Intrinsic value of Bruker - BRKR

Previous Close

$35.07

  Intrinsic Value

$21.02

stock screener

  Rating & Target

sell

-40%

Previous close

$35.07

 
Intrinsic value

$21.02

 
Up/down potential

-40%

 
Rating

sell

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

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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -0.80
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.86
  5.77
  5.69
  5.62
  5.56
  5.51
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
Revenue, $m
  1,611
  1,783
  1,964
  2,153
  2,350
  2,555
  2,769
  2,992
  3,223
  3,463
  3,712
  3,972
  4,242
  4,522
  4,814
  5,117
  5,433
  5,762
  6,105
  6,462
  6,835
  7,224
  7,630
  8,055
  8,498
  8,962
  9,447
  9,954
  10,484
  11,040
  11,621
Variable operating expenses, $m
 
  1,621
  1,784
  1,955
  2,133
  2,318
  2,511
  2,711
  2,920
  3,136
  3,361
  3,582
  3,825
  4,078
  4,341
  4,615
  4,900
  5,196
  5,506
  5,828
  6,164
  6,515
  6,882
  7,264
  7,664
  8,082
  8,520
  8,977
  9,456
  9,956
  10,481
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
  1,425
  1,621
  1,784
  1,955
  2,133
  2,318
  2,511
  2,711
  2,920
  3,136
  3,361
  3,582
  3,825
  4,078
  4,341
  4,615
  4,900
  5,196
  5,506
  5,828
  6,164
  6,515
  6,882
  7,264
  7,664
  8,082
  8,520
  8,977
  9,456
  9,956
  10,481
Operating income, $m
  186
  162
  180
  198
  218
  238
  259
  280
  303
  327
  351
  390
  416
  444
  472
  502
  533
  565
  599
  634
  671
  709
  749
  790
  834
  879
  927
  977
  1,029
  1,083
  1,140
EBITDA, $m
  240
  217
  239
  262
  286
  311
  337
  364
  392
  421
  452
  483
  516
  550
  586
  623
  661
  701
  743
  787
  832
  879
  929
  980
  1,034
  1,091
  1,150
  1,211
  1,276
  1,344
  1,414
Interest expense (income), $m
  13
  15
  19
  24
  29
  34
  39
  45
  51
  57
  63
  70
  76
  83
  91
  98
  106
  114
  123
  132
  141
  151
  161
  171
  182
  194
  206
  219
  232
  246
  260
Earnings before tax, $m
  178
  147
  160
  174
  189
  204
  219
  235
  252
  270
  288
  320
  340
  360
  382
  404
  427
  451
  476
  502
  530
  558
  588
  619
  651
  685
  721
  758
  797
  838
  880
Tax expense, $m
  23
  40
  43
  47
  51
  55
  59
  64
  68
  73
  78
  86
  92
  97
  103
  109
  115
  122
  129
  136
  143
  151
  159
  167
  176
  185
  195
  205
  215
  226
  238
Net income, $m
  154
  107
  117
  127
  138
  149
  160
  172
  184
  197
  210
  234
  248
  263
  279
  295
  312
  329
  348
  367
  387
  407
  429
  452
  476
  500
  526
  553
  582
  612
  643

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  500
  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
  1,808
  1,448
  1,594
  1,747
  1,907
  2,074
  2,248
  2,428
  2,616
  2,811
  3,013
  3,224
  3,443
  3,670
  3,907
  4,153
  4,410
  4,677
  4,955
  5,245
  5,548
  5,864
  6,194
  6,538
  6,898
  7,274
  7,668
  8,079
  8,510
  8,961
  9,433
Adjusted assets (=assets-cash), $m
  1,308
  1,448
  1,594
  1,747
  1,907
  2,074
  2,248
  2,428
  2,616
  2,811
  3,013
  3,224
  3,443
  3,670
  3,907
  4,153
  4,410
  4,677
  4,955
  5,245
  5,548
  5,864
  6,194
  6,538
  6,898
  7,274
  7,668
  8,079
  8,510
  8,961
  9,433
Revenue / Adjusted assets
  1.232
  1.231
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
  1.232
Average production assets, $m
  309
  341
  375
  411
  449
  488
  529
  571
  616
  661
  709
  759
  810
  864
  919
  977
  1,038
  1,101
  1,166
  1,234
  1,305
  1,380
  1,457
  1,538
  1,623
  1,712
  1,804
  1,901
  2,003
  2,109
  2,220
Working capital, $m
  751
  300
  330
  362
  395
  429
  465
  503
  541
  582
  624
  667
  713
  760
  809
  860
  913
  968
  1,026
  1,086
  1,148
  1,214
  1,282
  1,353
  1,428
  1,506
  1,587
  1,672
  1,761
  1,855
  1,952
Total debt, $m
  412
  510
  634
  763
  898
  1,039
  1,185
  1,337
  1,495
  1,659
  1,830
  2,008
  2,192
  2,384
  2,584
  2,791
  3,007
  3,233
  3,467
  3,712
  3,967
  4,233
  4,511
  4,802
  5,105
  5,422
  5,754
  6,101
  6,464
  6,844
  7,242
Total liabilities, $m
  1,122
  1,220
  1,344
  1,473
  1,608
  1,749
  1,895
  2,047
  2,205
  2,369
  2,540
  2,718
  2,902
  3,094
  3,294
  3,501
  3,717
  3,943
  4,177
  4,422
  4,677
  4,943
  5,221
  5,512
  5,815
  6,132
  6,464
  6,811
  7,174
  7,554
  7,952
Total equity, $m
  686
  227
  250
  274
  299
  326
  353
  381
  411
  441
  473
  506
  541
  576
  613
  652
  692
  734
  778
  824
  871
  921
  972
  1,026
  1,083
  1,142
  1,204
  1,268
  1,336
  1,407
  1,481
Total liabilities and equity, $m
  1,808
  1,447
  1,594
  1,747
  1,907
  2,075
  2,248
  2,428
  2,616
  2,810
  3,013
  3,224
  3,443
  3,670
  3,907
  4,153
  4,409
  4,677
  4,955
  5,246
  5,548
  5,864
  6,193
  6,538
  6,898
  7,274
  7,668
  8,079
  8,510
  8,961
  9,433
Debt-to-equity ratio
  0.601
  2.250
  2.530
  2.780
  3.000
  3.190
  3.360
  3.510
  3.640
  3.760
  3.870
  3.970
  4.060
  4.140
  4.210
  4.280
  4.340
  4.400
  4.460
  4.510
  4.550
  4.600
  4.640
  4.680
  4.710
  4.750
  4.780
  4.810
  4.840
  4.860
  4.890
Adjusted equity ratio
  0.142
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157
  0.157

