Intrinsic value of Express Scripts Holding - ESRX

Previous Close

$95.04

  Intrinsic Value

$139.93

stock screener

  Rating & Target

buy

+47%

Previous close

$95.04

 
Intrinsic value

$139.93

 
Up/down potential

+47%

 
Rating

buy

We calculate the intrinsic value of ESRX 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 53.4

 

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
  102,066
  104,413
  107,097
  110,109
  113,448
  117,110
  121,099
  125,416
  130,067
  135,059
  140,399
  146,097
  152,164
  158,612
  165,454
  172,705
  180,380
  188,497
  197,073
  206,128
  215,682
  225,758
  236,379
  247,570
  259,356
  271,765
  284,826
  298,571
  313,031
  328,240
Variable operating expenses, $m
  96,777
  98,908
  101,343
  104,077
  107,106
  110,430
  114,050
  117,967
  122,188
  126,718
  127,410
  132,581
  138,087
  143,938
  150,147
  156,727
  163,692
  171,058
  178,841
  187,058
  195,729
  204,873
  214,511
  224,666
  235,362
  246,623
  258,476
  270,949
  284,071
  297,873
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
  96,777
  98,908
  101,343
  104,077
  107,106
  110,430
  114,050
  117,967
  122,188
  126,718
  127,410
  132,581
  138,087
  143,938
  150,147
  156,727
  163,692
  171,058
  178,841
  187,058
  195,729
  204,873
  214,511
  224,666
  235,362
  246,623
  258,476
  270,949
  284,071
  297,873
Operating income, $m
  5,288
  5,506
  5,754
  6,033
  6,341
  6,680
  7,049
  7,449
  7,879
  8,341
  12,989
  13,516
  14,077
  14,674
  15,307
  15,978
  16,688
  17,439
  18,232
  19,070
  19,954
  20,886
  21,868
  22,904
  23,994
  25,142
  26,350
  27,622
  28,960
  30,367
EBITDA, $m
  10,373
  10,611
  10,884
  11,190
  11,530
  11,902
  12,307
  12,746
  13,219
  13,726
  14,269
  14,848
  15,464
  16,120
  16,815
  17,552
  18,332
  19,157
  20,028
  20,948
  21,920
  22,944
  24,023
  25,160
  26,358
  27,619
  28,947
  30,343
  31,813
  33,359
Interest expense (income), $m
  0
  865
  904
  950
  1,002
  1,061
  1,126
  1,197
  1,275
  1,359
  1,450
  1,548
  1,652
  1,763
  1,881
  2,007
  2,140
  2,282
  2,431
  2,590
  2,757
  2,934
  3,120
  3,316
  3,524
  3,742
  3,972
  4,214
  4,468
  4,737
  5,019
Earnings before tax, $m
  4,424
  4,602
  4,804
  5,030
  5,280
  5,554
  5,852
  6,173
  6,520
  6,891
  11,441
  11,864
  12,314
  12,793
  13,300
  13,837
  14,406
  15,007
  15,642
  16,313
  17,020
  17,766
  18,552
  19,380
  20,252
  21,170
  22,137
  23,153
  24,223
  25,348
Tax expense, $m
  1,194
  1,242
  1,297
  1,358
  1,426
  1,500
  1,580
  1,667
  1,760
  1,860
  3,089
  3,203
  3,325
  3,454
  3,591
  3,736
  3,890
  4,052
  4,223
  4,404
  4,595
  4,797
  5,009
  5,233
  5,468
  5,716
  5,977
  6,251
  6,540
  6,844
Net income, $m
  3,229
  3,359
  3,507
  3,672
  3,855
  4,055
  4,272
  4,507
  4,759
  5,030
  8,352
  8,661
  8,990
  9,339
  9,709
  10,101
  10,516
  10,955
  11,419
  11,908
  12,425
  12,969
  13,543
  14,147
  14,784
  15,454
  16,160
  16,902
  17,683
  18,504

