Intrinsic value of Boot Barn Holdings - BOOT

Previous Close

$16.96

  Intrinsic Value

$14.15

stock screener

  Rating & Target

hold

-17%

Previous close

$16.96

 
Intrinsic value

$14.15

 
Up/down potential

-17%

 
Rating

hold

We calculate the intrinsic value of BOOT 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
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, %
  10.72
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
Revenue, $m
  630
  672
  716
  762
  809
  859
  910
  964
  1,020
  1,079
  1,140
  1,203
  1,270
  1,340
  1,412
  1,488
  1,568
  1,651
  1,739
  1,830
  1,926
  2,026
  2,131
  2,241
  2,357
  2,478
  2,605
  2,738
  2,877
  3,024
  3,177
Variable operating expenses, $m
 
  582
  619
  657
  697
  738
  782
  827
  874
  922
  974
  1,008
  1,063
  1,122
  1,183
  1,246
  1,313
  1,383
  1,456
  1,532
  1,613
  1,697
  1,784
  1,877
  1,973
  2,075
  2,181
  2,292
  2,409
  2,532
  2,661
Fixed operating expenses, $m
 
  47
  48
  50
  51
  52
  53
  55
  56
  57
  59
  60
  62
  63
  65
  67
  68
  70
  72
  74
  75
  77
  79
  81
  83
  85
  87
  90
  92
  94
  96
Total operating expenses, $m
  592
  629
  667
  707
  748
  790
  835
  882
  930
  979
  1,033
  1,068
  1,125
  1,185
  1,248
  1,313
  1,381
  1,453
  1,528
  1,606
  1,688
  1,774
  1,863
  1,958
  2,056
  2,160
  2,268
  2,382
  2,501
  2,626
  2,757
Operating income, $m
  38
  43
  49
  55
  62
  68
  75
  83
  91
  99
  107
  135
  145
  154
  165
  175
  187
  199
  211
  224
  238
  252
  267
  283
  300
  318
  336
  356
  376
  398
  420
EBITDA, $m
  55
  70
  76
  83
  90
  98
  105
  113
  122
  130
  140
  149
  159
  170
  181
  193
  205
  218
  231
  245
  260
  276
  292
  309
  327
  346
  366
  387
  409
  432
  457
Interest expense (income), $m
  14
  13
  14
  16
  17
  19
  21
  22
  24
  26
  28
  30
  32
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
  64
  68
  72
  76
  80
  85
  90
  95
Earnings before tax, $m
  23
  30
  35
  39
  44
  49
  55
  60
  66
  72
  79
  105
  112
  120
  128
  136
  145
  154
  163
  173
  184
  195
  207
  219
  232
  246
  260
  275
  291
  308
  326
Tax expense, $m
  9
  8
  9
  11
  12
  13
  15
  16
  18
  20
  21
  28
  30
  32
  34
  37
  39
  41
  44
  47
  50
  53
  56
  59
  63
  66
  70
  74
  79
  83
  88
Net income, $m
  14
  22
  25
  29
  32
  36
  40
  44
  48
  53
  58
  77
  82
  87
  93
  99
  106
  112
  119
  127
  134
  142
  151
  160
  169
  179
  190
  201
  213
  225
  238

