Intrinsic value of Exact Sciences Corporation - EXAS

Previous Close

$91.93

  Intrinsic Value

$0.87

stock screener

  Rating & Target

str. sell

-99%

Previous close

$91.93

 
Intrinsic value

$0.87

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of EXAS 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 11.6

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  726
  1,122
  1,678
  2,435
  3,436
  4,723
  6,340
  8,325
  10,712
  13,531
  16,802
  20,542
  24,760
  29,459
  34,639
  40,294
  46,415
  52,993
  60,017
  67,477
  75,363
  83,667
  92,381
  101,504
  111,032
  120,968
  131,315
  142,080
  153,274
  164,908
Variable operating expenses, $m
  873
  1,335
  1,985
  2,869
  4,038
  5,542
  7,430
  9,748
  12,537
  15,829
  19,625
  23,994
  28,920
  34,410
  40,460
  47,064
  54,214
  61,898
  70,102
  78,816
  88,027
  97,725
  107,905
  118,560
  129,689
  141,295
  153,380
  165,955
  179,029
  192,619
Fixed operating expenses, $m
  61
  63
  64
  65
  67
  68
  70
  71
  73
  75
  76
  78
  80
  81
  83
  85
  87
  89
  91
  93
  95
  97
  99
  101
  103
  106
  108
  110
  113
  115
Total operating expenses, $m
  934
  1,398
  2,049
  2,934
  4,105
  5,610
  7,500
  9,819
  12,610
  15,904
  19,701
  24,072
  29,000
  34,491
  40,543
  47,149
  54,301
  61,987
  70,193
  78,909
  88,122
  97,822
  108,004
  118,661
  129,792
  141,401
  153,488
  166,065
  179,142
  192,734
Operating income, $m
  -208
  -276
  -371
  -499
  -669
  -887
  -1,160
  -1,495
  -1,898
  -2,373
  -2,900
  -3,530
  -4,240
  -5,032
  -5,904
  -6,856
  -7,886
  -8,993
  -10,176
  -11,431
  -12,758
  -14,156
  -15,622
  -17,157
  -18,761
  -20,432
  -22,173
  -23,985
  -25,868
  -27,826
EBITDA, $m
  -150
  -199
  -269
  -362
  -486
  -644
  -843
  -1,086
  -1,379
  -1,724
  -2,124
  -2,581
  -3,097
  -3,672
  -4,305
  -4,996
  -5,744
  -6,547
  -7,405
  -8,316
  -9,279
  -10,293
  -11,358
  -12,472
  -13,635
  -14,848
  -16,112
  -17,426
  -18,793
  -20,213
Interest expense (income), $m
  0
  73
  66
  110
  173
  258
  371
  516
  699
  922
  1,192
  1,509
  1,878
  2,300
  2,776
  3,306
  3,890
  4,527
  5,218
  5,959
  6,752
  7,593
  8,482
  9,418
  10,401
  11,430
  12,504
  13,625
  14,791
  16,005
  17,268
Earnings before tax, $m
  -281
  -341
  -481
  -672
  -927
  -1,258
  -1,676
  -2,193
  -2,820
  -3,564
  -4,409
  -5,408
  -6,540
  -7,807
  -9,209
  -10,745
  -12,414
  -14,211
  -16,135
  -18,183
  -20,351
  -22,638
  -25,041
  -27,559
  -30,191
  -32,937
  -35,798
  -38,776
  -41,874
  -45,093
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
  -281
  -341
  -481
  -672
  -927
  -1,258
  -1,676
  -2,193
  -2,820
  -3,564
  -4,409
  -5,408
  -6,540
  -7,807
  -9,209
  -10,745
  -12,414
  -14,211
  -16,135
  -18,183
  -20,351
  -22,638
  -25,041
  -27,559
  -30,191
  -32,937
  -35,798
  -38,776
  -41,874
  -45,093

