Intrinsic value of Bruker Corporation - BRKR

Previous Close

$41.47

  Intrinsic Value

$22.92

stock screener

  Rating & Target

sell

-45%

Previous close

$41.47

 
Intrinsic value

$22.92

 
Up/down potential

-45%

 
Rating

sell

We calculate the intrinsic value of BRKR 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 6.5

 

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, %
  4.40
  4.46
  4.51
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.97
  4.97
  4.97
Revenue, $m
  1,979
  2,068
  2,161
  2,260
  2,364
  2,474
  2,589
  2,711
  2,840
  2,975
  3,118
  3,268
  3,426
  3,592
  3,766
  3,950
  4,143
  4,346
  4,560
  4,784
  5,020
  5,267
  5,528
  5,801
  6,088
  6,390
  6,707
  7,040
  7,390
  7,757
Variable operating expenses, $m
  1,319
  1,377
  1,438
  1,502
  1,570
  1,642
  1,717
  1,797
  1,881
  1,969
  2,035
  2,133
  2,236
  2,344
  2,458
  2,578
  2,704
  2,837
  2,976
  3,123
  3,276
  3,438
  3,608
  3,786
  3,974
  4,171
  4,378
  4,595
  4,823
  5,063
Fixed operating expenses, $m
  384
  393
  401
  410
  419
  428
  438
  448
  457
  467
  478
  488
  499
  510
  521
  533
  544
  556
  569
  581
  594
  607
  620
  634
  648
  662
  677
  692
  707
  722
Total operating expenses, $m
  1,703
  1,770
  1,839
  1,912
  1,989
  2,070
  2,155
  2,245
  2,338
  2,436
  2,513
  2,621
  2,735
  2,854
  2,979
  3,111
  3,248
  3,393
  3,545
  3,704
  3,870
  4,045
  4,228
  4,420
  4,622
  4,833
  5,055
  5,287
  5,530
  5,785
Operating income, $m
  276
  298
  322
  347
  375
  404
  434
  467
  502
  539
  605
  647
  691
  737
  787
  839
  895
  953
  1,015
  1,080
  1,149
  1,222
  1,299
  1,381
  1,467
  1,557
  1,653
  1,753
  1,860
  1,972
EBITDA, $m
  351
  376
  402
  429
  459
  491
  524
  560
  598
  638
  681
  726
  774
  825
  878
  935
  995
  1,059
  1,126
  1,196
  1,271
  1,350
  1,433
  1,521
  1,614
  1,712
  1,815
  1,924
  2,039
  2,160
Interest expense (income), $m
  13
  18
  21
  24
  28
  31
  35
  39
  43
  47
  52
  56
  61
  67
  72
  78
  84
  91
  97
  104
  112
  120
  128
  137
  146
  155
  166
  176
  187
  199
  211
Earnings before tax, $m
  258
  277
  298
  320
  343
  369
  396
  424
  455
  487
  549
  585
  624
  665
  709
  755
  804
  856
  911
  969
  1,030
  1,094
  1,163
  1,235
  1,311
  1,392
  1,477
  1,566
  1,661
  1,761
Tax expense, $m
  70
  75
  80
  86
  93
  100
  107
  115
  123
  132
  148
  158
  169
  180
  191
  204
  217
  231
  246
  261
  278
  295
  314
  333
  354
  376
  399
  423
  448
  475
Net income, $m
  188
  202
  217
  233
  251
  269
  289
  310
  332
  356
  401
  427
  456
  486
  518
  551
  587
  625
  665
  707
  752
  799
  849
  901
  957
  1,016
  1,078
  1,143
  1,212
  1,285