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  8
  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
  566
  595
  634
  675
  717
  761
  806
  854
  904
  955
  1,009
  1,066
  1,125
  1,187
  1,251
  1,318
  1,389
  1,463
  1,540
  1,621
  1,706
  1,795
  1,888
  1,985
  2,087
  2,195
  2,307
  2,425
  2,549
  2,678
  2,814
Adjusted assets (=assets-cash), $m
  558
  595
  634
  675
  717
  761
  806
  854
  904
  955
  1,009
  1,066
  1,125
  1,187
  1,251
  1,318
  1,389
  1,463
  1,540
  1,621
  1,706
  1,795
  1,888
  1,985
  2,087
  2,195
  2,307
  2,425
  2,549
  2,678
  2,814
Revenue / Adjusted assets
  1.129
  1.129
  1.129
  1.129
  1.128
  1.129
  1.129
  1.129
  1.128
  1.130
  1.130
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
  1.129
Average production assets, $m
  145
  154
  164
  174
  185
  197
  208
  221
  234
  247
  261
  276
  291
  307
  323
  341
  359
  378
  398
  419
  441
  464
  488
  513
  540
  567
  596
  627
  659
  692
  728
Working capital, $m
  76
  110
  117
  124
  132
  140
  148
  157
  166
  176
  186
  196
  207
  218
  230
  243
  256
  269
  283
  298
  314
  330
  347
  365
  384
  404
  425
  446
  469
  493
  518
Total debt, $m
  234
  251
  277
  305
  333
  363
  394
  426
  460
  495
  531
  570
  610
  651
  695
  741
  788
  838
  891
  945
  1,003
  1,063
  1,126
  1,192
  1,261
  1,334
  1,410
  1,490
  1,573
  1,661
  1,753
Total liabilities, $m
  386
  403
  429
  457
  485
  515
  546
  578
  612
  647
  683
  722
  762
  803
  847
  893
  940
  990
  1,043
  1,097
  1,155
  1,215
  1,278
  1,344
  1,413
  1,486
  1,562
  1,642
  1,725
  1,813
  1,905
Total equity, $m
  180
  192
  205
  218
  232
  246
  260
  276
  292
  309
  326
  344
  363
  383
  404
  426
  449
  472
  497
  524
  551
  580
  610
  641
  674
  709
  745
  783
  823
  865
  909
Total liabilities and equity, $m
  566
  595
  634
  675
  717
  761
  806
  854
  904
  956
  1,009
  1,066
  1,125
  1,186
  1,251
  1,319
  1,389
  1,462
  1,540
  1,621
  1,706
  1,795
  1,888
  1,985
  2,087
  2,195
  2,307
  2,425
  2,548
  2,678
  2,814
Debt-to-equity ratio
  1.300
  1.310
  1.350
  1.400
  1.440
  1.480
  1.510
  1.540
  1.580
  1.600
  1.630
  1.650
  1.680
  1.700
  1.720
  1.740
  1.760
  1.770
  1.790
  1.810
  1.820
  1.830
  1.850
  1.860
  1.870
  1.880
  1.890
  1.900
  1.910
  1.920
  1.930
Adjusted equity ratio
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323
  0.323

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  14
  22
  25
  29
  32
  36
  40
  44
  48
  53
  58
  77
  82
  87
  93
  99
  106
  112
  119
  127
  134
  142
  151
  160
  169
  179
  190
  201
  213
  225
  238
Depreciation, amort., depletion, $m
  17
  27
  28
  28
  29
  29
  30
  30
  31
  32
  32
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  33
  35
  37
Funds from operations, $m
  39
  49
  53
  57
  61
  65
  70
  74
  79
  85
  90
  91
  97
  103
  109
  116
  124
  131
  139
  148
  156
  166
  175
  186
  197
  208
  220
  232
  246
  260
  274
Change in working capital, $m
  -2
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
Cash from operations, $m
  41
  42
  46
  49
  53
  57
  61
  66
  70
  75
  80
  80
  86
  91
  98
  104
  111
  118
  125
  133
  141
  149
  158
  168
  178
  188
  199
  211
  223
  236
  249
Maintenance CAPEX, $m
  0
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
New CAPEX, $m
  -22
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -35
Cash from investing activities, $m
  -24
  -16
  -18
  -18
  -20
  -20
  -22
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -58
  -60
  -64
  -67
  -70
Free cash flow, $m
  17
  25
  28
  31
  33
  36
  40
  43
  46
  50
  54
  52
  57
  61
  65
  70
  75
  80
  86
  92
  98
  104
  111
  118
  126
  133
  142
  150
  159
  169
  179
Issuance/(repayment) of debt, $m
  -18
  25
  26
  27
  29
  30
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
Issuance/(repurchase) of shares, $m
  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
  0
  0
Cash from financing (excl. dividends), $m  
  -17
  25
  26
  27
  29
  30
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  73
  76
  80
  84
  88
  92
Total cash flow (excl. dividends), $m
  1
  50
  54
  58
  62
  66
  71
  75
  80
  85
  90
  91
  97
  103
  109
  116
  123
  130
  138
  147
  155
  164
  174
  184
  195
  206
  218
  230
  243
  257
  271
Retained Cash Flow (-), $m
  -19
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
Prev. year cash balance distribution, $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 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
 
  38
  42
  45
  48
  52
  56
  60
  64
  68
  73
  72
  77
  83
  88
  94
  100
  107
  113
  120
  128
  136
  144
  153
  162
  171
  181
  192
  203
  215
  227
Discount rate, %
 
  8.50
  8.93
  9.37
  9.84
  10.33
  10.85
  11.39
  11.96
  12.56
  13.19
  13.85
  14.54
  15.26
  16.03
  16.83
  17.67
  18.55
  19.48
  20.46
  21.48
  22.55
  23.68
  24.86
  26.11
  27.41
  28.78
  30.22
  31.73
  33.32
  34.99
PV of cash for distribution, $m
 
  35
  35
  34
  33
  32
  30
  28
  26
  24
  21
  17
  15
  13
  11
  9
  7
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  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
  100.0

