Intrinsic value of Omnicell - OMCL

Previous Close

$50.90

  Intrinsic Value

$23.68

stock screener

  Rating & Target

str. sell

-53%

Previous close

$50.90

 
Intrinsic value

$23.68

 
Up/down potential

-53%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of OMCL 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  42.89
  5.60
  5.54
  5.49
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
  5.03
  5.03
Revenue, $m
  693
  732
  772
  815
  859
  905
  954
  1,005
  1,058
  1,113
  1,172
  1,233
  1,297
  1,364
  1,434
  1,507
  1,585
  1,666
  1,751
  1,840
  1,933
  2,031
  2,134
  2,242
  2,355
  2,474
  2,599
  2,730
  2,868
  3,012
  3,163
Variable operating expenses, $m
 
  656
  691
  727
  764
  804
  845
  888
  934
  981
  1,031
  1,050
  1,104
  1,161
  1,221
  1,284
  1,350
  1,419
  1,491
  1,567
  1,646
  1,730
  1,818
  1,910
  2,006
  2,107
  2,214
  2,325
  2,442
  2,565
  2,694
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
  686
  656
  691
  727
  764
  804
  845
  888
  934
  981
  1,031
  1,050
  1,104
  1,161
  1,221
  1,284
  1,350
  1,419
  1,491
  1,567
  1,646
  1,730
  1,818
  1,910
  2,006
  2,107
  2,214
  2,325
  2,442
  2,565
  2,694
Operating income, $m
  6
  76
  82
  88
  95
  101
  109
  116
  124
  132
  141
  183
  192
  202
  213
  224
  235
  247
  260
  273
  287
  301
  317
  333
  349
  367
  386
  405
  425
  447
  469
EBITDA, $m
  64
  137
  145
  152
  161
  169
  179
  188
  198
  208
  219
  231
  243
  255
  268
  282
  297
  312
  328
  344
  362
  380
  399
  420
  441
  463
  486
  511
  537
  564
  592
Interest expense (income), $m
  5
  10
  11
  12
  13
  14
  16
  17
  18
  20
  21
  23
  25
  26
  28
  30
  32
  34
  37
  39
  42
  44
  47
  50
  53
  56
  59
  63
  66
  70
  74
Earnings before tax, $m
  -2
  66
  71
  76
  82
  87
  93
  99
  106
  113
  120
  160
  168
  176
  184
  193
  203
  213
  223
  234
  245
  257
  270
  283
  297
  311
  326
  342
  359
  377
  395
Tax expense, $m
  -3
  18
  19
  21
  22
  24
  25
  27
  29
  30
  32
  43
  45
  47
  50
  52
  55
  57
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
  97
  102
  107
Net income, $m
  1
  48
  52
  56
  60
  64
  68
  73
  77
  82
  87
  117
  122
  128
  135
  141
  148
  155
  163
  171
  179
  188
  197
  206
  217
  227
  238
  250
  262
  275
  288

