Intrinsic value of Regeneron Pharmaceuticals - REGN

Previous Close

$367.11

  Intrinsic Value

$793.43

stock screener

  Rating & Target

str. buy

+116%

Previous close

$367.11

 
Intrinsic value

$793.43

 
Up/down potential

+116%

 
Rating

str. buy

We calculate the intrinsic value of REGN 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 38.9

 

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, %
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
Revenue, $m
  7,093
  8,457
  9,962
  11,607
  13,391
  15,310
  17,361
  19,541
  21,847
  24,277
  26,828
  29,500
  32,291
  35,202
  38,235
  41,390
  44,672
  48,082
  51,627
  55,310
  59,138
  63,117
  67,255
  71,560
  76,040
  80,704
  85,563
  90,628
  95,908
  101,417
Variable operating expenses, $m
  1,844
  2,199
  2,590
  3,018
  3,482
  3,981
  4,514
  5,081
  5,680
  6,312
  6,975
  7,670
  8,396
  9,153
  9,941
  10,762
  11,615
  12,501
  13,423
  14,381
  15,376
  16,411
  17,486
  18,606
  19,770
  20,983
  22,246
  23,563
  24,936
  26,369
Fixed operating expenses, $m
  2,368
  2,420
  2,473
  2,528
  2,583
  2,640
  2,698
  2,758
  2,818
  2,880
  2,944
  3,008
  3,075
  3,142
  3,211
  3,282
  3,354
  3,428
  3,503
  3,581
  3,659
  3,740
  3,822
  3,906
  3,992
  4,080
  4,170
  4,261
  4,355
  4,451
Total operating expenses, $m
  4,212
  4,619
  5,063
  5,546
  6,065
  6,621
  7,212
  7,839
  8,498
  9,192
  9,919
  10,678
  11,471
  12,295
  13,152
  14,044
  14,969
  15,929
  16,926
  17,962
  19,035
  20,151
  21,308
  22,512
  23,762
  25,063
  26,416
  27,824
  29,291
  30,820
Operating income, $m
  2,881
  3,838
  4,898
  6,062
  7,326
  8,689
  10,149
  11,703
  13,349
  15,084
  16,909
  18,821
  20,821
  22,908
  25,082
  27,347
  29,703
  32,153
  34,700
  37,349
  40,103
  42,967
  45,947
  49,048
  52,277
  55,641
  59,147
  62,803
  66,617
  70,598
EBITDA, $m
  3,149
  4,158
  5,275
  6,500
  7,832
  9,268
  10,805
  12,441
  14,174
  16,002
  17,923
  19,936
  22,041
  24,238
  26,528
  28,911
  31,391
  33,971
  36,652
  39,440
  42,338
  45,353
  48,489
  51,753
  55,152
  58,692
  62,381
  66,229
  70,242
  74,432
Interest expense (income), $m
  5
  38
  68
  100
  137
  176
  219
  266
  315
  368
  423
  482
  543
  608
  675
  745
  818
  895
  974
  1,056
  1,141
  1,230
  1,322
  1,418
  1,518
  1,622
  1,730
  1,842
  1,960
  2,082
  2,209
Earnings before tax, $m
  2,843
  3,770
  4,798
  5,925
  7,150
  8,470
  9,883
  11,388
  12,981
  14,661
  16,427
  18,278
  20,213
  22,232
  24,337
  26,528
  28,808
  31,179
  33,645
  36,208
  38,873
  41,645
  44,528
  47,530
  50,655
  53,911
  57,305
  60,843
  64,535
  68,389
Tax expense, $m
  768
  1,018
  1,295
  1,600
  1,930
  2,287
  2,668
  3,075
  3,505
  3,959
  4,435
  4,935
  5,457
  6,003
  6,571
  7,163
  7,778
  8,418
  9,084
  9,776
  10,496
  11,244
  12,023
  12,833
  13,677
  14,556
  15,472
  16,428
  17,425
  18,465
Net income, $m
  2,075
  2,752
  3,503
  4,325
  5,219
  6,183
  7,215
  8,313
  9,476
  10,703
  11,992
  13,343
  14,755
  16,230
  17,766
  19,366
  21,030
  22,761
  24,561
  26,432
  28,377
  30,401
  32,506
  34,697
  36,978
  39,355
  41,832
  44,416
  47,111
  49,924

