Intrinsic value of CrossAmerica Partners - CAPL

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$24.35

  Intrinsic Value

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  Value-price divergence*

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

We calculate the intrinsic value of CAPL 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 2016), $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 0.8

 

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, %
  -15.99
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,870
  2,259
  2,311
  2,371
  2,437
  2,511
  2,592
  2,681
  2,776
  2,879
  2,990
  3,108
  3,234
  3,368
  3,511
  3,662
  3,823
  3,993
  4,173
  4,362
  4,563
  4,774
  4,997
  5,232
  5,480
  5,741
  6,016
  6,305
  6,609
  6,929
  7,266
Variable operating expenses, $m
 
  2,250
  2,302
  2,361
  2,427
  2,500
  2,581
  2,668
  2,763
  2,865
  2,975
  3,084
  3,209
  3,342
  3,484
  3,634
  3,794
  3,962
  4,141
  4,329
  4,528
  4,738
  4,959
  5,192
  5,438
  5,697
  5,970
  6,257
  6,558
  6,876
  7,210
Fixed operating expenses, $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
Total operating expenses, $m
  1,838
  2,250
  2,302
  2,361
  2,427
  2,500
  2,581
  2,668
  2,763
  2,865
  2,975
  3,084
  3,209
  3,342
  3,484
  3,634
  3,794
  3,962
  4,141
  4,329
  4,528
  4,738
  4,959
  5,192
  5,438
  5,697
  5,970
  6,257
  6,558
  6,876
  7,210
Operating income, $m
  32
  9
  10
  10
  11
  11
  12
  12
  13
  14
  15
  24
  25
  26
  27
  28
  29
  31
  32
  33
  35
  37
  38
  40
  42
  44
  46
  48
  51
  53
  56
EBITDA, $m
  86
  62
  63
  65
  67
  69
  71
  73
  76
  79
  82
  85
  88
  92
  96
  100
  104
  109
  114
  119
  125
  130
  136
  143
  150
  157
  164
  172
  180
  189
  198
Interest expense (income), $m
  21
  21
  21
  22
  23
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
  37
  39
  41
  43
  45
  47
  50
  53
  55
  58
  61
  65
  68
  72
  76
  80
Earnings before tax, $m
  10
  -11
  -12
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -6
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -23
  -24
Tax expense, $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
Net income, $m
  11
  -11
  -12
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -6
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -23
  -24

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  932
  877
  897
  920
  946
  975
  1,006
  1,041
  1,078
  1,118
  1,161
  1,206
  1,255
  1,308
  1,363
  1,422
  1,484
  1,550
  1,620
  1,693
  1,771
  1,853
  1,940
  2,031
  2,127
  2,229
  2,335
  2,448
  2,566
  2,690
  2,821
Adjusted assets (=assets-cash), $m
  931
  877
  897
  920
  946
  975
  1,006
  1,041
  1,078
  1,118
  1,161
  1,206
  1,255
  1,308
  1,363
  1,422
  1,484
  1,550
  1,620
  1,693
  1,771
  1,853
  1,940
  2,031
  2,127
  2,229
  2,335
  2,448
  2,566
  2,690
  2,821
Revenue / Adjusted assets
  2.009
  2.576
  2.576
  2.577
  2.576
  2.575
  2.577
  2.575
  2.575
  2.575
  2.575
  2.577
  2.577
  2.575
  2.576
  2.575
  2.576
  2.576
  2.576
  2.576
  2.577
  2.576
  2.576
  2.576
  2.576
  2.576
  2.576
  2.576
  2.576
  2.576
  2.576
Average production assets, $m
  735
  603
  617
  633
  651
  671
  692
  716
  741
  769
  798
  830
  863
  899
  937
  978
  1,021
  1,066
  1,114
  1,165
  1,218
  1,275
  1,334
  1,397
  1,463
  1,533
  1,606
  1,683
  1,765
  1,850
  1,940
Working capital, $m
  -10
  -11
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
Total debt, $m
  468
  450
  463
  479
  497
  517
  538
  562
  587
  615
  644
  676
  709
  745
  783
  824
  867
  912
  960
  1,010
  1,064
  1,120
  1,180
  1,242
  1,309
  1,378
  1,451
  1,528
  1,610
  1,695
  1,785
Total liabilities, $m
  711
  603
  616
  632
  650
  670
  691
  715
  740
  768
  797
  829
  862
  898
  936
  977
  1,020
  1,065
  1,113
  1,163
  1,217
  1,273
  1,333
  1,395
  1,462
  1,531
  1,604
  1,681
  1,763
  1,848
  1,938
Total equity, $m
  221
  275
  281
  288
  296
  305
  315
  326
  337
  350
  363
  378
  393
  409
  427
  445
  465
  485
  507
  530
  554
  580
  607
  636
  666
  698
  731
  766
  803
  842
  883
Total liabilities and equity, $m
  932
  878
  897
  920
  946
  975
  1,006
  1,041
  1,077
  1,118
  1,160
  1,207
  1,255
  1,307
  1,363
  1,422
  1,485
  1,550
  1,620
  1,693
  1,771
  1,853
  1,940
  2,031
  2,128
  2,229
  2,335
  2,447
  2,566
  2,690
  2,821
Debt-to-equity ratio
  2.118
  1.640
  1.650
  1.660
  1.680
  1.690
  1.710
  1.730
  1.740
  1.760
  1.770
  1.790
  1.810
  1.820
  1.840
  1.850
  1.870
  1.880
  1.890
  1.910
  1.920
  1.930
  1.940
  1.950
  1.970
  1.980
  1.990
  2.000
  2.000
  2.010
  2.020
Adjusted equity ratio
  0.236
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313
  0.313

