NuVasive (NUVA:NAS) Fundamental Valuation Report

NuVasive (NUVA:NAS) Fundamental Valuation Report

Fundamental Valuation Report

NuVasive(NUVA: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
$69.14 (USD) 05/07/2021

Weighted Valuation
$69.00 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 0.2%

Valuation Models Adjusted Book Value: $65.99 (USD)
Multiples: $62.22 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation
According to Analyst consensus at $69.00 this stock is Fairly valued

Company Overview (NUVA:NAS USD)

Price 69.14
Range 68.01 – 70.14
52 week 43.41 – 71.72
Open 68.23
Vol / Avg. 469446/500815
Mkt cap 3.57B
P/E 46.72
Div/yield 0.00/0.00
EPS -0.72
Shares 51.65M
Beta 1.31

Company Description

NuVasive Inc is a medical device company focused on minimally invasive surgical products and integrated solutions for spine surgery. The firm’s spine surgery products contribute to the majority of revenue. Its key offering is the maximum access surgery minimally disruptive surgical platform, which minimizes soft-tissue disruption and contact with critical nerves and maximizes visualization during spine fusion surgery. NuVasive also develops biologics used to aid in the spinal fusion or bone-healing processes, such as a collagen-based synthetic bone substitute and synthetic bone-graft material. NuVasive generates the 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 NUVA:NAS

Using a discounted cash flow model we generated an intrinsic value of $32.02 (USD) for NUVA:NAS

Sensitivity Analysis

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

NUVA:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $32.02 1% 5% 1% 5%
WACC (or Ke) 8.58 $42.39 $24.82
Terminal Growth Rate 3.00 $25.33 $41.63
Tax Rate 0.22 $36.78 $27.26
Cash Flow 377,598,000 $27.38 $36.66
Capital Expenditures -105,825,200 $30.81 $33.23
Long Term Debt 680,925,000 $32.68 $31.36

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $118.53 (USD) for NUVA:NAS. We also generated a valuation of $145.73 (USD) using other metrics and comparables.
The comparable companies were AdaptHealth (AHCO:NAS), Quanterix (QTRX:NAS), Varex Imaging (VREX:NAS), OrthoPediatrics (KIDS:NAS) and Tactile Systems Tech (TCMD:NAS).

Company NUVA:NAS End Date Value
Earnings/Share ($0.72) (USD)
Book Value/Share $17.79 (USD)
Sales/Share $20.43 (USD)
Cash Flow/Share $3.62 (USD)
EBITDA/Share $3.19 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$122.03 (USD) -34.6
$179.78 (USD) -45.4
$171.64 (USD) -54.4
$0.00 (USD) -38.7
NUVA:NAS Ratios Used Average Values AHCO:NAS QTRX:NAS VREX:NAS KIDS:NAS TCMD:NAS
0.00 PE Ratio 0.00 0.00 0.00 0.00 0.00 0.00
3.89 PB Ratio 6.86 8.13 9.89 2.12 5.37 8.78
3.38 PS Ratio 8.80 1.31 19.22 1.33 16.30 5.84
19.12 PCF Ratio 371.05 7.07 0.00 104.34 0.00 1001.74
24.85 EV to EBITDA 113.99 77.24 0.00 150.75 0.00 0.00

Multiples

Using a multiples approach we generated a valuation of  $62.22 (USD) for NUVA:NAS

Company NUVA:NAS End Date Value
Earnings/Share ($0.72) (USD)
Book Value/Share $17.79 (USD)
Sales/Share $20.43 (USD)
Cash Flow/Share $3.62 (USD)
EBITDA/Share $3.19 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$69.42 (USD) 0
$62.05 (USD) 0
$60.22 (USD) 0
$57.20 (USD) 0
Ratios Ratio Average
PE Ratio 77.81
PB Ratio 3.90
PS Ratio 3.04
PCF Ratio 16.65
EV to EBITDA 17.95

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  NUVA:NAS for the last 10 years was  3.69

We ran the Adjusted Book Value for  NUVA:NAS and generated a book value of  $17.89 (USD)
By multiplying these we get an adjusted valuation of  $65.99 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for NUVA:NAS. The 3 analysts have a concensus valuation for NUVA:NAS for 2021 of $69.00 (USD).

NUVA:NAS NuVasive

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 1 3.0000 Hold 2021-5-6

Current Price: 69.14 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS 2.23 2.83 3.19
# EPS Analysts 3 3 3
Mean Revenue 1,200.70 1,296.10 1,392.40
# Revenue Analysts 3 3 3
Mean Target Price 69.00
Mean Cash Flow 4.68 5.19 5.51
Mean EBITDA 300.30 340.10 366.60
Mean Net Income 118.50 148.20 167.00
Mean Debt Outstanding 595.40 544.50 464.40
Mean Tax Rate 22.00 22.00 22.00
Mean Growth Rate 53.20
Mean Capital Expenditure 114.60 120.80 127.10

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.

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