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
  859
  1,327
  1,984
  2,879
  4,061
  5,583
  7,494
  9,841
  12,662
  15,994
  19,860
  24,281
  29,267
  34,822
  40,945
  47,628
  54,864
  62,639
  70,942
  79,760
  89,082
  98,897
  109,198
  119,981
  131,244
  142,988
  155,218
  167,944
  181,175
  194,927
Adjusted assets (=assets-cash), $m
  859
  1,327
  1,984
  2,879
  4,061
  5,583
  7,494
  9,841
  12,662
  15,994
  19,860
  24,281
  29,267
  34,822
  40,945
  47,628
  54,864
  62,639
  70,942
  79,760
  89,082
  98,897
  109,198
  119,981
  131,244
  142,988
  155,218
  167,944
  181,175
  194,927
Revenue / Adjusted assets
  0.845
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
Average production assets, $m
  288
  446
  666
  967
  1,364
  1,875
  2,517
  3,305
  4,253
  5,372
  6,670
  8,155
  9,830
  11,695
  13,752
  15,997
  18,427
  21,038
  23,827
  26,788
  29,919
  33,216
  36,675
  40,297
  44,080
  48,024
  52,132
  56,406
  60,850
  65,469
Working capital, $m
  -52
  -81
  -121
  -175
  -247
  -340
  -456
  -599
  -771
  -974
  -1,210
  -1,479
  -1,783
  -2,121
  -2,494
  -2,901
  -3,342
  -3,815
  -4,321
  -4,858
  -5,426
  -6,024
  -6,651
  -7,308
  -7,994
  -8,710
  -9,455
  -10,230
  -11,036
  -11,873
Total debt, $m
  619
  1,040
  1,631
  2,436
  3,501
  4,871
  6,591
  8,702
  11,242
  14,240
  17,720
  21,699
  26,186
  31,186
  36,696
  42,711
  49,223
  56,221
  63,694
  71,630
  80,019
  88,853
  98,124
  107,829
  117,965
  128,535
  139,542
  150,995
  162,903
  175,280
Total liabilities, $m
  773
  1,194
  1,786
  2,591
  3,655
  5,025
  6,745
  8,856
  11,396
  14,394
  17,874
  21,853
  26,340
  31,340
  36,850
  42,865
  49,377
  56,375
  63,848
  71,784
  80,173
  89,007
  98,278
  107,983
  118,119
  128,689
  139,697
  151,149
  163,057
  175,434
Total equity, $m
  86
  133
  198
  288
  406
  558
  749
  984
  1,266
  1,599
  1,986
  2,428
  2,927
  3,482
  4,094
  4,763
  5,486
  6,264
  7,094
  7,976
  8,908
  9,890
  10,920
  11,998
  13,124
  14,299
  15,522
  16,794
  18,117
  19,493
Total liabilities and equity, $m
  859
  1,327
  1,984
  2,879
  4,061
  5,583
  7,494
  9,840
  12,662
  15,993
  19,860
  24,281
  29,267
  34,822
  40,944
  47,628
  54,863
  62,639
  70,942
  79,760
  89,081
  98,897
  109,198
  119,981
  131,243
  142,988
  155,219
  167,943
  181,174
  194,927
Debt-to-equity ratio
  7.200
  7.840
  8.220
  8.460
  8.620
  8.720
  8.790
  8.840
  8.880
  8.900
  8.920
  8.940
  8.950
  8.960
  8.960
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
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
  -281
  -341
  -481
  -672
  -927
  -1,258
  -1,676
  -2,193
  -2,820
  -3,564
  -4,409
  -5,408
  -6,540
  -7,807
  -9,209
  -10,745
  -12,414
  -14,211
  -16,135
  -18,183
  -20,351
  -22,638
  -25,041
  -27,559
  -30,191
  -32,937
  -35,798
  -38,776
  -41,874
  -45,093
Depreciation, amort., depletion, $m
  58
  76
  102
  137
  183
  243
  317
  409
  519
  649
  776
  948
  1,143
  1,360
  1,599
  1,860
  2,143
  2,446
  2,771
  3,115
  3,479
  3,862
  4,265
  4,686
  5,126
  5,584
  6,062
  6,559
  7,076
  7,613
Funds from operations, $m
  -223
  -265
  -379
  -535
  -744
  -1,015
  -1,359
  -1,785
  -2,301
  -2,915
  -3,633
  -4,460
  -5,397
  -6,447
  -7,610
  -8,885
  -10,271
  -11,765
  -13,365
  -15,068
  -16,872
  -18,776
  -20,776
  -22,873
  -25,065
  -27,353
  -29,736
  -32,218
  -34,798
  -37,481
Change in working capital, $m
  -20
  -29
  -40
  -54
  -72
  -93
  -116
  -143
  -172
  -203
  -236
  -269
  -304
  -338
  -373
  -407
  -441
  -474
  -506
  -537
  -568
  -598
  -627
  -657
  -686
  -715
  -745
  -775
  -806