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
  10,251
  12,221
  14,396
  16,774
  19,351
  22,124
  25,088
  28,238
  31,571
  35,082
  38,769
  42,629
  46,663
  50,870
  55,253
  59,813
  64,555
  69,483
  74,605
  79,928
  85,460
  91,210
  97,190
  103,410
  109,884
  116,625
  123,646
  130,965
  138,596
  146,557
Adjusted assets (=assets-cash), $m
  10,251
  12,221
  14,396
  16,774
  19,351
  22,124
  25,088
  28,238
  31,571
  35,082
  38,769
  42,629
  46,663
  50,870
  55,253
  59,813
  64,555
  69,483
  74,605
  79,928
  85,460
  91,210
  97,190
  103,410
  109,884
  116,625
  123,646
  130,965
  138,596
  146,557
Revenue / Adjusted assets
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
  0.692
Average production assets, $m
  2,681
  3,197
  3,766
  4,388
  5,062
  5,787
  6,562
  7,386
  8,258
  9,177
  10,141
  11,151
  12,206
  13,306
  14,453
  15,646
  16,886
  18,175
  19,515
  20,907
  22,354
  23,858
  25,422
  27,050
  28,743
  30,506
  32,343
  34,257
  36,253
  38,336
Working capital, $m
  -106
  -127
  -149
  -174
  -201
  -230
  -260
  -293
  -328
  -364
  -402
  -442
  -484
  -528
  -574
  -621
  -670
  -721
  -774
  -830
  -887
  -947
  -1,009
  -1,073
  -1,141
  -1,211
  -1,283
  -1,359
  -1,439
  -1,521
Total debt, $m
  1,251
  1,859
  2,531
  3,266
  4,063
  4,920
  5,835
  6,809
  7,839
  8,923
  10,063
  11,256
  12,502
  13,802
  15,156
  16,565
  18,031
  19,554
  21,136
  22,781
  24,490
  26,267
  28,115
  30,037
  32,037
  34,120
  36,290
  38,551
  40,909
  43,369
Total liabilities, $m
  3,167
  3,776
  4,448
  5,183
  5,980
  6,836
  7,752
  8,726
  9,755
  10,840
  11,980
  13,173
  14,419
  15,719
  17,073
  18,482
  19,947
  21,470
  23,053
  24,698
  26,407
  28,184
  30,032
  31,954
  33,954
  36,037
  38,207
  40,468
  42,826
  45,286
Total equity, $m
  7,083
  8,445
  9,947
  11,591
  13,372
  15,288
  17,336
  19,513
  21,815
  24,242
  26,789
  29,457
  32,244
  35,151
  38,180
  41,331
  44,607
  48,013
  51,552
  55,230
  59,053
  63,026
  67,158
  71,456
  75,930
  80,588
  85,440
  90,497
  95,770
  101,271
Total liabilities and equity, $m
  10,250
  12,221
  14,395
  16,774
  19,352
  22,124
  25,088
  28,239
  31,570
  35,082
  38,769
  42,630
  46,663
  50,870
  55,253
  59,813
  64,554
  69,483
  74,605
  79,928
  85,460
  91,210
  97,190
  103,410
  109,884
  116,625
  123,647
  130,965
  138,596
  146,557
Debt-to-equity ratio
  0.180
  0.220
  0.250
  0.280
  0.300
  0.320
  0.340
  0.350
  0.360
  0.370
  0.380
  0.380
  0.390
  0.390
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.430
  0.430
  0.430
Adjusted equity ratio
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691
  0.691

