Intrinsic value of Benefitfocus - BNFT

Previous Close

$25.10

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$25.10

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of BNFT 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  25.95
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
Revenue, $m
  233
  249
  266
  283
  301
  320
  340
  360
  381
  404
  427
  451
  476
  502
  530
  559
  589
  620
  653
  688
  724
  762
  802
  843
  887
  933
  980
  1,031
  1,083
  1,139
  1,197
Variable operating expenses, $m
 
  140
  149
  159
  169
  180
  191
  202
  214
  227
  240
  253
  267
  282
  297
  314
  330
  348
  367
  386
  406
  428
  450
  473
  498
  523
  550
  578
  608
  639
  671
Fixed operating expenses, $m
 
  141
  145
  149
  152
  156
  160
  164
  168
  172
  177
  181
  186
  190
  195
  200
  205
  210
  215
  221
  226
  232
  238
  244
  250
  256
  262
  269
  276
  282
  289
Total operating expenses, $m
  266
  281
  294
  308
  321
  336
  351
  366
  382
  399
  417
  434
  453
  472
  492
  514
  535
  558
  582
  607
  632
  660
  688
  717
  748
  779
  812
  847
  884
  921
  960
Operating income, $m
  -32
  -32
  -29
  -25
  -20
  -16
  -11
  -6
  -1
  5
  10
  17
  23
  30
  38
  45
  54
  62
  72
  81
  92
  103
  114
  127
  140
  153
  168
  184
  200
  217
  236
EBITDA, $m
  -19
  -19
  -14
  -9
  -4
  2
  7
  13
  20
  27
  34
  41
  49
  57
  66
  76
  85
  96
  107
  119
  131
  144
  158
  172
  188
  204
  221
  239
  258
  279
  300
Interest expense (income), $m
  7
  7
  0
  1
  2
  2
  3
  4
  5
  6
  6
  7
  8
  9
  10
  11
  13
  14
  15
  16
  18
  19
  21
  22
  24
  25
  27
  29
  31
  33
  35
Earnings before tax, $m
  -40
  -39
  -29
  -26
  -22
  -18
  -14
  -10
  -6
  -1
  4
  9
  15
  21
  27
  34
  41
  49
  57
  65
  74
  84
  94
  104
  116
  128
  141
  154
  169
  184
  200
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  3
  4
  6
  7
  9
  11
  13
  15
  18
  20
  23
  25
  28
  31
  35
  38
  42
  46
  50
  54
Net income, $m
  -40
  -39
  -29
  -26
  -22
  -18
  -14
  -10
  -6
  -1
  3
  7
  11
  15
  20
  25
  30
  35
  41
  47
  54
  61
  68
  76
  85
  93
  103
  113
  123
  134
  146