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
  2,222
  2,321
  2,425
  2,536
  2,653
  2,776
  2,906
  3,043
  3,187
  3,339
  3,499
  3,668
  3,845
  4,031
  4,227
  4,433
  4,650
  4,878
  5,117
  5,369
  5,634
  5,912
  6,204
  6,511
  6,833
  7,172
  7,528
  7,901
  8,294
  8,706
Adjusted assets (=assets-cash), $m
  2,222
  2,321
  2,425
  2,536
  2,653
  2,776
  2,906
  3,043
  3,187
  3,339
  3,499
  3,668
  3,845
  4,031
  4,227
  4,433
  4,650
  4,878
  5,117
  5,369
  5,634
  5,912
  6,204
  6,511
  6,833
  7,172
  7,528
  7,901
  8,294
  8,706
Revenue / Adjusted assets
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
  0.891
Average production assets, $m
  475
  496
  519
  542
  567
  594
  621
  651
  682
  714
  748
  784
  822
  862
  904
  948
  994
  1,043
  1,094
  1,148
  1,205
  1,264
  1,327
  1,392
  1,461
  1,534
  1,610
  1,690
  1,774
  1,862
Working capital, $m
  420
  438
  458
  479
  501
  524
  549
  575
  602
  631
  661
  693
  726
  761
  798
  837
  878
  921
  967
  1,014
  1,064
  1,117
  1,172
  1,230
  1,291
  1,355
  1,422
  1,493
  1,567
  1,645
Total debt, $m
  395
  453
  513
  577
  645
  716
  792
  871
  955
  1,043
  1,135
  1,233
  1,335
  1,443
  1,557
  1,676
  1,802
  1,933
  2,072
  2,218
  2,371
  2,532
  2,701
  2,879
  3,065
  3,262
  3,468
  3,684
  3,911
  4,150
Total liabilities, $m
  1,286
  1,344
  1,404
  1,468
  1,536
  1,607
  1,683
  1,762
  1,845
  1,933
  2,026
  2,124
  2,226
  2,334
  2,448
  2,567
  2,692
  2,824
  2,963
  3,109
  3,262
  3,423
  3,592
  3,770
  3,956
  4,153
  4,359
  4,575
  4,802
  5,041
Total equity, $m
  935
  977
  1,021
  1,068
  1,117
  1,169
  1,223
  1,281
  1,342
  1,406
  1,473
  1,544
  1,619
  1,697
  1,780
  1,866
  1,958
  2,054
  2,154
  2,260
  2,372
  2,489
  2,612
  2,741
  2,877
  3,019
  3,169
  3,327
  3,492
  3,665
Total liabilities and equity, $m
  2,221
  2,321
  2,425
  2,536
  2,653
  2,776
  2,906
  3,043
  3,187
  3,339
  3,499
  3,668
  3,845
  4,031
  4,228
  4,433
  4,650
  4,878
  5,117
  5,369
  5,634
  5,912
  6,204
  6,511
  6,833
  7,172
  7,528
  7,902
  8,294
  8,706
Debt-to-equity ratio
  0.420
  0.460
  0.500
  0.540
  0.580
  0.610
  0.650
  0.680
  0.710
  0.740
  0.770
  0.800
  0.820
  0.850
  0.870
  0.900
  0.920
  0.940
  0.960
  0.980
  1.000
  1.020
  1.030
  1.050
  1.070
  1.080
  1.090
  1.110
  1.120
  1.130
Adjusted equity ratio
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421
  0.421

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  188
  202
  217
  233
  251
  269
  289
  310
  332
  356
  401
  427
  456
  486
  518
  551
  587
  625
  665
  707
  752
  799
  849
  901
  957
  1,016
  1,078
  1,143
  1,212
  1,285
Depreciation, amort., depletion, $m
  75
  77
  79
  82
  84
  87
  90
  93
  96
  99
  76
  79
  83
  87
  91
  96
  100
  105
  111
  116
  122
  128
  134
  141
  148
  155
  163
  171
  179
  188
Funds from operations, $m
  263
  279
  297
  315
  335
  356
  379
  403
  428
  455
  476
  507
  539
  573
  609
  647
  687
  730
  775
  823
  873
  927
  983
  1,042
  1,105
  1,171
  1,240
  1,314
  1,392
  1,473
Change in working capital, $m
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  48
  50
  53
  55
  58
  61
  64
  67
  71
  74
  78
Cash from operations, $m
  245
  261
  277
  294
  313
  333
  354
  377
  401
  426
  446
  475
  505
  538
  572
  608
  646
  687
  730
  775
  823
  874
  928
  984
  1,044
  1,107
  1,173
  1,243
  1,317
  1,395
Maintenance CAPEX, $m
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -96
  -100
  -105
  -111
  -116
  -122
  -128
  -134
  -141
  -148
  -155
  -163
  -171
  -179
New CAPEX, $m
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -49
  -51
  -54
  -57
  -59
  -62
  -66
  -69
  -72
  -76
  -80
  -84
  -88
Cash from investing activities, $m
  -66
  -69
  -72
  -76
  -80
  -83
  -88
  -92
  -97
  -101
  -106
  -112
  -117
  -123
  -129
  -135
  -142
  -149
  -156
  -165
  -173
  -181
  -190
  -200
  -210
  -220
  -231
  -243
  -255
  -267
Free cash flow, $m
  180
  191
  204
  218
  233
  249
  266
  285
  304
  325
  340
  363
  388
  415
  443
  473
  504
  538
  573
  611
  651
  693
  737
  785
  834
  887
  942
  1,001
  1,063
  1,128
Issuance/(repayment) of debt, $m
  54
  57
  61
  64
  68
  71
  75
  79
  84
  88
  93
  97
  103
  108
  113
  119
  125
  132
  139
  146
  153
  161
  169
  178
  187
  196
  206
  216
  227
  239
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  
  54
  57
  61
  64
  68
  71
  75
  79
  84
  88
  93
  97
  103
  108
  113
  119
  125
  132
  139
  146
  153
  161
  169
  178
  187
  196
  206
  216
  227
  239
Total cash flow (excl. dividends), $m
  234
  249
  265
  282
  301
  321
  342
  364
  388
  413
  432
  461
  491
  523
  556
  592
  630
  670
  712
  757
  804
  854
  907
  962
  1,021
  1,083
  1,148
  1,217
  1,290
  1,367
Retained Cash Flow (-), $m
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -78
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -129
  -136
  -143
  -150
  -157
  -165
  -174
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
  195
  207
  221
  236
  252
  269
  287
  306
  327
  349
  365
  390
  416
  444
  474
  505
  539
  574
  611
  651
  693
  737
  784
  833
  885
  940
  999
  1,060
  1,125
  1,193
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
  187
  190
  192
  194
  195
  195
  194
  191
  188
  183
  173
  166
  158
  149
  139
  128
  117
  106
  94
  83
  72
  61
  51
  42
  34
  27
  21
  16
  12
  9
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

