Intrinsic value of Stratasys, Ltd. - SSYS

Previous Close

$22.52

  Intrinsic Value

$4.21

stock screener

  Rating & Target

str. sell

-81%

Previous close

$22.52

 
Intrinsic value

$4.21

 
Up/down potential

-81%

 
Rating

str. sell

We calculate the intrinsic value of SSYS 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 1.2

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  676
  692
  710
  730
  752
  776
  802
  831
  862
  895
  930
  968
  1,008
  1,051
  1,096
  1,144
  1,195
  1,249
  1,306
  1,366
  1,429
  1,496
  1,566
  1,640
  1,718
  1,801
  1,887
  1,978
  2,074
  2,175
Variable operating expenses, $m
  706
  721
  738
  757
  779
  802
  828
  856
  886
  918
  903
  940
  979
  1,020
  1,064
  1,111
  1,160
  1,212
  1,267
  1,326
  1,387
  1,452
  1,520
  1,592
  1,668
  1,748
  1,832
  1,920
  2,013
  2,111
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
  706
  721
  738
  757
  779
  802
  828
  856
  886
  918
  903
  940
  979
  1,020
  1,064
  1,111
  1,160
  1,212
  1,267
  1,326
  1,387
  1,452
  1,520
  1,592
  1,668
  1,748
  1,832
  1,920
  2,013
  2,111
Operating income, $m
  -29
  -29
  -28
  -28
  -27
  -27
  -26
  -25
  -24
  -23
  27
  28
  30
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  53
  55
  58
  61
  64
EBITDA, $m
  60
  61
  63
  64
  66
  69
  71
  73
  76
  79
  82
  85
  89
  93
  97
  101
  106
  110
  115
  121
  126
  132
  138
  145
  152
  159
  167
  175
  183
  192
Interest expense (income), $m
  0
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  18
  19
  21
  22
  24
  25
  27
  29
Earnings before tax, $m
  -31
  -31
  -30
  -30
  -30
  -30
  -29
  -29
  -29
  -28
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  27
  27
  28
  29
  30
  31
  32
  33
  34
  35
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  9
  9
  9
  9
Net income, $m
  -31
  -31
  -30
  -30
  -30
  -30
  -29
  -29
  -29
  -28
  16
  16
  16
  17
  17
  17
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  24
  25
  25

