Intrinsic value of Blueprint Medicines Corporation - BPMC

Previous Close

$78.58

  Intrinsic Value

$2.21

stock screener

  Rating & Target

str. sell

-97%

Previous close

$78.58

 
Intrinsic value

$2.21

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of BPMC 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 3.5

 

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, %
  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
  46
  47
  48
  50
  51
  53
  54
  56
  58
  61
  63
  66
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  106
  111
  117
  122
  128
  134
  141
  148
Variable operating expenses, $m
  231
  237
  243
  249
  257
  265
  274
  284
  294
  305
  314
  327
  341
  355
  370
  387
  404
  422
  441
  461
  483
  505
  529
  554
  581
  608
  638
  668
  701
  735
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
  298
  306
  313
  321
  331
  340
  351
  363
  374
  387
  398
  413
  429
  445
  461
  480
  500
  520
  541
  563
  587
  612
  638
  665
  695
  724
  757
  789
  825
  862
Operating income, $m
  -253
  -259
  -265
  -272
  -280
  -288
  -296
  -306
  -316
  -327
  -335
  -347
  -360
  -373
  -387
  -402
  -418
  -435
  -452
  -471
  -490
  -510
  -532
  -554
  -578
  -602
  -628
  -655
  -684
  -714
EBITDA, $m
  -246
  -251
  -257
  -264
  -272
  -280
  -288
  -298
  -307
  -318
  -329
  -341
  -353
  -367
  -380
  -395
  -411
  -427
  -444
  -462
  -481
  -501
  -522
  -544
  -567
  -591
  -616
  -643
  -671
  -700
Interest expense (income), $m
  0
  0
  -3
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  0
  0
  1
  1
  2
  2
  3
  3
  4
  5
  6
  6
  7
  8
  9
  10
  11
  12
  13
  15
  16
Earnings before tax, $m
  -253
  -256
  -263
  -270
  -278
  -286
  -295
  -305
  -315
  -326
  -335
  -348
  -361
  -375
  -390
  -405
  -422
  -439
  -457
  -476
  -496
  -518
  -540
  -563
  -588
  -613
  -640
  -669
  -698
  -730
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
  -253
  -256
  -263
  -270
  -278
  -286
  -295
  -305
  -315
  -326
  -335
  -348
  -361
  -375
  -390
  -405
  -422
  -439
  -457
  -476
  -496
  -518
  -540
  -563
  -588
  -613
  -640
  -669
  -698
  -730