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  11
  -11
  -12
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -6
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -23
  -24
Depreciation, amort., depletion, $m
  54
  52
  53
  55
  56
  57
  59
  61
  63
  65
  67
  61
  63
  66
  69
  72
  75
  78
  82
  86
  90
  94
  98
  103
  108
  113
  118
  124
  130
  136
  143
Funds from operations, $m
  79
  41
  42
  43
  44
  45
  46
  48
  49
  51
  53
  55
  56
  59
  61
  63
  66
  68
  71
  74
  77
  80
  84
  87
  91
  95
  99
  104
  109
  113
  119
Change in working capital, $m
  0
  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
  -2
  -2
  -2
Cash from operations, $m
  79
  162
  42
  43
  44
  46
  47
  48
  50
  51
  53
  55
  57
  59
  61
  64
  66
  69
  72
  75
  78
  81
  85
  89
  92
  96
  101
  105
  110
  115
  120
Maintenance CAPEX, $m
  0
  -43
  -44
  -45
  -47
  -48
  -49
  -51
  -53
  -55
  -57
  -59
  -61
  -63
  -66
  -69
  -72
  -75
  -78
  -82
  -86
  -90
  -94
  -98
  -103
  -108
  -113
  -118
  -124
  -130
  -136
New CAPEX, $m
  -21
  -13
  -14
  -16
  -18
  -20
  -22
  -24
  -26
  -27
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -51
  -54
  -56
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -90
Cash from investing activities, $m
  -97
  -56
  -58
  -61
  -65
  -68
  -71
  -75
  -79
  -82
  -87
  -91
  -95
  -99
  -104
  -109
  -115
  -120
  -126
  -133
  -140
  -146
  -154
  -161
  -169
  -178
  -186
  -195
  -205
  -215
  -226
Free cash flow, $m
  -18
  106
  -16
  -18
  -20
  -22
  -24
  -26
  -28
  -31
  -33
  -35
  -38
  -40
  -43
  -45
  -48
  -51
  -54
  -58
  -61
  -65
  -68
  -72
  -76
  -81
  -85
  -90
  -95
  -100
  -106
Issuance/(repayment) of debt, $m
  80
  12
  14
  16
  18
  20
  22
  24
  25
  27
  29
  32
  34
  36
  38
  40
  43
  45
  48
  51
  53
  56
  59
  63
  66
  70
  73
  77
  81
  85
  90
Issuance/(repurchase) of shares, $m
  -3
  0
  8
  9
  10
  11
  12
  13
  14
  16
  17
  18
  19
  21
  22
  23
  25
  27
  28
  30
  32
  34
  36
  38
  41
  43
  45
  48
  51
  54
  57
Cash from financing (excl. dividends), $m  
  18
  12
  22
  25
  28
  31
  34
  37
  39
  43
  46
  50
  53
  57
  60
  63
  68
  72
  76
  81
  85
  90
  95
  101
  107
  113
  118
  125
  132
  139
  147
Total cash flow (excl. dividends), $m
  0
  117
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -15
  -16
Retained Cash Flow (-), $m
  48
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
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
 
