Intrinsic value of Endo International - ENDP

Previous Close

$11.57

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$11.57

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of ENDP 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 2.6

 

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
  3,538
  3,620
  3,713
  3,817
  3,933
  4,060
  4,198
  4,348
  4,509
  4,682
  4,867
  5,065
  5,275
  5,498
  5,736
  5,987
  6,253
  6,534
  6,832
  7,146
  7,477
  7,826
  8,194
  8,582
  8,991
  9,421
  9,874
  10,350
  10,852
  11,379
Variable operating expenses, $m
  6,585
  6,716
  6,866
  7,035
  7,221
  7,426
  7,649
  7,891
  8,151
  8,430
  7,852
  8,170
  8,510
  8,870
  9,253
  9,659
  10,088
  10,542
  11,021
  11,528
  12,062
  12,626
  13,220
  13,845
  14,504
  15,198
  15,929
  16,698
  17,506
  18,357
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
  6,585
  6,716
  6,866
  7,035
  7,221
  7,426
  7,649
  7,891
  8,151
  8,430
  7,852
  8,170
  8,510
  8,870
  9,253
  9,659
  10,088
  10,542
  11,021
  11,528
  12,062
  12,626
  13,220
  13,845
  14,504
  15,198
  15,929
  16,698
  17,506
  18,357
Operating income, $m
  -3,047
  -3,096
  -3,154
  -3,218
  -3,289
  -3,366
  -3,451
  -3,543
  -3,642
  -3,748
  -2,985
  -3,106
  -3,235
  -3,372
  -3,517
  -3,672
  -3,835
  -4,007
  -4,190
  -4,382
  -4,585
  -4,799
  -5,025
  -5,263
  -5,514
  -5,777
  -6,055
  -6,347
  -6,655
  -6,978
EBITDA, $m
  -1,637
  -1,674
  -1,717
  -1,766
  -1,819
  -1,878
  -1,942
  -2,011
  -2,086
  -2,166
  -2,251
  -2,343
  -2,440
  -2,543
  -2,653
  -2,769
  -2,892
  -3,023
  -3,160
  -3,305
  -3,459
  -3,620
  -3,790
  -3,970
  -4,159
  -4,358
  -4,567
  -4,788
  -5,020
  -5,264
Interest expense (income), $m
  0
  488
  461
  475
  492
  511
  531
  554
  578
  605
  634
  665
  698
  733
  770
  810
  852
  897
  945
  995
  1,048
  1,104
  1,163
  1,225
  1,291
  1,360
  1,432
  1,509
  1,590
  1,675
  1,764
Earnings before tax, $m
  -3,535
  -3,557
  -3,629
  -3,710
  -3,799
  -3,898
  -4,005
  -4,121
  -4,247
  -4,382
  -3,649
  -3,804
  -3,968
  -4,142
  -4,328
  -4,524
  -4,732
  -4,952
  -5,184
  -5,430
  -5,689
  -5,962
  -6,250
  -6,554
  -6,873
  -7,210
  -7,564
  -7,937
  -8,329
  -8,742
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
  -3,535
  -3,557
  -3,629
  -3,710
  -3,799
  -3,898
  -4,005
  -4,121
  -4,247
  -4,382
  -3,649
  -3,804
  -3,968
  -4,142
  -4,328
  -4,524
  -4,732
  -4,952
  -5,184
  -5,430
  -5,689
  -5,962
  -6,250
  -6,554
  -6,873
  -7,210
  -7,564
  -7,937
  -8,329
  -8,742

