Intrinsic value of Avante Logixx Inc - XX

Previous Close

$0.27

  Intrinsic Value

$0.83

stock screener

  Rating & Target

str. buy

+206%

  Value-price divergence*

0%

Previous close

$0.27

 
Intrinsic value

$0.83

 
Up/down potential

+206%

 
Rating

str. buy

 
Value-price divergence*

0%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of XX stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  40.00
  25.00
  23.00
  21.20
  19.58
  18.12
  16.81
  15.63
  14.57
  13.61
  12.75
  11.97
  11.28
  10.65
  10.08
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
Revenue, $m
  21
  26
  32
  39
  47
  55
  65
  75
  86
  97
  110
  123
  137
  151
  166
  182
  199
  216
  234
  253
  272
  293
  314
  335
  358
  382
  406
  432
  459
  486
  515
Variable operating expenses, $m
 
  22
  27
  33
  40
  47
  55
  63
  72
  82
  92
  103
  114
  127
  139
  153
  167
  181
  196
  212
  228
  245
  263
  281
  300
  320
  341
  362
  384
  408
  432
Fixed operating expenses, $m
 
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
Total operating expenses, $m
  20
  24
  29
  35
  42
  49
  57
  65
  74
  84
  95
  106
  117
  130
  142
  156
  170
  184
  199
  215
  231
  248
  266
  285
  304
  324
  345
  366
  388
  412
  436
Operating income, $m
  0
  2
  3
  4
  5
  6
  8
  9
  11
  13
  15
  17
  19
  22
  24
  27
  29
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  66
  70
  75
  79
EBITDA, $m
  1
  3
  4
  5
  7
  8
  10
  12
  14
  16
  18
  21
  23
  26
  29
  32
  35
  38
  41
  45
  48
  52
  56
  60
  64
  68
  73
  78
  83
  88
  93
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
Earnings before tax, $m
  0
  2
  3
  4
  5
  6
  7
  9
  10
  12
  14
  16
  18
  20
  22
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  73
Tax expense, $m
  0
  0
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  9
  10
  11
  12
  13
  14
  14
  15
  16
  18
  19
  20
Net income, $m
  0
  1
  2
  3
  3
  4
  5
  6
  8
  9
  10
  12
  13
  15
  16
  18
  20
  22
  24
  26
  28
  30
  32
  34
  37
  39
  42
  45
  47
  50
  53

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  19
  21
  26
  32
  38
  45
  52
  60
  69
  79
  89
  99
  111
  122
  135
  148
  161
  175
  190
  205
  221
  237
  254
  272
  290
  309
  329
  350
  371
  394
  417
Adjusted assets (=assets-cash), $m
  17
  21
  26
  32
  38
  45
  52
  60
  69
  79
  89
  99
  111
  122
  135
  148
  161
  175
  190
  205
  221
  237
  254
  272
  290
  309
  329
  350
  371
  394
  417
Revenue / Adjusted assets
  1.235
  1.238
  1.231
  1.219
  1.237
  1.222
  1.250
  1.250
  1.246
  1.228
  1.236
  1.242
  1.234
  1.238
  1.230
  1.230
  1.236
  1.234
  1.232
  1.234
  1.231
  1.236
  1.236
  1.232
  1.234
  1.236
  1.234
  1.234
  1.237
  1.234
  1.235
Average production assets, $m
  5
  6
  7
  8
  10
  12
  14
  16
  18
  21
  23
  26
  29
  32
  36
  39
  43
  46
  50
  54
  58
  63
  67
  72
  77
  82
  87
  92
  98
  104
  110
Working capital, $m
  3
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  23
  25
Total debt, $m
  0
  2
  4
  7
  10
  13
  17
  20
  25
  29
  34
  39
  44
  50
  55
  61
  68
  74
  81
  88
  96
  104
  112
  120
  129
  138
  147
  157
  167
  177
  188
Total liabilities, $m
  8
  10
  12
  15
  18
  21
  25
  28
  33
  37
  42
  47
  52
  58
  63
  69
  76
  82
  89
  96
  104
  112
  120
  128
  137
  146
  155
  165
  175
  185
  196
Total equity, $m
  11
  11
  14
  17
  20
  24
  28
  32
  37
  42
  47
  53
  58
  65
  71
  78
  85
  93
  100
  108
  117
  125
  134
  144
  153
  164
  174
  185
  196
  208
  221
Total liabilities and equity, $m
  19
  21
  26
  32
  38
  45
  53
  60
  70
  79
  89
  100
  110
  123
  134
  147
  161
  175
  189
  204
  221
  237
  254
  272
  290
  310
  329
  350
  371
  393
  417
Debt-to-equity ratio
  0.000
  0.180
  0.310
  0.410
  0.490
  0.550
  0.600
  0.640
  0.670
  0.700
  0.720
  0.740
  0.750
  0.770
  0.780
  0.790
  0.800
  0.800
  0.810
  0.820
  0.820
  0.830
  0.830
  0.830
  0.840
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
Adjusted equity ratio
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  1
  2
  3
  3
  4
  5
  6
  8
  9
  10
  12
  13
  15
  16
  18
  20
  22
  24
  26
  28
  30
  32
  34
  37
  39
  42
  45
  47
  50
  53
Depreciation, amort., depletion, $m
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
Funds from operations, $m
  2
  2
  3
  4
  5
  6
  7
  9
  10
  12
  13
  15
  17
  19
  21
  23
  25
  27
  30
  32
  35
  38
  40
  43
  46
  49
  53
  56
  60
  63
  67
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  18
  20
  22
  24
  27
  29
  31
  34
  37
  39
  42
  45
  48
  51
  55
  58
  62
  66
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
Cash from investing activities, $m
  -3
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -6
  -6
  -6
  -7
  -7
  -7
  -9
  -9
  -10
  -10
  -11
  -11
  -13
  -13
  -14
  -15
  -15
  -16
  -18
  -18
  -19
Free cash flow, $m
  -1
  0
  1
  1
  2
  3
  4
  4
  5
  6
  8
  9
  10
  11
  13
  14
  16
  18
  19
  21
  23
  25
  27
  29
  31
  34
  36
  38
  41
  44
  47
Issuance/(repayment) of debt, $m
  0
  2
  2
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
Issuance/(repurchase) of shares, $m
  0
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  0
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
Total cash flow (excl. dividends), $m
  -1
  3
  4
  4
  5
  6
  7
  8
  10
  11
  12
  14
  15
  17
  19
  20
  22
  24
  26
  28
  30
  33
  35
  37
  40
  43
  45
  48
  51
  54
  58
Retained Cash Flow (-), $m
  -1
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
Prev. year cash balance distribution, $m
 
