Intrinsic value of Syneos Health, Inc. - SYNH

Previous Close

$53.09

  Intrinsic Value

$135.37

stock screener

  Rating & Target

str. buy

+155%

Previous close

$53.09

 
Intrinsic value

$135.37

 
Up/down potential

+155%

 
Rating

str. buy

We calculate the intrinsic value of SYNH 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 5.5

 

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, %
  35.60
  32.54
  29.79
  27.31
  25.08
  23.07
  21.26
  19.64
  18.17
  16.86
  15.67
  14.60
  13.64
  12.78
  12.00
  11.30
  10.67
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
Revenue, $m
  3,623
  4,802
  6,233
  7,935
  9,924
  12,214
  14,811
  17,719
  20,939
  24,468
  28,302
  32,435
  36,860
  41,570
  46,558
  51,820
  57,349
  63,143
  69,200
  75,521
  82,106
  88,961
  96,089
  103,500
  111,201
  119,204
  127,521
  136,166
  145,155
  154,505
Variable operating expenses, $m
  3,073
  3,892
  4,885
  6,066
  7,447
  9,037
  10,840
  12,858
  15,094
  17,544
  19,647
  22,516
  25,588
  28,858
  32,321
  35,973
  39,812
  43,834
  48,039
  52,427
  56,998
  61,757
  66,706
  71,850
  77,196
  82,752
  88,526
  94,527
  100,767
  107,258
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
  3,073
  3,892
  4,885
  6,066
  7,447
  9,037
  10,840
  12,858
  15,094
  17,544
  19,647
  22,516
  25,588
  28,858
  32,321
  35,973
  39,812
  43,834
  48,039
  52,427
  56,998
  61,757
  66,706
  71,850
  77,196
  82,752
  88,526
  94,527
  100,767
  107,258
Operating income, $m
  550
  911
  1,348
  1,868
  2,477
  3,177
  3,971
  4,860
  5,845
  6,924
  8,655
  9,918
  11,272
  12,712
  14,237
  15,846
  17,537
  19,309
  21,161
  23,094
  25,108
  27,204
  29,384
  31,650
  34,005
  36,452
  38,995
  41,639
  44,388
  47,247
EBITDA, $m
  1,235
  1,636
  2,124
  2,704
  3,382
  4,162
  5,047
  6,038
  7,135
  8,337
  9,644
  11,052
  12,560
  14,164
  15,864
  17,657
  19,541
  21,515
  23,579
  25,733
  27,977
  30,312
  32,741
  35,266
  37,891
  40,617
  43,451
  46,397
  49,460
  52,646
Interest expense (income), $m
  0
  162
  244
  346
  469
  615
  786
  984
  1,207
  1,457
  1,735
  2,038
  2,368
  2,724
  3,105
  3,510
  3,940
  4,393
  4,869
  5,367
  5,889
  6,433
  7,000
  7,590
  8,203
  8,841
  9,504
  10,193
  10,909
  11,653
  12,427
Earnings before tax, $m
  388
  667
  1,002
  1,400
  1,862
  2,391
  2,988
  3,653
  4,388
  5,190
  6,616
  7,550
  8,547
  9,607
  10,727
  11,906
  13,144
  14,440
  15,794
  17,205
  18,675
  20,204
  21,794
  23,446
  25,164
  26,948
  28,802
  30,730
  32,735
  34,820
Tax expense, $m
  105
  180
  271
  378
  503
  645
  807
  986
  1,185
  1,401
  1,786
  2,039
  2,308
  2,594
  2,896
  3,215
  3,549
  3,899
  4,264
  4,645
  5,042
  5,455
  5,884
  6,331
  6,794
  7,276
  7,777
  8,297
  8,838
  9,401
Net income, $m
  283
  487
  732
  1,022
  1,359
  1,745
  2,181
  2,667
  3,203
  3,789
  4,830
  5,512
  6,240
  7,013
  7,831
  8,692
  9,595
  10,541
  11,529
  12,560
  13,633
  14,749
  15,910
  17,116
  18,369
  19,672
  21,026
  22,433
  23,896
  25,419