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
  11,873
  12,146
  12,459
  12,809
  13,197
  13,623
  14,087
  14,590
  15,131
  15,711
  16,333
  16,995
  17,701
  18,451
  19,247
  20,091
  20,984
  21,928
  22,925
  23,979
  25,090
  26,262
  27,498
  28,800
  30,171
  31,614
  33,134
  34,733
  36,415
  38,184
Adjusted assets (=assets-cash), $m
  11,873
  12,146
  12,459
  12,809
  13,197
  13,623
  14,087
  14,590
  15,131
  15,711
  16,333
  16,995
  17,701
  18,451
  19,247
  20,091
  20,984
  21,928
  22,925
  23,979
  25,090
  26,262
  27,498
  28,800
  30,171
  31,614
  33,134
  34,733
  36,415
  38,184
Revenue / Adjusted assets
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
  0.298
Average production assets, $m
  5,544
  5,672
  5,818
  5,981
  6,163
  6,362
  6,578
  6,813
  7,066
  7,337
  7,627
  7,936
  8,266
  8,616
  8,988
  9,382
  9,799
  10,239
  10,705
  11,197
  11,716
  12,264
  12,841
  13,448
  14,089
  14,763
  15,472
  16,219
  17,004
  17,831
Working capital, $m
  -1,245
  -1,274
  -1,307
  -1,344
  -1,384
  -1,429
  -1,478
  -1,530
  -1,587
  -1,648
  -1,713
  -1,783
  -1,857
  -1,935
  -2,019
  -2,107
  -2,201
  -2,300
  -2,405
  -2,515
  -2,632
  -2,755
  -2,884
  -3,021
  -3,165
  -3,316
  -3,476
  -3,643
  -3,820
  -4,005
Total debt, $m
  7,811
  8,057
  8,338
  8,654
  9,003
  9,387
  9,804
  10,256
  10,743
  11,266
  11,825
  12,421
  13,057
  13,732
  14,448
  15,207
  16,011
  16,860
  17,758
  18,706
  19,707
  20,762
  21,874
  23,045
  24,279
  25,578
  26,946
  28,385
  29,899
  31,491
Total liabilities, $m
  10,686
  10,932
  11,213
  11,528
  11,878
  12,261
  12,679
  13,131
  13,618
  14,140
  14,699
  15,296
  15,931
  16,606
  17,322
  18,082
  18,885
  19,735
  20,633
  21,581
  22,581
  23,636
  24,748
  25,920
  27,154
  28,453
  29,820
  31,259
  32,773
  34,366
Total equity, $m
  1,187
  1,215
  1,246
  1,281
  1,320
  1,362
  1,409
  1,459
  1,513
  1,571
  1,633
  1,700
  1,770
  1,845
  1,925
  2,009
  2,098
  2,193
  2,293
  2,398
  2,509
  2,626
  2,750
  2,880
  3,017
  3,161
  3,313
  3,473
  3,641
  3,818
Total liabilities and equity, $m
  11,873
  12,147
  12,459
  12,809
  13,198
  13,623
  14,088
  14,590
  15,131
  15,711
  16,332
  16,996
  17,701
  18,451
  19,247
  20,091
  20,983
  21,928
  22,926
  23,979
  25,090
  26,262
  27,498
  28,800
  30,171
  31,614
  33,133
  34,732
  36,414
  38,184
Debt-to-equity ratio
  6.580
  6.630
  6.690
  6.760
  6.820
  6.890
  6.960
  7.030
  7.100
  7.170
  7.240
  7.310
  7.380
  7.440
  7.510
  7.570
  7.630
  7.690
  7.750
  7.800
  7.850
  7.910
  7.950
  8.000
  8.050
  8.090
  8.130
  8.170
  8.210
  8.250
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
  -3,535
  -3,557
  -3,629
  -3,710
  -3,799
  -3,898
  -4,005
  -4,121
  -4,247
  -4,382
  -3,649
  -3,804
  -3,968
  -4,142
  -4,328
  -4,524
  -4,732
  -4,952
  -5,184
  -5,430
  -5,689
  -5,962
  -6,250
  -6,554
  -6,873
  -7,210
  -7,564
  -7,937
  -8,329
  -8,742
Depreciation, amort., depletion, $m
  1,410
  1,422
  1,436
  1,452
  1,469
  1,488
  1,509
  1,532
  1,556
  1,582
  733
  763
  795
  828
  864
  902
  942
  985
  1,029
  1,077
  1,127
  1,179
  1,235
  1,293
  1,355
  1,419
  1,488
  1,560
  1,635
  1,714
Funds from operations, $m
  -2,125
  -2,135
  -2,193
  -2,258
  -2,330
  -2,409
  -2,496
  -2,590
  -2,691
  -2,800
  -2,916
  -3,040
  -3,173
  -3,314
  -3,463
  -3,622
  -3,790
  -3,967
  -4,155
  -4,353
  -4,562
  -4,783
  -5,015
  -5,260
  -5,519
  -5,790
  -6,076
  -6,378
  -6,694
  -7,028
Change in working capital, $m
  -24
  -29
  -33
  -37
  -41
  -45
  -49
  -53
  -57
  -61
  -65
  -70
  -74
  -79
  -83
  -88
  -94
  -99
  -105
  -110
  -117
  -123
  -130
  -137
