Intrinsic value of Haemonetics - HAE

Previous Close

$106.31

  Intrinsic Value

$1.86

stock screener

  Rating & Target

str. sell

-98%

Previous close

$106.31

 
Intrinsic value

$1.86

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of HAE 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 5.5

 

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, %
  8.70
  8.33
  8.00
  7.70
  7.43
  7.18
  6.97
  6.77
  6.59
  6.43
  6.29
  6.16
  6.04
  5.94
  5.85
  5.76
  5.69
  5.62
  5.56
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
Revenue, $m
  983
  1,064
  1,150
  1,238
  1,330
  1,426
  1,525
  1,628
  1,735
  1,847
  1,963
  2,084
  2,210
  2,341
  2,478
  2,621
  2,770
  2,926
  3,088
  3,258
  3,436
  3,621
  3,816
  4,019
  4,232
  4,455
  4,688
  4,933
  5,189
  5,457
Variable operating expenses, $m
  1,001
  1,081
  1,165
  1,252
  1,342
  1,436
  1,533
  1,634
  1,740
  1,849
  1,926
  2,045
  2,169
  2,298
  2,432
  2,572
  2,718
  2,871
  3,031
  3,197
  3,371
  3,554
  3,744
  3,944
  4,153
  4,371
  4,600
  4,840
  5,092
  5,355
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
  1,001
  1,081
  1,165
  1,252
  1,342
  1,436
  1,533
  1,634
  1,740
  1,849
  1,926
  2,045
  2,169
  2,298
  2,432
  2,572
  2,718
  2,871
  3,031
  3,197
  3,371
  3,554
  3,744
  3,944
  4,153
  4,371
  4,600
  4,840
  5,092
  5,355
Operating income, $m
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -4
  -2
  37
  39
  41
  44
  46
  49
  52
  55
  58
  61
  64
  68
  71
  75
  79
  83
  88
  92
  97
  102
EBITDA, $m
  90
  97
  105
  113
  121
  130
  139
  148
  158
  168
  179
  190
  201
  213
  226
  239
  252
  267
  281
  297
  313
  330
  348
  366
  386
  406
  427
  449
  473
  497
Interest expense (income), $m
  8
  14
  16
  18
  21
  23
  26
  29
  32
  35
  38
  41
  44
  48
  52
  55
  59
  63
  68
  72
  77
  82
  87
  92
  98
  104
  110
  117
  123
  130
  138
Earnings before tax, $m
  -32
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -40
  -4
  -5
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -36
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
  -32
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -40
  -4
  -5
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -36

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
  1,344
  1,456
  1,573
  1,694
  1,819
  1,950
  2,086
  2,227
  2,374
  2,527
  2,686
  2,851
  3,023
  3,203
  3,390
  3,586
  3,790
  4,002
  4,225
  4,457
  4,700
  4,954
  5,220
  5,498
  5,789
  6,094
  6,413
  6,748
  7,098
  7,465
Adjusted assets (=assets-cash), $m
  1,344
  1,456
  1,573
  1,694
  1,819
  1,950
  2,086
  2,227
  2,374
  2,527
  2,686
  2,851
  3,023
  3,203
  3,390
  3,586
  3,790
  4,002
  4,225
  4,457
  4,700
  4,954
  5,220
  5,498
  5,789
  6,094
  6,413
  6,748
  7,098
  7,465
Revenue / Adjusted assets
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
Average production assets, $m
  562
  609
  658
  708
  761
  815
  872
  931
  993
  1,057
  1,123
  1,192
  1,264
  1,339
  1,418
  1,499
  1,585
  1,674
  1,767
  1,864
  1,965
  2,071
  2,183
  2,299
  2,421
  2,548
  2,682
  2,821
  2,968
  3,121
Working capital, $m
  164
  178
  192
  207
  222
  238
  255
  272
  290
  308
  328
  348
  369
  391
  414
  438
  463
  489
  516
  544
  574
  605
  637
  671
  707
  744
  783
  824
  867
  911
Total debt, $m
  296
  340
  385
  433
  482
  533
  586
  642
  699
  759
  822
  886
  954
  1,024
  1,098
  1,174
  1,254
  1,338
  1,425
  1,516
  1,611
  1,711
  1,815
  1,924
  2,038
  2,158
  2,283
  2,414
  2,551
  2,695
Total liabilities, $m
  527
  571
  616
  664
  713
  764
  818
  873
  931
  990
  1,053
  1,118
  1,185
  1,256
  1,329
  1,406
  1,486
  1,569
  1,656
  1,747
  1,842
  1,942
  2,046
  2,155
  2,269
  2,389
  2,514
  2,645
  2,782
  2,926
Total equity, $m
  817
  885
  956
  1,030
  1,106
  1,186
  1,268
  1,354
  1,443
  1,536
  1,633
  1,733
  1,838
  1,947
  2,061
  2,180
  2,304
  2,433
  2,569
  2,710
  2,858
  3,012
  3,174
  3,343
  3,520
  3,705
  3,899
  4,103
  4,316
  4,539
Total liabilities and equity, $m
  1,344
  1,456
  1,572
  1,694
  1,819
  1,950
  2,086
  2,227
  2,374
  2,526
  2,686
  2,851
  3,023
  3,203
  3,390
  3,586
  3,790
  4,002
  4,225
  4,457
  4,700
  4,954
  5,220
  5,498
  5,789
  6,094
  6,413
  6,748
  7,098
  7,465
Debt-to-equity ratio
  0.360
  0.380
  0.400
  0.420
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
  0.510
  0.520
  0.530
  0.530
  0.540
  0.540
  0.550
  0.550
  0.560
  0.560
  0.570
  0.570
  0.580
  0.580
  0.580
  0.590
  0.590
  0.590
  0.590
Adjusted equity ratio
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608
  0.608