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
  9,873
  13,085
  16,983
  21,620
  27,042
  33,280
  40,356
  48,280
  57,054
  66,670
  77,117
  88,379
  100,435
  113,269
  126,862
  141,198
  156,264
  172,051
  188,556
  205,778
  223,722
  242,399
  261,824
  282,016
  303,000
  324,806
  347,468
  371,024
  395,517
  420,994
Adjusted assets (=assets-cash), $m
  9,873
  13,085
  16,983
  21,620
  27,042
  33,280
  40,356
  48,280
  57,054
  66,670
  77,117
  88,379
  100,435
  113,269
  126,862
  141,198
  156,264
  172,051
  188,556
  205,778
  223,722
  242,399
  261,824
  282,016
  303,000
  324,806
  347,468
  371,024
  395,517
  420,994
Revenue / Adjusted assets
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
Average production assets, $m
  2,279
  3,021
  3,920
  4,991
  6,242
  7,682
  9,316
  11,145
  13,171
  15,390
  17,802
  20,402
  23,185
  26,147
  29,285
  32,594
  36,072
  39,717
  43,527
  47,502
  51,645
  55,956
  60,440
  65,101
  69,945
  74,979
  80,211
  85,648
  91,302
  97,183
Working capital, $m
  -25
  -34
  -44
  -56
  -69
  -85
  -104
  -124
  -147
  -171
  -198
  -227
  -258
  -291
  -326
  -363
  -401
  -442
  -484
  -529
  -575
  -623
  -673
  -724
  -778
  -834
  -893
  -953
  -1,016
  -1,082
Total debt, $m
  4,520
  6,399
  8,679
  11,392
  14,564
  18,213
  22,353
  26,988
  32,121
  37,747
  43,858
  50,446
  57,499
  65,007
  72,959
  81,345
  90,159
  99,394
  109,050
  119,125
  129,622
  140,548
  151,911
  163,724
  175,999
  188,756
  202,013
  215,794
  230,122
  245,026
Total liabilities, $m
  5,775
  7,655
  9,935
  12,648
  15,819
  19,469
  23,608
  28,244
  33,377
  39,002
  45,114
  51,701
  58,755
  66,262
  74,214
  82,601
  91,414
  100,650
  110,305
  120,380
  130,878
  141,804
  153,167
  164,979
  177,255
  190,012
  203,269
  217,049
  231,378
  246,281
Total equity, $m
  4,097
  5,430
  7,048
  8,972
  11,222
  13,811
  16,748
  20,036
  23,677
  27,668
  32,004
  36,677
  41,681
  47,007
  52,648
  58,597
  64,849
  71,401
  78,251
  85,398
  92,845
  100,596
  108,657
  117,036
  125,745
  134,795
  144,199
  153,975
  164,140
  174,712
Total liabilities and equity, $m
  9,872
  13,085
  16,983
  21,620
  27,041
  33,280
  40,356
  48,280
  57,054
  66,670
  77,118
  88,378
  100,436
  113,269
  126,862
  141,198
  156,263
  172,051
  188,556
  205,778
  223,723
  242,400
  261,824
  282,015
  303,000
  324,807
  347,468
  371,024
  395,518
  420,993
Debt-to-equity ratio
  1.100
  1.180
  1.230
  1.270
  1.300
  1.320
  1.330
  1.350
  1.360
  1.360
  1.370
  1.380
  1.380
  1.380
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
  1.400
Adjusted equity ratio
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415
  0.415

