Intrinsic value of Omnicell - OMCL

Previous Close

$70.95

  Intrinsic Value

$9.40

stock screener

  Rating & Target

str. sell

-87%

Previous close

$70.95

 
Intrinsic value

$9.40

 
Up/down potential

-87%

 
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 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, %
  4.20
  4.28
  4.35
  4.42
  4.48
  4.53
  4.57
  4.62
  4.66
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
  4.95
  4.96
  4.96
Revenue, $m
  746
  778
  812
  848
  886
  926
  968
  1,013
  1,060
  1,110
  1,162
  1,218
  1,276
  1,337
  1,401
  1,469
  1,540
  1,615
  1,694
  1,777
  1,864
  1,956
  2,052
  2,153
  2,259
  2,371
  2,488
  2,611
  2,741
  2,877
Variable operating expenses, $m
  737
  766
  797
  830
  865
  902
  941
  982
  1,025
  1,071
  1,069
  1,119
  1,173
  1,229
  1,288
  1,351
  1,416
  1,485
  1,557
  1,634
  1,714
  1,798
  1,886
  1,979
  2,077
  2,180
  2,288
  2,401
  2,520
  2,645
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
  737
  766
  797
  830
  865
  902
  941
  982
  1,025
  1,071
  1,069
  1,119
  1,173
  1,229
  1,288
  1,351
  1,416
  1,485
  1,557
  1,634
  1,714
  1,798
  1,886
  1,979
  2,077
  2,180
  2,288
  2,401
  2,520
  2,645
Operating income, $m
  10
  12
  15
  18
  21
  24
  27
  31
  35
  39
  94
  98
  103
  108
  113
  118
  124
  130
  137
  143
  150
  158
  165
  174
  182
  191
  201
  211
  221
  232
EBITDA, $m
  89
  93
  97
  101
  106
  110
  115
  121
  126
  132
  139
  145
  152
  159
  167
  175
  184
  193
  202
  212
  222
  233
  245
  257
  269
  283
  297
  311
  327
  343
Interest expense (income), $m
  5
  11
  12
  14
  15
  16
  17
  19
  20
  22
  23
  25
  27
  29
  31
  33
  35
  38
  40
  43
  46
  48
  51
  55
  58
  62
  65
  69
  73
  78
  82
Earnings before tax, $m
  -2
  0
  1
  3
  5
  7
  9
  11
  13
  16
  69
  71
  74
  77
  80
  83
  87
  90
  94
  98
  102
  106
  111
  116
  121
  126
  131
  137
  143
  150
Tax expense, $m
  0
  0
  0
  1
  1
  2
  2
  3
  4
  4
  19
  19
  20
  21
  22
  22
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  36
  37
  39
  40
Net income, $m
  -2
  0
  1
  2
  4
  5
  6
  8
  10
  11
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
  74
  78
  81
  84
  88
  92
  96
  100
  105
  109

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
  1,060
  1,105
  1,153
  1,204
  1,258
  1,315
  1,375
  1,439
  1,506
  1,577
  1,651
  1,729
  1,812
  1,899
  1,990
  2,087
  2,188
  2,294
  2,406
  2,524
  2,648
  2,778
  2,915
  3,058
  3,209
  3,368
  3,534
  3,710
  3,893
  4,087
Adjusted assets (=assets-cash), $m
  1,060
  1,105
  1,153
  1,204
  1,258
  1,315
  1,375
  1,439
  1,506
  1,577
  1,651
  1,729
  1,812
  1,899
  1,990
  2,087
  2,188
  2,294
  2,406
  2,524
  2,648
  2,778
  2,915
  3,058
  3,209
  3,368
  3,534
  3,710
  3,893
  4,087
Revenue / Adjusted assets
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
  0.704
Average production assets, $m
  311
  325
  339
  354
  369
  386
  404
  422
  442
  463
  485
  508
  532
  557
  584
  613
  642
  674
  706
  741
  777
  815
  856
  898
  942
  989
  1,038
  1,089
  1,143
  1,200
Working capital, $m
  135
  141
  147
  153
  160
  168
  175
  183
  192
  201
  210
  220
  231
  242
  254
  266
  279
  292
  307
  322
  337
  354
  371
  390
  409
  429
  450
  473
  496
  521
Total debt, $m
  230
  251
  273
  296
  321
  347
  374
  403
  433
  465
  499
  535
  573
  612
  654
  698
  744
  792
  843
  897
  953
  1,012
  1,074
  1,140
  1,208
  1,280
  1,356
  1,436
  1,520
  1,608
Total liabilities, $m
  482
  503
  525
  548
  573
  598
  626
  655
  685
  717
  751
  787
  824
  864
  906
  949
  995
  1,044
  1,095
  1,148
  1,205
  1,264
  1,326
  1,391
  1,460
  1,532
  1,608
  1,688
  1,772
  1,859
Total equity, $m
  578
  602
  629
  656
  686
  717
  750
  784
  821
  859
  900
  943
  988
  1,035
  1,085
  1,137
  1,192
  1,250
  1,311
  1,376
  1,443
  1,514
  1,588
  1,667
  1,749
  1,835
  1,926
  2,022
  2,122
  2,227
Total liabilities and equity, $m
  1,060
  1,105
  1,154
  1,204
  1,259
  1,315
  1,376
  1,439
  1,506
  1,576
  1,651
  1,730
  1,812
  1,899
  1,991
  2,086
  2,187
  2,294
  2,406
  2,524
  2,648
  2,778
  2,914
  3,058
  3,209
  3,367
  3,534
  3,710
  3,894
  4,086
Debt-to-equity ratio
  0.400
  0.420
  0.430
  0.450
  0.470
  0.480
  0.500
  0.510
  0.530
  0.540
  0.550
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.670
  0.680
  0.680
  0.690
  0.700
  0.700
  0.710
  0.720
  0.720
Adjusted equity ratio
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545
  0.545

