Intrinsic value of Omnicell - OMCL

Previous Close

$55.10

  Intrinsic Value

$8.19

stock screener

  Rating & Target

str. sell

-85%

Previous close

$55.10

 
Intrinsic value

$8.19

 
Up/down potential

-85%

 
Rating

str. 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 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 2.0

 

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, %
  3.40
  3.56
  3.70
  3.83
  3.95
  4.06
  4.15
  4.23
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.82
  4.84
  4.86
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
Revenue, $m
  740
  767
  795
  826
  858
  893
  930
  969
  1,011
  1,056
  1,102
  1,152
  1,204
  1,260
  1,318
  1,380
  1,445
  1,513
  1,585
  1,661
  1,741
  1,825
  1,913
  2,006
  2,104
  2,206
  2,314
  2,428
  2,547
  2,673
Variable operating expenses, $m
  731
  755
  782
  810
  840
  872
  906
  942
  980
  1,021
  1,013
  1,059
  1,107
  1,158
  1,212
  1,268
  1,328
  1,391
  1,457
  1,527
  1,600
  1,677
  1,759
  1,844
  1,934
  2,028
  2,128
  2,232
  2,342
  2,457
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
  731
  755
  782
  810
  840
  872
  906
  942
  980
  1,021
  1,013
  1,059
  1,107
  1,158
  1,212
  1,268
  1,328
  1,391
  1,457
  1,527
  1,600
  1,677
  1,759
  1,844
  1,934
  2,028
  2,128
  2,232
  2,342
  2,457
Operating income, $m
  9
  11
  14
  16
  19
  21
  24
  28
  31
  35
  89
  93
  97
  102
  106
  111
  117
  122
  128
  134
  140
  147
  154
  162
  170
  178
  187
  196
  205
  216
EBITDA, $m
  117
  121
  126
  130
  136
  141
  147
  153
  160
  167
  174
  182
  190
  199
  208
  218
  228
  239
  251
  263
  275
  288
  302
  317
  333
  349
  366
  384
  403
  422
Interest expense (income), $m
  5
  11
  12
  13
  14
  15
  16
  17
  19
  20
  22
  23
  25
  26
  28
  30
  32
  34
  37
  39
  42
  44
  47
  50
  53
  56
  60
  63
  67
  71
  75
Earnings before tax, $m
  -2
  -1
  0
  2
  4
  5
  7
  9
  11
  13
  66
  68
  71
  73
  76
  79
  82
  85
  89
  92
  96
  100
  104
  109
  113
  118
  123
  129
  135
  140
Tax expense, $m
  0
  0
  0
  1
  1
  1
  2
  2
  3
  3
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
Net income, $m
  -2
  -1
  0
  1
  3
  4
  5
  6
  8
  9
  48
  50
  52
  54
  56
  58
  60
  62
  65
  67
  70
  73
  76
  79
  83
  86
  90
  94
  98
  103

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
  1,013
  1,049
  1,088
  1,129
  1,174
  1,222
  1,272
  1,326
  1,383
  1,444
  1,508
  1,576
  1,648
  1,723
  1,803
  1,887
  1,976
  2,070
  2,168
  2,272
  2,381
  2,496
  2,617
  2,744
  2,878
  3,018
  3,166
  3,321
  3,485
  3,656
Adjusted assets (=assets-cash), $m
  1,013
  1,049
  1,088
  1,129
  1,174
  1,222
  1,272
  1,326
  1,383
  1,444
  1,508
  1,576
  1,648
  1,723
  1,803
  1,887
  1,976
  2,070
  2,168
  2,272
  2,381
  2,496
  2,617
  2,744
  2,878
  3,018
  3,166
  3,321
  3,485
  3,656
Revenue / Adjusted assets
  0.731
  0.731
  0.731
  0.732
  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
  573
  593
  615
  639
  664
  691
  720
  750
  783
  817
  853
  892
  932
  975
  1,020
  1,068
  1,118
  1,171
  1,227
  1,285
  1,347
  1,412
  1,481
  1,553
  1,628
  1,708
  1,791
  1,879
  1,972
  2,069
Working capital, $m
  50
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  117
  122
  128
  134
  141
  148
  155
  163
  171
  179
Total debt, $m
  225
  242
  260
  280
  301
  323
  347
  373
  400
  428
  459
  491
  524
  560
  598
  638
  680
  724
  770
  819
  871
  925
  982
  1,042
  1,105
  1,171
  1,241
  1,314
  1,392
  1,473
Total liabilities, $m
  478
  495
  513
  533
  554
  577
  601
  626
  653
  682
  712
  744
  778
  813
  851
  891
  933
  977
  1,023
  1,072
  1,124
  1,178
  1,235
  1,295
  1,358
  1,425
  1,494
  1,568
  1,645
  1,726
Total equity, $m
  535
  554
  574
  596
  620
  645
  672
  700
  730
  762
  796
  832
  870
  910
  952
  997
  1,043
  1,093
  1,145
  1,200
  1,257
  1,318
  1,382
  1,449
  1,519
  1,594
  1,672
  1,754
  1,840
  1,930
Total liabilities and equity, $m
  1,013
  1,049
  1,087
  1,129
  1,174
  1,222
  1,273
  1,326
  1,383
  1,444
  1,508
  1,576
  1,648
  1,723
  1,803
  1,888
  1,976
  2,070
  2,168
  2,272
  2,381
  2,496
  2,617
  2,744
  2,877
  3,019
  3,166
  3,322
  3,485
  3,656
Debt-to-equity ratio
  0.420
  0.440
  0.450
  0.470
  0.490
  0.500
  0.520
  0.530
  0.550
  0.560
  0.580
  0.590
  0.600
  0.620
  0.630
  0.640
  0.650
  0.660
  0.670
  0.680
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
  0.760
  0.760
Adjusted equity ratio
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528
  0.528