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  59
  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
  180
  129
  138
  147
  156
  166
  176
  187
  198
  210
  222
  234
  247
  261
  275
  290
  306
  322
  339
  357
  376
  396
  416
  438
  460
  484
  509
  535
  562
  591
  621
Adjusted assets (=assets-cash), $m
  121
  129
  138
  147
  156
  166
  176
  187
  198
  210
  222
  234
  247
  261
  275
  290
  306
  322
  339
  357
  376
  396
  416
  438
  460
  484
  509
  535
  562
  591
  621
Revenue / Adjusted assets
  1.926
  1.930
  1.928
  1.925
  1.929
  1.928
  1.932
  1.925
  1.924
  1.924
  1.923
  1.927
  1.927
  1.923
  1.927
  1.928
  1.925
  1.925
  1.926
  1.927
  1.926
  1.924
  1.928
  1.925
  1.928
  1.928
  1.925
  1.927
  1.927
  1.927
  1.928
Average production assets, $m
  68
  73
  78
  83
  88
  93
  99
  105
  111
  118
  125
  132
  139
  147
  155
  163
  172
  181
  191
  201
  211
  223
  234
  246
  259
  272
  286
  301
  316
  332
  349
Working capital, $m
  4
  -34
  -36
  -39
  -41
  -44
  -47
  -49
  -52
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -104
  -110
  -116
  -121
  -128
  -134
  -141
  -148
  -156
  -164
Total debt, $m
  101
  4
  12
  20
  29
  38
  47
  56
  66
  77
  87
  99
  110
  123
  136
  149
  163
  178
  193
  209
  226
  244
  263
  282
  302
  324
  346
  370
  394
  420
  447
Total liabilities, $m
  214
  116
  124
  132
  141
  150
  159
  168
  178
  189
  199
  211
  222
  235
  248
  261
  275
  290
  305
  321
  338
  356
  375
  394
  414
  436
  458
  482
  506
  532
  559
Total equity, $m
  -33
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
  44
  46
  48
  51
  54
  56
  59
  62
Total liabilities and equity, $m
  181
  129
  138
  147
  157
  167
  177
  187
  198
  210
  221
  234
  247
  261
  276
  290
  306
  322
  339
  357
  376
  396
  417
  438
  460
  484
  509
  536
  562
  591
  621
Debt-to-equity ratio
  -3.061
  0.340
  0.880
  1.380
  1.840
  2.260
  2.650
  3.010
  3.340
  3.650
  3.940
  4.220
  4.470
  4.710
  4.930
  5.140
  5.340
  5.520
  5.700
  5.860
  6.020
  6.170
  6.310
  6.440
  6.570
  6.690
  6.800
  6.910
  7.010
  7.110
  7.200
Adjusted equity ratio
  -0.595
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -40
  -39
  -29
  -26
  -22
  -18
  -14
  -10
  -6
  -1
  3
  7
  11
  15
  20
  25
  30
  35
  41
  47
  54
  61
  68
  76
  85
  93
  103
  113
  123
  134
  146
Depreciation, amort., depletion, $m
  13
  14
  15
  16
  16
  18
  19
  20
  21
  22
  23
  24
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
  50
  53
  56
  59
  62
  65
Funds from operations, $m
  -45
  -25
  -14
  -10
  -6
  -1
  4
  10
  15
  21
  26
  31
  37
  42
  49
  55
  62
  69
  77
  85
  93
  102
  112
  122
  133
  144
  156
  168
  182
  196
  211
Change in working capital, $m
  -22
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
Cash from operations, $m
  -23
  -23
  -12
  -8
  -3
  2
  7
  12
  18
  24
  29
  35
  40
  46
  52
  59
  66
  73
  81
  89
  98
  107
  117
  128
  139
  150
  162
  175
  189
  204
  219
Maintenance CAPEX, $m
  0
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -50
  -53
  -56
  -59
  -62
New CAPEX, $m
  -13
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
Cash from investing activities, $m
  26
  -18
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -29
  -30
  -31
  -34
  -35
  -37
  -39
  -41
  -44
  -45
  -48
  -50
  -53
  -55
  -59
  -61
  -64
  -68
  -71
  -75
  -79
Free cash flow, $m
  3
  -40
  -30
  -27
  -24
  -20
  -16
  -12
  -8
  -3
  1
  4
  8
  13
  17
  22
  27
  32
  38
  44
  50
  57
  64
  72
  80
  89
  98
  108
  118
  129
  140
Issuance/(repayment) of debt, $m
  0
  -74
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
  22
  23
  25
  26
  27
Issuance/(repurchase) of shares, $m
  7
  121
  30
  26
  23
  19
  15
  11
  7
  2
  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  
  6
  47
  38
  34
  31
  28
  24
  21
  17
  12
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
  22
  23
  25
  26
  27
Total cash flow (excl. dividends), $m
  9
  7
  7
  7
  8
  8
  8
  9
  9
  9
  12
  16
  20
  25
  30
  35
  41
  47
  53
  60
  67
  75
  83
  92
  101
  110
  120
  131
  143
  155
  167
Retained Cash Flow (-), $m
  15
  -121
  -30
  -26
  -23
  -19
  -15
  -11
  -7
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
Prev. year cash balance distribution, $m
 
  36
  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
 
  -78
  -23
  -19
  -15
  -11
  -7
  -2
  2
  7
  10
  14
  19
  24
  29
  34
  39
  45
  52
  58
  65
  73
  81
  89
  98
  108
  118
  129
  140
  152
  164
Discount rate, %
 
  11.10
  11.66
  12.24
  12.85
  13.49
  14.17
  14.88
  15.62
  16.40
  17.22
  18.08
  18.98
  19.93
  20.93
  21.98
  23.08
  24.23
  25.44
  26.71
  28.05
  29.45
  30.92
  32.47
  34.09
  35.80
  37.59
  39.47
  41.44
  43.51
  45.69
PV of cash for distribution, $m
 
  -70
  -18
  -13
  -9
  -6
  -3
  -1
  1
  2
  2
  2
  2
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  15.1
  5.2
  2.0
  0.9
  0.5
  0.3
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2

Benefitfocus, Inc. (Benefitfocus) is a provider of cloud-based benefits management platform for consumers, employers, insurance carriers and brokers. The Benefitfocus Platform allows how organizations and individuals shop for, enroll in, manage and exchange benefits. The Company operates through two business segments: Employer, which derives its revenue from customers that use the Company's services for the provision of benefits to their employees, and administrators acting on behalf of employers, Carrier, which derives its revenue from insurance companies that provide coverage at their own risk. Its solutions support benefits plans, including healthcare, dental, life and disability insurance, and voluntary benefits plans, such as critical illness, supplemental income and wellness programs. It provides a multi-tenant cloud-based benefits management platform to the employer and carrier markets.