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2
  0
  1
  2
  4
  5
  6
  8
  10
  11
  50
  52
  54
  56
  58
  61
  63
  66
  68
  71
  74
  78
  81
  84
  88
  92
  96
  100
  105
  109
Depreciation, amort., depletion, $m
  79
  81
  82
  83
  85
  86
  88
  90
  92
  93
  45
  47
  49
  52
  54
  57
  59
  62
  65
  69
  72
  76
  79
  83
  87
  92
  96
  101
  106
  111
Funds from operations, $m
  78
  80
  83
  86
  88
  91
  94
  98
  101
  105
  95
  99
  103
  108
  112
  117
  123
  128
  134
  140
  146
  153
  160
  168
  175
  183
  192
  201
  211
  221
Change in working capital, $m
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  25
Cash from operations, $m
  72
  75
  77
  79
  81
  84
  87
  90
  93
  96
  85
  89
  93
  97
  101
  105
  110
  115
  120
  125
  131
  136
  143
  149
  156
  163
  171
  179
  187
  196
Maintenance CAPEX, $m
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -62
  -65
  -69
  -72
  -76
  -79
  -83
  -87
  -92
  -96
  -101
  -106
New CAPEX, $m
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -57
Cash from investing activities, $m
  -41
  -42
  -44
  -46
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -71
  -75
  -79
  -82
  -87
  -90
  -95
  -100
  -105
  -110
  -116
  -121
  -127
  -134
  -141
  -147
  -155
  -163
Free cash flow, $m
  32
  32
  33
  33
  33
  33
  33
  34
  34
  34
  21
  21
  21
  22
  22
  23
  23
  24
  24
  25
  26
  26
  27
  28
  29
  29
  30
  31
  32
  33
Issuance/(repayment) of debt, $m
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  46
  48
  51
  54
  56
  59
  62
  65
  69
  72
  76
  80
  84
  88
Issuance/(repurchase) of shares, $m
  25
  25
  25
  26
  26
  26
  26
  27
  27
  27
  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
  46
  47
  49
  51
  52
  53
  56
  57
  59
  34
  36
  38
  40
  42
  44
  46
  48
  51
  54
  56
  59
  62
  65
  69
  72
  76
  80
  84
  88
Total cash flow (excl. dividends), $m
  77
  78
  80
  81
  83
  85
  87
  89
  91
  93
  55
  57
  59
  61
  64
  67
  69
  72
  75
  79
  82
  86
  89
  93
  97
  102
  106
  111
  116
  121
Retained Cash Flow (-), $m
  -25
  -25
  -26
  -28
  -29
  -31
  -33
  -35
  -37
  -38
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -78
  -82
  -86
  -91
  -95
  -100
  -105
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
  52
  53
  54
  54
  54
  54
  54
  54
  55
  55
  14
  14
  14
  14
  14
  14
  14
  14
  14
  14
  15
  15
  15
  15
  15
  15
  15
  16
  16
  16
Discount rate, %
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
  49
  47
  44
  41
  37
  34
  31
  28
  25
  22
  5
  4
  4
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  99.1
  98.3
  97.4
  96.7
  95.9
  95.2
  94.5
  93.8
  93.2
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6

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 2598.9
Price to Sales 3.8
Price to Book 6
Price to Tangible Book
Price to Cash Flow 54.1
Price to Free Cash Flow 136.8
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 $716.165 million for the last fiscal year's total revenue generated by Omnicell. The default revenue input number comes from 0001 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 4.2% 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 6.2%, 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 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 41.7%.

Life of production assets of 10.8 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 18.1%. 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 - $554.341 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 39.27 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 $2.8 billion.

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COMPANY NEWS

▶ Omnicell: 3Q Earnings Snapshot   [05:27PM  Associated Press]
▶ Rob Seim to retire and join Omnicell Board of Directors   [Sep-14-18 04:01PM  PR Newswire]
▶ Has Omnicell Inc (NASDAQ:OMCL) Got Enough Cash?   [Sep-06-18 10:07AM  Simply Wall St.]
▶ Why Omnicell Is Soaring Today   [Jul-27-18 12:01PM  Motley Fool]
▶ Omnicell: 2Q Earnings Snapshot   [Jul-26-18 05:32PM  Associated Press]
▶ 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]

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