Intrinsic value of BlueLinx Holdings - BXC

Previous Close

$25.55

  Intrinsic Value

$5.26

stock screener

  Rating & Target

str. sell

-79%

Previous close

$25.55

 
Intrinsic value

$5.26

 
Up/down potential

-79%

 
Rating

str. sell

We calculate the intrinsic value of BXC 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, %
  -1.88
  2.10
  2.39
  2.65
  2.89
  3.10
  3.29
  3.46
  3.61
  3.75
  3.88
  3.99
  4.09
  4.18
  4.26
  4.34
  4.40
  4.46
  4.52
  4.56
  4.61
  4.65
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
Revenue, $m
  1,881
  1,854
  1,898
  1,948
  2,005
  2,067
  2,135
  2,208
  2,288
  2,374
  2,466
  2,564
  2,669
  2,781
  2,899
  3,025
  3,158
  3,299
  3,448
  3,606
  3,772
  3,947
  4,132
  4,327
  4,532
  4,748
  4,976
  5,215
  5,467
  5,732
  6,011
Variable operating expenses, $m
 
  1,535
  1,572
  1,613
  1,660
  1,711
  1,767
  1,829
  1,895
  1,966
  2,042
  2,123
  2,210
  2,303
  2,401
  2,505
  2,615
  2,732
  2,855
  2,986
  3,123
  3,268
  3,421
  3,583
  3,752
  3,931
  4,120
  4,318
  4,527
  4,746
  4,977
Fixed operating expenses, $m
 
  294
  301
  307
  314
  321
  328
  335
  343
  350
  358
  366
  374
  382
  391
  399
  408
  417
  426
  435
  445
  455
  465
  475
  486
  496
  507
  518
  530
  541
  553
Total operating expenses, $m
  1,839
  1,829
  1,873
  1,920
  1,974
  2,032
  2,095
  2,164
  2,238
  2,316
  2,400
  2,489
  2,584
  2,685
  2,792
  2,904
  3,023
  3,149
  3,281
  3,421
  3,568
  3,723
  3,886
  4,058
  4,238
  4,427
  4,627
  4,836
  5,057
  5,287
  5,530
Operating income, $m
  42
  24
  26
  28
  31
  34
  39
  44
  51
  58
  66
  75
  85
  96
  108
  121
  135
  151
  167
  185
  204
  224
  246
  269
  294
  320
  349
  379
  411
  445
  481
EBITDA, $m
  51
  34
  35
  37
  40
  45
  50
  55
  62
  70
  78
  88
  98
  110
  122
  136
  151
  167
  184
  203
  222
  244
  266
  291
  316
  344
  373
  405
  438
  473
  510
Interest expense (income), $m
  21
  20
  20
  21
  22
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
  42
  44
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  85
Earnings before tax, $m
  17
  4
  6
  7
  9
  12
  15
  20
  25
  31
  38
  45
  53
  63
  73
  84
  96
  109
  123
  138
  155
  172
  191
  211
  233
  256
  281
  307
  335
  364
  396
Tax expense, $m
  1
  1
  2
  2
  2
  3
  4
  5
  7
  8
  10
  12
  14
  17
  20
  23
  26
  29
  33
  37
  42
  46
  52
  57
  63
  69
  76
  83
  90
  98
  107
Net income, $m
  16
  3
  4
  5
  7
  9
  11
  14
  18
  23
  27
  33
  39
  46
  53
  61
  70
  79
  90
  101
  113
  126
  139
  154
  170
  187
  205
  224
  244
  266
  289

