Intrinsic value of Tandem Diabetes Care, Inc. - TNDM

Previous Close

$63.58

  Intrinsic Value

$116.85

stock screener

  Rating & Target

str. buy

+84%

Previous close

$63.58

 
Intrinsic value

$116.85

 
Up/down potential

+84%

 
Rating

str. buy

We calculate the intrinsic value of TNDM 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 3.7

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  294
  455
  680
  987
  1,392
  1,914
  2,570
  3,374
  4,342
  5,484
  6,810
  8,325
  10,035
  11,940
  14,039
  16,330
  18,811
  21,477
  24,324
  27,348
  30,544
  33,909
  37,441
  41,138
  45,000
  49,027
  53,220
  57,583
  62,120
  66,835
Variable operating expenses, $m
  224
  346
  517
  751
  1,059
  1,456
  1,954
  2,566
  3,302
  4,170
  5,178
  6,331
  7,631
  9,079
  10,676
  12,419
  14,305
  16,333
  18,497
  20,797
  23,227
  25,786
  28,472
  31,284
  34,220
  37,283
  40,472
  43,790
  47,239
  50,825
Fixed operating expenses, $m
  93
  95
  97
  99
  101
  104
  106
  108
  111
  113
  116
  118
  121
  123
  126
  129
  132
  135
  138
  141
  144
  147
  150
  153
  157
  160
  164
  167
  171
  175
Total operating expenses, $m
  317
  441
  614
  850
  1,160
  1,560
  2,060
  2,674
  3,413
  4,283
  5,294
  6,449
  7,752
  9,202
  10,802
  12,548
  14,437
  16,468
  18,635
  20,938
  23,371
  25,933
  28,622
  31,437
  34,377
  37,443
  40,636
  43,957
  47,410
  51,000
Operating income, $m
  -23
  14
  66
  137
  232
  355
  509
  700
  929
  1,200
  1,516
  1,876
  2,283
  2,737
  3,237
  3,783
  4,374
  5,010
  5,689
  6,410
  7,173
  7,976
  8,819
  9,701
  10,623
  11,584
  12,585
  13,626
  14,709
  15,835
EBITDA, $m
  -16
  23
  80
  157
  261
  394
  562
  769
  1,019
  1,313
  1,656
  2,048
  2,490
  2,983
  3,526
  4,119
  4,762
  5,453
  6,190
  6,974
  7,802
  8,674
  9,590
  10,548
  11,550
  12,594
  13,681
  14,813
  15,989
  17,212
Interest expense (income), $m
  4
  0
  9
  22
  40
  65
  98
  140
  193
  258
  336
  428
  535
  658
  796
  950
  1,119
  1,304
  1,505
  1,720
  1,950
  2,194
  2,452
  2,724
  3,009
  3,308
  3,620
  3,945
  4,284
  4,636
  5,003
Earnings before tax, $m
  -23
  5
  44
  97
  167
  257
  370
  507
  672
  865
  1,087
  1,341
  1,625
  1,941
  2,287
  2,664
  3,070
  3,505
  3,969
  4,460
  4,979
  5,523
  6,094
  6,691
  7,315
  7,964
  8,639
  9,342
  10,073
  10,832
Tax expense, $m
  0
  1
  12
  26
  45
  69
  100
  137
  181
  233
  294
  362
  439
  524
  618
  719
  829
  946
  1,072
  1,204
  1,344
  1,491
  1,646
  1,807
  1,975
  2,150
  2,333
  2,522
  2,720
  2,925
Net income, $m
  -23
  4
  32
  71
  122
  188
  270
  370
  490
  631
  794
  979
  1,187
  1,417
  1,670
  1,945
  2,241
  2,559
  2,897
  3,256
  3,634
  4,032
  4,449
  4,885
  5,340
  5,814
  6,307
  6,820
  7,353
  7,908

