Intrinsic value of Quidel Corporation - QDEL

Previous Close

$67.63

  Intrinsic Value

$72.87

stock screener

  Rating & Target

hold

+8%

Previous close

$67.63

 
Intrinsic value

$72.87

 
Up/down potential

+8%

 
Rating

hold

We calculate the intrinsic value of QDEL 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 2.7

 

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, %
  15.40
  14.36
  13.42
  12.58
  11.82
  11.14
  10.53
  9.97
  9.48
  9.03
  8.63
  8.26
  7.94
  7.64
  7.38
  7.14
  6.93
  6.73
  6.56
  6.40
  6.26
  6.14
  6.02
  5.92
  5.83
  5.75
  5.67
  5.60
  5.54
  5.49
Revenue, $m
  602
  689
  781
  880
  984
  1,093
  1,208
  1,329
  1,455
  1,586
  1,723
  1,865
  2,013
  2,167
  2,327
  2,493
  2,666
  2,846
  3,032
  3,227
  3,429
  3,639
  3,859
  4,087
  4,325
  4,574
  4,833
  5,104
  5,387
  5,683
Variable operating expenses, $m
  382
  430
  481
  535
  592
  652
  716
  782
  851
  923
  948
  1,026
  1,107
  1,192
  1,280
  1,371
  1,466
  1,565
  1,668
  1,774
  1,886
  2,001
  2,122
  2,248
  2,379
  2,515
  2,658
  2,807
  2,962
  3,125
Fixed operating expenses, $m
  92
  94
  96
  98
  100
  103
  105
  107
  109
  112
  114
  117
  119
  122
  125
  127
  130
  133
  136
  139
  142
  145
  148
  152
  155
  158
  162
  166
  169
  173
Total operating expenses, $m
  474
  524
  577
  633
  692
  755
  821
  889
  960
  1,035
  1,062
  1,143
  1,226
  1,314
  1,405
  1,498
  1,596
  1,698
  1,804
  1,913
  2,028
  2,146
  2,270
  2,400
  2,534
  2,673
  2,820
  2,973
  3,131
  3,298
Operating income, $m
  128
  165
  204
  247
  291
  338
  388
  440
  494
  551
  661
  723
  787
  853
  923
  995
  1,070
  1,148
  1,229
  1,313
  1,401
  1,493
  1,588
  1,688
  1,792
  1,900
  2,013
  2,132
  2,256
  2,385
EBITDA, $m
  209
  250
  294
  341
  391
  444
  499
  557
  617
  681
  747
  815
  887
  961
  1,038
  1,118
  1,202
  1,289
  1,379
  1,473
  1,571
  1,673
  1,779
  1,890
  2,006
  2,127
  2,253
  2,385
  2,522
  2,666
Interest expense (income), $m
  6
  10
  16
  22
  28
  35
  43
  50
  58
  67
  76
  85
  94
  104
  115
  126
  137
  148
  160
  173
  186
  200
  214
  229
  244
  260
  277
  294
  312
  331
  351
Earnings before tax, $m
  118
  149
  182
  218
  256
  296
  338
  381
  427
  475
  576
  628
  682
  739
  797
  858
  921
  987
  1,056
  1,127
  1,201
  1,279
  1,360
  1,444
  1,532
  1,623
  1,719
  1,820
  1,924
  2,034
Tax expense, $m
  32
  40
  49
  59
  69
  80
  91
  103
  115
  128
  156
  170
  184
  199
  215
  232
  249
  267
  285
  304
  324
  345
  367
  390
  414
  438
  464
  491
  520
  549
Net income, $m
  86
  109
  133
  159
  187
  216
  246
  278
  312
  347
  421
  459
  498
  539
  582
  626
  673
  721
  771
  823
  877
  934
  992
  1,054
  1,118
  1,185
  1,255
  1,328
  1,405
  1,485