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2,075
  2,752
  3,503
  4,325
  5,219
  6,183
  7,215
  8,313
  9,476
  10,703
  11,992
  13,343
  14,755
  16,230
  17,766
  19,366
  21,030
  22,761
  24,561
  26,432
  28,377
  30,401
  32,506
  34,697
  36,978
  39,355
  41,832
  44,416
  47,111
  49,924
Depreciation, amort., depletion, $m
  268
  320
  377
  439
  506
  579
  656
  739
  826
  918
  1,014
  1,115
  1,221
  1,331
  1,445
  1,565
  1,689
  1,818
  1,951
  2,091
  2,235
  2,386
  2,542
  2,705
  2,874
  3,051
  3,234
  3,426
  3,625
  3,834
Funds from operations, $m
  2,344
  3,072
  3,879
  4,764
  5,725
  6,762
  7,871
  9,052
  10,302
  11,620
  13,006
  14,458
  15,976
  17,560
  19,211
  20,930
  22,719
  24,578
  26,512
  28,522
  30,612
  32,786
  35,048
  37,402
  39,853
  42,406
  45,067
  47,841
  50,736
  53,757
Change in working capital, $m
  -18
  -20
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -83
Cash from operations, $m
  2,362
  3,092
  3,902
  4,789
  5,752
  6,790
  7,902
  9,084
  10,336
  11,657
  13,044
  14,498
  16,018
  17,604
  19,257
  20,978
  22,768
  24,630
  26,565
  28,578
  30,670
  32,846
  35,110
  37,466
  39,920
  42,476
  45,140
  47,917
  50,815
  53,840
Maintenance CAPEX, $m
  -222
  -268
  -320
  -377
  -439
  -506
  -579
  -656
  -739
  -826
  -918
  -1,014
  -1,115
  -1,221
  -1,331
  -1,445
  -1,565
  -1,689
  -1,818
  -1,951
  -2,091
  -2,235
  -2,386
  -2,542
  -2,705
  -2,874
  -3,051
  -3,234
  -3,426
  -3,625
New CAPEX, $m
  -460
  -515
  -569
  -622
  -674
  -725
  -775
  -824
  -872
  -918
  -964
  -1,010
  -1,055
  -1,101
  -1,146
  -1,193
  -1,240
  -1,289
  -1,340
  -1,392
  -1,447
  -1,504
  -1,564
  -1,627
  -1,693
  -1,763
  -1,837
  -1,914
  -1,996
  -2,082
Cash from investing activities, $m
  -682
  -783
  -889
  -999
  -1,113
  -1,231
  -1,354
  -1,480
  -1,611
  -1,744
  -1,882
  -2,024
  -2,170
  -2,322
  -2,477
  -2,638
  -2,805
  -2,978
  -3,158
  -3,343
  -3,538
  -3,739
  -3,950
  -4,169
  -4,398
  -4,637
  -4,888
  -5,148
  -5,422
  -5,707
Free cash flow, $m
  1,680
  2,309
  3,013
  3,790
  4,639
  5,559
  6,548
  7,604
  8,726
  9,913
  11,162
  12,474
  13,848
  15,283
  16,780
  18,340
  19,963
  21,652
  23,408
  25,234
  27,132
  29,106
  31,160
  33,297
  35,522
  37,838
  40,252
  42,769
  45,393
  48,132
Issuance/(repayment) of debt, $m
  547
  609
  672
  735
  796
  857
  916
  973
  1,030
  1,085
  1,139
  1,193
  1,246
  1,300
  1,354
  1,409
  1,465
  1,523
  1,583
  1,645
  1,709
  1,777
  1,848
  1,922
  2,000
  2,083
  2,170
  2,261
  2,358
  2,460
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  
  547
  609
  672
  735
  796
  857
  916
  973
  1,030
  1,085
  1,139
  1,193
  1,246
  1,300
  1,354
  1,409
  1,465
  1,523
  1,583
  1,645
  1,709
  1,777
  1,848
  1,922
  2,000
  2,083
  2,170
  2,261
  2,358
  2,460
Total cash flow (excl. dividends), $m
  2,227
  2,918
  3,685
  4,525
  5,436
  6,416
  7,464
  8,577
  9,756
  10,997
  12,301
  13,667
  15,094
  16,583
  18,134
  19,749
  21,428
  23,175
  24,991
  26,878
  28,842
  30,883
  33,008
  35,219
  37,522
  39,921
  42,422
  45,030
  47,751
  50,592
Retained Cash Flow (-), $m
  -1,213
  -1,361
  -1,503
  -1,643
  -1,781
  -1,916
  -2,048
  -2,177
  -2,303
  -2,426
  -2,548
  -2,668
  -2,787
  -2,907
  -3,028
  -3,151
  -3,277
  -3,406
  -3,539
  -3,678
  -3,822
  -3,974
  -4,132
  -4,298
  -4,473
  -4,658
  -4,852
  -5,057
  -5,273
  -5,501
Prev. year cash balance distribution, $m
  274
  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
  505
  610
  727
  857
  998
  1,152
  1,317
  1,493
  1,681
  1,879
  2,088
  2,307
  2,537
  2,777
  3,027
  3,288
  3,560
  3,842
  4,135
  4,440
  4,757
  5,086
  5,428
  5,784
  6,154
  6,539
  6,941
  7,358
  7,794
  8,248
Cash available for distribution, $m
  1,288
  1,556
  2,182
  2,882
  3,655
  4,500
  5,416
  6,401
  7,453
  8,571
  9,754
  10,999
  12,307
  13,676
  15,106
  16,598
  18,152
  19,769
  21,451
  23,201
  25,019
  26,910
  28,876
  30,921
  33,049
  35,263
  37,570
  39,973
  42,478
  45,091
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
  1,234
  1,425
  1,899
  2,373
  2,833
  3,266
  3,659
  4,001
  4,281
  4,494
  4,632
  4,694
  4,679
  4,591
  4,435
  4,218
  3,949
  3,641
  3,303
  2,948
  2,588
  2,233
  1,893
  1,575
  1,286
  1,029
  806
  618
  464
  340
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