Bruker Corporation designs and manufactures scientific instruments, and analytical and diagnostic solutions. Its segments include the Bruker BioSpin Group; the Bruker Chemicals, Applied Markets, Life Science, In-Vitro Diagnostics, Detection (CALID) Group; the Bruker Nano Group, and the Bruker Energy & Supercon Technologies (BEST) Segment. The Bruker BioSpin Group segment designs, manufactures and distributes enabling life science tools. The Bruker CALID segment designs, manufactures and distributes life science mass spectrometry instruments that can be integrated and used along with other sample preparation or chromatography instruments, as well as chemical, biological, radiological, nuclear and explosive detection products. The Bruker Nano segment designs, manufactures and distributes spectroscopy and microscopy instruments. The BEST segment develops and manufactures superconducting and non-superconducting materials and devices. It also focuses on nanomechanical testing instruments.

FINANCIAL RATIOS  of  Bruker Corporation (BRKR)

Valuation Ratios
P/E Ratio 43
Price to Sales 4.1
Price to Book 9.7
Price to Tangible Book
Price to Cash Flow 50.6
Price to Free Cash Flow 70.5
Growth Rates
Sales Growth Rate -0.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.8%
Cap. Spend. - 3 Yr. Gr. Rate -5.8%
Financial Strength
Quick Ratio 25
Current Ratio 0.2
LT Debt to Equity 57.1%
Total Debt to Equity 60.1%
Interest Coverage 15
Management Effectiveness
Return On Assets 9.3%
Ret/ On Assets - 3 Yr. Avg. 6.3%
Return On Total Capital 14.7%
Ret/ On T. Cap. - 3 Yr. Avg. 9.8%
Return On Equity 21.8%
Return On Equity - 3 Yr. Avg. 14.2%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 46.1%
Gross Margin - 3 Yr. Avg. 44%
EBITDA Margin 15.2%
EBITDA Margin - 3 Yr. Avg. 12.2%
Operating Margin 11.5%
Oper. Margin - 3 Yr. Avg. 8.8%
Pre-Tax Margin 11%
Pre-Tax Margin - 3 Yr. Avg. 8.2%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 6.3%
Effective Tax Rate 12.9%
Eff/ Tax Rate - 3 Yr. Avg. 23.8%
Payout Ratio 16.9%

BRKR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BRKR stock intrinsic value calculation we used $1896 million for the last fiscal year's total revenue generated by Bruker Corporation. The default revenue input number comes from 0001 income statement of Bruker 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 BRKR stock valuation model: a) initial revenue growth rate of 4.4% 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 BRKR is calculated based on our internal credit rating of Bruker 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 Bruker 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 BRKR stock the variable cost ratio is equal to 66.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $376 million in the base year in the intrinsic value calculation for BRKR 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 Bruker Corporation.

Corporate tax rate of 27% is the nominal tax rate for Bruker 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 BRKR 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 BRKR are equal to 24%.

Life of production assets of 9.9 years is the average useful life of capital assets used in Bruker 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 BRKR is equal to 21.2%. 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 - $896.6 million for Bruker 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 156.676 million for Bruker 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 Bruker Corporation at the current share price and the inputted number of shares is $6.5 billion.

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