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
  931
  1,065
  1,208
  1,360
  1,520
  1,690
  1,868
  2,054
  2,249
  2,452
  2,663
  2,883
  3,112
  3,350
  3,597
  3,854
  4,121
  4,398
  4,687
  4,987
  5,300
  5,625
  5,964
  6,317
  6,685
  7,069
  7,470
  7,889
  8,326
  8,783
Adjusted assets (=assets-cash), $m
  931
  1,065
  1,208
  1,360
  1,520
  1,690
  1,868
  2,054
  2,249
  2,452
  2,663
  2,883
  3,112
  3,350
  3,597
  3,854
  4,121
  4,398
  4,687
  4,987
  5,300
  5,625
  5,964
  6,317
  6,685
  7,069
  7,470
  7,889
  8,326
  8,783
Revenue / Adjusted assets
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
Average production assets, $m
  382
  437
  495
  558
  624
  693
  766
  843
  922
  1,006
  1,092
  1,183
  1,277
  1,374
  1,476
  1,581
  1,690
  1,804
  1,923
  2,046
  2,174
  2,307
  2,446
  2,591
  2,742
  2,900
  3,064
  3,236
  3,415
  3,603
Working capital, $m
  51
  59
  66
  75
  84
  93
  103
  113
  124
  135
  146
  159
  171
  184
  198
  212
  227
  242
  258
  274
  291
  309
  328
  347
  368
  389
  411
  434
  458
  483
Total debt, $m
  166
  229
  297
  369
  444
  524
  608
  696
  788
  884
  984
  1,088
  1,196
  1,308
  1,425
  1,546
  1,672
  1,803
  1,939
  2,081
  2,228
  2,382
  2,542
  2,708
  2,882
  3,064
  3,253
  3,450
  3,657
  3,873
Total liabilities, $m
  439
  503
  570
  642
  718
  798
  882
  969
  1,061
  1,157
  1,257
  1,361
  1,469
  1,581
  1,698
  1,819
  1,945
  2,076
  2,212
  2,354
  2,501
  2,655
  2,815
  2,982
  3,155
  3,337
  3,526
  3,724
  3,930
  4,146
Total equity, $m
  492
  562
  638
  718
  803
  892
  986
  1,084
  1,187
  1,294
  1,406
  1,522
  1,643
  1,769
  1,899
  2,035
  2,176
  2,322
  2,475
  2,633
  2,798
  2,970
  3,149
  3,335
  3,530
  3,733
  3,944
  4,165
  4,396
  4,638
Total liabilities and equity, $m
  931
  1,065
  1,208
  1,360
  1,521
  1,690
  1,868
  2,053
  2,248
  2,451
  2,663
  2,883
  3,112
  3,350
  3,597
  3,854
  4,121
  4,398
  4,687
  4,987
  5,299
  5,625
  5,964
  6,317
  6,685
  7,070
  7,470
  7,889
  8,326
  8,784
Debt-to-equity ratio
  0.340
  0.410
  0.470
  0.510
  0.550
  0.590
  0.620
  0.640
  0.660
  0.680
  0.700
  0.710
  0.730
  0.740
  0.750
  0.760
  0.770
  0.780
  0.780
  0.790
  0.800
  0.800
  0.810
  0.810
  0.820
  0.820
  0.820
  0.830
  0.830
  0.840
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
  86
  109
  133
  159
  187
  216
  246
  278
  312
  347
  421
  459
  498
  539
  582
  626
  673
  721
  771
  823
  877
  934
  992
  1,054
  1,118
  1,185
  1,255
  1,328
  1,405
  1,485
Depreciation, amort., depletion, $m
  81
  85
  90
  95
  100
  105
  111
  117
  123
  130
  85
  92
  100
  107
  115
  124
  132
  141
  150
  160
  170
  180
  191
  202
  214
  227
  239
  253
  267
  281
Funds from operations, $m
  167
  194
  223
  254
  287
  321
  357
  395
  435
  477
  506
  551
  598
  647
  697
  750
  805
  862
  921
  983
  1,047
  1,114
  1,184
  1,256
  1,332
  1,412
  1,495
  1,581
  1,672
  1,766
Change in working capital, $m
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
Cash from operations, $m
  160
  187
  215
  246
  278
  312
  348
  385
  424
  465
  494
  539
  585
  633
  684
  736
  790
  846
  905
  966
  1,030
  1,096
  1,165
  1,237
  1,312
  1,391
  1,472
  1,558
  1,648
  1,741
Maintenance CAPEX, $m
  -26
  -30
  -34
  -39
  -44
  -49
  -54
  -60
  -66
  -72
  -79
  -85
  -92
  -100
  -107
  -115
  -124
  -132
  -141
  -150
  -160
  -170
  -180
  -191
  -202
  -214
  -227
  -239
  -253
  -267
New CAPEX, $m
  -51
  -55
  -59
  -62
  -66
  -69
  -73
  -76
  -80
  -83
  -87
  -90
  -94
  -98
  -101
  -105
  -110
  -114
  -118
  -123
  -128
  -133
  -139
  -145
  -151
  -158
  -164
  -172
  -179
  -188
Cash from investing activities, $m
  -77
  -85
  -93
  -101
  -110
  -118
  -127
  -136
  -146
  -155
  -166
  -175
  -186
  -198
  -208
  -220
  -234
  -246
  -259
  -273
  -288
  -303
  -319
  -336
  -353
  -372
  -391
  -411
  -432
  -455
Free cash flow, $m
  83
  102
  122
  145
  168
  194
  221
  249
  279
  310
  329
  363
  399
  436
  475
  515
  557
  600
  646
  693
  742
  793
  846
  901
  959
  1,019
  1,081
  1,147
  1,215
  1,287
Issuance/(repayment) of debt, $m
  59
  63
  67
  72
  76
  80
  84
  88
  92
  96
  100
  104
  108
  112
  117
  121
  126
  131
  136
  142
  147
  154
  160
  167
  174
  181
  189
  198
  206
  216
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  59
  63
  67
  72
  76
  80
  84
  88
  92
  96
  100
  104
  108
  112
  117
  121
  126
  131
  136
  142
  147
  154
  160
  167
  174
  181
  189
  198
  206
  216
Total cash flow (excl. dividends), $m
  142
  165
  190
  216
  244
  274
  305
  337
  371
  406
  429
  467
  507
  548
  592
  636
  683
  731
  782
  834
  889
  946
  1,006
  1,068
  1,132
  1,200
  1,271
  1,345
  1,422
  1,502
Retained Cash Flow (-), $m
  -66
  -71
  -75
  -80
  -85
  -89
  -94
  -98
  -103
  -107
  -112
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -152
  -159
  -165
  -172
  -179
  -186
  -194
  -203
  -212
  -221
  -231
  -241
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
  76
  94
  114
  136
  159
  184
  211
  239
  268
  299
  317
  351
  386
  423
  461
  501
  542
  585
  630
  676
  724
  774
  827
  881
  938
  997
  1,059
  1,123
  1,191
  1,261
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
  73
  87
  100
  112
  123
  134
  142
  149
  154
  157
  151
  150
  147
  142
  135
  127
  118
  108
  97
  86
  75
  64
  54
  45
  36
  29
  23
  17
  13
  9
Current shareholders' claim on cash, %
  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

