Intrinsic value of CrossAmerica Partners - CAPL

Previous Close

$23.84

  Intrinsic Value

$2.02

stock screener

  Rating & Target

str. sell

-92%

Previous close

$23.84

 
Intrinsic value

$2.02

 
Up/down potential

-92%

 
Rating

str. sell

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

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, %
  -15.99
  11.50
  10.85
  10.27
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.27
  7.04
  6.84
  6.65
  6.49
  6.34
  6.20
  6.08
  5.98
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
Revenue, $m
  1,870
  2,085
  2,311
  2,549
  2,797
  3,056
  3,326
  3,607
  3,900
  4,204
  4,520
  4,848
  5,189
  5,544
  5,913
  6,297
  6,696
  7,111
  7,544
  7,995
  8,464
  8,955
  9,466
  10,000
  10,557
  11,140
  11,749
  12,386
  13,052
  13,749
  14,478
Variable operating expenses, $m
 
  2,059
  2,281
  2,515
  2,759
  3,014
  3,279
  3,556
  3,843
  4,142
  4,453
  4,767
  5,102
  5,451
  5,814
  6,191
  6,583
  6,992
  7,417
  7,861
  8,323
  8,804
  9,307
  9,832
  10,381
  10,953
  11,552
  12,178
  12,833
  13,519
  14,236
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
  2,059
  2,281
  2,515
  2,759
  3,014
  3,279
  3,556
  3,843
  4,142
  4,453
  4,767
  5,102
  5,451
  5,814
  6,191
  6,583
  6,992
  7,417
  7,861
  8,323
  8,804
  9,307
  9,832
  10,381
  10,953
  11,552
  12,178
  12,833
  13,519
  14,236
Operating income, $m
  32
  26
  30
  34
  38
  42
  47
  52
  56
  62
  67
  81
  87
  93
  99
  106
  112
  119
  126
  134
  142
  150
  159
  168
  177
  187
  197
  208
  219
  230
  243
EBITDA, $m
  86
  89
  98
  109
  119
  130
  142
  154
  166
  179
  193
  207
  221
  236
  252
  268
  285
  303
  321
  341
  361
  382
  403
  426
  450
  475
  501
  528
  556
  586
  617
Interest expense (income), $m
  21
  21
  25
  29
  33
  38
  42
  47
  52
  57
  62
  68
  74
  79
  86
  92
  99
  106
  113
  121
  128
  137
  145
  154
  164
  173
  183
  194
  205
  217
  229
Earnings before tax, $m
  10
  5
  5
  5
  5
  5
  5
  5
  5
  5
  5
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  13
  14
  14
  14
Tax expense, $m
  -1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
Net income, $m
  11
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10

