Cardiovascular Systems (CSII:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Cardiovascular Systems(CSII:NAS)

Healthcare:Medical Devices

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

Close Price/Date
$32.50 (USD) 06/11/2018

Weighted Valuation
$30.96 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 4.7%

Valuation Models Analyst Consensus: $31.00 (USD)
(in order of importance) Comparables: $32.05 (USD)
Adjusted Book Value: $28.68 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Fairly valued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (CSII:NAS USD)

Price 32.50
Range 31.17 – 32.64
52 week 21.05 – 39.25
Open 31.17
Vol / Avg. 349166/358575
Mkt cap 1.13B
P/E 1625.00
Div/yield 0.00/0.00
EPS 0.05
Shares 34.7M
Beta 2.36

Company Description

Cardiovascular Systems Inc is a medical technology company focused on patients with peripheral and coronary artery diseases. Its peripheral artery disease systems are catheter-based platforms used to treat plaque in leg arteries above and below the knee. The firm’s orbital atherectomy systems are used in peripheral and coronary commercial applications. Its OAS products include the Diamondback 360 Peripheral and Stealth 360 systems. Sales of Peripheral OAS contribute the majority of revenue. Cardiovascular systems generates the vast majority of its revenue in the United States.

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 CSII:NAS

Using a discounted cash flow model we generated an intrinsic value of $0.13 (USD) for CSII:NAS

Sensitivity Analysis

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

CSII:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $0.13 1% 5% 1% 5%
WACC (or Ke) 19.94 $0.14 $0.12
Terminal Growth Rate 3.00 $0.12 $0.15
Tax Rate 0.07 $0.17 $0.09
Cash Flow 9,371,493 $0.06 $0.20
Capital Expenditures -7,959,400 $0.09 $0.17
Long Term Debt 0 $0.13 $0.13

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $32.05 (USD) for CSII:NAS. We also generated a valuation of $57.08 (USD) using other metrics and comparables.
The comparable companies were AxoGen (AXGN:NAS), Conmed (CNMD:NAS), Cryolife (CRY:NYS), Nevro (NVRO:NYS) and Tactile Systems Tech (TCMD:NAS).

Company CSII:NAS End Date Value
Earnings/Share $0.02 (USD)
Book Value/Share $3.88 (USD)
Sales/Share $6.46 (USD)
Cash Flow/Share $0.29 (USD)
EBITDA/Share $0.22 (USD)
Price Based on Comps Adjustment Factor (%)
$2.31 (USD) 0.0
$29.52 (USD) 64.1
$49.72 (USD) 9.3
$33.86 (USD) 0.0
$17.65 (USD) 21.6
CSII:NAS Ratios Used Average Values AXGN:NAS CNMD:NAS CRY:NYS NVRO:NYS TCMD:NAS
561.00 PE Ratio 115.38 0.00 26.14 0.00 0.00 204.63
7.24 PB Ratio 7.62 9.65 2.93 4.22 5.99 15.31
4.34 PS Ratio 7.70 17.28 2.32 4.83 3.99 10.09
97.47 PCF Ratio 119.83 0.00 24.05 0.00 0.00 215.60
117.10 EV to EBITDA 79.44 0.00 17.67 82.90 0.00 137.74

Multiples

Using a multiples approach we generated a valuation of  $27.22 (USD) for CSII:NAS

Company CSII:NAS End Date Value
Earnings/Share $0.02 (USD)
Book Value/Share $3.88 (USD)
Sales/Share $6.46 (USD)
Cash Flow/Share $0.29 (USD)
EBITDA/Share $0.22 (USD)
Price Based on Comps Adjustment Factor
$15.13 (USD) 0
$27.46 (USD) 0
$29.15 (USD) 0
$33.24 (USD) 0
$31.11 (USD) 0
Ratios Ratio Average
PE Ratio 756.69
PB Ratio 7.09
PS Ratio 4.51
PCF Ratio 115.50
EV to EBITDA 140.01

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CSII:NAS for the last 10 years was  7.14

We ran the Adjusted Book Value for  CSII:NAS and generated a book value of  $4.02 (USD)
By multiplying these we get an adjusted valuation of  $28.68 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for CSII:NAS. The 1 analysts have a concensus valuation for CSII:NAS for 2019 of $31.00 (USD).

CSII:NAS Cardiovascular Systems

No analyst recommendation
Current Price: not available

No analyst consensus

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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