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
  55,350
  56,623
  58,079
  59,712
  61,523
  63,509
  65,672
  68,013
  70,535
  73,242
  76,138
  79,228
  82,519
  86,015
  89,726
  93,658
  97,820
  102,222
  106,872
  111,783
  116,964
  122,429
  128,188
  134,257
  140,648
  147,378
  154,461
  161,915
  169,756
  178,004
Adjusted assets (=assets-cash), $m
  55,350
  56,623
  58,079
  59,712
  61,523
  63,509
  65,672
  68,013
  70,535
  73,242
  76,138
  79,228
  82,519
  86,015
  89,726
  93,658
  97,820
  102,222
  106,872
  111,783
  116,964
  122,429
  128,188
  134,257
  140,648
  147,378
  154,461
  161,915
  169,756
  178,004
Revenue / Adjusted assets
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
  1.844
Average production assets, $m
  21,026
  21,509
  22,062
  22,683
  23,370
  24,125
  24,946
  25,836
  26,794
  27,822
  28,922
  30,096
  31,346
  32,674
  34,084
  35,577
  37,158
  38,830
  40,597
  42,462
  44,431
  46,506
  48,694
  50,999
  53,427
  55,984
  58,674
  61,506
  64,484
  67,617
Working capital, $m
  -7,349
  -7,518
  -7,711
  -7,928
  -8,168
  -8,432
  -8,719
  -9,030
  -9,365
  -9,724
  -10,109
  -10,519
  -10,956
  -11,420
  -11,913
  -12,435
  -12,987
  -13,572
  -14,189
  -14,841
  -15,529
  -16,255
  -17,019
  -17,825
  -18,674
  -19,567
  -20,508
  -21,497
  -22,538
  -23,633
Total debt, $m
  16,741
  17,589
  18,559
  19,647
  20,852
  22,175
  23,616
  25,175
  26,855
  28,658
  30,586
  32,644
  34,836
  37,164
  39,636
  42,254
  45,026
  47,958
  51,055
  54,326
  57,776
  61,416
  65,252
  69,293
  73,550
  78,032
  82,749
  87,713
  92,936
  98,429
Total liabilities, $m
  36,863
  37,711
  38,680
  39,768
  40,974
  42,297
  43,737
  45,297
  46,977
  48,779
  50,708
  52,766
  54,957
  57,286
  59,757
  62,376
  65,148
  68,080
  71,177
  74,447
  77,898
  81,537
  85,373
  89,415
  93,672
  98,154
  102,871
  107,835
  113,058
  118,551
Total equity, $m
  18,487
  18,912
  19,398
  19,944
  20,549
  21,212
  21,934
  22,716
  23,559
  24,463
  25,430
  26,462
  27,561
  28,729
  29,968
  31,282
  32,672
  34,142
  35,695
  37,335
  39,066
  40,891
  42,815
  44,842
  46,977
  49,224
  51,590
  54,080
  56,699
  59,453
Total liabilities and equity, $m
  55,350
  56,623
  58,078
  59,712
  61,523
  63,509
  65,671
  68,013
  70,536
  73,242
  76,138
  79,228
  82,518
  86,015
  89,725
  93,658
  97,820
  102,222
  106,872
  111,782
  116,964
  122,428
  128,188
  134,257
  140,649
  147,378
  154,461
  161,915
  169,757
  178,004
Debt-to-equity ratio
  0.910
  0.930
  0.960
  0.990
  1.010
  1.050
  1.080
  1.110
  1.140
  1.170
  1.200
  1.230
  1.260
  1.290
  1.320
  1.350
  1.380
  1.400
  1.430
  1.460
  1.480
  1.500
  1.520
  1.550
  1.570
  1.590
  1.600
  1.620
  1.640
  1.660
Adjusted equity ratio
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3,229
  3,359
  3,507
  3,672
  3,855
  4,055
  4,272
  4,507
  4,759
  5,030
  8,352
  8,661
  8,990
  9,339
  9,709
  10,101
  10,516
  10,955
  11,419
  11,908
  12,425
  12,969
  13,543
  14,147
  14,784
  15,454
  16,160
  16,902
  17,683
  18,504
Depreciation, amort., depletion, $m
  5,084
  5,106
  5,130
  5,158
  5,188
  5,222
  5,258
  5,297
  5,340
  5,385
  1,280
  1,332
  1,387
  1,446
  1,508
  1,574
  1,644
  1,718
  1,796
  1,879
  1,966
  2,058
  2,155
  2,257
  2,364
  2,477
  2,596
  2,721
  2,853
  2,992
Funds from operations, $m
  8,314
  8,465
  8,637
  8,830
  9,043
  9,276
  9,530
  9,804
  10,099
  10,415
  9,632
  9,993
  10,377
  10,784
  11,217
  11,675
  12,160
  12,673
  13,215
  13,787
  14,391
  15,027
  15,697
  16,404
  17,148
  17,931
  18,756
  19,623