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
  1,038
  1,150
  1,269
  1,392
  1,521
  1,656
  1,795
  1,941
  2,092
  2,250
  2,413
  2,583
  2,760
  2,943
  3,134
  3,333
  3,540
  3,755
  3,979
  4,213
  4,457
  4,712
  4,978
  5,255
  5,545
  5,848
  6,165
  6,497
  6,844
  7,207
Adjusted assets (=assets-cash), $m
  931
  1,038
  1,150
  1,269
  1,392
  1,521
  1,656
  1,795
  1,941
  2,092
  2,250
  2,413
  2,583
  2,760
  2,943
  3,134
  3,333
  3,540
  3,755
  3,979
  4,213
  4,457
  4,712
  4,978
  5,255
  5,545
  5,848
  6,165
  6,497
  6,844
  7,207
Revenue / Adjusted assets
  2.009
  2.009
  2.010
  2.009
  2.009
  2.009
  2.008
  2.009
  2.009
  2.010
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
  2.009
Average production assets, $m
  735
  819
  908
  1,002
  1,099
  1,201
  1,307
  1,418
  1,533
  1,652
  1,776
  1,905
  2,039
  2,179
  2,324
  2,475
  2,631
  2,795
  2,965
  3,142
  3,327
  3,519
  3,720
  3,930
  4,149
  4,378
  4,617
  4,868
  5,129
  5,403
  5,690
Working capital, $m
  -10
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -50
  -52
  -55
  -58
Total debt, $m
  468
  549
  635
  725
  819
  918
  1,020
  1,127
  1,238
  1,354
  1,474
  1,598
  1,728
  1,863
  2,003
  2,148
  2,300
  2,458
  2,622
  2,793
  2,972
  3,158
  3,352
  3,555
  3,767
  3,988
  4,219
  4,461
  4,714
  4,979
  5,256
Total liabilities, $m
  711
  792
  878
  968
  1,062
  1,161
  1,263
  1,370
  1,481
  1,597
  1,717
  1,841
  1,971
  2,106
  2,246
  2,391
  2,543
  2,701
  2,865
  3,036
  3,215
  3,401
  3,595
  3,798
  4,010
  4,231
  4,462
  4,704
  4,957
  5,222
  5,499
Total equity, $m
  221
  246
  273
  301
  330
  360
  392
  426
  460
  496
  533
  572
  612
  654
  698
  743
  790
  839
  890
  943
  999
  1,056
  1,117
  1,180
  1,245
  1,314
  1,386
  1,461
  1,540
  1,622
  1,708
Total liabilities and equity, $m
  932
  1,038
  1,151
  1,269
  1,392
  1,521
  1,655
  1,796
  1,941
  2,093
  2,250
  2,413
  2,583
  2,760
  2,944
  3,134
  3,333
  3,540
  3,755
  3,979
  4,214
  4,457
  4,712
  4,978
  5,255
  5,545
  5,848
  6,165
  6,497
  6,844
  7,207
Debt-to-equity ratio
  2.118
  2.230
  2.330
  2.410
  2.480
  2.550
  2.600
  2.650
  2.690
  2.730
  2.760
  2.790
  2.820
  2.850
  2.870
  2.890
  2.910
  2.930
  2.950
  2.960
  2.980
  2.990
  3.000
  3.010
  3.020
  3.030
  3.040
  3.050
  3.060
  3.070
  3.080
Adjusted equity ratio
  0.236
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237
  0.237

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  11
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
Depreciation, amort., depletion, $m
  54
  63
  69
  75
  81
  88
  95
  102
  110
  118
  126
  125
  134
  143
  153
  163
  173
  184
  195
  207
  219
  232
  245
  259
  273
  288
  304
  320
  337
  355
  374
Funds from operations, $m
  79
  66
  72
  78
  85
  91
  98
  106
  113
  121
  129
  135
  144
  153
  163
  173
  183
  194
  205
  216
  229
  241
  255
  268
  283
  298
  314
  330
  347
  365
  384
Change in working capital, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
Cash from operations, $m
  79
  67
  73
  79
  86
  92
  99
  107
  114
  122
  130
  136
  145
  155
  164
  174
  184
  195
  207
  218
  230
  243
  257
  270
  285
  300
  316
  333
  350
  368
  387
Maintenance CAPEX, $m
  0
  -48
  -54
  -60
  -66
  -72
  -79
  -86
  -93
  -101
  -109
  -117
  -125
  -134
  -143
  -153
  -163
  -173
  -184
  -195
  -207
  -219
  -232
  -245
  -259
  -273
  -288
  -304
  -320
  -337
  -355
New CAPEX, $m
  -21
  -84
  -89
  -93
  -98
  -102
  -106
  -111
  -115
  -120
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -201
  -210
  -219
  -229
  -239
  -250
  -262
  -274
  -287
Cash from investing activities, $m
  -97
  -132
  -143
  -153
  -164
  -174
  -185
  -197
  -208
  -221
  -233
  -246
  -259
  -273
  -288
  -304
  -320
  -336
  -354
  -372
  -392
  -412
  -433
  -455
  -478
  -502
  -527
  -554
  -582
  -611
  -642
Free cash flow, $m
  -18
  -66
  -70
  -74
  -78
  -82
  -86
  -90
  -94
  -98
  -103
  -109
  -114
  -119
  -124
  -130
  -135
  -141
  -147
  -154
  -161
  -168
  -176
  -184
  -193
  -202
  -211
  -221
  -232
  -243
  -255
Issuance/(repayment) of debt, $m
  80
  82
  86
  90
  94
  98
  103
  107
  111
  115
  120
  125
  130
  135
  140
  146
  152
  158
  164
  171
  178
  186
  194
  203
  212
  221
  231
  242
  253
  265
  277
Issuance/(repurchase) of shares, $m
  -3
  22
  23
  25
  26
  27
  28
  30
  31
  33
  34
  29
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
  59
  62
  65
  69
  72
  76
Cash from financing (excl. dividends), $m  
  18
  104
  109
  115
  120
  125
  131
  137
  142
  148
  154
  154
  160
  167
  174
  181
  189
  197
  205
  214
  224
  234
  245
  256
  268
  280
  293
  307
  322
  337
  353
Total cash flow (excl. dividends), $m
  0
  38
  39
  41
  42
  44
  45
  47
  48
  50
  51
  44
  46
  48
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  75
  78
  82
  86
  90
  94
  98
Retained Cash Flow (-), $m
  48
  -25
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -75
  -79
  -82
  -86
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
 