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -32
  -33
  -34
  -34
  -35
  -36
  -37
  -38
  -39
  -40
  -4
  -5
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -36
Depreciation, amort., depletion, $m
  108
  114
  120
  126
  133
  140
  147
  155
  162
  171
  142
  151
  160
  170
  179
  190
  201
  212
  224
  236
  249
  262
  276
  291
  306
  323
  339
  357
  376
  395
Funds from operations, $m
  76
  81
  86
  92
  98
  104
  110
  117
  123
  131
  138
  146
  154
  162
  170
  180
  189
  199
  209
  220
  231
  243
  255
  268
  282
  296
  311
  326
  342
  359
Change in working capital, $m
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
  39
  41
  43
  45
Cash from operations, $m
  63
  67
  72
  77
  82
  88
  94
  99
  106
  112
  118
  125
  132
  140
  148
  156
  164
  173
  182
  192
  202
  212
  223
  234
  246
  259
  272
  285
  300
  315
Maintenance CAPEX, $m
  -65
  -71
  -77
  -83
  -90
  -96
  -103
  -110
  -118
  -126
  -134
  -142
  -151
  -160
  -170
  -179
  -190
  -201
  -212
  -224
  -236
  -249
  -262
  -276
  -291
  -306
  -323
  -339
  -357
  -376
New CAPEX, $m
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -61
  -64
  -66
  -69
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -97
  -102
  -106
  -111
  -116
  -122
  -127
  -133
  -140
  -147
  -154
Cash from investing activities, $m
  -110
  -118
  -126
  -134
  -143
  -151
  -160
  -169
  -179
  -190
  -200
  -211
  -223
  -235
  -248
  -261
  -275
  -290
  -305
  -321
  -338
  -355
  -373
  -392
  -413
  -433
  -456
  -479
  -504
  -530
Free cash flow, $m
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -86
  -90
  -95
  -100
  -105
  -111
  -117
  -123
  -129
  -136
  -143
  -150
  -158
  -167
  -175
  -184
  -194
  -204
  -215
Issuance/(repayment) of debt, $m
  42
  44
  46
  47
  49
  51
  53
  55
  58
  60
  62
  65
  68
  70
  73
  77
  80
  83
  87
  91
  95
  100
  104
  109
  114
  119
  125
  131
  137
  144
Issuance/(repurchase) of shares, $m
  97
  101
  104
  108
  112
  116
  120
  124
  128
  133
  101
  106
  111
  117
  123
  129
  136
  142
  150
  157
  165
  174
  183
  192
  202
  212
  223
  234
  246
  259
Cash from financing (excl. dividends), $m  
  139
  145
  150
  155
  161
  167
  173
  179
  186
  193
  163
  171
  179
  187
  196
  206
  216
  225
  237
  248
  260
  274
  287
  301
  316
  331
  348
  365
  383
  403
Total cash flow (excl. dividends), $m
  91
  94
  97
  99
  101
  104
  106
  109
  112
  115
  81
  85
  88
  92
  96
  100
  105
  109
  114
  119
  125
  130
  136
  143
  149
  156
  164
  171
  180
  188
Retained Cash Flow (-), $m
  -97
  -101
  -104
  -108
  -112
  -116
  -120
  -124
  -128
  -133
  -101
  -106
  -111
  -117
  -123
  -129
  -136
  -142
  -150
  -157
  -165
  -174
  -183
  -192
  -202
  -212
  -223
  -234
  -246
  -259
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
  -6
  -7
  -8
  -9
  -10
  -12
  -13
  -15
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -36
  -38
  -41
  -43
  -46
  -49
  -52
  -56
  -59
  -63
  -67
  -71
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
  -5
  -6
  -7
  -8
  -8
  -9
  -9
  -9
  -9
  -9
  -9
  -9
  -9
  -8
  -8
  -7
  -7
  -6
  -5
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
  -1
Current shareholders' claim on cash, %
  98.3
  96.6
  95.1
  93.6
  92.3
  91.0
  89.7
  88.6
  87.4
  86.3
  85.6
  84.8
  84.1
  83.3
  82.6
  81.9
  81.2
  80.6
  79.9
  79.2
  78.6
  77.9
  77.3
  76.6
  76.0
  75.4
  74.8
  74.2
  73.6
  73.0