Regeneron Pharmaceuticals, Inc. is a biopharmaceutical company that discovers, invents, develops, manufactures and commercializes medicines for the treatment of serious medical conditions. The Company commercializes medicines for eye diseases, high low-density lipoprotein (LDL) cholesterol, and an inflammatory condition and have product candidates in development in other areas, including rheumatoid arthritis, asthma, atopic dermatitis, pain, cancer, and infectious diseases. The Company's marketed products include EYLEA (aflibercept) Injection, Praluent (alirocumab) Injection, ARCALYST (rilonacept) Injection for Subcutaneous Use, Kevzara (sarilumab) Solution for Subcutaneous Injection and ZALTRAP (ziv-aflibercept) Injection for Intravenous Infusion. As of December 31, 2016, the Company had 16 product candidates in clinical development, which consisted of a Trap-based clinical program and 15 fully human monoclonal antibody product candidates.

FINANCIAL RATIOS  of  Regeneron Pharmaceuticals (REGN)

Valuation Ratios
P/E Ratio 43.4
Price to Sales 8
Price to Book 8.7
Price to Tangible Book
Price to Cash Flow 26.4
Price to Free Cash Flow 40.5
Growth Rates
Sales Growth Rate 18.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.5%
Cap. Spend. - 3 Yr. Gr. Rate 26.8%
Financial Strength
Quick Ratio 8
Current Ratio 0.1
LT Debt to Equity 7.9%
Total Debt to Equity 10.8%
Interest Coverage 267
Management Effectiveness
Return On Assets 14.3%
Ret/ On Assets - 3 Yr. Avg. 12.7%
Return On Total Capital 20%
Ret/ On T. Cap. - 3 Yr. Avg. 16.8%
Return On Equity 22.1%
Return On Equity - 3 Yr. Avg. 19.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 93.8%
Gross Margin - 3 Yr. Avg. 92.3%
EBITDA Margin 29.6%
EBITDA Margin - 3 Yr. Avg. 30.4%
Operating Margin 27.4%
Oper. Margin - 3 Yr. Avg. 28.5%
Pre-Tax Margin 27.4%
Pre-Tax Margin - 3 Yr. Avg. 28.1%
Net Profit Margin 18.4%
Net Profit Margin - 3 Yr. Avg. 15.3%
Effective Tax Rate 32.6%
Eff/ Tax Rate - 3 Yr. Avg. 45.4%
Payout Ratio 0%