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  154
  107
  117
  127
  138
  149
  160
  172
  184
  197
  210
  234
  248
  263
  279
  295
  312
  329
  348
  367
  387
  407
  429
  452
  476
  500
  526
  553
  582
  612
  643
Depreciation, amort., depletion, $m
  54
  55
  59
  64
  69
  73
  78
  84
  89
  95
  101
  94
  100
  107
  114
  121
  128
  136
  144
  152
  161
  170
  180
  190
  200
  211
  223
  235
  247
  260
  274
Funds from operations, $m
  42
  162
  176
  191
  206
  222
  238
  256
  273
  292
  311
  327
  348
  370
  392
  416
  440
  465
  492
  519
  548
  578
  609
  642
  676
  712
  749
  788
  829
  872
  917
Change in working capital, $m
  -89
  29
  30
  32
  33
  35
  36
  37
  39
  40
  42
  44
  45
  47
  49
  51
  53
  55
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
  89
  93
  98
Cash from operations, $m
  131
  134
  146
  159
  173
  187
  202
  218
  234
  251
  269
  284
  303
  323
  343
  365
  387
  410
  434
  459
  485
  512
  541
  571
  601
  634
  668
  703
  740
  779
  819
Maintenance CAPEX, $m
  0
  -38
  -42
  -46
  -51
  -55
  -60
  -65
  -71
  -76
  -82
  -88
  -94
  -100
  -107
  -114
  -121
  -128
  -136
  -144
  -152
  -161
  -170
  -180
  -190
  -200
  -211
  -223
  -235
  -247
  -260
New CAPEX, $m
  -37
  -32
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -93
  -97
  -101
  -106
  -111
Cash from investing activities, $m
  -22
  -70
  -77
  -82
  -89
  -94
  -101
  -107
  -115
  -122
  -130
  -138
  -146
  -154
  -163
  -172
  -181
  -191
  -201
  -212
  -223
  -235
  -248
  -261
  -275
  -289
  -304
  -320
  -336
  -353
  -371
Free cash flow, $m
  109
  63
  69
  77
  85
  93
  101
  110
  120
  130
  140
  147
  158
  169
  181
  193
  206
  219
  233
  247
  262
  277
  293
  310
  327
  345
  364
  383
  404
  425
  448
Issuance/(repayment) of debt, $m
  146
  118
  124
  129
  135
  141
  146
  152
  158
  164
  171
  178
  185
  192
  200
  208
  216
  225
  235
  245
  255
  266
  278
  290
  303
  317
  332
  347
  363
  380
  398
Issuance/(repurchase) of shares, $m
  -149
  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  
  -1
  118
  124
  129
  135
  141
  146
  152
  158
  164
  171
  178
  185
  192
  200
  208
  216
  225
  235
  245
  255
  266
  278
  290
  303
  317
  332
  347
  363
  380
  398
Total cash flow (excl. dividends), $m
  101
  182
  193
  206
  219
  233
  248
  263
  278
  294
  311
  324
  342
  361
  380
  401
  422
  444
  467
  491
  517
  543
  571
  600
  630
  662
  695
  730
  767
  805
  846
Retained Cash Flow (-), $m
  40
  -21
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -59
  -62
  -65
  -68
  -71
  -74
Prev. year cash balance distribution, $m
 
  480
  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
 
  640
  170
  182
  194
  207
  220
  234
  248
  263
  279
  291
  308
  325
  343
  362
  382
  402
  424
  446
  469
  494
  519
  546
  574
  603
  634
  666
  699
  735
  771
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
 
  614
  156
  158
  160
  161
  160
  158
  155
  151
  146
  138
  131
  124
  115
  106
  97
  88
  78
  69
  60
  51
  43
  36
  29
  23
  18
  14
  11
  8
  6
Current shareholders' claim on cash, %
  100
  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 (BRKR)

Valuation Ratios
P/E Ratio 36.4
Price to Sales 3.5
Price to Book 8.2
Price to Tangible Book
Price to Cash Flow 42.8
Price to Free Cash Flow 59.6
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 $1611 million for the last fiscal year's total revenue generated by Bruker. The default revenue input number comes from 2016 income statement of Bruker. 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 10.7% 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, 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.
    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 91%.

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 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 3.8% for Bruker.

Corporate tax rate of 27% is the nominal tax rate for Bruker. 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 19.1%.

Life of production assets of 8.1 years is the average useful life of capital assets used in Bruker 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 16.8%. 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 - $686 million for Bruker - 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 155.886 million for Bruker 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 at the current share price and the inputted number of shares is $5.5 billion.

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Financial statements of BRKR
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