,977
  5,969
  7,059
  8,241
  9,511
  10,865
  12,296
  13,802
  15,379
  17,025
  18,737
  20,516
  22,360
  24,270
  26,248
  28,297
  30,417
  32,614
  34,892
  37,253
  39,703
Total cash flow (excl. dividends), $m
  115
  226
  307
  431
  586
  774
  996
  1,250
  1,535
  1,846
  2,178
  2,527
  2,889
  3,259
  3,631
  4,001
  4,368
  4,729
  5,082
  5,427
  5,763
  6,092
  6,415
  6,733
  7,047
  7,361
  7,676
  7,994
  8,317
  8,648
  8,988
Retained Cash Flow (-), $m
  -18
  -227
  -335
  -490
  -694
  -957
  -1,286
  -1,687
  -2,167
  -2,729
  -3,378
  -4,113
  -4,937
  -5,848
  -6,845
  -7,926
  -9,088
  -10,329
  -11,647
  -13,040
  -14,505
  -16,042
  -17,649
  -19,326
  -21,073
  -22,891
  -24,780
  -26,744
  -28,784
  -30,902
  -33,102
Prev. year cash balance distribution, $m
 
  704
  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
 
  703
  -28
  -59
  -108
  -183
  -290
  -437
  -632
  -884
  -1,200
  -1,586
  -2,047
  -2,589
  -3,214
  -3,924
  -4,720
  -5,600
  -6,565
  -7,613
  -8,742
  -9,950
  -11,234
  -12,593
  -14,025
  -15,530
  -17,105
  -18,750
  -20,467
  -22,254
  -24,114
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
 
  674
  -26
  -51
  -89
  -142
  -210
  -295
  -395
  -508
  -629
  -753
  -874
  -985
  -1,079
  -1,152
  -1,199
  -1,219
  -1,209
  -1,172
  -1,111
  -1,029
  -932
  -825
  -714
  -604
  -499
  -402
  -317
  -243
  -182
Current shareholders' claim on cash, %
  100
  84.4
  72.5
  62.8
  54.7
  48.0
  42.4
  37.6
  33.5
  30.0
  27.0
  24.4
  22.1
  20.0
  18.2
  16.6
  15.2
  14.0
  12.8
  11.8
  10.8
  10.0
  9.2
  8.5
  7.9
  7.3
  6.8
  6.3
  5.8
  5.4
  5.0

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 (BLUE)

Valuation Ratios
P/E Ratio -22.1
Price to Sales 971.8
Price to Book 6.7
Price to Tangible Book
Price to Cash Flow -30.7
Price to Free Cash Flow -26.7
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 $6 million for the last fiscal year's total revenue generated by bluebird bio. The default revenue input number comes from 2016 income statement of bluebird bio. 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, 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.
    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 1300%.

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 3.5% for bluebird bio.

Corporate tax rate of 27% is the nominal tax rate for bluebird bio. 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 2366.7%.

Life of production assets of 15.5 years is the average useful life of capital assets used in bluebird bio 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 -916.7%. 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 - $869 million for bluebird bio - 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 45.273 million for bluebird bio 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 at the current share price and the inputted number of shares is $6.5 billion.

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EDIT Editas Medicin 22.79 0.83  str.sell
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JUNO Juno Therapeut 42.88 1.99  str.sell

COMPANY NEWS

▶ bluebird bio to Present at Chardan Gene Therapy Conference   [Oct-06-17 04:16PM  Business Wire]
▶ Why bluebird bio, Inc. Stock Gained 10% in September   [Oct-03-17 10:42AM  Motley Fool]
▶ Why Bluebird's Downgrade Sent These Two Rivals Skyrocketing   [Oct-02-17 04:10PM  Investor's Business Daily]
▶ Why Biotech and Tech Will Push Stocks Higher In 4Q   [Sep-29-17 10:54AM  Investopedia]
▶ Bluebird Hits High On Bullish Report Highlighting Blood Drugs   [Sep-28-17 04:57PM  Investor's Business Daily]
▶ 3 Biotech Stocks With Major Catalysts in October   [Sep-26-17 09:32AM  Motley Fool]
▶ Juno Therapeutics Inc (JUNO) Stock: To Buy or Not to Buy?   [Sep-22-17 07:03AM  InvestorPlace]
▶ Why bluebird bio Inc Jumped Higher Today   [04:37PM  Motley Fool]
▶ Novartis: A New $475,000 Drug   [01:59PM  Barrons.com]
▶ ETF Topper: Booming Biotech   [Aug-28-17 05:39PM  Barrons.com]
▶ Is This Why bluebird bio Dipped 10.5% in July?   [Aug-09-17 08:18AM  Motley Fool]
▶ Bluebird reports 2Q loss   [Aug-04-17 02:34AM  Associated Press]
▶ Biotech still has more room to run: Technician   [Jul-25-17 05:30PM  CNBC Videos]
▶ ETFs with exposure to bluebird bio, Inc. : July 24, 2017   [Jul-24-17 02:25PM  Capital Cube]
▶ Novartis Grabs Key FDA Panel Approval Of Experimental Cancer Drug   [Jul-12-17 05:08PM  Investor's Business Daily]
▶ Can Celgene, Bluebird Keep Their Lead As Rivals Champ At The Bit?   [Jun-30-17 04:16PM  Investor's Business Daily]
▶ The Cure For Cancer? Look At Your Blood   [01:10PM  Investor's Business Daily]
▶ Bluebird Bio: Too Much Good News?   [10:40AM  Barrons.com]
▶ Blue Apron IPO Prices At 10, Low End Of Lowered Range   [Jun-28-17 05:54PM  Investor's Business Daily]
▶ Time to Take Profits in Bluebird Bio   [11:17AM  TheStreet.com]
▶ Why BlackBerry, Sysco, and bluebird bio Slumped Today   [Jun-23-17 05:01PM  Motley Fool]
▶ These Biotechs Are Leading The Sector To A 3-Month High Today   [Jun-20-17 12:57PM  Investor's Business Daily]
▶ 3 Top-Performing Biotech Stocks This Week   [Jun-16-17 07:41AM  Motley Fool]
▶ The SPDR S&P Biotech (ETF) (XBI) Is on Breakout Watch   [Jun-14-17 08:17AM  InvestorPlace]
▶ What Investors Missed in the Market Last Week   [Jun-11-17 01:33PM  Motley Fool]
▶ Bluebird Bio Appoints Two New Directors to its Board   [Jun-08-17 04:46PM  TheStreet.com]
▶ Why bluebird bio Inc. Flew Higher Again Today   [Jun-07-17 04:53PM  Motley Fool]
▶ 3 Promising Stocks to Buy Now   [08:22AM  Motley Fool]
▶ This Small Biotech Soared On Its Celgene-Partnered Trial   [Jun-06-17 04:58PM  Investor's Business Daily]
▶ Why bluebird bio Inc Flew Higher Today   [01:40PM  Motley Fool]
▶ Stocks to watch during ASCO   [Jun-02-17 12:49PM  CNBC Videos]
▶ bluebird bio to Present at Two Investor Conferences in June   [Jun-01-17 08:00AM  Business Wire]
▶ ETFs with exposure to bluebird bio, Inc. : May 22, 2017   [May-22-17 01:24PM  Capital Cube]
Financial statements of BLUE
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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