  -144
  -151
  -159
  -168
  -176
  -186
Cash from operations, $m
  -2,101
  -2,107
  -2,160
  -2,221
  -2,289
  -2,364
  -2,447
  -2,537
  -2,634
  -2,739
  -2,851
  -2,971
  -3,099
  -3,235
  -3,380
  -3,533
  -3,696
  -3,868
  -4,050
  -4,243
  -4,446
  -4,660
  -4,886
  -5,124
  -5,375
  -5,639
  -5,917
  -6,210
  -6,518
  -6,842
Maintenance CAPEX, $m
  -523
  -533
  -545
  -559
  -575
  -593
  -612
  -633
  -655
  -679
  -705
  -733
  -763
  -795
  -828
  -864
  -902
  -942
  -985
  -1,029
  -1,077
  -1,127
  -1,179
  -1,235
  -1,293
  -1,355
  -1,419
  -1,488
  -1,560
  -1,635
New CAPEX, $m
  -109
  -128
  -146
  -164
  -181
  -199
  -217
  -235
  -253
  -271
  -290
  -310
  -330
  -350
  -372
  -394
  -417
  -441
  -466
  -492
  -519
  -547
  -577
  -608
  -640
  -674
  -710
  -747
  -785
  -826
Cash from investing activities, $m
  -632
  -661
  -691
  -723
  -756
  -792
  -829
  -868
  -908
  -950
  -995
  -1,043
  -1,093
  -1,145
  -1,200
  -1,258
  -1,319
  -1,383
  -1,451
  -1,521
  -1,596
  -1,674
  -1,756
  -1,843
  -1,933
  -2,029
  -2,129
  -2,235
  -2,345
  -2,461
Free cash flow, $m
  -2,732
  -2,767
  -2,851
  -2,944
  -3,045
  -3,156
  -3,275
  -3,404
  -3,542
  -3,689
  -3,846
  -4,014
  -4,192
  -4,380
  -4,580
  -4,791
  -5,015
  -5,251
  -5,501
  -5,764
  -6,041
  -6,334
  -6,642
  -6,966
  -7,308
  -7,668
  -8,046
  -8,444
  -8,863
  -9,303
Issuance/(repayment) of debt, $m
  -465
  246
  281
  315
  349
  383
  418
  452
  487
  523
  559
  597
  635
  675
  716
  759
  804
  850
  898
  948
  1,000
  1,055
  1,112
  1,172
  1,234
  1,299
  1,367
  1,439
  1,514
  1,592
Issuance/(repurchase) of shares, $m
  4,237
  3,585
  3,660
  3,745
  3,838
  3,940
  4,051
  4,172
  4,301
  4,440
  3,712
  3,870
  4,038
  4,217
  4,407
  4,608
  4,821
  5,046
  5,284
  5,535
  5,800
  6,079
  6,374
  6,684
  7,010
  7,354
  7,716
  8,097
  8,498
  8,919
Cash from financing (excl. dividends), $m  
  3,772
  3,831
  3,941
  4,060
  4,187
  4,323
  4,469
  4,624
  4,788
  4,963
  4,271
  4,467
  4,673
  4,892
  5,123
  5,367
  5,625
  5,896
  6,182
  6,483
  6,800
  7,134
  7,486
  7,856
  8,244
  8,653
  9,083
  9,536
  10,012
  10,511
Total cash flow (excl. dividends), $m
  1,041
  1,063
  1,090
  1,116
  1,142
  1,168
  1,194
  1,220
  1,246
  1,273
  424
  453
  482
  512
  543
  576
  610
  645
  681
  719
  759
  800
  844
  889
  936
  986
  1,038
  1,092
  1,149
  1,208
Retained Cash Flow (-), $m
  -4,237
  -3,585
  -3,660
  -3,745
  -3,838
  -3,940
  -4,051
  -4,172
  -4,301
  -4,440
  -3,712
  -3,870
  -4,038
  -4,217
  -4,407
  -4,608
  -4,821
  -5,046
  -5,284
  -5,535
  -5,800
  -6,079
  -6,374
  -6,684
  -7,010
  -7,354
  -7,716
  -8,097
  -8,498
  -8,919
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
  -3,197
  -2,521
  -2,570
  -2,628
  -2,696
  -2,772
  -2,858
  -2,952
  -3,055
  -3,167
  -3,287
  -3,417
  -3,556
  -3,705
  -3,864
  -4,032
  -4,212
  -4,402
  -4,603
  -4,816
  -5,041
  -5,279
  -5,530
  -5,795
  -6,074
  -6,369
  -6,679
  -7,005
  -7,349
  -7,711
Discount rate, %
  11.90
  12.50
  13.12
  13.78
  14.46
  15.19
  15.95
  16.74
  17.58
  18.46
  19.38
  20.35
  21.37
  22.44
  23.56
  24.74
  25.98
  27.28
  28.64
  30.07
  31.57
  33.15
  34.81
  36.55
  38.38
  40.30
  42.31
  44.43
  46.65
  48.98
PV of cash for distribution, $m
  -2,857
  -1,992
  -1,776
  -1,569
  -1,372
  -1,187
  -1,014
  -855
  -711
  -582
  -468
  -370
  -287
  -218
  -162
  -117
  -83
  -57
  -38
  -25
  -16
  -10
  -6
  -3
  -2
  -1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  37.9
  24.2
  15.5
  9.9
  6.3
  4.1
  2.6
  1.7
  1.1
  0.7
  0.5
  0.3
  0.2
  0.2
  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
  0.0
  0.0
  0.0