FINANCIAL RATIOS  of  Benefitfocus (BNFT)

Valuation Ratios
P/E Ratio -19.1
Price to Sales 3.3
Price to Book -23.1
Price to Tangible Book
Price to Cash Flow -33.2
Price to Free Cash Flow -21.2
Growth Rates
Sales Growth Rate 25.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -13.3%
Cap. Spend. - 3 Yr. Gr. Rate 7.6%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity -236.4%
Total Debt to Equity -306.1%
Interest Coverage -5
Management Effectiveness
Return On Assets -18.2%
Ret/ On Assets - 3 Yr. Avg. -32%
Return On Total Capital -69.6%
Ret/ On T. Cap. - 3 Yr. Avg. -185.8%
Return On Equity 156.9%
Return On Equity - 3 Yr. Avg. 251.3%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 48.5%
Gross Margin - 3 Yr. Avg. 43.1%
EBITDA Margin -8.6%
EBITDA Margin - 3 Yr. Avg. -23.3%
Operating Margin -14.2%
Oper. Margin - 3 Yr. Avg. -28.8%
Pre-Tax Margin -17.2%
Pre-Tax Margin - 3 Yr. Avg. -32.2%
Net Profit Margin -17.2%
Net Profit Margin - 3 Yr. Avg. -32.2%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BNFT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BNFT stock intrinsic value calculation we used $233 million for the last fiscal year's total revenue generated by Benefitfocus. The default revenue input number comes from 2016 income statement of Benefitfocus. 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 BNFT stock valuation model: a) initial revenue growth rate of 6.9% 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 11.1%, whose default value for BNFT is calculated based on our internal credit rating of Benefitfocus, 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 Benefitfocus.
    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 BNFT stock the variable cost ratio is equal to 56.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $138 million in the base year in the intrinsic value calculation for BNFT 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 8.4% for Benefitfocus.

Corporate tax rate of 27% is the nominal tax rate for Benefitfocus. 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 BNFT 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 BNFT are equal to 29.2%.

Life of production assets of 5.4 years is the average useful life of capital assets used in Benefitfocus 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 BNFT is equal to -13.7%. 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 - $-33 million for Benefitfocus - 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 31.122 million for Benefitfocus 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 Benefitfocus at the current share price and the inputted number of shares is $0.8 billion.

RELATED COMPANIES Price Int.Val. Rating
CSLT Castlight Heal 3.70 5.45  buy
ORCL Oracle 50.50 36.10  sell
ULTI Ultimate Softw 247.14 75.74  str.sell
SAP SAP ADR 104.90 85.52  sell
WDAY Workday 127.33 2.08  str.sell
EBIX Ebix 86.90 153.07  str.buy
PCTY Paylocity Hold 46.22 86.75  str.buy
MSFT Microsoft 94.06 55.03  sell
CSOD Cornerstone On 41.32 3.45  str.sell

COMPANY NEWS

▶ 8 Stocks That Will Hit All-Time Lows in 2018   [Jan-19-18 01:08PM  InvestorPlace]
▶ Benefitfocus Promotes Ray August to Chief Executive Officer   [Nov-20-17 04:30PM  GlobeNewswire]
▶ Benefitfocus reports 3Q loss   [Nov-02-17 07:09PM  Associated Press]
▶ Why MannKind, Intelsat, and Benefitfocus Jumped Today   [Oct-04-17 04:30PM  Motley Fool]
▶ Benefitfocus Expands to Salt Lake City   [Sep-27-17 09:00AM  PR Newswire]
▶ Benefitfocus reports 2Q loss   [Aug-04-17 02:34AM  Associated Press]
▶ ETFs with exposure to Benefitfocus, Inc. : June 2, 2017   [Jun-02-17 01:54PM  Capital Cube]
▶ ETFs with exposure to Benefitfocus, Inc. : May 18, 2017   [May-18-17 01:33PM  Capital Cube]
▶ ETFs with exposure to Benefitfocus, Inc. : May 2, 2017   [May-02-17 03:45PM  Capital Cube]
▶ Benefitfocus reports 1Q loss   [Apr-27-17 06:16PM  Associated Press]
▶ Benefitfocus reports 4Q loss   [Feb-23-17 06:15PM  Associated Press]
▶ Baron Opportunity Fund Comments on Benefitfocus   [Feb-21-17 11:57AM  Gurufocus]
Financial statements of BNFT
Valuation of Stocks

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

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.