Intrinsic value of Omnicell, Inc. - OMCL

Previous Close

$68.68

  Intrinsic Value

$45.91

stock screener

  Rating & Target

sell

-33%

Previous close

$68.68

 
Intrinsic value

$45.91

 
Up/down potential

-33%

 
Rating

sell

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

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 2.8

 

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, %
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.21
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
Revenue, $m
  848
  912
  978
  1,047
  1,119
  1,193
  1,271
  1,351
  1,435
  1,523
  1,614
  1,708
  1,807
  1,911
  2,018
  2,131
  2,249
  2,372
  2,500
  2,635
  2,775
  2,922
  3,077
  3,238
  3,407
  3,584
  3,770
  3,965
  4,169
  4,383
Variable operating expenses, $m
  469
  500
  533
  568
  603
  640
  678
  718
  760
  803
  800
  847
  896
  948
  1,001
  1,057
  1,115
  1,176
  1,240
  1,307
  1,377
  1,450
  1,526
  1,606
  1,690
  1,778
  1,870
  1,967
  2,068
  2,174
Fixed operating expenses, $m
  319
  326
  333
  340
  348
  356
  363
  371
  380
  388
  396
  405
  414
  423
  432
  442
  452
  462
  472
  482
  493
  504
  515
  526
  538
  549
  561
  574
  586
  599
Total operating expenses, $m
  788
  826
  866
  908
  951
  996
  1,041
  1,089
  1,140
  1,191
  1,196
  1,252
  1,310
  1,371
  1,433
  1,499
  1,567
  1,638
  1,712
  1,789
  1,870
  1,954
  2,041
  2,132
  2,228
  2,327
  2,431
  2,541
  2,654
  2,773
Operating income, $m
  61
  86
  112
  139
  168
  198
  229
  262
  296
  332
  417
  456
  497
  540
  585
  632
  682
  734
  788
  846
  906
  969
  1,036
  1,106
  1,180
  1,257
  1,339
  1,424
  1,515
  1,610
EBITDA, $m
  139
  166
  195
  225
  256
  288
  322
  358
  395
  434
  474
  517
  561
  608
  657
  708
  761
  818
  877
  939
  1,005
  1,073
  1,145
  1,221
  1,301
  1,384
  1,473
  1,565
  1,663
  1,765
Interest expense (income), $m
  5
  7
  9
  11
  13
  14
  16
  18
  21
  23
  25
  28
  30
  33
  35
  38
  41
  44
  48
  51
  54
  58
  62
  66
  70
  75
  79
  84
  89
  95
  100
Earnings before tax, $m
  53
  77
  101
  127
  154
  182
  211
  241
  273
  306
  389
  426
  464
  504
  547
  591
  637
  686
  737
  791
  848
  907
  970
  1,036
  1,105
  1,178
  1,254
  1,335
  1,420
  1,509
Tax expense, $m
  14
  21
  27
  34
  41
  49
  57
  65
  74
  83
  105
  115
  125
  136
  148
  160
  172
  185
  199
  214
  229
  245
  262
  280
  298
  318
  339
  360
  383
  407
Net income, $m
  39
  56
  74
  93
  112
  133
  154
  176
  199
  224
  284
  311
  339
  368
  399
  431
  465
  501
  538
  578
  619
  662
  708
  756
  807
  860
  916
  975
  1,037
  1,102

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
  1,165
  1,253
  1,344
  1,439
  1,537
  1,639
  1,746
  1,856
  1,972
  2,092
  2,217
  2,347
  2,483
  2,625
  2,773
  2,927
  3,089
  3,258
  3,434
  3,619
  3,812
  4,014
  4,226
  4,448
  4,680
  4,924
  5,179
  5,446
  5,726
  6,020
Adjusted assets (=assets-cash), $m
  1,165
  1,253
  1,344
  1,439
  1,537
  1,639
  1,746
  1,856
  1,972
  2,092
  2,217
  2,347
  2,483
  2,625
  2,773
  2,927
  3,089
  3,258
  3,434
  3,619
  3,812
  4,014
  4,226
  4,448
  4,680
  4,924
  5,179
  5,446
  5,726
  6,020
Revenue / Adjusted assets
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
  0.728
Average production assets, $m
  316
  340
  365
  391
  417
  445
  474
  504
  535
  568
  602
  637
  674
  713
  753
  795
  839
  885
  933
  983
  1,035
  1,090
  1,148
  1,208
  1,271
  1,337
  1,406
  1,479
  1,555
  1,635
Working capital, $m
  135
  145
  156
  167
  178
  190
  202
  215
  228
  242
  257
  272
  287
  304
  321
  339
  358
  377
  398
  419
  441
  465
  489
  515
  542
  570
  599
  630
  663
  697
Total debt, $m
  166
  199
  232
  268
  304
  342
  381
  423
  465
  510
  556
  604
  655
  707
  762
  820
  880
  942
  1,008
  1,076
  1,148
  1,223
  1,302
  1,384
  1,470
  1,560
  1,655
  1,754
  1,858
  1,967
Total liabilities, $m
  432
  465
  499
  534
  570
  608
  648
  689
  731
  776
  822
  871
  921
  974
  1,029
  1,086
  1,146
  1,209
  1,274
  1,343
  1,414
  1,489
  1,568
  1,650
  1,736
  1,827
  1,921
  2,021
  2,125
  2,234
Total equity, $m
  733
  788
  845
  905
  967
  1,031
  1,098
  1,168
  1,240
  1,316
  1,394
  1,476
  1,562
  1,651
  1,744
  1,841
  1,943
  2,049
  2,160
  2,276
  2,398
  2,525
  2,658
  2,798
  2,944
  3,097
  3,257
  3,426
  3,602
  3,787
Total liabilities and equity, $m
  1,165
  1,253
  1,344
  1,439
  1,537
  1,639
  1,746
  1,857
  1,971
  2,092
  2,216
  2,347
  2,483
  2,625
  2,773
  2,927
  3,089
  3,258
  3,434
  3,619
  3,812
  4,014
  4,226
  4,448
  4,680
  4,924
  5,178
  5,447
  5,727
  6,021
Debt-to-equity ratio
  0.230
  0.250
  0.270
  0.300
  0.310
  0.330
  0.350
  0.360
  0.380
  0.390
  0.400
  0.410
  0.420
  0.430
  0.440
  0.450
  0.450
  0.460
  0.470
  0.470
  0.480
  0.480
  0.490
  0.490
  0.500
  0.500
  0.510
  0.510
  0.520
  0.520
Adjusted equity ratio
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629
  0.629