Endo International plc develops, manufactures, and distributes pharmaceutical products and devices worldwide. Its U.S. Branded Pharmaceuticals segment offers chronic pain management products, such as BELBUCA, OPANA ER, and Percocet; Lidoderm for opioid analgesics; and Voltaren gel for osteoarthritis pain, as well as XIAFLEX for treating Peyronie’s and Dupuytren’s contracture diseases. This segment also provides Supprelin LA for central precocious puberty treatment; testosterone replacement therapies, such as Aveed and TESTOPEL, as well as Fortesta and Testim gels; Frova and Sumavel DosePro for migraine headaches; Valstar, a sterile solution for intravesical instillation of valrubicin; and Vantas for the palliative treatment of prostate cancer. The company’s U.S. Generic Pharmaceuticals segment provides tablets, capsules, powders, injectables, liquids, nasal sprays, ophthalmics, and transdermal patches for pain management, urology, central nervous system disorders, immunosuppression, oncology, women’s health, and cardiovascular disease markets. Its International Pharmaceuticals segment offers specialty pharmaceutical products in various therapeutic areas, including attention deficit hyperactivity disorder, pain, women’s health, and oncology; generic, branded generic, and over-the-counter products in the areas of dermatology and anti-infectives; injectables for the treatment of pain, anti-infectives, cardiovascular, and other therapeutics areas; and healthcare services, products, and solutions to hospitals, pharmacies, and practitioners, as well as for government healthcare programs. The company also provides Monarc subfascial hammock to treat female stress urinary incontinence; and Elevate transvaginal pelvic floor repair system for the treatment of pelvic organ prolapse. It sells its branded pharmaceuticals and generics directly, as well as through wholesale drug distributors. Endo International plc was founded in 1920 and is headquartered in Dublin, Ireland.