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
  1,186
  1,214
  1,245
  1,280
  1,319
  1,361
  1,408
  1,458
  1,512
  1,570
  1,632
  1,698
  1,769
  1,844
  1,923
  2,008
  2,097
  2,191
  2,291
  2,396
  2,507
  2,624
  2,748
  2,878
  3,015
  3,159
  3,311
  3,471
  3,639
  3,815
Adjusted assets (=assets-cash), $m
  1,186
  1,214
  1,245
  1,280
  1,319
  1,361
  1,408
  1,458
  1,512
  1,570
  1,632
  1,698
  1,769
  1,844
  1,923
  2,008
  2,097
  2,191
  2,291
  2,396
  2,507
  2,624
  2,748
  2,878
  3,015
  3,159
  3,311
  3,471
  3,639
  3,815
Revenue / Adjusted assets
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
  0.570
Average production assets, $m
  459
  469
  481
  495
  510
  526
  544
  563
  584
  607
  631
  656
  684
  713
  743
  776
  810
  847
  885
  926
  969
  1,014
  1,062
  1,112
  1,165
  1,221
  1,280
  1,341
  1,406
  1,475
Working capital, $m
  120
  123
  126
  130
  134
  138
  143
  148
  153
  159
  166
  172
  179
  187
  195
  204
  213
  222
  232
  243
  254
  266
  279
  292
  306
  321
  336
  352
  369
  387
Total debt, $m
  32
  37
  44
  51
  59
  68
  78
  88
  99
  111
  124
  138
  152
  168
  184
  202
  220
  240
  260
  282
  305
  329
  355
  382
  410
  440
  471
  505
  539
  576
Total liabilities, $m
  246
  251
  258
  265
  273
  282
  291
  302
  313
  325
  338
  352
  366
  382
  398
  416
  434
  454
  474
  496
  519
  543
  569
  596
  624
  654
  685
  718
  753
  790
Total equity, $m
  941
  962
  987
  1,015
  1,046
  1,080
  1,116
  1,156
  1,199
  1,245
  1,294
  1,347
  1,403
  1,462
  1,525
  1,592
  1,663
  1,738
  1,817
  1,900
  1,988
  2,081
  2,179
  2,282
  2,391
  2,505
  2,625
  2,752
  2,885
  3,026
Total liabilities and equity, $m
  1,187
  1,213
  1,245
  1,280
  1,319
  1,362
  1,407
  1,458
  1,512
  1,570
  1,632
  1,699
  1,769
  1,844
  1,923
  2,008
  2,097
  2,192
  2,291
  2,396
  2,507
  2,624
  2,748
  2,878
  3,015
  3,159
  3,310
  3,470
  3,638
  3,816
Debt-to-equity ratio
  0.030
  0.040
  0.040
  0.050
  0.060
  0.060
  0.070
  0.080
  0.080
  0.090
  0.100
  0.100
  0.110
  0.110
  0.120
  0.130
  0.130
  0.140
  0.140
  0.150
  0.150
  0.160
  0.160
  0.170
  0.170
  0.180
  0.180
  0.180
  0.190
  0.190
Adjusted equity ratio
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -31
  -31
  -30
  -30
  -30
  -30
  -29
  -29
  -29
  -28
  16
  16
  16
  17
  17
  17
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  24
  25
  25
Depreciation, amort., depletion, $m
  89
  90
  91
  92
  94
  95
  97
  98
  100
  102
  55
  57
  59
  62
  65
  67
  70
  74
  77
  81
  84
  88
  92
  97
  101
  106
  111
  117
  122
  128
Funds from operations, $m
  58
  59
  61
  62
  64
  65
  67
  69
  71
  74
  70
  73
  76
  78
  82
  85
  88
  92
  96
  100
  104
  108
  113
  118
  123
  129
  134
  140
  147
  154
Change in working capital, $m
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
Cash from operations, $m
  56
  57
  57
  59
  60
  61
  62
  64
  66
  68
  64
  66
  68
  71
  73
  76
  79
  82
  85
  89
  92
  96
  100
  105
  109
  114
  119
  124
  130
  136
Maintenance CAPEX, $m
  -39
  -40
  -41
  -42
  -43
  -44
  -46
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -65
  -67
  -70
  -74
  -77
  -81
  -84
  -88
  -92
  -97
  -101
  -106
  -111
  -117
  -122
New CAPEX, $m
  -9
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -34
  -36
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
Cash from investing activities, $m
  -48
  -51
  -53
  -56
  -58
  -60
  -64
  -66
  -70
  -73
  -77
  -81
  -84
  -88
  -93
  -98
  -101
  -106
  -113
  -118
  -124
  -129
  -136
  -142
  -150
  -157
  -165
  -173
  -182
  -190
Free cash flow, $m
  8
  6
  5
  3
  2
  0
  -1
  -3
  -4
  -5
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -36
  -38
  -40
  -43
  -46
  -49
  -52
  -55
Issuance/(repayment) of debt, $m
  5
  6
  6
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  16
  17
  18
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  35
  37
Issuance/(repurchase) of shares, $m
  50
  52
  55
  58
  61
  63
  66
  69
  72
  74
  34
  37
  40
  43
  46
  50
  53
  57
  61
  64
  69
  73
  77
  82
  87
  92
  97
  103
  109
  115
Cash from financing (excl. dividends), $m  
  55
  58
  61
  65
  69
  72
  76
  79
  83
  86
  47
  51
  55
  59
  62
  67
  71
  77
  82
  86
  92
  97
  103
  109
  115
  122
  128
  136
  144
  152
Total cash flow (excl. dividends), $m
  62
  64
  66
  68
  70
  73
  75
  77
  79
  81
  34
  36
  38
  41
  43
  46
  49
  51
  54
  57
  61
  64
  67
  71
  75
  79
  83
  87
  92
  96
Retained Cash Flow (-), $m
  -50
  -52
  -55
  -58
  -61
  -63
  -66
  -69
  -72
  -74
  -49
  -53
  -56
  -59
  -63
  -67
  -71
  -75
  -79
  -83
  -88
  -93
  -98
  -103
  -109
  -114
  -120
  -127
  -133
  -140
Prev. year cash balance distribution, $m
  220
  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
  233
  12
  11
  10
  10
  9
  8
  8
  7
  7
  -15
  -16
  -17
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -44
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
  223
  11
  10
  9
  8
  7
  6
  5
  4
  3
  -7
  -7
  -7
  -6
  -6
  -5
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  95.2
  90.4
  85.8
  81.3
  76.9
  72.8
  68.8
  65.0
  61.4
  58.0
  56.6
  55.1
  53.6
  52.1
  50.6
  49.1
  47.6
  46.1
  44.7
  43.2
  41.8
  40.4
  39.0
  37.7
  36.4
  35.1
  33.9
  32.7
  31.5
  30.3