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  6
  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
  444
  504
  516
  530
  545
  562
  581
  601
  623
  646
  671
  698
  726
  757
  789
  823
  859
  898
  938
  981
  1,026
  1,074
  1,124
  1,177
  1,233
  1,292
  1,354
  1,419
  1,488
  1,560
  1,636
Adjusted assets (=assets-cash), $m
  438
  504
  516
  530
  545
  562
  581
  601
  623
  646
  671
  698
  726
  757
  789
  823
  859
  898
  938
  981
  1,026
  1,074
  1,124
  1,177
  1,233
  1,292
  1,354
  1,419
  1,488
  1,560
  1,636
Revenue / Adjusted assets
  4.295
  3.679
  3.678
  3.675
  3.679
  3.678
  3.675
  3.674
  3.673
  3.675
  3.675
  3.673
  3.676
  3.674
  3.674
  3.676
  3.676
  3.674
  3.676
  3.676
  3.676
  3.675
  3.676
  3.676
  3.676
  3.675
  3.675
  3.675
  3.674
  3.674
  3.674
Average production assets, $m
  95
  87
  89
  92
  94
  97
  100
  104
  108
  112
  116
  121
  125
  131
  136
  142
  148
  155
  162
  169
  177
  186
  194
  203
  213
  223
  234
  245
  257
  269
  283
Working capital, $m
  192
  248
  254
  261
  269
  277
  286
  296
  307
  318
  330
  344
  358
  373
  389
  405
  423
  442
  462
  483
  505
  529
  554
  580
  607
  636
  667
  699
  733
  768
  805
Total debt, $m
  322
  293
  304
  316
  330
  345
  362
  380
  400
  421
  443
  467
  493
  520
  549
  580
  613
  647
  684
  722
  763
  806
  851
  899
  949
  1,002
  1,058
  1,116
  1,178
  1,243
  1,311
Total liabilities, $m
  474
  454
  465
  477
  491
  506
  523
  541
  560
  581
  604
  628
  654
  681
  710
  741
  773
  808
  844
  883
  924
  967
  1,012
  1,060
  1,110
  1,163
  1,219
  1,277
  1,339
  1,404
  1,472
Total equity, $m
  -30
  50
  52
  53
  55
  56
  58
  60
  62
  65
  67
  70
  73
  76
  79
  82
  86
  90
  94
  98
  103
  107
  112
  118
  123
  129
  135
  142
  149
  156
  164
Total liabilities and equity, $m
  444
  504
  517
  530
  546
  562
  581
  601
  622
  646
  671
  698
  727
  757
  789
  823
  859
  898
  938
  981
  1,027
  1,074
  1,124
  1,178
  1,233
  1,292
  1,354
  1,419
  1,488
  1,560
  1,636
Debt-to-equity ratio
  -10.733
  5.810
  5.890
  5.970
  6.050
  6.140
  6.230
  6.320
  6.420
  6.510
  6.600
  6.700
  6.790
  6.870
  6.960
  7.050
  7.130
  7.210
  7.290
  7.360
  7.430
  7.500
  7.570
  7.630
  7.700
  7.760
  7.810
  7.870
  7.920
  7.970
  8.020
Adjusted equity ratio
  -0.068
  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
  16
  3
  4
  5
  7
  9
  11
  14
  18
  23
  27
  33
  39
  46
  53
  61
  70
  79
  90
  101
  113
  126
  139
  154
  170
  187
  205
  224
  244
  266
  289
Depreciation, amort., depletion, $m
  9
  9
  9
  10
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  25
  26
  27
  28
  30
Funds from operations, $m
  83
  12
  14
  15
  17
  19
  22
  25
  30
  34
  40
  46
  52
  59
  67
  76
  86
  96
  107
  119
  132
  145
  160
  176
  192
  210
  229
  250
  271
  294
  319
Change in working capital, $m
  42
  5
  6
  7
  8
  8
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  36
  37
Cash from operations, $m
  41
  7
  8
  8
  9
  11
  13
  16
  19
  23
  27
  32
  38
  45
  52
  59
  68
  77
  87
  98
  109
  122
  135
  150
  165
  181
  199
  218
  238
  259
  282
Maintenance CAPEX, $m
  0
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
New CAPEX, $m
  -1
  -1
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
Cash from investing activities, $m
  37
  -10
  -11
  -11
  -13
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -20
  -20
  -21
  -23
  -23
  -24
  -26
  -27
  -29
  -29
  -31
  -32
  -34
  -36
  -38
  -39
  -41
Free cash flow, $m
  78
  -3
  -4
  -4
  -3
  -2
  -1
  1
  4
  7
  11
  16
  21
  26
  32
  39
  47
  55
  64
  73
  84
  95
  107
  120
  134
  149
  165
  182
  200
  219
  240
Issuance/(repayment) of debt, $m
  -85
  -5
  11
  12
  14
  15
  17
  18
  20
  21
  23
  24
  26
  27
  29
  31
  33
  35
  36
  39
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  68
Issuance/(repurchase) of shares, $m
  0
  12
  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  
  -78
  7
  11
  12
  14
  15
  17
  18
  20
  21
  23
  24
  26
  27
  29
  31
  33
  35
  36
  39
  41
  43
  45
  48
  50
  53
  56
  59
  62
  65
  68
Total cash flow (excl. dividends), $m
  1
  4
  7
  9
  10
  13
  16
  20
  24
  28
  34
  40
  46
  53
  61
  70
  79
  89
  100
  112
  124
  138
  152
  168
  184
  202
  220
  240
  262
  284
  308
Retained Cash Flow (-), $m
  -16
  -15
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
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
 
  -11
  6
  7
  9
  11
  14
  18
  22
  26
  31
  37
  43
  50
  58
  66
  76
  85
  96
  107
  120
  133
  147
  162
  179
  196
  214
  234
  255
  277
  301
Discount rate, %
 
  14.10
  14.81
  15.55
  16.32
  17.14
  18.00
  18.90
  19.84
  20.83
  21.87
  22.97
  24.12
  25.32
  26.59
  27.92
  29.31
  30.78
  32.32
  33.93
  35.63
  37.41
  39.28
  41.25
  43.31
  45.47
  47.75
  50.13
  52.64
  55.27
  58.04
PV of cash for distribution, $m
 
  -10
  5
  5
  5
  5
  5
  5
  5
  5
  4
  4
  3
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0
  95.0

BlueLinx Holdings, Inc. is a distributor of building products in North America. The Company operates its distribution business through a network of approximately 40 distribution centers. It serves metropolitan areas in the United States and delivers building products to a range of wholesale and retail customers. The Company distributes products in approximately two categories, such as structural products and specialty products. Structural products include plywood, oriented strand board (OSB), rebar and remesh, lumber and other wood products primarily used for structural support, walls and flooring in construction projects. Specialty products include roofing, insulation, specialty panels, molding, engineered wood products, vinyl products (used primarily in siding), outdoor living, particle board and metal products (excluding rebar and remesh). It also provides a range of services and solutions, such as intermodal distribution services; inventory stocking, and backhaul services.