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  39
  56
  74
  93
  112
  133
  154
  176
  199
  224
  284
  311
  339
  368
  399
  431
  465
  501
  538
  578
  619
  662
  708
  756
  807
  860
  916
  975
  1,037
  1,102
Depreciation, amort., depletion, $m
  78
  80
  83
  85
  88
  90
  93
  96
  99
  102
  57
  61
  64
  68
  72
  76
  80
  84
  89
  94
  99
  104
  109
  115
  121
  127
  134
  141
  148
  156
Funds from operations, $m
  117
  137
  157
  178
  200
  223
  247
  272
  298
  326
  342
  372
  403
  436
  471
  507
  545
  585
  627
  671
  717
  766
  817
  871
  928
  987
  1,050
  1,115
  1,185
  1,257
Change in working capital, $m
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  25
  26
  27
  28
  30
  31
  32
  34
Cash from operations, $m
  107
  126
  146
  167
  189
  211
  235
  259
  285
  312
  327
  357
  387
  420
  454
  489
  526
  566
  607
  650
  695
  743
  793
  845
  901
  959
  1,020
  1,084
  1,152
  1,223
Maintenance CAPEX, $m
  -28
  -30
  -32
  -35
  -37
  -40
  -42
  -45
  -48
  -51
  -54
  -57
  -61
  -64
  -68
  -72
  -76
  -80
  -84
  -89
  -94
  -99
  -104
  -109
  -115
  -121
  -127
  -134
  -141
  -148
New CAPEX, $m
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -58
  -60
  -63
  -66
  -69
  -73
  -76
  -80
Cash from investing activities, $m
  -51
  -54
  -57
  -61
  -64
  -68
  -71
  -75
  -79
  -84
  -88
  -92
  -98
  -103
  -108
  -114
  -120
  -126
  -132
  -139
  -146
  -154
  -162
  -169
  -178
  -187
  -196
  -207
  -217
  -228
Free cash flow, $m
  56
  72
  89
  106
  125
  144
  163
  184
  206
  228
  239
  264
  290
  317
  346
  375
  407
  440
  474
  511
  549
  589
  631
  676
  723
  772
  824
  878
  935
  996
Issuance/(repayment) of debt, $m
  31
  33
  34
  35
  36
  38
  39
  41
  43
  45
  46
  48
  50
  53
  55
  57
  60
  63
  66
  69
  72
  75
  79
  82
  86
  90
  95
  99
  104
  109
Issuance/(repurchase) of shares, $m
  14
  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  
  45
  33
  34
  35
  36
  38
  39
  41
  43
  45
  46
  48
  50
  53
  55
  57
  60
  63
  66
  69
  72
  75
  79
  82
  86
  90
  95
  99
  104
  109
Total cash flow (excl. dividends), $m
  102
  105
  123
  142
  161
  182
  203
  225
  248
  273
  285
  312
  340
  370
  400
  433
  467
  502
  540
  579
  621
  664
  710
  758
  809
  862
  918
  977
  1,039
  1,105
Retained Cash Flow (-), $m
  -53
  -55
  -57
  -60
  -62
  -64
  -67
  -70
  -72
  -75
  -79
  -82
  -85
  -89
  -93
  -97
  -102
  -106
  -111
  -116
  -122
  -127
  -133
  -140
  -146
  -153
  -160
  -168
  -176
  -185
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
  48
  50
  66
  82
  99
  117
  136
  156
  176
  197
  207
  230
  255
  280
  307
  336
  365
  396
  429
  463
  499
  537
  577
  619
  663
  709
  758
  809
  863
  920
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
  46
  46
  57
  68
  77
  85
  92
  97
  101
  103
  98
  98
  97
  94
  90
  85
  79
  73
  66
  59
  52
  45
  38
  32
  26
  21
  16
  13
  9
  7
Current shareholders' claim on cash, %
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5
  99.5

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, Inc. (OMCL)

Valuation Ratios
P/E Ratio 2515.7
Price to Sales 3.6
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 52.4
Price to Free Cash Flow 132.4
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 $787 million for the last fiscal year's total revenue generated by Omnicell, Inc.. The default revenue input number comes from 0001 income statement of Omnicell, Inc.. 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 7.8% 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 OMCL is calculated based on our internal credit rating of Omnicell, Inc., 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, Inc..
    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 55.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $312 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 5.4% for Omnicell, Inc..

Corporate tax rate of 27% is the nominal tax rate for Omnicell, Inc.. 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 37.3%.

Life of production assets of 10.5 years is the average useful life of capital assets used in Omnicell, Inc. 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 15.9%. 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 - $679.617 million for Omnicell, Inc. - 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 40.831 million for Omnicell, Inc. 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, Inc. at the current share price and the inputted number of shares is $2.8 billion.

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