Stratasys Ltd. provides three-dimensional (3D) printing and additive manufacturing (AM) solutions for the creation of parts used in the processes of designing and manufacturing products; and for the direct manufacture of end parts. Its 3D printing systems utilize its patented fused deposition modeling (FDM) and inkjet-based PolyJet technologies to enable the production of prototypes, tools used for production and manufactured goods directly from 3D CAD files or other 3D content. The company offers entry-level desktop 3D printers to systems for rapid prototyping, and production systems for direct digital manufacturing under the Dimension, Objet, Fortus, Polyjet, SolidScape, and MakerBot brands, as well as MoJo and uPrint product families, and Dental Series products. It also provides 3D printing consumable materials, including FDM, cartridge-based materials, Polyjet cartridge-based materials, Smooth Curvature Printing inkjet-based materials, and non-color digital materials, as well as provides color variation services. In addition, the company offers customer support, basic warranty, and extended support programs; leases or rents 3D printers and 3D production systems; produces prototypes and end-use parts for customers from a customer-provided CAD file; and provides plastic and metal parts for rapid prototyping and production processes, as well as related professional services. Further, it operates Thingiverse, an online community for sharing downloadable, digital 3D designs; and GrabCAD Community for mechanical engineers and designers. The company’s products and services are used in aerospace, automotive, consumer electronics, consumer goods, medical processes and medical devices, education, dental, jewelry, and other industries. It sells its products through a network of resellers and independent sales agents worldwide. Stratasys Ltd. was founded in 1989 and is headquartered in Eden Prairie, Minnesota.

FINANCIAL RATIOS  of  Stratasys, Ltd. (SSYS)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

SSYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SSYS stock intrinsic value calculation we used $663 million for the last fiscal year's total revenue generated by Stratasys, Ltd.. The default revenue input number comes from 0001 income statement of Stratasys, Ltd.. 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 SSYS stock valuation model: a) initial revenue growth rate of 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 4.3%, whose default value for SSYS is calculated based on our internal credit rating of Stratasys, Ltd., 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 Stratasys, Ltd..
    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 SSYS stock the variable cost ratio is equal to 104.5%.

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 SSYS 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 Stratasys, Ltd..

Corporate tax rate of 27% is the nominal tax rate for Stratasys, Ltd.. 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 SSYS 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 SSYS are equal to 67.8%.

Life of production assets of 11.5 years is the average useful life of capital assets used in Stratasys, Ltd. 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 SSYS is equal to 17.8%. 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 - $1142.115 million for Stratasys, Ltd. - 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 53.782 million for Stratasys, Ltd. 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 Stratasys, Ltd. at the current share price and the inputted number of shares is $1.2 billion.

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