  20,536
  21,496
Change in working capital, $m
  -144
  -169
  -193
  -217
  -240
  -264
  -287
  -311
  -335
  -359
  -384
  -410
  -437
  -464
  -493
  -522
  -553
  -584
  -617
  -652
  -688
  -725
  -765
  -806
  -849
  -893
  -940
  -990
  -1,041
  -1,095
Cash from operations, $m
  8,458
  8,634
  8,830
  9,047
  9,283
  9,540
  9,817
  10,115
  10,434
  10,775
  10,016
  10,403
  10,813
  11,249
  11,710
  12,197
  12,713
  13,258
  13,833
  14,439
  15,078
  15,752
  16,462
  17,210
  17,997
  18,825
  19,696
  20,613
  21,577
  22,591
Maintenance CAPEX, $m
  -912
  -930
  -952
  -976
  -1,004
  -1,034
  -1,067
  -1,104
  -1,143
  -1,186
  -1,231
  -1,280
  -1,332
  -1,387
  -1,446
  -1,508
  -1,574
  -1,644
  -1,718
  -1,796
  -1,879
  -1,966
  -2,058
  -2,155
  -2,257
  -2,364
  -2,477
  -2,596
  -2,721
  -2,853
New CAPEX, $m
  -404
  -484
  -553
  -621
  -688
  -755
  -822
  -889
  -958
  -1,028
  -1,100
  -1,174
  -1,250
  -1,328
  -1,409
  -1,494
  -1,581
  -1,672
  -1,767
  -1,865
  -1,968
  -2,076
  -2,188
  -2,305
  -2,428
  -2,556
  -2,691
  -2,831
  -2,979
  -3,133
Cash from investing activities, $m
  -1,316
  -1,414
  -1,505
  -1,597
  -1,692
  -1,789
  -1,889
  -1,993
  -2,101
  -2,214
  -2,331
  -2,454
  -2,582
  -2,715
  -2,855
  -3,002
  -3,155
  -3,316
  -3,485
  -3,661
  -3,847
  -4,042
  -4,246
  -4,460
  -4,685
  -4,920
  -5,168
  -5,427
  -5,700
  -5,986
Free cash flow, $m
  7,141
  7,220
  7,326
  7,450
  7,592
  7,751
  7,928
  8,121
  8,332
  8,561
  7,685
  7,949
  8,232
  8,533
  8,854
  9,196
  9,558
  9,942
  10,348
  10,777
  11,231
  11,711
  12,216
  12,750
  13,312
  13,905
  14,529
  15,186
  15,877
  16,605
Issuance/(repayment) of debt, $m
  727
  848
  969
  1,088
  1,206
  1,323
  1,440
  1,559
  1,680
  1,803
  1,929
  2,058
  2,191
  2,329
  2,471
  2,619
  2,772
  2,931
  3,097
  3,270
  3,451
  3,639
  3,836
  4,042
  4,257
  4,482
  4,717
  4,964
  5,222
  5,493
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  
  727
  848
  969
  1,088
  1,206
  1,323
  1,440
  1,559
  1,680
  1,803
  1,929
  2,058
  2,191
  2,329
  2,471
  2,619
  2,772
  2,931
  3,097
  3,270
  3,451
  3,639
  3,836
  4,042
  4,257
  4,482
  4,717
  4,964
  5,222
  5,493
Total cash flow (excl. dividends), $m
  7,868
  8,068
  8,295
  8,538
  8,798
  9,074
  9,368
  9,681
  10,012
  10,364
  9,614
  10,007
  10,423
  10,862
  11,326
  11,814
  12,330
  12,873
  13,445
  14,048
  14,682
  15,350
  16,052
  16,792
  17,569
  18,386
  19,246
  20,150
  21,100
  22,098
Retained Cash Flow (-), $m
  -367
  -425
  -486
  -546
  -605
  -663
  -722
  -782
  -842
  -904
  -967
  -1,032
  -1,099
  -1,168
  -1,239
  -1,313
  -1,390
  -1,470
  -1,553
  -1,640
  -1,731
  -1,825
  -1,924
  -2,027
  -2,135
  -2,248
  -2,366
  -2,490
  -2,619
  -2,755
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
  7,501
  7,643
  7,809
  7,992
  8,193
  8,411
  8,646
  8,899
  9,170
  9,460
  8,647
  8,975
  9,324
  9,694
  10,086
  10,501
  10,940
  11,403
  11,892
  12,408
  12,952
  13,525
  14,129
  14,765
  15,434
  16,139
  16,880
  17,660
  18,480
  19,343
Discount rate, %
  5.70
  5.99
  6.28
  6.60
  6.93
  7.27
  7.64
  8.02
  8.42
  8.84
  9.28
  9.75
  10.24
  10.75
  11.29
  11.85
  12.44
  13.06
  13.72
  14.40
  15.12
  15.88
  16.67
  17.51
  18.38
  19.30
  20.27
  21.28
  22.34
  23.46
PV of cash for distribution, $m
  7,096
  6,804
  6,504
  6,190
  5,861
  5,519
  5,165
  4,800
  4,429
  4,054
  3,256
  2,939
  2,627
  2,322
  2,028
  1,750
  1,490
  1,251
  1,034
  841
  673
  528
  407
  307
  227
  164
  116
  80
  53
  35
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

