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Albany Molecular Research Inc. Message Board

  • jagad5 jagad5 Jul 22, 2003 9:21 AM Flag

    My estimates

    Rev - $45.0M
    Net - $4.2M
    eps - $.13
    Value - $30
    R^2 - 9.37

    AMRI has been reporting within a couple percent of my revenue predictions for a couple of years. I hope they reach within a couple percent of my value prediction!


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    • The market has yet to react to the good report. AMRI beat my statistical (an emotionless projection) by a considerable amount.

      For the next quarter, I predict
      REV - $46.8M
      NET - $7.48M
      EPS - $.23
      WMV - $40 - if net profit margins return to historic 25%+ range
      WMV - $20 - if npm remain at their "paltry" 15%

      One conservatism in my analysis - AMRI exceeded my last prediction by nearly 20%. If it does that again, we should be in for quite a ride.

      Any emotionless explainations for why the company trades for a fraction of its value would be greatly appreciated. The price reflects an expected growth rate of 4.9%. Taking into account the huge cash position, we have a company with $162M in revenues selling for $237M, a PE of 7 and a PSR of 1.46 for a company growing revenues at an average of 40% per year for the last 3 years.

      I used to be a member of the American Association of Individual Investors. In their journal, several articles discussed the concept of "growth flow" which was defined as EPS +R&D/share. (I have not seen many point out that R&D for the quarter more than doubled to over $5M. That's a lot of thinking.) For the latest quarter, we had growth flow of approximately $0.43 vs. $0.38, suggesting that the company's future prospects have grown stronger.

      I'm an engineer and a mathematician, both might suggest the ability to evaluate facts coldly and objectively. If you can identify a factual error, please bring it to my attention so that I can correct my analysis. I'm am not particularly interested in any emotional appeals to rely on a short squeeze or to insult the girth or integrity of the current administration.


      • 2 Replies to jagad5
      • The valuation is low because of the concerns about Allegra royalties. Contract revenue excluding Organichem was down and gross margin down too due to R&D budget cuts by big Pharms and biotechs. The stock will turn around if contract revenue stablizes and goes up again. AMRI will be hit hard if Allegra becomes OTC. What the company needs is some good news on the drug discovery front.

      • Very interesting post.
        If I understand you right, you're taking out the $4 a share in cash and valuing AMRI as a $10 stock.
        With earnings estimate of $1.09, the P/E should be about 9 on a $10 stock.
        Your estimate of 23 cents for Q3 is below the company guidance of 27-28 cents. If they report 23 cents, the stock will drop further for sure.
        Personally, I think AMRI needs to show a pickup in business or it will stay around current levels.
        I have heard that Quintiles is taking on business at cost, hurting PPDI and other CROs.

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