Boot Barn Holdings, Inc. is a lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company's stores are located in or near neighborhood shopping centers with trade areas of approximately five or more miles, and it has opened stores in malls and outlet center locations. The Company's stores average an area of approximately 11,490 square feet and feature an assortment of brands and styles. It also carries assortments of denim, western shirts, cowboy hats, belts and belt buckles, western-style jewelry and accessories. The Company's western assortment includes various brands, such as Ariat, Dan Post, Justin, Levi Strauss, Lucchese, Miss Me, Montana Silversmiths, Resistol and Wrangler. Its work assortment includes rugged footwear, outerwear, overalls, denim and shirts. Its other brands include Carhartt, Georgia, Timberland Pro and Wolverine. As of September 12, 2017, the Company operated 218 stores in 31 states.

FINANCIAL RATIOS  of  Boot Barn Holdings (BOOT)

Valuation Ratios
P/E Ratio 32.2
Price to Sales 0.7
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 11
Price to Free Cash Flow 23.7
Growth Rates
Sales Growth Rate 10.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -38.9%
Cap. Spend. - 3 Yr. Gr. Rate 12.9%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 110.6%
Total Debt to Equity 130%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.1%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.3%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 30.2%
Gross Margin - 3 Yr. Avg. 31.4%
EBITDA Margin 8.6%
EBITDA Margin - 3 Yr. Avg. 8.8%
Operating Margin 6%
Oper. Margin - 3 Yr. Avg. 6.7%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 4%
Net Profit Margin 2.2%
Net Profit Margin - 3 Yr. Avg. 2.5%
Effective Tax Rate 39.1%
Eff/ Tax Rate - 3 Yr. Avg. 38.9%
Payout Ratio 0%

BOOT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BOOT stock intrinsic value calculation we used $630 million for the last fiscal year's total revenue generated by Boot Barn Holdings. The default revenue input number comes from 2017 income statement of Boot Barn Holdings. 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 BOOT stock valuation model: a) initial revenue growth rate of 6.7% 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 8.5%, whose default value for BOOT is calculated based on our internal credit rating of Boot Barn Holdings, 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 Boot Barn Holdings.
    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 BOOT stock the variable cost ratio is equal to 86.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $46 million in the base year in the intrinsic value calculation for BOOT 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 5.7% for Boot Barn Holdings.

Corporate tax rate of 27% is the nominal tax rate for Boot Barn Holdings. 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 BOOT 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 BOOT are equal to 22.9%.

Life of production assets of 19.9 years is the average useful life of capital assets used in Boot Barn Holdings 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 BOOT is equal to 16.3%. 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 - $180 million for Boot Barn Holdings - 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 27.828 million for Boot Barn Holdings 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 Boot Barn Holdings at the current share price and the inputted number of shares is $0.5 billion.

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COMPANY NEWS

▶ Boot Barn misses 3Q revenue forecasts   [Jan-31-18 06:53PM  Associated Press]
▶ 5 Top Multibagger Stocks to Buy in 2018   [Jan-02-18 08:57AM  Zacks]
▶ Best ETFs & Stocks From November's Top Sector   [Nov-30-17 11:32AM  Zacks]
▶ Boot Barn Announces Miranda Lambert Idyllwind Trunk Shows   [Nov-14-17 09:00AM  Business Wire]
▶ Boot Barn beats Street 2Q forecasts   [Nov-02-17 07:05PM  Associated Press]
▶ Boot Barn Supporting Troops with Socks for Soldiers Event   [Oct-19-17 06:55AM  Business Wire]
▶ Boot Barn buys Texas chain, reopens most of Houston-area stores   [Sep-13-17 04:15PM  American City Business Journals]
▶ Why Boot Barn Holdings Inc. Stock Popped Today   [Aug-02-17 08:39PM  Motley Fool]
▶ Boot Barn tops Street 1Q forecasts   [Aug-01-17 11:30PM  Associated Press]
▶ Story Stocks from Briefing.com   [12:17PM  Briefing.com]
▶ Boot Barn misses Street 4Q forecasts   [Jun-01-17 04:38PM  Associated Press]
▶ National apparel retailer opens a second Louisville-area location   [Apr-19-17 07:25AM  American City Business Journals]
▶ Why These 7 Stocks Are Poised to Explode   [09:58AM  TheStreet.com]
▶ Boot Barn meets 3Q profit forecasts   [05:28PM  Associated Press]
▶ Boot Barn Remains Open Amidst Artegon Marketplace Closure   [Jan-13-17 10:16PM  Business Wire]
Financial statements of BOOT
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.

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