Express Scripts Holding Company operates as a pharmacy benefit management (PBM) company in the United States, Canada, and Europe. It operates in two segments, PBM and Other Business Operations. The PBM segment offers clinical solutions, specialized pharmacy care, home delivery and specialty pharmacy, retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management, administration of a group purchasing organization, and consumer health and drug information services. This segment also provides Medicare, Medicaid, and health insurance marketplace products; and Express Scripts SafeGuardRxSM, a suite of solutions targeting the medication classes that pose a budgetary threat to its clients. The Other Business Operations segment distributes pharmaceuticals and medical supplies, including injectable and infusible pharmaceuticals and medications to treat specialty and rare/orphan diseases. This segment also provides consulting services, such as design, implementation, and project management for pharmaceutical and biotechnology manufacturers to collect scientific evidence to guide the use of medicines. The company serves care organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers’ compensation plans, government health programs, providers, clinics, hospitals, and others. As of December 31, 2016, it operated four automated dispensing home delivery pharmacies; one non-automated dispensing home delivery pharmacy; and one non-dispensing home delivery pharmacy, as well as various non-dispensing order processing and patient contact centers, specialty drug pharmacies, and fertility pharmacies. The company was formerly known as Aristotle Holding, Inc. and changed its name to Express Scripts Holding Company in April 2012. Express Scripts Holding Company was founded in 1986 and is headquartered in Saint Louis, Missouri.

