Intrinsic value of Haemonetics Corporation - HAE

Previous Close

$82.12

  Intrinsic Value

$1.89

stock screener

  Rating & Target

str. sell

-98%

Previous close

$82.12

 
Intrinsic value

$1.89

 
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 4.2

 

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, %
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.11
  5.09
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
Revenue, $m
  956
  1,009
  1,066
  1,124
  1,186
  1,250
  1,317
  1,387
  1,461
  1,538
  1,618
  1,703
  1,791
  1,884
  1,981
  2,083
  2,190
  2,302
  2,420
  2,543
  2,672
  2,808
  2,950
  3,100
  3,256
  3,421
  3,593
  3,774
  3,965
  4,164
Variable operating expenses, $m
  974
  1,027
  1,082
  1,140
  1,200
  1,263
  1,329
  1,398
  1,470
  1,546
  1,588
  1,671
  1,758
  1,849
  1,944
  2,044
  2,149
  2,259
  2,374
  2,495
  2,622
  2,755
  2,895
  3,042
  3,195
  3,357
  3,526
  3,704
  3,890
  4,086
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
  974
  1,027
  1,082
  1,140
  1,200
  1,263
  1,329
  1,398
  1,470
  1,546
  1,588
  1,671
  1,758
  1,849
  1,944
  2,044
  2,149
  2,259
  2,374
  2,495
  2,622
  2,755
  2,895
  3,042
  3,195
  3,357
  3,526
  3,704
  3,890
  4,086
Operating income, $m
  -19
  -18
  -17
  -16
  -15
  -13
  -12
  -11
  -9
  -8
  30
  32
  34
  35
  37
  39
  41
  43
  45
  48
  50
  53
  55
  58
  61
  64
  67
  71
  74
  78
EBITDA, $m
  87
  92
  97
  102
  108
  114
  120
  126
  133
  140
  147
  155
  163
  172
  181
  190
  200
  210
  220
  232
  243
  256
  269
  282
  297
  312
  327
  344
  361
  379
Interest expense (income), $m
  8
  14
  15
  17
  18
  20
  22
  24
  26
  28
  30
  32
  34
  37
  39
  42
  45
  48
  51
  54
  58
  61
  65
  69
  73
  77
  82
  87
  92
  97
  102
Earnings before tax, $m
  -33
  -33
  -34
  -34
  -35
  -35
  -36
  -36
  -37
  -38
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -23
  -24
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
  -33
  -33
  -34
  -34
  -35
  -35
  -36
  -36
  -37
  -38
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -23
  -24