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
  103
  106
  108
  112
  115
  119
  123
  127
  132
  137
  142
  148
  154
  161
  168
  175
  183
  191
  200
  209
  218
  229
  239
  251
  263
  275
  288
  302
  317
  332
Adjusted assets (=assets-cash), $m
  103
  106
  108
  112
  115
  119
  123
  127
  132
  137
  142
  148
  154
  161
  168
  175
  183
  191
  200
  209
  218
  229
  239
  251
  263
  275
  288
  302
  317
  332
Revenue / Adjusted assets
  0.447
  0.443
  0.444
  0.446
  0.443
  0.445
  0.439
  0.441
  0.439
  0.445
  0.444
  0.446
  0.442
  0.441
  0.440
  0.446
  0.443
  0.445
  0.445
  0.445
  0.445
  0.445
  0.444
  0.442
  0.445
  0.444
  0.444
  0.444
  0.445
  0.446
Average production assets, $m
  28
  28
  29
  30
  31
  32
  33
  34
  35
  36
  38
  39
  41
  43
  45
  47
  49
  51
  53
  56
  58
  61
  64
  67
  70
  73
  77
  81
  84
  89
Working capital, $m
  -61
  -62
  -64
  -66
  -68
  -70
  -72
  -75
  -78
  -81
  -84
  -87
  -91
  -95
  -99
  -103
  -108
  -112
  -118
  -123
  -129
  -135
  -141
  -148
  -155
  -162
  -170
  -178
  -187
  -196
Total debt, $m
  -28
  -26
  -23
  -21
  -18
  -14
  -11
  -7
  -3
  2
  7
  12
  18
  23
  30
  36
  43
  51
  59
  67
  75
  85
  94
  105
  115
  127
  139
  151
  164
  178
Total liabilities, $m
  93
  95
  98
  100
  103
  107
  110
  114
  119
  123
  128
  133
  139
  145
  151
  157
  164
  172
  180
  188
  197
  206
  215
  226
  236
  248
  260
  272
  285
  299
Total equity, $m
  10
  11
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
Total liabilities and equity, $m
  103
  106
  109
  111
  114
  119
  122
  127
  132
  137
  142
  148
  154
  161
  168
  174
  182
  191
  200
  209
  219
  229
  239
  251
  262
  276
  289
  302
  317
  332
Debt-to-equity ratio
  -2.720
  -2.450
  -2.170
  -1.860
  -1.540
  -1.210
  -0.870
  -0.530
  -0.190
  0.150
  0.480
  0.820
  1.140
  1.460
  1.770
  2.080
  2.370
  2.660
  2.930
  3.200
  3.460
  3.700
  3.940
  4.170
  4.390
  4.600
  4.800
  5.000
  5.180
  5.360
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
  -253
  -256
  -263
  -270
  -278
  -286
  -295
  -305
  -315
  -326
  -335
  -348
  -361
  -375
  -390
  -405
  -422
  -439
  -457
  -476
  -496
  -518
  -540
  -563
  -588
  -613
  -640
  -669
  -698
  -730
Depreciation, amort., depletion, $m
  7
  7
  8
  8
  8
  8
  8
  8
  8
  9
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  13
  13
  14
Funds from operations, $m
  -246
  -249
  -255
  -262
  -270
  -278
  -287
  -297
  -307
  -318
  -329
  -342
  -354
  -368
  -383
  -398
  -414
  -431
  -449
  -468
  -487
  -508
  -530
  -553
  -577
  -602
  -628
  -656
  -685
  -716
Change in working capital, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
Cash from operations, $m
  -245
  -247
  -253
  -260
  -268
  -276
  -285
  -294
  -304
  -315
  -326
  -338
  -351
  -364
  -379
  -394
  -409
  -426
  -444
  -462
  -482
  -502
  -523
  -546
  -570
  -595
  -621
  -648
  -677
  -707
Maintenance CAPEX, $m
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -13
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
Cash from investing activities, $m
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -6
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -12
  -12
  -13
  -13
  -13
  -14
  -15
  -16
  -17
  -17
Free cash flow, $m
  -249
  -252
  -259
  -266
  -273
  -282
  -291
  -300
  -311
  -322
  -333
  -346
  -359
  -373
  -387
  -403
  -419
  -436
  -454
  -473
  -493
  -514
  -536
  -559
  -583
  -609
  -636
  -664
  -693
  -724
Issuance/(repayment) of debt, $m
  -28
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
Issuance/(repurchase) of shares, $m
  283
  256
  263
  270
  278
  286
  295
  305
  316
  327
  336
  348
  362
  376
  390
  406
  422
  440
  458
  477
  497
  519
  541
  564
  589
  615
  642
  670
  700
  731
Cash from financing (excl. dividends), $m  
  255
  258
  265
  273
  281
  289
  299
  309
  320
  332
  341
  353
  368
  382
  396
  413
  429
  447
  466
  485
  506
  528
  551
  574
  600
  626
  654
  683
  713
  745
Total cash flow (excl. dividends), $m
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
Retained Cash Flow (-), $m
  -283
  -256
  -263
  -270
  -278
  -286
  -295
  -305
  -316
  -327
  -336
  -348
  -362
  -376
  -390
  -406
  -422
  -440
  -458
  -477
  -497
  -519
  -541
  -564
  -589
  -615
  -642
  -670
  -700
  -731
Prev. year cash balance distribution, $m
  439
  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
  161
  -250
  -256
  -263
  -270
  -278
  -287
  -296
  -306
  -317
  -328
  -340
  -353
  -367
  -381
  -396
  -412
  -429
  -446
  -465
  -484
  -505
  -526
  -549
  -573
  -597
  -624
  -651
  -680
  -710
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
  155
  -229
  -223
  -216
  -209
  -202
  -194
  -185
  -176
  -166
  -156
  -145
  -134
  -123
  -112
  -101
  -90
  -79
  -69
  -59
  -50
  -42
  -34
  -28
  -22
  -17
  -13
  -10
  -7
  -5
Current shareholders' claim on cash, %
  50.0
  12.5
  3.1
  0.8
  0.2
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  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
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Blueprint Medicines Corporation is a biopharmaceutical company. The Company focuses on patients with genomically defined diseases driven by abnormal kinase activation. It focuses on crafting drug candidates that provide clinical responses to patients without adequate treatment options. It has developed a small molecule drug pipeline in cancer and a genetic disease. Its drug candidate, BLU-285, targets KIT, including Exon 17 mutations, and targets PDGFRa, including the D842V mutation. These mutations activate receptor tyrosine kinases that are drivers of cancer and proliferative disorders, including gastrointestinal stromal tumors (GIST), and systemic mastocytosis (SM). Its drug candidate BLU-554 targets FGFR4, a kinase that is activated in a defined subset of patients with hepatocellular carcinoma (HCC), the common type of liver cancer. It is engaged in developing BLU-667, a drug candidate that targets RET, a receptor tyrosine kinase that is activated by mutations or translocations.