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2
  -1
  0
  1
  3
  4
  5
  6
  8
  9
  48
  50
  52
  54
  56
  58
  60
  62
  65
  67
  70
  73
  76
  79
  83
  86
  90
  94
  98
  103
Depreciation, amort., depletion, $m
  108
  110
  112
  114
  117
  120
  123
  126
  129
  132
  85
  89
  93
  98
  102
  107
  112
  117
  123
  129
  135
  141
  148
  155
  163
  171
  179
  188
  197
  207
Funds from operations, $m
  106
  109
  112
  116
  120
  124
  128
  132
  137
  142
  133
  139
  145
  151
  158
  164
  172
  179
  187
  196
  205
  214
  224
  235
  246
  257
  269
  282
  295
  309
Change in working capital, $m
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
Cash from operations, $m
  104
  107
  111
  114
  117
  121
  125
  129
  134
  139
  130
  136
  141
  147
  154
  160
  167
  175
  183
  191
  200
  209
  218
  228
  239
  250
  262
  274
  287
  301
Maintenance CAPEX, $m
  -55
  -57
  -59
  -62
  -64
  -66
  -69
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -98
  -102
  -107
  -112
  -117
  -123
  -129
  -135
  -141
  -148
  -155
  -163
  -171
  -179
  -188
  -197
New CAPEX, $m
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -36
  -38
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
  -80
  -84
  -88
  -92
  -97
Cash from investing activities, $m
  -74
  -77
  -81
  -86
  -89
  -93
  -98
  -102
  -107
  -112
  -118
  -123
  -130
  -136
  -143
  -150
  -157
  -165
  -173
  -182
  -191
  -200
  -209
  -220
  -231
  -243
  -255
  -267
  -280
  -294
Free cash flow, $m
  30
  30
  29
  29
  28
  28
  27
  27
  27
  26
  12
  12
  12
  11
  11
  11
  10
  10
  10
  10
  9
  9
  9
  8
  8
  8
  8
  7
  7
  7
Issuance/(repayment) of debt, $m
  15
  17
  18
  20
  21
  22
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  52
  54
  57
  60
  63
  66
  70
  73
  77
  81
Issuance/(repurchase) of shares, $m
  20
  20
  20
  21
  21
  21
  22
  22
  22
  23
  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  
  35
  37
  38
  41
  42
  43
  46
  47
  49
  52
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  52
  54
  57
  60
  63
  66
  70
  73
  77
  81
Total cash flow (excl. dividends), $m
  65
  67
  68
  69
  70
  72
  73
  74
  76
  77
  43
  44
  45
  47
  49
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
  74
  77
  81
  84
  88
Retained Cash Flow (-), $m
  -20
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -86
  -91
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
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  49
  51
  54
  57
  59
  62
  65
  68
  72
  75
  79
Cash available for distribution, $m
  45
  47
  47
  47
  47
  46
  46
  46
  46
  45
  9
  8
  8
  7
  6
  6
  5
  5
  4
  4
  3
  3
  2
  1
  1
  0
  -1
  -1
  -2
  -3
Discount rate, %
  6.40
  6.72
  7.06
  7.41
  7.78
  8.17
  8.58
  9.01
  9.46
  9.93
  10.42
  10.95
  11.49
  12.07
  12.67
  13.31
  13.97
  14.67
  15.40
  16.17
  16.98
  17.83
  18.72
  19.66
  20.64
  21.67
  22.76
  23.89
  25.09
  26.34
PV of cash for distribution, $m
  42
  41
  39
  35
  32
  29
  26
  23
  20
  18
  3
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  99.0
  98.1
  97.2
  96.3
  95.5
  94.7
  93.9
  93.1
  92.3
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6
  91.6

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 2018.3
Price to Sales 2.9
Price to Book 4.7
Price to Tangible Book
Price to Cash Flow 42
Price to Free Cash Flow 106.2
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 $716 million for the last fiscal year's total revenue generated by Omnicell. The default revenue input number comes from 2017 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 3.4% 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 6.4%, 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 99%.

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 5.4% 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 3.1%.

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 OMCL are equal to 77.4%.

Life of production assets of 10 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 6.7%. 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 - $517 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 37 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
CERN Cerner 60.45 28.89  sell
BDX Becton Dickins 247.03 144.47  sell
SWK Stanley Black& 144.23 302.99  str.buy
MCK McKesson 132.90 355.02  str.buy

COMPANY NEWS

▶ Is Omnicell Inc (NASDAQ:OMCL) A Sell At Its Current PE Ratio?   [Jun-22-18 11:30AM  Simply Wall St.]
▶ Omnicell: 1Q Earnings Snapshot   [Apr-26-18 07:44PM  Associated Press]
▶ 9 Stocks to Buy Instead of Bitcoin   [Mar-01-18 12:00PM  InvestorPlace]
▶ Omnicell tops 4Q profit forecasts   [Feb-01-18 04:53PM  Associated Press]
▶ Omnicell, Inc. to Host Earnings Call   [12:00PM  ACCESSWIRE]
▶ 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]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.