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
  230
  355
  531
  770
  1,086
  1,493
  2,004
  2,632
  3,387
  4,278
  5,312
  6,494
  7,828
  9,313
  10,951
  12,738
  14,673
  16,753
  18,974
  21,332
  23,825
  26,450
  29,205
  32,089
  35,101
  38,242
  41,513
  44,917
  48,455
  52,133
Adjusted assets (=assets-cash), $m
  230
  355
  531
  770
  1,086
  1,493
  2,004
  2,632
  3,387
  4,278
  5,312
  6,494
  7,828
  9,313
  10,951
  12,738
  14,673
  16,753
  18,974
  21,332
  23,825
  26,450
  29,205
  32,089
  35,101
  38,242
  41,513
  44,917
  48,455
  52,133
Revenue / Adjusted assets
  1.278
  1.282
  1.281
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
  1.282
Average production assets, $m
  30
  47
  70
  102
  143
  197
  265
  348
  447
  565
  701
  858
  1,034
  1,230
  1,446
  1,682
  1,938
  2,212
  2,505
  2,817
  3,146
  3,493
  3,856
  4,237
  4,635
  5,050
  5,482
  5,931
  6,398
  6,884
Working capital, $m
  -12
  -18
  -27
  -39
  -56
  -77
  -103
  -135
  -174
  -219
  -272
  -333
  -401
  -478
  -562
  -653
  -752
  -859
  -973
  -1,094
  -1,222
  -1,356
  -1,498
  -1,646
  -1,800
  -1,961
  -2,129
  -2,303
  -2,485
  -2,673
Total debt, $m
  45
  111
  202
  328
  493
  706
  973
  1,301
  1,696
  2,162
  2,703
  3,321
  4,019
  4,796
  5,652
  6,587
  7,599
  8,687
  9,848
  11,082
  12,385
  13,758
  15,199
  16,708
  18,283
  19,926
  21,636
  23,416
  25,267
  27,191
Total liabilities, $m
  120
  186
  278
  403
  568
  781
  1,048
  1,376
  1,771
  2,237
  2,778
  3,396
  4,094
  4,871
  5,727
  6,662
  7,674
  8,762
  9,923
  11,157
  12,460
  13,833
  15,274
  16,783
  18,358
  20,001
  21,711
  23,491
  25,342
  27,266
Total equity, $m
  110
  169
  253
  367
  518
  712
  956
  1,255
  1,615
  2,040
  2,534
  3,098
  3,734
  4,442
  5,223
  6,076
  6,999
  7,991
  9,050
  10,175
  11,365
  12,617
  13,931
  15,306
  16,743
  18,242
  19,802
  21,425
  23,113
  24,868
Total liabilities and equity, $m
  230
  355
  531
  770
  1,086
  1,493
  2,004
  2,631
  3,386
  4,277
  5,312
  6,494
  7,828
  9,313
  10,950
  12,738
  14,673
  16,753
  18,973
  21,332
  23,825
  26,450
  29,205
  32,089
  35,101
  38,243
  41,513
  44,916
  48,455
  52,134
Debt-to-equity ratio
  0.410
  0.650
  0.800
  0.890
  0.950
  0.990
  1.020
  1.040
  1.050
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
  1.090
Adjusted equity ratio
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -23
  4
  32
  71
  122
  188
  270
  370
  490
  631
  794
  979
  1,187
  1,417
  1,670
  1,945
  2,241
  2,559
  2,897
  3,256
  3,634
  4,032
  4,449
  4,885
  5,340
  5,814
  6,307
  6,820
  7,353
  7,908
Depreciation, amort., depletion, $m
  6
  9
  14
  20
  29
  40
  53
  70
  90
  113
  140
  172
  207
  246
  289
  336
  388
  442
  501
  563
  629
  699
  771
  847
  927
  1,010
  1,096
  1,186
  1,280
  1,377
Funds from operations, $m
  -16
  13
  46
  91
  151
  227
  323
  440
  580
  744
  934
  1,150
  1,393
  1,663
  1,959
  2,281
  2,629
  3,001
  3,399
  3,819
  4,264
  4,731
  5,220
  5,732
  6,267
  6,823
  7,403
  8,006
  8,633
  9,284