FINANCIAL RATIOS  of  Express Scripts Holding (ESRX)

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%

ESRX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ESRX stock intrinsic value calculation we used $100064.6 million for the last fiscal year's total revenue generated by Express Scripts Holding. The default revenue input number comes from 0001 income statement of Express Scripts Holding. 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 ESRX 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 5.7%, whose default value for ESRX is calculated based on our internal credit rating of Express Scripts Holding, 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 Express Scripts Holding.
    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 ESRX stock the variable cost ratio is equal to 94.9%.

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 ESRX 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 Express Scripts Holding.

Corporate tax rate of 27% is the nominal tax rate for Express Scripts Holding. 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 ESRX 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 ESRX are equal to 20.6%.

Life of production assets of 22.6 years is the average useful life of capital assets used in Express Scripts Holding 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 ESRX is equal to -7.2%. 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 - $18119.6 million for Express Scripts Holding - 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 561.721 million for Express Scripts Holding 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 Express Scripts Holding at the current share price and the inputted number of shares is $53.4 billion.

RELATED COMPANIES Price Int.Val. Rating
UNH UnitedHealth G 266.39 561.84  str.buy
AET Aetna 205.20 153.46  sell
ANTM Anthem 274.12 368.26  buy
CVS CVS Health 79.39 125.09  str.buy
RAD Rite Aid 1.32 2.58  str.buy
HUM Humana 337.66 278.71  hold

COMPANY NEWS

▶ Department of Justice Approves Cigna-Express Scripts Deal   [Sep-18-18 12:37PM  GuruFocus.com]
▶ [$$] Stocks to Watch: FedEx, Oracle, Avon, Express Scripts   [06:49AM  The Wall Street Journal]
▶ Why Express Scripts Gained 11% in August   [Sep-10-18 11:09AM  Motley Fool]
▶ 5 Stocks With Low Price-Sales Ratios   [Aug-31-18 04:11PM  GuruFocus.com]
▶ [$$] Shareholders Approve Cigna-Express Scripts Deal   [Aug-24-18 08:19PM  The Wall Street Journal]
▶ [$$] Shareholders Approve Cigna-Express Scripts Deal   [01:07PM  The Wall Street Journal]
▶ Yahoo Finance Live: Market Movers - Aug 24th, 2018   [07:10AM  Yahoo Finance Video]
▶ Trump slams Fed chairman over interest rates   [Aug-21-18 08:47AM  Yahoo Finance]
▶ Yahoo Finance Live: Market Movers - Aug 21st, 2018   [07:20AM  Yahoo Finance Video]
▶ Tapestry, Advance Auto Parts and Wolverine rise   [Aug-14-18 04:28PM  Associated Press]
▶ Icahn won't solicit votes against Cigna-Express Scripts deal   [08:56AM  American City Business Journals]
▶ Icahn abandons fight against Express Scripts-Cigna deal   [08:01AM  American City Business Journals]
▶ [$$] M&A/activists: Carl cools it   [12:13AM  Financial Times]
▶ [$$] Icahn Backs Down on Cigna-Express Scripts Deal   [Aug-13-18 10:54PM  The Wall Street Journal]
▶ [$$] Icahn Backs Down on Cigna-Express Scripts Deal   [09:09PM  The Wall Street Journal]
▶ Express Scripts-Cigna pending merger praised by proxy advisory firms   [08:26AM  American City Business Journals]
▶ [$$] ISS Backs Cigna-Express Scripts Deal, in Blow to Carl Icahn   [Aug-10-18 07:49PM  The Wall Street Journal]
▶ [$$] ISS Backs Cigna-Express Scripts Deal   [12:36PM  The Wall Street Journal]
▶ Carl Icahn Fires Shots at Express Scripts   [Aug-09-18 10:25PM  Motley Fool]
▶ Cigna CEO defends Express Scripts acquisition   [Aug-08-18 02:53PM  American City Business Journals]
▶ Fear of Amazon fuels Icahn's disdain of Cigna-Express Scripts deal   [12:35PM  American City Business Journals]
▶ Why Carl Icahn Is Long Cigna and Short Express Scripts   [Aug-07-18 09:30PM  Motley Fool]
▶ [$$] Icahn Goes Public Against Cigna's Express Scripts Deal   [05:30PM  The Wall Street Journal]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.