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  54
  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
  935
  930
  981
  1,035
  1,092
  1,150
  1,212
  1,276
  1,344
  1,415
  1,489
  1,566
  1,647
  1,733
  1,822
  1,915
  2,014
  2,117
  2,224
  2,338
  2,456
  2,581
  2,712
  2,849
  2,993
  3,144
  3,303
  3,469
  3,644
  3,827
  4,019
Adjusted assets (=assets-cash), $m
  881
  930
  981
  1,035
  1,092
  1,150
  1,212
  1,276
  1,344
  1,415
  1,489
  1,566
  1,647
  1,733
  1,822
  1,915
  2,014
  2,117
  2,224
  2,338
  2,456
  2,581
  2,712
  2,849
  2,993
  3,144
  3,303
  3,469
  3,644
  3,827
  4,019
Revenue / Adjusted assets
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.788
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
  0.787
Average production assets, $m
  208
  219
  231
  244
  257
  271
  285
  300
  316
  333
  350
  369
  388
  408
  429
  451
  474
  498
  523
  550
  578
  607
  638
  670
  704
  740
  777
  816
  857
  901
  946
Working capital, $m
  134
  93
  98
  103
  109
  115
  121
  128
  134
  141
  149
  157
  165
  173
  182
  191
  201
  212
  222
  234
  246
  258
  271
  285
  299
  314
  330
  347
  364
  383
  402
Total debt, $m
  254
  274
  303
  333
  364
  398
  432
  468
  506
  546
  588
  631
  677
  725
  775
  827
  883
  940
  1,001
  1,065
  1,132
  1,202
  1,275
  1,352
  1,433
  1,518
  1,607
  1,701
  1,799
  1,902
  2,010
Total liabilities, $m
  504
  523
  552
  582
  613
  647
  681
  717
  755
  795
  837
  880
  926
  974
  1,024
  1,076
  1,132
  1,189
  1,250
  1,314
  1,381
  1,451
  1,524
  1,601
  1,682
  1,767
  1,856
  1,950
  2,048
  2,151
  2,259
Total equity, $m
  432
  407
  430
  453
  478
  504
  531
  559
  589
  620
  652
  686
  722
  759
  798
  839
  882
  927
  974
  1,024
  1,076
  1,131
  1,188
  1,248
  1,311
  1,377
  1,447
  1,519
  1,596
  1,676
  1,761
Total liabilities and equity, $m
  936
  930
  982
  1,035
  1,091
  1,151
  1,212
  1,276
  1,344
  1,415
  1,489
  1,566
  1,648
  1,733
  1,822
  1,915
  2,014
  2,116
  2,224
  2,338
  2,457
  2,582
  2,712
  2,849
  2,993
  3,144
  3,303
  3,469
  3,644
  3,827
  4,020
Debt-to-equity ratio
  0.588
  0.670
  0.700
  0.730
  0.760
  0.790
  0.810
  0.840
  0.860
  0.880
  0.900
  0.920
  0.940
  0.950
  0.970
  0.990
  1.000
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.080
  1.090
  1.100
  1.110
  1.120
  1.130
  1.130
  1.140
Adjusted equity ratio
  0.429
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  48
  52
  56
  60
  64
  68
  73
  77
  82
  87
  117
  122
  128
  135
  141
  148
  155
  163
  171
  179
  188
  197
  206
  217
  227
  238
  250
  262
  275
  288
Depreciation, amort., depletion, $m
  58
  61
  63
  64
  66
  68
  70
  72
  74
  76
  78
  48
  50
  53
  56
  59
  62
  65
  68
  71
  75
  79
  83
  87
  91
  96
  101
  106
  111
  117
  123
Funds from operations, $m
  28
  110
  115
  120
  126
  132
  138
  144
  151
  158
  166
  165
  173
  181
  190
  200
  210
  220
  231
  242
  254
  267
  280
  294
  308
  323
  339
  356
  373
  392
  411
Change in working capital, $m
  -20
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  17
  18
  19
Cash from operations, $m
  48
  105
  110
  115
  120
  126
  132
  138
  144
  151
  158
  157
  165
  173
  181
  190
  200
  210
  220
  231
  242
  254
  267
  280
  294
  308
  323
  339
  356
  374
  392
Maintenance CAPEX, $m
  0
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
New CAPEX, $m
  -29
  -11
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -45
Cash from investing activities, $m
  -341
  -38
  -40
  -43
  -45
  -47
  -49
  -52
  -55
  -58
  -60
  -63
  -67
  -70
  -74
  -78
  -82
  -86
  -90
  -95
  -99
  -104
  -110
  -115
  -121
  -127
  -133
  -140
  -147
  -154
  -162
Free cash flow, $m
  -293
  66
  69
  72
  75
  79
  82
  86
  89
  93
  98
  93
  98
  102
  107
  113
  118
  124
  130
  136
  143
  150
  157
  165
  173
  181
  190
  199
  209
  219
  230
Issuance/(repayment) of debt, $m
  250
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
  67
  70
  73
  77
  81
  85
  89
  94
  98
  103
  108
Issuance/(repurchase) of shares, $m
  18
  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  
  266
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
  67
  70
  73
  77
  81
  85
  89
  94
  98
  103
  108
Total cash flow (excl. dividends), $m
  -28
  94
  98
  102
  107
  112
  117
  122
  127
  133
  139
  137
  143
  150
  158
  165
  173
  182
  191
  200
  210
  220
  231
  242
  254
  266
  279
  293
  307
  322
  338
Retained Cash Flow (-), $m
  -30
  -21
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -80
  -84
Prev. year cash balance distribution, $m
 
  46
  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
 
  119
  75
  79
  82
  86
  90
  94
  98
  102
  107
  103
  108
  113
  118
  124
  130
  137
  143
  150
  158
  165
  173
  182
  191
  200
  210
  220
  231
  242
  254
Discount rate, %
 
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
 
  112
  67
  66
  64
  62
  59
  56
  53
  50
  46
  39
  36
  33
  29
  26
  22
  19
  16
  14
  11
  9
  7
  6
  4
  3
  2
  2
  1
  1
  1
Current shareholders' claim on cash, %
  100
  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

