Phibro Animal Health (PAHC:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Phibro Animal Health(PAHC:NAS)

Healthcare:Drug Manufacturers-Specialty & Generic

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$42.38 (USD) 05/11/2018

Weighted Valuation
$42.42 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 0.1%

Valuation Models Analyst Consensus: $42.00 (USD)
(in order of importance) Multiples: $43.06 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (PAHC:NAS USD)

Price 42.38
Range 41.34 – 43.40
52 week 32.20 – 53.50
Open 42.30
Vol / Avg. 134321/105091
Mkt cap 1.71B
P/E 26.32
Div/yield 0.40/0.01
EPS 1.61
Shares 40.4M
Beta 0.00

Company Description

Phibro Animal Health Corp operates as a diversified animal health and mineral nutrition company. It develops, manufactures, and markets products for a range of food animals comprising poultry, swine, beef and dairy cattle, and aquaculture. The product portfolio of the company includes animal health products such as antibacterials, anticoccidials, nutritional specialty products and vaccines, and mineral nutrition products. The company operates through three segments, Animal Health, Mineral Nutrition, and Performance Products, of which key revenue is derived from the Animal Health segment which relates to the development, manufacturing, and marketing of antibacterials, nutritional specialty products, and vaccines. The entity sells its products in the US and other international countries.

Valuation Details

 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 PAHC:NAS

Using a discounted cash flow model we generated an intrinsic value of $26.50 (USD) for PAHC:NAS

Sensitivity Analysis

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

PAHC:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $26.50 1% 5% 1% 5%
WACC (or Ke) 8.65 $34.10 $21.18
Terminal Growth Rate 3.00 $21.65 $33.44
Tax Rate 0.26 $29.56 $23.44
Cash Flow 153,470,000 $24.25 $28.75
Capital Expenditures 0 $26.50 $26.50
Long Term Debt 342,601,000 $26.92 $26.07

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $68.58 (USD) for PAHC:NAS. We also generated a valuation of $39.15 (USD) using other metrics and comparables.
The comparable companies were Heron Therapeutics (HRTX:NAS), Ironwood Pharmaceuticals (IRWD:NAS), Medicines Co (MDCO:NAS), OPKO Health (OPK:NAS) and Pacira Pharmaceuticals (PCRX:NAS).

Company PAHC:NAS End Date Value
Earnings/Share $1.61 (USD)
Book Value/Share $4.58 (USD)
Sales/Share $20.30 (USD)
Cash Flow/Share $1.73 (USD)
EBITDA/Share $3.18 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 4.6
$107.36 (USD) 0.0
$96.85 (USD) -80.7
$129.25 (USD) -41.8
$0.00 (USD) 52.6
PAHC:NAS Ratios Used Average Values HRTX:NAS IRWD:NAS MDCO:NAS OPK:NAS PCRX:NAS
26.66 PE Ratio 0.00 0.00 0.00 0.00 0.00 0.00
9.38 PB Ratio 23.45 5.00 0.00 80.85 1.05 6.92
2.11 PS Ratio 23.31 36.34 5.96 65.91 1.84 6.51
24.76 PCF Ratio 79.02 0.00 0.00 0.00 0.00 79.02
15.30 EV to EBITDA 92.21 0.00 0.00 0.00 0.00 92.21

Multiples

Using a multiples approach we generated a valuation of  $43.06 (USD) for PAHC:NAS

Company PAHC:NAS End Date Value
Earnings/Share $1.61 (USD)
Book Value/Share $4.58 (USD)
Sales/Share $20.30 (USD)
Cash Flow/Share $1.73 (USD)
EBITDA/Share $3.18 (USD)
Price Based on Comps Adjustment Factor
$35.56 (USD) 0
$58.18 (USD) 0
$34.09 (USD) 0
$43.07 (USD) 0
$44.41 (USD) 0
Ratios Ratio Average
PE Ratio 22.08
PB Ratio 12.71
PS Ratio 1.68
PCF Ratio 24.85
EV to EBITDA 13.94

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  PAHC:NAS for the last 4 years was  12.70

We ran the Adjusted Book Value for  PAHC:NAS and generated a book value of  $4.58 (USD)
By multiplying these we get an adjusted valuation of  $58.18 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for PAHC:NAS. The 1 analysts have a concensus valuation for PAHC:NAS for 2019 of $42.00 (USD).

PAHC:NAS Phibro Animal Health

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
0 2 0 3.0000 Hold 2018-11-2

Current Price: 42.38 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 1.75 1.92 2.10
# EPS Analysts 2 2 1
Mean Revenue 866.30 895.50 927.00
# Revenue Analysts 2 2 1
Mean Target Price 42.00
Mean Cash Flow 3.17 3.44
Mean EBITDA 128.90 138.70 149.00
Mean Net Income 71.20 79.10
Mean Debt Outstanding 168.90 147.40 75.00
Mean Tax Rate
Mean Growth Rate 6.60
Mean Capital Expenditure 31.10 27.10 26.10

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.

Notice to User


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