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  283
  487
  732
  1,022
  1,359
  1,745
  2,181
  2,667
  3,203
  3,789
  4,830
  5,512
  6,240
  7,013
  7,831
  8,692
  9,595
  10,541
  11,529
  12,560
  13,633
  14,749
  15,910
  17,116
  18,369
  19,672
  21,026
  22,433
  23,896
  25,419
Depreciation, amort., depletion, $m
  685
  726
  776
  835
  905
  985
  1,075
  1,177
  1,290
  1,413
  989
  1,133
  1,288
  1,453
  1,627
  1,811
  2,004
  2,206
  2,418
  2,639
  2,869
  3,109
  3,358
  3,617
  3,886
  4,166
  4,456
  4,758
  5,072
  5,399
Funds from operations, $m
  967
  1,212
  1,507
  1,857
  2,264
  2,730
  3,256
  3,844
  4,493
  5,201
  5,819
  6,645
  7,528
  8,466
  9,458
  10,502
  11,599
  12,748
  13,948
  15,199
  16,502
  17,858
  19,267
  20,733
  22,255
  23,838
  25,482
  27,191
  28,969
  30,818
Change in working capital, $m
  -7
  -8
  -10
  -12
  -14
  -16
  -18
  -20
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -61
  -63
  -65
Cash from operations, $m
  974
  1,221
  1,517
  1,869
  2,278
  2,746
  3,275
  3,864
  4,515
  5,226
  5,846
  6,674
  7,559
  8,499
  9,493
  10,539
  11,638
  12,788
  13,990
  15,243
  16,548
  17,906
  19,317
  20,785
  22,309
  23,894
  25,540
  27,252
  29,032
  30,883
Maintenance CAPEX, $m
  -93
  -127
  -168
  -218
  -277
  -347
  -427
  -518
  -619
  -732
  -855
  -989
  -1,133
  -1,288
  -1,453
  -1,627
  -1,811
  -2,004
  -2,206
  -2,418
  -2,639
  -2,869
  -3,109
  -3,358
  -3,617
  -3,886
  -4,166
  -4,456
  -4,758
  -5,072
New CAPEX, $m
  -598
  -742
  -900
  -1,071
  -1,252
  -1,440
  -1,633
  -1,829
  -2,025
  -2,220
  -2,412
  -2,600
  -2,783
  -2,963
  -3,138
  -3,309
  -3,478
  -3,644
  -3,810
  -3,976
  -4,142
  -4,311
  -4,484
  -4,661
  -4,844
  -5,034
  -5,231
  -5,438
  -5,654
  -5,881
Cash from investing activities, $m
  -691
  -869
  -1,068
  -1,289
  -1,529
  -1,787
  -2,060
  -2,347
  -2,644
  -2,952
  -3,267
  -3,589
  -3,916
  -4,251
  -4,591
  -4,936
  -5,289
  -5,648
  -6,016
  -6,394
  -6,781
  -7,180
  -7,593
  -8,019
  -8,461
  -8,920
  -9,397
  -9,894
  -10,412
  -10,953
Free cash flow, $m
  283
  352
  450
  581
  749
  959
  1,214
  1,518
  1,871
  2,275
  2,579
  3,085
  3,642
  4,248
  4,902
  5,603
  6,349
  7,140
  7,973
  8,849
  9,767
  10,725
  11,725
  12,766
  13,848
  14,974
  16,143
  17,358
  18,619
  19,930
Issuance/(repayment) of debt, $m
  1,512
  1,879
  2,280
  2,713
  3,172
  3,649
  4,139
  4,636
  5,133
  5,626
  6,111
  6,588
  7,053
  7,508
  7,952
  8,386
  8,814
  9,236
  9,655
  10,075
  10,497
  10,926
  11,363
  11,812
  12,276
  12,757
  13,257
  13,780
  14,328
  14,904
Issuance/(repurchase) of shares, $m
  792
  847
  886
  903
  891
  844
  756
  622
  438
  202
  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  
  2,304
  2,726
  3,166
  3,616
  4,063
  4,493
  4,895
  5,258
  5,571
  5,828
  6,111
  6,588
  7,053
  7,508
  7,952
  8,386
  8,814
  9,236
  9,655
  10,075
  10,497
  10,926
  11,363
  11,812
  12,276
  12,757
  13,257
  13,780
  14,328
  14,904
Total cash flow (excl. dividends), $m
  2,586
  3,078
  3,616
  4,196
  4,811
  5,452
  6,109
  6,775
  7,441
  8,103
  8,691
  9,673
  10,695
  11,756
  12,854
  13,989
  15,163
  16,376
  17,629
  18,924
  20,264
  21,651
  23,088
  24,578
  26,124
  27,731
  29,401
  31,138
  32,948
  34,834
Retained Cash Flow (-), $m
  -1,075
  -1,333
  -1,617
  -1,925
  -2,250
  -2,589
  -2,937
  -3,289
  -3,641
  -3,991
  -4,335
  -4,673
  -5,004
  -5,326
  -5,641
  -5,949
  -6,252
  -6,552
  -6,849
  -7,147
  -7,447
  -7,751
  -8,061
  -8,380
  -8,709
  -9,050
  -9,405
  -9,776
  -10,165
  -10,573
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
  1,512
  1,745
  1,998
  2,272
  2,561
  2,863
  3,173
  3,486
  3,800
  4,112
  4,355
  5,000
  5,692
  6,430
  7,213
  8,040
  8,911
  9,824
  10,779
  11,777
  12,817
  13,900
  15,027
  16,198
  17,416
  18,681
  19,996
  21,362
  22,783
  24,261
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  1,396
  1,477
  1,537
  1,574
  1,584
  1,565
  1,516
  1,441
  1,342
  1,225
  1,079
  1,017
  935
  840
  736
  630
  525
  427
  339
  261
  196
  143
  101
  70
  46
  30
  19
  11
  6
  4
Current shareholders' claim on cash, %
  87.4
  78.4
  71.9
  67.2
  63.7
  61.2
  59.4
  58.2
  57.5
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2
  57.2

FINANCIAL RATIOS  of  Syneos Health, Inc. (SYNH)

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%

SYNH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SYNH stock intrinsic value calculation we used $2672 million for the last fiscal year's total revenue generated by Syneos Health, Inc.. The default revenue input number comes from 0001 income statement of Syneos Health, Inc.. 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 SYNH stock valuation model: a) initial revenue growth rate of 35.6% 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 8.3%, whose default value for SYNH is calculated based on our internal credit rating of Syneos Health, Inc., 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 Syneos Health, Inc..
    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 SYNH stock the variable cost ratio is equal to 90.3%.

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 SYNH 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 Syneos Health, Inc..

Corporate tax rate of 27% is the nominal tax rate for Syneos Health, Inc.. 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 SYNH 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 SYNH are equal to 62.9%.

Life of production assets of 18 years is the average useful life of capital assets used in Syneos Health, Inc. 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 SYNH is equal to -0.7%. 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 - $3022.579 million for Syneos Health, Inc. - 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 103.154 million for Syneos Health, Inc. 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 Syneos Health, Inc. at the current share price and the inputted number of shares is $5.5 billion.

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