Quidel Corporation is engaged in the development, manufacturing and marketing of diagnostic testing solutions. These diagnostic testing solutions are separated into four product categories: immunoassays, molecular assays, virology and specialty products. The Company sells its products directly to end users and distributors, in each case, for professional use in physician offices, hospitals, clinical laboratories, reference laboratories, universities, retail clinics, pharmacies and wellness screening centers. Its diagnostic solutions aid in the detection and diagnosis of critical diseases and other medical conditions, including infectious diseases, women's health, gastrointestinal diseases, autoimmune diseases, bone health and thyroid diseases. The Company provides diagnostic testing solutions under various brand names, including Quidel, QuickVue, QuickVue+, MicroVue, FreshCells, D3 FastPoint, Super E-Mix, ELVIS, Sofia, Quidel Molecular, Amplivue, Lyra and Thyretain.

FINANCIAL RATIOS  of  Quidel Corporation (QDEL)

Valuation Ratios
P/E Ratio -158.9
Price to Sales 11.6
Price to Book 11.1
Price to Tangible Book
Price to Cash Flow 185.4
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -29.4%
Cap. Spend. - 3 Yr. Gr. Rate -12.2%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 73.6%
Total Debt to Equity 73.6%
Interest Coverage -2
Management Effectiveness
Return On Assets -2.2%
Ret/ On Assets - 3 Yr. Avg. -1.4%
Return On Total Capital -3.9%
Ret/ On T. Cap. - 3 Yr. Avg. -2.6%
Return On Equity -6.7%
Return On Equity - 3 Yr. Avg. -4.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 61.5%
Gross Margin - 3 Yr. Avg. 61.5%
EBITDA Margin 6.8%
EBITDA Margin - 3 Yr. Avg. 9.1%
Operating Margin -2.1%
Oper. Margin - 3 Yr. Avg. -1.8%
Pre-Tax Margin -8.3%
Pre-Tax Margin - 3 Yr. Avg. -6.3%
Net Profit Margin -7.3%
Net Profit Margin - 3 Yr. Avg. -4.7%
Effective Tax Rate 12.5%
Eff/ Tax Rate - 3 Yr. Avg. 27.4%
Payout Ratio 0%

QDEL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QDEL stock intrinsic value calculation we used $522 million for the last fiscal year's total revenue generated by Quidel Corporation. The default revenue input number comes from 0001 income statement of Quidel Corporation. 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 QDEL stock valuation model: a) initial revenue growth rate of 15.4% 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 4.3%, whose default value for QDEL is calculated based on our internal credit rating of Quidel Corporation, 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 Quidel Corporation.
    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 QDEL stock the variable cost ratio is equal to 64.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $90 million in the base year in the intrinsic value calculation for QDEL 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 9.6% for Quidel Corporation.

Corporate tax rate of 27% is the nominal tax rate for Quidel Corporation. 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 QDEL 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 QDEL are equal to 63.4%.

Life of production assets of 12.8 years is the average useful life of capital assets used in Quidel Corporation 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 QDEL is equal to 8.5%. 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 - $425.584 million for Quidel Corporation - 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 39.478 million for Quidel Corporation 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 Quidel Corporation at the current share price and the inputted number of shares is $2.7 billion.

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