FINANCIAL RATIOS  of  Endo International (ENDP)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

ENDP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENDP stock intrinsic value calculation we used $3468.858 million for the last fiscal year's total revenue generated by Endo International. The default revenue input number comes from 0001 income statement of Endo International. 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 ENDP 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 11.9%, whose default value for ENDP is calculated based on our internal credit rating of Endo International, 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 Endo International.
    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 ENDP stock the variable cost ratio is equal to 186.6%.

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 ENDP 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 5.9% for Endo International.

Corporate tax rate of 27% is the nominal tax rate for Endo International. 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 ENDP 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 ENDP are equal to 156.7%.

Life of production assets of 10.4 years is the average useful life of capital assets used in Endo International 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 ENDP is equal to -35.2%. 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 - $484.88 million for Endo International - 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 223.791 million for Endo International 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 Endo International at the current share price and the inputted number of shares is $2.6 billion.

COMPANY NEWS

▶ Bill Miller Sees a Buying Opportunity   [Nov-20-18 05:49PM  GuruFocus.com]
▶ Managers Of This Fund Like The Outlook For Small-Cap Stocks   [Nov-15-18 02:15PM  Investor's Business Daily]
▶ Which Pharmaceutical Stocks Are Outperforming All Other Stocks?   [Nov-13-18 12:51PM  Investor's Business Daily]
▶ Endo Plans For Cellulite Drug In 2020 Here's Why Investors Balked   [Nov-08-18 04:16PM  Investor's Business Daily]
▶ Endo: 3Q Earnings Snapshot   [08:25AM  Associated Press]
▶ Q3 Earnings Preview For Endo   [Nov-07-18 01:30PM  Benzinga]
▶ Endo posts positive results from experimental cellulite treatment   [10:57AM  American City Business Journals]
▶ Knock Offs Loom For J&J's Blockbuster Why An Analyst Is Still Bullish   [Oct-29-18 04:17PM  Investor's Business Daily]
▶ Endo to Announce Third-Quarter 2018 Financial Results   [Sep-28-18 02:45PM  PR Newswire]
▶ [$$] Endo Recalls Robaxin Tablets Due to Dosing Error   [11:59AM  The Wall Street Journal]
▶ Endo once more agrees to delay FDA litigation   [Sep-24-18 12:11PM  American City Business Journals]
▶ 5 Problematic Stocks Francis Chou Dared To Buy   [Sep-14-18 10:59AM  Insider Monkey]
▶ Endo advancing experimental cellulite treatment   [11:49AM  American City Business Journals]
▶ Buy These 5 Low-Beta Stocks to Brave Market Volatility   [Aug-20-18 05:40PM  InvestorPlace]
▶ 3 Biotech Stocks That Soared This Week: Are They Buys?   [Aug-11-18 07:03AM  Motley Fool]
▶ Endo teaming up with pro golfer for hand disorder awareness campaign   [Aug-10-18 12:03PM  American City Business Journals]
▶ Company News For Aug 9, 2018   [Aug-09-18 10:28AM  Zacks]
▶ Endo: 2Q Earnings Snapshot   [07:57AM  Associated Press]
▶ Earnings Preview: Endo International   [Aug-07-18 02:52PM  Benzinga]
▶ Endo to Announce Second-Quarter 2018 Financial Results   [Jul-20-18 07:30AM  PR Newswire]

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