Intrinsic value of Haemonetics - HAE

Previous Close

$103.30

  Intrinsic Value

$1.69

stock screener

  Rating & Target

str. sell

-98%

Previous close

$103.30

 
Intrinsic value

$1.69

 
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 2017), $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 5.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

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
  904
  925
  948
  975
  1,004
  1,037
  1,072
  1,110
  1,152
  1,196
  1,243
  1,294
  1,347
  1,404
  1,465
  1,529
  1,597
  1,669
  1,745
  1,825
  1,910
  1,999
  2,093
  2,192
  2,296
  2,406
  2,522
  2,644
  2,772
  2,906
Variable operating expenses, $m
  946
  967
  991
  1,018
  1,048
  1,080
  1,116
  1,154
  1,195
  1,240
  1,248
  1,299
  1,353
  1,410
  1,471
  1,536
  1,604
  1,676
  1,752
  1,833
  1,918
  2,007
  2,102
  2,201
  2,306
  2,416
  2,533
  2,655
  2,783
  2,919
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
  946
  967
  991
  1,018
  1,048
  1,080
  1,116
  1,154
  1,195
  1,240
  1,248
  1,299
  1,353
  1,410
  1,471
  1,536
  1,604
  1,676
  1,752
  1,833
  1,918
  2,007
  2,102
  2,201
  2,306
  2,416
  2,533
  2,655
  2,783
  2,919
Operating income, $m
  -43
  -43
  -43
  -43
  -43
  -43
  -43
  -43
  -44
  -44
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
EBITDA, $m
  74
  76
  77
  80
  82
  85
  88
  91
  94
  98
  102
  106
  110
  115
  120
  125
  130
  136
  143
  149
  156
  163
  171
  179
  188
  197
  206
  216
  226
  237
Interest expense (income), $m
  8
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  43
  46
  48
  51
  54
  57
  60
  63
  67
  71
  74
Earnings before tax, $m
  -60
  -60
  -61
  -62
  -63
  -64
  -65
  -66
  -68
  -69
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -87
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
  -60
  -60
  -61
  -62
  -63
  -64
  -65
  -66
  -68
  -69
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -87