FINANCIAL RATIOS  of  Blueprint Medicines Corporation (BPMC)

Valuation Ratios
P/E Ratio -35.7
Price to Sales 92.9
Price to Book 12.2
Price to Tangible Book
Price to Cash Flow -104.1
Price to Free Cash Flow -96.4
Growth Rates
Sales Growth Rate 154.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -60%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 71
Current Ratio 0
LT Debt to Equity 0.5%
Total Debt to Equity 1.9%
Interest Coverage 0
Management Effectiveness
Return On Assets -31.6%
Ret/ On Assets - 3 Yr. Avg. -75.3%
Return On Total Capital -39.7%
Ret/ On T. Cap. - 3 Yr. Avg. -90.6%
Return On Equity -40.9%
Return On Equity - 3 Yr. Avg. -114.2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin -253.6%
EBITDA Margin - 3 Yr. Avg. -242.1%
Operating Margin -257.1%
Oper. Margin - 3 Yr. Avg. -243.3%
Pre-Tax Margin -260.7%
Pre-Tax Margin - 3 Yr. Avg. -247.5%
Net Profit Margin -260.7%
Net Profit Margin - 3 Yr. Avg. -247.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BPMC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BPMC stock intrinsic value calculation we used $45 million for the last fiscal year's total revenue generated by Blueprint Medicines Corporation. The default revenue input number comes from 0001 income statement of Blueprint Medicines Corporation. 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 BPMC 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 4.3%, whose default value for BPMC is calculated based on our internal credit rating of Blueprint Medicines Corporation, 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 Blueprint Medicines Corporation.
    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 BPMC stock the variable cost ratio is equal to 504.4%.

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 BPMC 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 9.6% for Blueprint Medicines Corporation.

Corporate tax rate of 27% is the nominal tax rate for Blueprint Medicines Corporation. 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 BPMC 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 BPMC are equal to 60%.

Life of production assets of 6.4 years is the average useful life of capital assets used in Blueprint Medicines Corporation 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 BPMC is equal to -132.7%. 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 - $419.009 million for Blueprint Medicines Corporation - 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 44.087 million for Blueprint Medicines Corporation 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 Blueprint Medicines Corporation at the current share price and the inputted number of shares is $3.5 billion.

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