REGN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the REGN stock intrinsic value calculation we used $5872 million for the last fiscal year's total revenue generated by Regeneron Pharmaceuticals. The default revenue input number comes from 2017 income statement of Regeneron Pharmaceuticals. 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 REGN stock valuation model: a) initial revenue growth rate of 20.8% 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 REGN is calculated based on our internal credit rating of Regeneron Pharmaceuticals, 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 Regeneron Pharmaceuticals.
    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 REGN stock the variable cost ratio is equal to 26%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2317 million in the base year in the intrinsic value calculation for REGN 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 Regeneron Pharmaceuticals.

Corporate tax rate of 27% is the nominal tax rate for Regeneron Pharmaceuticals. 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 REGN stock is equal to 8.6%.

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 REGN are equal to 37.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Regeneron Pharmaceuticals 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 REGN is equal to -1.5%. 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 - $6144 million for Regeneron Pharmaceuticals - 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 106 million for Regeneron Pharmaceuticals 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 Regeneron Pharmaceuticals at the current share price and the inputted number of shares is $38.9 billion.

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▶ Regeneron, McKesson, AmerisourceBergen, FedEx & Hilton   [Jun-28-18 01:57PM  CNBC Videos]
▶ Regeneron: 'On the Cusp' of Big Sales Growth   [Jun-27-18 11:09AM  Barrons.com]
▶ New Ebola Outbreak May Open Door to Finding Drugs   [Jun-05-18 07:01PM  Bloomberg]
▶ Aggressive Traders Must Go Long Regeneron Pharmaceuticals   [Jun-01-18 12:58PM  TheStreet.com]
▶ Regeneron: Too 'Legit' To Quit Vs. Merck, Bristol In Lung Cancer   [May-17-18 04:41PM  Investor's Business Daily]
▶ Geisinger to offer DNA sequencing to all its patients   [May-07-18 11:34AM  American City Business Journals]
▶ 3 Reasons Regeneron Stock Could Start Climbing Again   [May-06-18 09:22AM  Motley Fool]
▶ 2 Beaten-Down Biotech Stocks That Look Like Bargains Now   [May-05-18 09:16AM  Motley Fool]
▶ Regeneron Topples Despite Surprising Beat For Blockbuster Eye Drug   [May-03-18 05:44PM  Investor's Business Daily]
▶ Regeneron: 1Q Earnings Snapshot   [06:41AM  Associated Press]
▶ Regeneron Is Undercutting Amgen In Cholesterol Drugs Will It Help Share?   [May-01-18 04:19PM  Investor's Business Daily]
▶ Biotech: Better Luck Next Time   [10:13AM  Barrons.com]
▶ Why Regeneron's Quarter 'Won't Be Pretty' For Potential Blockbuster Drug   [Apr-27-18 04:45PM  Investor's Business Daily]
▶ Closing Bell Ringer, April 18, 2018   [Apr-18-18 03:59PM  CNBC Videos]
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▶ Oakmark fund manager talks his Q1 buys   [Apr-12-18 12:15PM  CNBC Videos]
▶ Vertex Is Worth More Than You Think   [Apr-11-18 12:22PM  Barrons.com]
▶ Edited Transcript of REGN presentation 6-Mar-17 6:05pm GMT   [01:29PM  Thomson Reuters StreetEvents]
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