Omnicell, Inc. provides automation and business analytics software solutions for patient-centric medication and supply management across the entire healthcare continuum, from the acute care hospital setting to post-acute skilled nursing and long-term care facilities to the home. It operates through two segments: Automation and Analytics, and Medication Adherence. The Automation and Analytics segment is engaged in the design, manufacturing, selling and servicing of medication and supply dispensing systems, pharmacy inventory management systems and related software. The Medication Adherence segment includes the development, manufacturing and selling of consumable medication blister cards, packaging equipment, medication synchronization platform, and ancillary products and services. Its products are used to manage medication administration outside of the hospital setting and include medication adherence products sold under the brand name MTS, Surgichem, SureMed and the Omnicell brand.

FINANCIAL RATIOS  of  Omnicell (OMCL)

Valuation Ratios
P/E Ratio 1864.5
Price to Sales 2.7
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 38.8
Price to Free Cash Flow 98.1
Growth Rates
Sales Growth Rate 42.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 45%
Cap. Spend. - 3 Yr. Gr. Rate 7.7%
Financial Strength
Quick Ratio 7
Current Ratio 0.1
LT Debt to Equity 56.9%
Total Debt to Equity 58.8%
Interest Coverage 1
Management Effectiveness
Return On Assets -0.2%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital 0.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity 0.2%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 45.3%
Gross Margin - 3 Yr. Avg. 49.8%
EBITDA Margin 8.8%
EBITDA Margin - 3 Yr. Avg. 13.1%
Operating Margin 1%
Oper. Margin - 3 Yr. Avg. 7.5%
Pre-Tax Margin -0.3%
Pre-Tax Margin - 3 Yr. Avg. 6.8%
Net Profit Margin 0.1%
Net Profit Margin - 3 Yr. Avg. 4.5%
Effective Tax Rate 150%
Eff/ Tax Rate - 3 Yr. Avg. 73.1%
Payout Ratio 0%

OMCL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OMCL stock intrinsic value calculation we used $693 million for the last fiscal year's total revenue generated by Omnicell. The default revenue input number comes from 2016 income statement of Omnicell. 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 OMCL stock valuation model: a) initial revenue growth rate of 5.6% 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 5.6%, whose default value for OMCL is calculated based on our internal credit rating of Omnicell, 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 Omnicell.
    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 OMCL stock the variable cost ratio is equal to 89.9%.

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 OMCL 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 3.9% for Omnicell.

Corporate tax rate of 27% is the nominal tax rate for Omnicell. 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 OMCL 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 OMCL are equal to 29.9%.

Life of production assets of 7.7 years is the average useful life of capital assets used in Omnicell 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 OMCL is equal to 12.7%. 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 - $432 million for Omnicell - 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 38.763 million for Omnicell 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 Omnicell at the current share price and the inputted number of shares is $2.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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SWK Stanley Black& 173.76 142.67  hold
MCK McKesson 172.83 1,204.99  str.buy

COMPANY NEWS

▶ IBD Rating Upgrades: Omnicell Flashes Improved Price Strength   [Jan-08-18 03:00AM  Investor's Business Daily]
▶ ETFs with exposure to Omnicell, Inc. : November 20, 2017   [Nov-20-17 01:01PM  Capital Cube]
▶ ETFs with exposure to Omnicell, Inc. : November 9, 2017   [Nov-09-17 01:01PM  Capital Cube]
▶ Stocks Showing Rising Market Leadership: Omnicell Earns 83 RS Rating   [Nov-01-17 03:00AM  Investor's Business Daily]
▶ Omnicell beats 3Q profit forecasts   [Oct-26-17 07:16PM  Associated Press]
▶ Omnicell Announces Inaugural "Inspired by Care" Awards   [Oct-12-17 08:00AM  PR Newswire]
▶ Omnicell tops Street 2Q forecasts   [Jul-28-17 01:36AM  Associated Press]
▶ ETFs with exposure to Omnicell, Inc. : July 10, 2017   [Jul-10-17 02:59PM  Capital Cube]
▶ ETFs with exposure to Omnicell, Inc. : June 27, 2017   [Jun-27-17 03:30PM  Capital Cube]
▶ Omnicell reports 1Q loss   [May-04-17 09:16AM  Associated Press]
▶ Omnicell Acquires InPharmics   [Apr-19-17 08:00AM  PR Newswire]
Financial statements of OMCL
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