AtriCure (ATRC:NAS) Fundamental Valuation Report


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AtriCure $17.71 (USD) Close Price as of 01/03/2018

Based on the analysis conducted in this report, AtriCure, (ATRC:NAS) is found to be  Undervalued.

Company AtriCure
Symbol:Exchange ATRC:NAS
Industry Healthcare:Medical Instruments & Supplies
Close Price/Date $17.71 (USD) 01/03/2018
Weighted Average Valuation $19.84 (USD)
Summary ATRC:NAS is found to be  Undervalued by 12.0% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $20.00 (USD)
(in order of importance) Adjusted Book Value: $19.43 (USD)
Multiples: $20.16 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

AtriCure Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for ATRC:NAS

Using a discounted cash flow model generates a negative intrinsic value due to one of 1) zero or negative projected cash flows 2) excessive capital expenditures or 3) excessive debt to calculated equity value for ATRC:NAS. We have not shown the calculated value here for that reason.

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $29.89 (USD) for ATRC:NAS. We also generated a valuation of $28.13 (USD) using other metrics and comparables.
The comparable companies were Atrion (ATRI:NAS), Entellus Medical (ENTL:NAS), Glaukos (GKOS:NYS), Luminex (LMNX:NAS) and Merit Medical Systems (MMSI:NAS)

Company ATRC:NAS End Date Value
Cash/Share $0.00 (USD)
Book Value/Share $4.61 (USD)
MarketCap 610,536,647
1 Year Return -0.065
NetPPE 0
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0
$26.54 (USD) 0
$34.35 (USD) 0
$23.50 (USD) 0
$0.00 (USD) 0
Ratios Used Average Values ATRI:NAS ENTL:NAS GKOS:NYS LMNX:NAS MMSI:NAS
Cash / Share 3.83 16.23 0.00 0.00 2.94 0.00
Book Value / Share 24.41 92.76 3.35 3.64 9.61 12.72
Market Cap 1,118,939,784 1,094,262,480 432,267,903 1,259,974,032 876,527,257 1,931,667,247
1 Year Return 0.24 0.18 0.75 -0.29 0.05 0.50
Net PPE 62,313,500 66,369,000 0 0 58,258,000 0

Multiples

Using a multiples approach we generated a valuation of  $20.16 (USD) for ATRC:NAS

Company ATRC:NAS End Date Value
Earnings/Share ($0.83) (USD)
Book Value/Share $4.61 (USD)
Sales/Share $5.28 (USD)
Cash Flow/Share ($0.30) (USD)
EBITDA/Share ($0.69) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$18.75 (USD) 0
$21.58 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 0.00
PB Ratio 4.07
PS Ratio 4.09
PCF Ratio 0.00
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ATRC:NAS for the last 10 years was  4.08

We ran the Adjusted Book Value for  ATRC:NAS and generated a book value of  $4.77 (USD)
By multiplying these we get an adjusted valuation of  $19.43 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for ATRC:NAS. The 2 analysts have a concensus valuation for ATRC:NAS for 2018 of $20.00 (USD).

ATRC:NAS AtriCure

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 1 3.0000 Hold 2018-2-28

Current Price: not available

Analyst Consensus
USD Millions 2017 2018 2019
Mean EPS -0.90 -0.81 -0.64
# EPS Analysts 2 2 2
Mean Revenue 174.70 190.40 208.40
# Revenue Analysts 2 2 2
Mean Target Price 20.00
Mean Cash Flow -0.68 -0.46 -0.26
Mean EBITDA -21.20 -14.70 -8.30
Mean Net Income -29.30 -27.40 -22.20
Mean Debt Outstanding -65.00 -92.50 -114.30
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 7.80 8.00 8.20

Company Overview (ATRC:NAS USD)

Price 17.71
Range 17.36 – 17.92
52 week 15.05 – 24.88
Open 17.67
Vol / Avg. 410018/98130
Mkt cap 610.53M
P/E 0.00
Div/yield 0.00/0.00
EPS -1.05
Shares 34.47M
Beta 1.21
Summary chart

Detailed Company Description

AtriCure Inc is a medical device company. It develops, manufactures and sells cardiac surgical ablation systems designed to create precise lesions, scars in cardiac, heart, and tissue. It generates revenue by selling disposable surgical devices.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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