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
  1,307
  1,381
  1,458
  1,538
  1,622
  1,710
  1,802
  1,898
  1,998
  2,104
  2,214
  2,329
  2,451
  2,577
  2,710
  2,850
  2,996
  3,149
  3,310
  3,479
  3,656
  3,841
  4,036
  4,240
  4,455
  4,680
  4,916
  5,163
  5,423
  5,696
Adjusted assets (=assets-cash), $m
  1,307
  1,381
  1,458
  1,538
  1,622
  1,710
  1,802
  1,898
  1,998
  2,104
  2,214
  2,329
  2,451
  2,577
  2,710
  2,850
  2,996
  3,149
  3,310
  3,479
  3,656
  3,841
  4,036
  4,240
  4,455
  4,680
  4,916
  5,163
  5,423
  5,696
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
  547
  577
  609
  643
  678
  715
  753
  793
  836
  880
  926
  974
  1,025
  1,078
  1,133
  1,192
  1,253
  1,317
  1,384
  1,455
  1,529
  1,606
  1,688
  1,773
  1,863
  1,957
  2,055
  2,159
  2,268
  2,382
Working capital, $m
  160
  169
  178
  188
  198
  209
  220
  232
  244
  257
  270
  284
  299
  315
  331
  348
  366
  384
  404
  425
  446
  469
  493
  518
  544
  571
  600
  630
  662
  695
Total debt, $m
  281
  310
  340
  372
  405
  439
  475
  513
  552
  593
  637
  682
  729
  779
  831
  886
  943
  1,003
  1,066
  1,132
  1,202
  1,275
  1,351
  1,431
  1,515
  1,603
  1,696
  1,793
  1,895
  2,002
Total liabilities, $m
  512
  541
  571
  603
  636
  670
  706
  744
  783
  825
  868
  913
  961
  1,010
  1,062
  1,117
  1,174
  1,235
  1,298
  1,364
  1,433
  1,506
  1,582
  1,662
  1,746
  1,834
  1,927
  2,024
  2,126
  2,233
Total equity, $m
  795
  839
  886
  935
  986
  1,039
  1,095
  1,154
  1,215
  1,279
  1,346
  1,416
  1,490
  1,567
  1,648
  1,733
  1,822
  1,915
  2,013
  2,115
  2,223
  2,335
  2,454
  2,578
  2,708
  2,845
  2,989
  3,139
  3,297
  3,463
Total liabilities and equity, $m
  1,307
  1,380
  1,457
  1,538
  1,622
  1,709
  1,801
  1,898
  1,998
  2,104
  2,214
  2,329
  2,451
  2,577
  2,710
  2,850
  2,996
  3,150
  3,311
  3,479
  3,656
  3,841
  4,036
  4,240
  4,454
  4,679
  4,916
  5,163
  5,423
  5,696
Debt-to-equity ratio
  0.350
  0.370
  0.380
  0.400
  0.410
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
  0.500
  0.510
  0.520
  0.520
  0.530
  0.540
  0.540
  0.550
  0.550
  0.560
  0.560
  0.560
  0.570
  0.570
  0.570
  0.580
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
  -33
  -33
  -34
  -34
  -35
  -35
  -36
  -36
  -37
  -38
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -23
  -24
Depreciation, amort., depletion, $m
  106
  110
  114
  118
  123
  127
  132
  137
  143
  148
  117
  123
  130
  136
  143
  151
  159
  167
  175
  184
  193
  203
  214
  224
  236
  248
  260
  273
  287
  302
Funds from operations, $m
  73
  77
  80
  84
  88
  92
  96
  101
  105
  110
  115
  121
  126
  132
  138
  145
  152
  159
  166
  174
  182
  191
  200
  209
  219
  230
  241
  252
  264
  277
Change in working capital, $m
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
Cash from operations, $m
  65
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  107
  112
  117
  122
  128
  134
  140
  147
  154
  161
  168
  176
  185
  193
  202
  212
  222
  233
  244
Maintenance CAPEX, $m
  -65
  -69
  -73
  -77
  -81
  -86
  -90
  -95
  -100
  -106
  -111
  -117
  -123
  -130
  -136
  -143
  -151
  -159
  -167
  -175
  -184
  -193
  -203
  -214
  -224
  -236
  -248
  -260
  -273
  -287
New CAPEX, $m
  -29
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -81
  -85
  -90
  -94
  -99
  -104
  -109
  -114
Cash from investing activities, $m
  -94
  -100
  -105
  -111
  -116
  -123
  -128
  -135
  -142
  -150
  -157
  -165
  -174
  -183
  -192
  -201
  -212
  -223
  -234
  -246
  -258
  -271
  -284
  -299
  -314
  -330
  -347
  -364
  -382
  -401
Free cash flow, $m
  -30
  -32
  -34
  -36
  -39
  -41
  -44
  -47
  -49
  -52
  -56
  -59
  -62
  -66
  -70
  -74
  -78
  -83
  -87
  -92
  -97
  -103
  -109
  -115
  -121
  -127
  -134
  -142
  -149
  -157
Issuance/(repayment) of debt, $m
  27
  29
  30
  31
  33
  34
  36
  38
  39
  41
  43
  45
  47
  50
  52
  55
  57
  60
  63
  66
  69
  73
  76
  80
  84
  88
  93
  97
  102
  107
Issuance/(repurchase) of shares, $m
  75
  78
  80
  83
  86
  89
  92
  95
  98
  102
  69
  73
  77
  81
  86
  91
  96
  101
  107
  113
  119
  125
  132
  139
  147
  155
  163
  172
  181
  190
Cash from financing (excl. dividends), $m  
  102
  107
  110
  114
  119
  123
  128
  133
  137
  143
  112
  118
  124
  131
  138
  146
  153
  161
  170
  179
  188
  198
  208
  219
  231
  243
  256
  269
  283
  297
Total cash flow (excl. dividends), $m
  72
  75
  76
  78
  80
  82
  84
  86
  88
  91
  57
  59
  62
  65
  68
  71
  75
  79
  82
  86
  91
  95
  100
  105
  110
  115
  121
  127
  133
  140
Retained Cash Flow (-), $m
  -75
  -78
  -80
  -83
  -86
  -89
  -92
  -95
  -98
  -102
  -69
  -73
  -77
  -81
  -86
  -91
  -96
  -101
  -107
  -113
  -119
  -125
  -132
  -139
  -147
  -155
  -163
  -172
  -181
  -190
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
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -30
  -32
  -34
  -37
  -39
  -42
  -45
  -47
  -50
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
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -6
  -5
  -5
  -5
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  0
Current shareholders' claim on cash, %
  98.2
  96.5
  94.9
  93.3
  91.8
  90.4
  89.0
  87.6
  86.3
  85.0
  84.2
  83.4
  82.6
  81.8
  81.0
  80.2
  79.4
  78.6
  77.8
  77.0
  76.3
  75.5
  74.8
  74.0
  73.2
  72.5
  71.8
  71.0
  70.3
  69.6

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 Corporation (HAE)

Valuation Ratios
P/E Ratio -165.1
Price to Sales 4.8
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 26.8
Price to Free Cash Flow 51.1
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 $904 million for the last fiscal year's total revenue generated by Haemonetics Corporation. The default revenue input number comes from 0001 income statement of Haemonetics 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 HAE stock valuation model: a) initial revenue growth rate of 5.7% 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 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 Haemonetics 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 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 Corporation.

Corporate tax rate of 27% is the nominal tax rate for Haemonetics 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 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 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 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 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 50.986 million for Haemonetics 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 Haemonetics Corporation at the current share price and the inputted number of shares is $4.2 billion.

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