  13
  13
  13
  13
  13
  13
  14
  14
  14
  14
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
Discount rate, %
 
  9.90
  10.40
  10.91
  11.46
  12.03
  12.64
  13.27
  13.93
  14.63
  15.36
  16.13
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.83
  25.02
  26.27
  27.58
  28.96
  30.41
  31.93
  33.52
  35.20
  36.96
  38.81
  40.75
PV of cash for distribution, $m
 
  12
  10
  9
  8
  7
  7
  6
  5
  4
  3
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  97.4
  94.9
  92.6
  90.5
  88.5
  86.6
  84.9
  83.2
  81.6
  80.1
  79.0
  77.8
  76.7
  75.7
  74.6
  73.6
  72.6
  71.7
  70.7
  69.8
  68.9
  68.0
  67.1
  66.3
  65.4
  64.6
  63.8
  63.0
  62.2
  61.4

CrossAmerica Partners LP is a limited partnership engaged in the wholesale distribution of motor fuel, and the ownership and leasing of real estate used in the retail distribution of motor fuel. The Company operates in two segments: wholesale and retail. The wholesale segment is engaged in the wholesale distribution of motor fuel to lessee dealers, independent dealers, commission agents, Dunne Manning Stores LLC (DMS), CST Brands, Inc. and subsidiaries (CST) and company operated retail sites. The Retail segment owns or leases and operates retail sites. As of December 31, 2016, it distributed motor fuels to approximately 1,200 sites located in 29 states (Arizona, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Dakota, Tennessee, Texas, Virginia, West Virginia and Wisconsin).

FINANCIAL RATIOS  of  CrossAmerica Partners (CAPL)

Valuation Ratios
P/E Ratio 72.6
Price to Sales 0.4
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 10.1
Price to Free Cash Flow 13.8
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 $1870 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 11.5% 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 9.9%, 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 98.8%.

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 4.6% 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 39.3%.

Life of production assets of 15.2 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 -0.4%. 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 - $221 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 33.913 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

▶ Will 2018 Be Sunoco LP's Best Year Yet?   [Feb-06-18 09:48AM  Motley Fool]
▶ Is CrossAmerica Partners LP (NYSE:CAPL) Undervalued?   [Jan-29-18 01:32PM  Simply Wall St.]
▶ CrossAmerica Partners LP: Maintains Quarterly Distribution   [Jan-24-18 04:31PM  GlobeNewswire]
▶ CrossAmerica beats 3Q profit forecasts   [Nov-07-17 06:33PM  Associated Press]
▶ CrossAmerica reports 2Q loss   [Aug-07-17 10:43PM  Associated Press]
▶ CrossAmerica misses Street 1Q forecasts   [May-08-17 06:48PM  Associated Press]
▶ CrossAmerica misses 4Q profit forecasts   [Mar-01-17 05:50AM  Associated Press]
Financial statements of CAPL
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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