Change in working capital, $m
  -4
  -6
  -9
  -12
  -16
  -21
  -26
  -32
  -39
  -46
  -53
  -61
  -68
  -76
  -84
  -92
  -99
  -107
  -114
  -121
  -128
  -135
  -141
  -148
  -154
  -161
  -168
  -175
  -181
  -189
Cash from operations, $m
  -12
  19
  55
  103
  167
  248
  349
  472
  618
  790
  987
  1,211
  1,462
  1,739
  2,043
  2,373
  2,728
  3,108
  3,512
  3,940
  4,391
  4,865
  5,362
  5,880
  6,421
  6,985
  7,571
  8,181
  8,814
  9,473
Maintenance CAPEX, $m
  -4
  -6
  -9
  -14
  -20
  -29
  -39
  -53
  -70
  -89
  -113
  -140
  -172
  -207
  -246
  -289
  -336
  -388
  -442
  -501
  -563
  -629
  -699
  -771
  -847
  -927
  -1,010
  -1,096
  -1,186
  -1,280
New CAPEX, $m
  -11
  -17
  -23
  -32
  -42
  -54
  -67
  -83
  -100
  -118
  -137
  -156
  -176
  -196
  -216
  -236
  -256
  -275
  -293
  -311
  -329
  -347
  -364
  -381
  -398
  -415
  -432
  -449
  -467
  -486
Cash from investing activities, $m
  -15
  -23
  -32
  -46
  -62
  -83
  -106
  -136
  -170
  -207
  -250
  -296
  -348
  -403
  -462
  -525
  -592
  -663
  -735
  -812
  -892
  -976
  -1,063
  -1,152
  -1,245
  -1,342
  -1,442
  -1,545
  -1,653
  -1,766
Free cash flow, $m
  -27
  -3
  23
  58
  105
  166
  242
  336
  449
  583
  738
  915
  1,114
  1,336
  1,581
  1,847
  2,136
  2,446
  2,777
  3,128
  3,499
  3,889
  4,299
  4,728
  5,176
  5,643
  6,129
  6,635
  7,161
  7,708
Issuance/(repayment) of debt, $m
  45
  65
  92
  125
  165
  213
  267
  328
  395
  466
  541
  618
  697
  777
  856
  935
  1,012
  1,088
  1,161
  1,233
  1,304
  1,373
  1,441
  1,508
  1,575
  1,643
  1,711
  1,780
  1,851
  1,924
Issuance/(repurchase) of shares, $m
  64
  56
  52
  43
  29
  6
  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  
  109
  121
  144
  168
  194
  219
  267
  328
  395
  466
  541
  618
  697
  777
  856
  935
  1,012
  1,088
  1,161
  1,233
  1,304
  1,373
  1,441
  1,508
  1,575
  1,643
  1,711
  1,780
  1,851
  1,924
Total cash flow (excl. dividends), $m
  81
  118
  166
  226
  299
  385
  510
  664
  844
  1,049
  1,279
  1,533
  1,811
  2,113
  2,437
  2,782
  3,148
  3,534
  3,938
  4,361
  4,803
  5,262
  5,740
  6,236
  6,751
  7,286
  7,840
  8,415
  9,012
  9,631
Retained Cash Flow (-), $m
  -64
  -60
  -84
  -114
  -151
  -194
  -244
  -299
  -360
  -425
  -493
  -564
  -636
  -709
  -781
  -853
  -923
  -992
  -1,059
  -1,125
  -1,189
  -1,252
  -1,314
  -1,376
  -1,437
  -1,498
  -1,560
  -1,623
  -1,688
  -1,754
Prev. year cash balance distribution, $m
  63
  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
  81
  59
  82
  112
  148
  191
  266
  365
  484
  624
  785
  969
  1,175
  1,404
  1,656
  1,930
  2,225
  2,542
  2,879
  3,236
  3,614
  4,010
  4,426
  4,861
  5,314
  5,787
  6,279
  6,791
  7,324
  7,877
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
  77
  54
  72
  92
  115
  139
  179
  228
  278
  327
  373
  414
  447
  471
  486
  490
  484
  468
  443
  411
  374
  333
  290
  248
  207
  169
  135
  105
  80
  59
Current shareholders' claim on cash, %
  91.5
  87.0
  84.5
  83.0
  82.4
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3
  82.3