Haemonetics Corporation (Haemonetics) is a healthcare company. The Company provides various products to customers involved in the processing, handling and analysis of blood. The Company's segments include Japan, EMEA, North America Plasma and All Other. Haemonetics provides plasma collection systems and software, which enable plasma fractionators to make pharmaceuticals. The Company enables plasma collection customers to source from it a range of products necessary for plasma collection and storage, including PCS brand plasma collection equipment and disposables, plasma collection containers and intravenous solutions, such as saline. Haemonetics offers automated blood component and manual whole blood collection systems to blood collection centers to collect blood products. The Company offers a range of blood management solutions. The Company has a suite of integrated software solutions, which include solutions for blood drive planning and blood collection.

FINANCIAL RATIOS  of  Haemonetics (HAE)

Valuation Ratios
P/E Ratio -213.7
Price to Sales 6.3
Price to Book 7.5
Price to Tangible Book
Price to Cash Flow 34.7
Price to Free Cash Flow 66.1
Growth Rates
Sales Growth Rate -2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25.5%
Cap. Spend. - 3 Yr. Gr. Rate 0.5%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 34.3%
Total Debt to Equity 42.6%
Interest Coverage -2
Management Effectiveness
Return On Assets -1.4%
Ret/ On Assets - 3 Yr. Avg. -1.1%
Return On Total Capital -2.4%
Ret/ On T. Cap. - 3 Yr. Avg. -1.9%
Return On Equity -3.6%
Return On Equity - 3 Yr. Avg. -2.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 42.7%
Gross Margin - 3 Yr. Avg. 45%
EBITDA Margin 8%
EBITDA Margin - 3 Yr. Avg. 9%
Operating Margin -2.3%
Oper. Margin - 3 Yr. Avg. -0.9%
Pre-Tax Margin -3%
Pre-Tax Margin - 3 Yr. Avg. -1.8%
Net Profit Margin -2.9%
Net Profit Margin - 3 Yr. Avg. -2.4%
Effective Tax Rate 3.7%
Eff/ Tax Rate - 3 Yr. Avg. 14.4%
Payout Ratio 0%

HAE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HAE stock intrinsic value calculation we used $903.923 million for the last fiscal year's total revenue generated by Haemonetics. The default revenue input number comes from 0001 income statement of Haemonetics. 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 HAE stock valuation model: a) initial revenue growth rate of 8.7% 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 HAE is calculated based on our internal credit rating of Haemonetics, 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 Haemonetics.
    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 HAE stock the variable cost ratio is equal to 102.2%.

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 HAE 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 Haemonetics.

Corporate tax rate of 27% is the nominal tax rate for Haemonetics. 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 HAE 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 HAE are equal to 57.2%.

Life of production assets of 7.9 years is the average useful life of capital assets used in Haemonetics 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 HAE is equal to 16.7%. 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 - $752.429 million for Haemonetics - 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 51.692 million for Haemonetics 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 Haemonetics at the current share price and the inputted number of shares is $5.5 billion.

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COMPANY NEWS

▶ Haemonetics: Fiscal 1Q Earnings Snapshot   [Aug-07-18 06:35AM  Associated Press]
▶ Buy These 5 Efficient Stocks for Superb Returns   [Jul-26-18 08:28AM  Zacks]
▶ Haemonetics: Fiscal 4Q Earnings Snapshot   [08:24AM  Associated Press]
▶ 5 Top Efficient Stocks to Add to Your Portfolio   [Feb-22-18 09:20AM  Zacks]
▶ Haemonetics reports 3Q loss   [Feb-06-18 06:23AM  Associated Press]
▶ Ellen M. Zane Rejoins Haemonetics Board of Directors   [Jan-25-18 08:00AM  PR Newswire]
▶ Haemonetics Shows Market Leadership With Jump To 91 RS Rating   [Nov-09-17 03:00AM  Investor's Business Daily]
▶ Haemonetics announces plans to cut 350 jobs   [08:22AM  American City Business Journals]
▶ Haemonetics tops Street 2Q forecasts   [06:21AM  Associated Press]
▶ Robert E. Abernathy Joins Haemonetics Board of Directors   [Oct-18-17 08:00AM  PR Newswire]
▶ ETFs with exposure to Haemonetics Corp. : October 9, 2017   [Oct-09-17 11:36AM  Capital Cube]
▶ Haemonetics Shows Market Leadership With Jump To 81 RS Rating   [03:00AM  Investor's Business Daily]

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