  -838
Cash from operations, $m
  -203
  -237
  -339
  -481
  -672
  -922
  -1,242
  -1,642
  -2,129
  -2,712
  -3,398
  -4,190
  -5,094
  -6,109
  -7,237
  -8,478
  -9,830
  -11,291
  -12,859
  -14,531
  -16,304
  -18,178
  -20,149
  -22,216
  -24,379
  -26,637
  -28,991
  -31,442
  -33,992
  -36,643
Maintenance CAPEX, $m
  -21
  -34
  -52
  -77
  -112
  -159
  -218
  -293
  -384
  -495
  -625
  -776
  -948
  -1,143
  -1,360
  -1,599
  -1,860
  -2,143
  -2,446
  -2,771
  -3,115
  -3,479
  -3,862
  -4,265
  -4,686
  -5,126
  -5,584
  -6,062
  -6,559
  -7,076
New CAPEX, $m
  -108
  -157
  -221
  -300
  -397
  -511
  -642
  -788
  -948
  -1,119
  -1,299
  -1,485
  -1,675
  -1,866
  -2,056
  -2,245
  -2,430
  -2,612
  -2,789
  -2,962
  -3,131
  -3,297
  -3,460
  -3,622
  -3,783
  -3,944
  -4,108
  -4,274
  -4,444
  -4,619
Cash from investing activities, $m
  -129
  -191
  -273
  -377
  -509
  -670
  -860
  -1,081
  -1,332
  -1,614
  -1,924
  -2,261
  -2,623
  -3,009
  -3,416
  -3,844
  -4,290
  -4,755
  -5,235
  -5,733
  -6,246
  -6,776
  -7,322
  -7,887
  -8,469
  -9,070
  -9,692
  -10,336
  -11,003
  -11,695
Free cash flow, $m
  -332
  -427
  -611
  -859
  -1,181
  -1,592
  -2,102
  -2,722
  -3,461
  -4,326
  -5,321
  -6,451
  -7,716
  -9,118
  -10,654
  -12,322
  -14,120
  -16,045
  -18,094
  -20,263
  -22,550
  -24,953
  -27,471
  -30,102
  -32,847
  -35,707
  -38,683
  -41,778
  -44,995
  -48,338
Issuance/(repayment) of debt, $m
  -70
  421
  592
  805
  1,064
  1,370
  1,720
  2,112
  2,540
  2,998
  3,480
  3,979
  4,487
  4,999
  5,510
  6,015
  6,512
  6,998
  7,473
  7,936
  8,389
  8,834
  9,271
  9,705
  10,137
  10,570
  11,008
  11,453
  11,908
  12,377
Issuance/(repurchase) of shares, $m
  673
  388
  547
  762
  1,045
  1,410
  1,867
  2,428
  3,102
  3,897
  4,796
  5,850
  7,039
  8,363
  9,822
  11,414
  13,137
  14,989
  16,965
  19,065
  21,283
  23,619
  26,071
  28,637
  31,317
  34,111
  37,021
  40,049
  43,197
  46,469
Cash from financing (excl. dividends), $m  
  603
  809
  1,139
  1,567
  2,109
  2,780
  3,587
  4,540
  5,642
  6,895
  8,276
  9,829
  11,526
  13,362
  15,332
  17,429
  19,649
  21,987
  24,438
  27,001
  29,672
  32,453
  35,342
  38,342
  41,454
  44,681
  48,029
  51,502
  55,105
  58,846
Total cash flow (excl. dividends), $m
  270
  382
  527
  708
  928
  1,187
  1,485
  1,817
  2,181
  2,570
  2,955
  3,378
  3,810
  4,245
  4,678
  5,107
  5,529
  5,941
  6,344
  6,738
  7,122
  7,500
  7,871
  8,239
  8,606
  8,974
  9,345
  9,723
  10,110
  10,508
Retained Cash Flow (-), $m
  -673
  -388
  -547
  -762
  -1,045
  -1,410
  -1,867
  -2,428
  -3,102
  -3,897
  -4,796
  -5,850
  -7,039
  -8,363
  -9,822
  -11,414
  -13,137
  -14,989
  -16,965
  -19,065
  -21,283
  -23,619
  -26,071
  -28,637
  -31,317
  -34,111
  -37,021
  -40,049
  -43,197
  -46,469
Prev. year cash balance distribution, $m
  988
  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
  585
  -6
  -20
  -53
  -117
  -222
  -382
  -611
  -921
  -1,328
  -1,841
  -2,472
  -3,229
  -4,118
  -5,143
  -6,307
  -7,608
  -9,047
  -10,621
  -12,327
  -14,161
  -16,120
  -18,200
  -20,398
  -22,711
  -25,137
  -27,676
  -30,326
  -33,087
  -35,961
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
  561
  -6
  -17
  -44
  -91
  -161
  -258
  -382
  -529
  -696
  -874
  -1,055
  -1,228
  -1,383
  -1,510
  -1,603
  -1,655
  -1,666
  -1,635
  -1,566
  -1,465
  -1,338
  -1,193
  -1,039
  -883
  -733
  -594
  -469
  -361
  -271
Current shareholders' claim on cash, %
  50.0
  34.4
  24.4
  17.6
  12.9
  9.6
  7.2
  5.4
  4.1
  3.2
  2.4
  1.9
  1.5
  1.1
  0.9
  0.7
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0