  112
  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
Discount rate, %
 
  9.60
  10.08
  10.58
  11.11
  11.67
  12.25
  12.86
  13.51
  14.18
  14.89
  15.64
  16.42
  17.24
  18.10
  19.01
  19.96
  20.96
  22.00
  23.10
  24.26
  25.47
  26.75
  28.08
  29.49
  30.96
  32.51
  34.13
  35.84
  37.63
  39.51
PV of cash for distribution, $m
 
  102
  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
Current shareholders' claim on cash, %
  100
  100.0
  99.0
  97.9
  96.8
  95.6
  94.3
  93.0
  91.7
  90.4
  89.0
  87.5
  86.1
  84.6
  83.2
  81.7
  80.2
  78.7
  77.3
  75.8
  74.3
  72.9
  71.4
  70.0
  68.5
  67.1
  65.7
  64.3
  63.0
  61.6
  60.3

CrossAmerica Partners LP engages in the wholesale distribution of motor fuels, and ownership and leasing of real estate used in the retail distribution of motor fuels in the United States. It distributes gasoline and diesel fuel to approximately 1,100 sites located in 25 states. The company also operates convenience stores. CrossAmerica GP LLC operates as the general partner of the company. The company was formerly known as Lehigh Gas Partners LP and changed its name to CrossAmerica Partners LP in October 2014. CrossAmerica Partners LP was founded in 1992 and is based in Allentown, Pennsylvania.

FINANCIAL RATIOS  of  CrossAmerica Partners (CAPL)

Valuation Ratios
P/E Ratio 74.2
Price to Sales 0.4
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 10.3
Price to Free Cash Flow 14.1
Growth Rates
Sales Growth Rate -16%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2000%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 210.4%
Total Debt to Equity 211.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.8%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 1.6%
Ret/ On T. Cap. - 3 Yr. Avg. 0.7%
Return On Equity 4.5%
Return On Equity - 3 Yr. Avg. 1.7%
Asset Turnover 2.1
Profitability Ratios
Gross Margin 8.3%
Gross Margin - 3 Yr. Avg. 6.9%
EBITDA Margin 4.5%
EBITDA Margin - 3 Yr. Avg. 3.1%
Operating Margin 1.7%
Oper. Margin - 3 Yr. Avg. 1.1%
Pre-Tax Margin 0.5%
Pre-Tax Margin - 3 Yr. Avg. 0.2%
Net Profit Margin 0.6%
Net Profit Margin - 3 Yr. Avg. 0.3%
Effective Tax Rate -10%
Eff/ Tax Rate - 3 Yr. Avg. -7.5%
Payout Ratio 0%

CAPL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CAPL stock intrinsic value calculation we used $2215 million for the last fiscal year's total revenue generated by CrossAmerica Partners. The default revenue input number comes from 2016 income statement of CrossAmerica Partners. 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 CAPL stock valuation model: a) initial revenue growth rate of 2% 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 9.6%, whose default value for CAPL is calculated based on our internal credit rating of CrossAmerica Partners, 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 CrossAmerica Partners.
    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 CAPL stock the variable cost ratio is equal to 99.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CAPL 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 4.7% for CrossAmerica Partners.

Corporate tax rate of 27% is the nominal tax rate for CrossAmerica Partners. 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 CAPL 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 CAPL are equal to 26.7%.

Life of production assets of 13.6 years is the average useful life of capital assets used in CrossAmerica Partners 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 CAPL is equal to -0.5%. 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 - $269 million for CrossAmerica Partners - 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 33.717 million for CrossAmerica Partners 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 CrossAmerica Partners at the current share price and the inputted number of shares is $0.8 billion.


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COMPANY NEWS

▶ CrossAmerica misses Street 1Q forecasts   [May-08-17 06:48PM  Associated Press]
▶ CrossAmerica misses 4Q profit forecasts   [Mar-01-17 05:50AM  Associated Press]
▶ 7 Stocks Spiking on Big Volume   [07:13AM  at TheStreet]
Stock chart of CAPL Financial statements of CAPL Annual reports of CAPL
Valuation of Stocks

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