Tandem Diabetes Care, Inc. is a medical device company. The Company is engaged in designing, developing and commercializing products for people with insulin-dependent diabetes. The Company manufactures and sells three insulin pump products, which include t:slim Insulin Delivery System (t:slim), t:flex Insulin Delivery System (t:flex) and t:slim G4 Insulin Delivery System (t:slim G4). Its technology platform features Micro-Delivery Technology, a miniaturized pumping mechanism, which draws insulin from a flexible bag within the pump's cartridge rather than relying on a syringe and plunger mechanism. It also features a software, which is a vivid color touch screen and a micro- universal serial bus (USB) connection that supports both a rechargeable battery and uploads to t:connect Diabetes Management Application (t:connect), its custom cloud-based data management application that provides display therapy management data from the pump and supported blood glucose meters.

FINANCIAL RATIOS  of  Tandem Diabetes Care, Inc. (TNDM)

Valuation Ratios
P/E Ratio -2.4
Price to Sales 2.4
Price to Book -33
Price to Tangible Book
Price to Cash Flow -3.2
Price to Free Cash Flow -2.8
Growth Rates
Sales Growth Rate 15.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 17.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity -1316.7%
Total Debt to Equity -1316.7%
Interest Coverage -20
Management Effectiveness
Return On Assets -66.7%
Ret/ On Assets - 3 Yr. Avg. -61.3%
Return On Total Capital -100.6%
Ret/ On T. Cap. - 3 Yr. Avg. -84.1%
Return On Equity -291.2%
Return On Equity - 3 Yr. Avg. -168.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 28.6%
Gross Margin - 3 Yr. Avg. 31.9%
EBITDA Margin -88.1%
EBITDA Margin - 3 Yr. Avg. -106.6%
Operating Margin -92.9%
Oper. Margin - 3 Yr. Avg. -112.5%
Pre-Tax Margin -98.8%
Pre-Tax Margin - 3 Yr. Avg. -118.5%
Net Profit Margin -98.8%
Net Profit Margin - 3 Yr. Avg. -119.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -0.4%
Payout Ratio 0%

TNDM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TNDM stock intrinsic value calculation we used $184 million for the last fiscal year's total revenue generated by Tandem Diabetes Care, Inc.. The default revenue input number comes from 0001 income statement of Tandem Diabetes Care, 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 TNDM stock valuation model: a) initial revenue growth rate of 60% 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 TNDM is calculated based on our internal credit rating of Tandem Diabetes Care, 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 Tandem Diabetes Care, 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 TNDM stock the variable cost ratio is equal to 76.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $91 million in the base year in the intrinsic value calculation for TNDM 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 19.8% for Tandem Diabetes Care, Inc..

Corporate tax rate of 27% is the nominal tax rate for Tandem Diabetes Care, 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 TNDM 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 TNDM are equal to 10.3%.

Life of production assets of 3.4 years is the average useful life of capital assets used in Tandem Diabetes Care, 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 TNDM is equal to -4%. 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 - $131.275 million for Tandem Diabetes Care, 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 57.690 million for Tandem Diabetes Care, 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 Tandem Diabetes Care, Inc. at the current share price and the inputted number of shares is $3.7 billion.

RELATED COMPANIES Price Int.Val. Rating
PODD Insulet Corpor 115.09 70.67  sell
IRMD iRadimed Corpo 20.01 47.70  str.buy
JNJ Johnson & John 140.09 107.87  sell
DXCM DexCom, Inc. 148.04 5.21  str.sell
ICUI ICU Medical, I 241.71 20.14  str.sell
CAH Cardinal Healt 44.16 157.75  str.buy

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.