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
  1,264
  1,293
  1,326
  1,364
  1,405
  1,450
  1,500
  1,553
  1,611
  1,673
  1,739
  1,809
  1,884
  1,964
  2,049
  2,139
  2,234
  2,334
  2,440
  2,553
  2,671
  2,796
  2,927
  3,066
  3,212
  3,365
  3,527
  3,697
  3,876
  4,065
Adjusted assets (=assets-cash), $m
  1,264
  1,293
  1,326
  1,364
  1,405
  1,450
  1,500
  1,553
  1,611
  1,673
  1,739
  1,809
  1,884
  1,964
  2,049
  2,139
  2,234
  2,334
  2,440
  2,553
  2,671
  2,796
  2,927
  3,066
  3,212
  3,365
  3,527
  3,697
  3,876
  4,065
Revenue / Adjusted assets
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
Average production assets, $m
  776
  794
  815
  837
  863
  891
  921
  954
  989
  1,027
  1,068
  1,111
  1,157
  1,206
  1,258
  1,314
  1,372
  1,434
  1,499
  1,568
  1,640
  1,717
  1,798
  1,883
  1,973
  2,067
  2,166
  2,271
  2,381
  2,497
Working capital, $m
  136
  140
  143
  147
  152
  157
  162
  168
  174
  181
  188
  195
  203
  212
  221
  231
  241
  252
  263
  276
  288
  302
  316
  331
  347
  363
  381
  399
  419
  439
Total debt, $m
  325
  337
  350
  365
  382
  400
  420
  442
  465
  490
  517
  545
  575
  608
  642
  678
  716
  757
  799
  845
  892
  943
  996
  1,051
  1,110
  1,172
  1,237
  1,306
  1,378
  1,454
Total liabilities, $m
  509
  521
  534
  550
  566
  584
  604
  626
  649
  674
  701
  729
  759
  792
  826
  862
  900
  941
  984
  1,029
  1,076
  1,127
  1,180
  1,236
  1,294
  1,356
  1,421
  1,490
  1,562
  1,638
Total equity, $m
  755
  772
  792
  814
  839
  866
  895
  927
  962
  998
  1,038
  1,080
  1,125
  1,173
  1,223
  1,277
  1,334
  1,394
  1,457
  1,524
  1,595
  1,669
  1,748
  1,830
  1,917
  2,009
  2,106
  2,207
  2,314
  2,427
Total liabilities and equity, $m
  1,264
  1,293
  1,326
  1,364
  1,405
  1,450
  1,499
  1,553
  1,611
  1,672
  1,739
  1,809
  1,884
  1,965
  2,049
  2,139
  2,234
  2,335
  2,441
  2,553
  2,671
  2,796
  2,928
  3,066
  3,211
  3,365
  3,527
  3,697
  3,876
  4,065
Debt-to-equity ratio
  0.430
  0.440
  0.440
  0.450
  0.460
  0.460
  0.470
  0.480
  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
  0.570
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
Adjusted equity ratio
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -60
  -60
  -61
  -62
  -63
  -64
  -65
  -66
  -68
  -69
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -74
  -78
  -82
  -87
Depreciation, amort., depletion, $m
  116
  118
  120
  123
  125
  128
  131
  134
  138
  142
  107
  111
  116
  121
  126
  131
  137
  143
  150
  157
  164
  172
  180
  188
  197
  207
  217
  227
  238
  250
Funds from operations, $m
  57
  58
  59
  61
  62
  64
  66
  68
  70
  73
  75
  78
  81
  84
  87
  90
  94
  98
  102
  106
  110
  115
  120
  125
  131
  137
  143
  149
  156
  163
Change in working capital, $m
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
Cash from operations, $m
  54
  55
  56
  57
  58
  59
  61
  62
  64
  66
  68
  70
  73
  75
  78
  81
  84
  87
  90
  94
  98
  102
  106
  110
  115
  120
  125
  131
  137
  143
Maintenance CAPEX, $m
  -76
  -78
  -79
  -81
  -84
  -86
  -89
  -92
  -95
  -99
  -103
  -107
  -111
  -116
  -121
  -126
  -131
  -137
  -143
  -150
  -157
  -164
  -172
  -180
  -188
  -197
  -207
  -217
  -227
  -238
New CAPEX, $m
  -15
  -18
  -20
  -23
  -25
  -28
  -30
  -33
  -35
  -38
  -41
  -43
  -46
  -49
  -52
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -105
  -110
  -116
Cash from investing activities, $m
  -91
  -96
  -99
  -104
  -109
  -114
  -119
  -125
  -130
  -137
  -144
  -150
  -157
  -165
  -173
  -181
  -189
  -199
  -208
  -219
  -230
  -241
  -253
  -265
  -278
  -291
  -306
  -322
  -337
  -354
Free cash flow, $m
  -37
  -41
  -44
  -48
  -51
  -55
  -59
  -63
  -67
  -71
  -75
  -80
  -85
  -90
  -95
  -100
  -106
  -112
  -118
  -125
  -132
  -139
  -147
  -155
  -163
  -172
  -181
  -190
  -200
  -211
Issuance/(repayment) of debt, $m
  11
  12
  13
  15
  17
  18
  20
  22
  23
  25
  27
  28
  30
  32
  34
  36
  38
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  69
  72
  76
Issuance/(repurchase) of shares, $m
  74
  78
  81
  84
  87
  91
  94
  98
  102
  106
  71
  75
  80
  85
  90
  95
  100
  106
  112
  118
  124
  131
  138
  146
  154
  162
  170
  180
  189
  199
Cash from financing (excl. dividends), $m  
  85
  90
  94
  99
  104
  109
  114
  120
  125
  131
  98
  103
  110
  117
  124
  131
  138
  147
  155
  163
  172
  181
  191
  202
  213
  224
  235
  249
  261
  275
Total cash flow (excl. dividends), $m
  48
  49
  50
  51
  53
  54
  56
  57
  58
  60
  22
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  64
Retained Cash Flow (-), $m
  -74
  -78
  -81
  -84
  -87
  -91
  -94
  -98
  -102
  -106
  -71
  -75
  -80
  -85
  -90
  -95
  -100
  -106
  -112
  -118
  -124
  -131
  -138
  -146
  -154
  -162
  -170
  -180
  -189
  -199
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
  9
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
Cash available for distribution, $m
  -26
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -49
  -52
  -54
  -58
  -61
  -64
  -68
  -72
  -76
  -80
  -84
  -89
  -94
  -99
  -104
  -110
  -116
  -122
  -128
  -135
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
  -25
  -27
  -27
  -27
  -27
  -27
  -26
  -26
  -25
  -24
  -23
  -22
  -21
  -19
  -18
  -16
  -15
  -13
  -12
  -10
  -9
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  98.6
  97.3
  95.9
  94.5
  93.1
  91.7
  90.4
  89.0
  87.7
  86.4
  85.6
  84.7
  83.9
  83.0
  82.1
  81.3
  80.4
  79.5
  78.7
  77.8
  76.9
  76.1
  75.2
  74.4
  73.5
  72.7
  71.8
  71.0
  70.2
  69.3

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 -207.6
Price to Sales 6.1
Price to Book 7.3
Price to Tangible Book
Price to Cash Flow 33.7
Price to Free Cash Flow 64.3
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 $886 million for the last fiscal year's total revenue generated by Haemonetics. The default revenue input number comes from 2017 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 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 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 104.8%.

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 1%.

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 85.9%.

Life of production assets of 10 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 15.1%. 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 - $740 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 52 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 $5.4 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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