FINANCIAL RATIOS  of  BlueLinx Holdings (BXC)

Valuation Ratios
P/E Ratio 14.4
Price to Sales 0.1
Price to Book -7.7
Price to Tangible Book
Price to Cash Flow 5.6
Price to Free Cash Flow 5.8
Growth Rates
Sales Growth Rate -1.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -27.5%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity -903.3%
Total Debt to Equity -1073.3%
Interest Coverage 2
Management Effectiveness
Return On Assets 7.5%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 4.9%
Ret/ On T. Cap. - 3 Yr. Avg. -0.6%
Return On Equity -42.1%
Return On Equity - 3 Yr. Avg. 17.9%
Asset Turnover 3.9
Profitability Ratios
Gross Margin 12.1%
Gross Margin - 3 Yr. Avg. 11.7%
EBITDA Margin 2.5%
EBITDA Margin - 3 Yr. Avg. 1.5%
Operating Margin 2.2%
Oper. Margin - 3 Yr. Avg. 1.3%
Pre-Tax Margin 0.9%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin 0.9%
Net Profit Margin - 3 Yr. Avg. -0.2%
Effective Tax Rate 5.9%
Eff/ Tax Rate - 3 Yr. Avg. -1.1%
Payout Ratio 0%

BXC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BXC stock intrinsic value calculation we used $1815.535 million for the last fiscal year's total revenue generated by BlueLinx Holdings. The default revenue input number comes from 2016 income statement of BlueLinx 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 BXC stock valuation model: a) initial revenue growth rate of 2.1% 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 14.1%, whose default value for BXC is calculated based on our internal credit rating of BlueLinx 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 BlueLinx 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 BXC stock the variable cost ratio is equal to 82.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $288 million in the base year in the intrinsic value calculation for BXC 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 6.8% for BlueLinx Holdings.

Corporate tax rate of 27% is the nominal tax rate for BlueLinx 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 BXC 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 BXC are equal to 4.7%.

Life of production assets of 9.5 years is the average useful life of capital assets used in BlueLinx 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 BXC is equal to 13.4%. 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 - $35.002 million for BlueLinx 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 9.289 million for BlueLinx 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 BlueLinx Holdings at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
BECN Beacon Roofing 31.01 34.23  hold
BCC Boise Cascade 33.91 266.33  str.buy
GMS GMS 19.17 28.39  hold
JCTCF Jewett-Cameron 9.78 3.15  str.sell
HBP Huttig Buildin 3.58 5.43  hold
BMCH BMC Stock Hold 17.42 16.24  sell
LL Lumber Liquida 13.14 96.87  str.buy

COMPANY NEWS

▶ BlueLinx: 2Q Earnings Snapshot   [Aug-09-18 07:19AM  Associated Press]
▶ BlueLinx Announces First Quarter 2018 Results   [May-03-18 07:00AM  GlobeNewswire]
▶ BlueLinx to Announce First Quarter Results on May 3rd   [Apr-25-18 07:00AM  GlobeNewswire]
▶ BlueLinx posts 4Q profit   [Mar-01-18 08:34AM  Associated Press]
▶ BlueLinx Announces Repayment of $98 Million CMBS Mortgage   [Jan-10-18 09:43PM  GlobeNewswire]
▶ When Should You Buy Bluelinx Holdings Inc (BXC)?   [Nov-08-17 11:09AM  Simply Wall St.]
▶ BlueLinx posts 3Q profit   [Nov-02-17 08:23AM  Associated Press]
▶ BlueLinx Announces Third-Quarter Results   [07:30AM  GlobeNewswire]
▶ BlueLinx to Announce Third Quarter Results on November 2nd   [Oct-25-17 06:59PM  GlobeNewswire]
▶ BlueLinx announces new Asset Based Loan   [Oct-09-17 11:25PM  GlobeNewswire]
▶ BlueLinx posts 2Q profit   [Aug-10-17 11:51PM  Associated Press]
▶ BlueLinx Announces Second-Quarter Results   [07:30AM  GlobeNewswire]
▶ BlueLinx posts 1Q profit   [May-04-17 07:47AM  Associated Press]
▶ BlueLinx to Announce First Quarter Results on May 4th   [Apr-20-17 04:15PM  GlobeNewswire]
▶ BlueLinx Completes Three Property Sales   [04:45PM  GlobeNewswire]
▶ BlueLinx posts 4Q profit   [07:53AM  Associated Press]
▶ BlueLinx Announces Third-Quarter Results   [07:00AM  GlobeNewswire]
▶ BlueLinx Announces Extension of Revolving Credit Facility   [Nov-03-16 06:00PM  GlobeNewswire]
Financial statements of BXC
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

CONTACT US       ASSET ALLOCATION

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

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