  2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  3
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  9
  11
  12
  14
  15
  17
  18
  20
  22
  24
  26
  28
  30
  33
  35
  37
  40
  42
  45
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  3
  1
  1
  1
  2
  2
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  3
  3
  3
  2
  2
  2
  2
  1
  1
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  95.1
  92.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5
  91.5

Avante Logixx Inc. is engaged in development of technologies, products and solutions for personal, condominiums and commercial monitoring, and control applications. The Company operates through its subsidiaries, Avante Security Inc. (ASI), INTO ELECTRONICS Inc. (INTO) and LVS Inc. It provides a range of home and corporate security services ranging from system design, installations and monitoring to services, such as alarm response, patrols, secured transport, international travel advisory and incident planning. Its monitoring services are provided through multiple channels, and applications of these services include virtual video patrols of retail stores, shopping malls, daycare centers and hotels. It provides Electronic Building Management through INTO. ASI's offerings include Rapid Alarm Response service and its Intelligent Perimeter Protection Video Analytics, as well as commercial offerings, such as Closed Circuit Television (CCTV), access controls and security services.

FINANCIAL RATIOS  of  Avante Logixx Inc (XX)

Valuation Ratios
P/E Ratio 0
Price to Sales 1
Price to Book 2
Price to Tangible Book
Price to Cash Flow 11
Price to Free Cash Flow 22
Growth Rates
Sales Growth Rate 40%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 2.9%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 3.9%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 3.9%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 33.3%
Gross Margin - 3 Yr. Avg. 35.6%
EBITDA Margin 4.8%
EBITDA Margin - 3 Yr. Avg. 4.9%
Operating Margin 4.8%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 3.3%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

XX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XX stock intrinsic value calculation we used $21 million for the last fiscal year's total revenue generated by Avante Logixx Inc. The default revenue input number comes from 2017 income statement of Avante Logixx Inc. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our XX stock valuation model: a) initial revenue growth rate of 25% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for XX is calculated based on our internal credit rating of Avante Logixx Inc, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Avante Logixx Inc.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of XX stock the variable cost ratio is equal to 85.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2 million in the base year in the intrinsic value calculation for XX stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Avante Logixx Inc.

Corporate tax rate of 27% is the nominal tax rate for Avante Logixx Inc. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the XX stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for XX are equal to 21.4%.

Life of production assets of 8 years is the average useful life of capital assets used in Avante Logixx Inc operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for XX is equal to 4.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $11 million for Avante Logixx Inc - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 81.545 million for Avante Logixx Inc is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Avante Logixx Inc at the current share price and the inputted number of shares is $0.0 billion.

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The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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