Exact Sciences Corporation is a molecular diagnostics company. The Company focuses on the early detection and prevention of some forms of cancer. It offers a non-invasive screening test called Cologuard for the early detection of colorectal cancer and pre-cancer. Its Cologuard test is a stool-based deoxyribonucleic acid (sDNA) screening test, which utilizes a multi-target approach to detect deoxyribonucleic acid (DNA) and hemoglobin biomarkers associated with colorectal cancer and pre-cancer. The Cologuard test is intended for the qualitative detection of colorectal neoplasia associated DNA markers and for the presence of occult hemoglobin in human stool. It focuses on the development of additional tests for other types of cancer. It is developing a blood-based biomarker test to aid in the early detection of lung cancer in individuals with lung nodules discovered through a computerized tomography (CT) or other scan.

FINANCIAL RATIOS  of  Exact Sciences Corporation (EXAS)

Valuation Ratios
P/E Ratio -60.7
Price to Sales 102.4
Price to Book 30.3
Price to Tangible Book
Price to Cash Flow -78
Price to Free Cash Flow -69.9
Growth Rates
Sales Growth Rate 153.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -31.8%
Cap. Spend. - 3 Yr. Gr. Rate 10.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 1.5%
Total Debt to Equity 1.5%
Interest Coverage 0
Management Effectiveness
Return On Assets -45.1%
Ret/ On Assets - 3 Yr. Avg. -45.1%
Return On Total Capital -49.6%
Ret/ On T. Cap. - 3 Yr. Avg. -48.9%
Return On Equity -50.5%
Return On Equity - 3 Yr. Avg. -49.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 54.5%
Gross Margin - 3 Yr. Avg. -19%
EBITDA Margin -157.6%
EBITDA Margin - 3 Yr. Avg. -1780.7%
Operating Margin -170.7%
Oper. Margin - 3 Yr. Avg. -1860.3%
Pre-Tax Margin -168.7%
Pre-Tax Margin - 3 Yr. Avg. -1857.9%
Net Profit Margin -168.7%
Net Profit Margin - 3 Yr. Avg. -1857.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

EXAS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EXAS stock intrinsic value calculation we used $454 million for the last fiscal year's total revenue generated by Exact Sciences Corporation. The default revenue input number comes from 0001 income statement of Exact Sciences 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 EXAS stock valuation model: a) initial revenue growth rate of 60% 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 EXAS is calculated based on our internal credit rating of Exact Sciences 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 Exact Sciences 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 EXAS stock the variable cost ratio is equal to 122.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $60 million in the base year in the intrinsic value calculation for EXAS 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 10.6% for Exact Sciences Corporation.

Corporate tax rate of 27% is the nominal tax rate for Exact Sciences 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 EXAS 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 EXAS are equal to 39.7%.

Life of production assets of 8.6 years is the average useful life of capital assets used in Exact Sciences 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 EXAS 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 - $680.941 million for Exact Sciences 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 125.735 million for Exact Sciences 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 Exact Sciences Corporation at the current share price and the inputted number of shares is $11.6 billion.

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