Intrinsic value of Christopher&Banks - CBK

Previous Close

$1.35

  Intrinsic Value

$0.44

stock screener

  Rating & Target

str. sell

-67%

  Value-price divergence*

-63%

Previous close

$1.35

 
Intrinsic value

$0.44

 
Up/down potential

-67%

 
Rating

str. sell

 
Value-price divergence*

-63%

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

We calculate the intrinsic value of CBK 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 2017), $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 0.1

 

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, %
  -0.52
  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
  382
  390
  399
  409
  420
  433
  447
  462
  479
  497
  516
  536
  558
  581
  606
  632
  659
  689
  720
  752
  787
  823
  862
  902
  945
  990
  1,037
  1,087
  1,140
  1,195
  1,253
Variable operating expenses, $m
 
  401
  410
  421
  433
  446
  460
  476
  493
  511
  531
  552
  574
  598
  623
  650
  678
  709
  740
  774
  810
  847
  887
  929
  973
  1,019
  1,068
  1,119
  1,173
  1,230
  1,289
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
  400
  401
  410
  421
  433
  446
  460
  476
  493
  511
  531
  552
  574
  598
  623
  650
  678
  709
  740
  774
  810
  847
  887
  929
  973
  1,019
  1,068
  1,119
  1,173
  1,230
  1,289
Operating income, $m
  -19
  -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
EBITDA, $m
  -7
  0
  0
  0
  0
  0
  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
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
Earnings before tax, $m
  -18
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
Tax expense, $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
  0
Net income, $m
  -18
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  35
  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
  135
  102
  104
  107
  110
  113
  117
  121
  125
  130
  135
  140
  146
  152
  159
  165
  173
  180
  188
  197
  206
  216
  226
  236
  247
  259
  272
  285
  298
  313
  328
Adjusted assets (=assets-cash), $m
  100
  102
  104
  107
  110
  113
  117
  121
  125
  130
  135
  140
  146
  152
  159
  165
  173
  180
  188
  197
  206
  216
  226
  236
  247
  259
  272
  285
  298
  313
  328
Revenue / Adjusted assets
  3.820
  3.824
  3.837
  3.822
  3.818
  3.832
  3.821
  3.818
  3.832
  3.823
  3.822
  3.829
  3.822
  3.822
  3.811
  3.830
  3.809
  3.828
  3.830
  3.817
  3.820
  3.810
  3.814
  3.822
  3.826
  3.822
  3.813
  3.814
  3.826
  3.818
  3.820
Average production assets, $m
  57
  58
  59
  61
  63
  65
  67
  69
  71
  74
  77
  80
  83
  87
  90
  94
  98
  103
  107
  112
  117
  123
  128
  134
  141
  148
  155
  162
  170
  178
  187
Working capital, $m
  31
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
Total debt, $m
  0
  1
  3
  4
  6
  9
  11
  13
  16
  19
  22
  26
  29
  33
  37
  42
  46
  51
  57
  62
  68
  74
  80
  87
  94
  102
  110
  118
  127
  136
  146
Total liabilities, $m
  63
  65
  67
  68
  70
  73
  75
  77
  80
  83
  86
  90
  93
  97
  101
  106
  110
  115
  121
  126
  132
  138
  144
  151
  158
  166
  174
  182
  191
  200
  210
Total equity, $m
  71
  37
  38
  39
  40
  41
  42
  44
  45
  47
  49
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  78
  81
  85
  89
  93
  98
  102
  107
  113
  118
Total liabilities and equity, $m
  134
  102
  105
  107
  110
  114
  117
  121
  125
  130
  135
  141
  146
  152
  158
  166
  172
  180
  189
  197
  206
  216
  225
  236
  247
  259
  272
  284
  298
  313
  328
Debt-to-equity ratio
  0.000
  0.030
  0.070
  0.120
  0.160
  0.210
  0.260
  0.310
  0.360
  0.410
  0.460
  0.510
  0.560
  0.610
  0.660
  0.700
  0.750
  0.790
  0.830
  0.880
  0.910
  0.950
  0.990
  1.030
  1.060
  1.090
  1.120
  1.150
  1.180
  1.210
  1.240
Adjusted equity ratio
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -18
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -41
Depreciation, amort., depletion, $m
  12
  12
  12
  12
  13
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  21
  22
  23
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
Funds from operations, $m
  26
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
Change in working capital, $m
  16
  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
  -1
  -1
  -1
Cash from operations, $m
  10
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
Maintenance CAPEX, $m
  0
  -11
  -12
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -36
New CAPEX, $m
  -10
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
Cash from investing activities, $m
  -6
  -12
  -13
  -14
  -14
  -15
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -26
  -27
  -28
  -31
  -32
  -33
  -35
  -37
  -38
  -40
  -42
  -45
Free cash flow, $m
  4
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
Issuance/(repayment) of debt, $m
  0
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
Issuance/(repurchase) of shares, $m
  0
  12
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  30
  31
  33
  34
  36
  38
  40
  42
  44
  47
Cash from financing (excl. dividends), $m  
  0
  13
  14
  15
  15
  16
  17
  18
  19
  20
  20
  21
  23
  24
  25
  26
  28
  29
  31
  32
  34
  36
  37
  40
  41
  44
  46
  48
  51
  53
  57
Total cash flow (excl. dividends), $m
  4
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
Retained Cash Flow (-), $m
  17
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -40
  -42
  -44
  -47
Prev. year cash balance distribution, $m
 
  35
  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
 
  24
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -36
  -38
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  23
  -10
  -10
  -10
  -9
  -9
  -9
  -8
  -8
  -8
  -7
  -7
  -6
  -6
  -5
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  100
  69.7
  48.3
  33.3
  22.9
  15.7
  10.7
  7.3
  4.9
  3.3
  2.2
  1.5
  1.0
  0.7
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Christopher & Banks Corporation is a national specialty retailer featuring private-brand women's apparel and accessories. The Company offers its customers an assortment of clothing for everyday needs. Its merchandise assortments include designs of women's apparel, generally consisting of casual clothing, everyday basics, wear-to-work, leisure/active wear, and sleepwear in missy, petite and women sizes. The Company also offers a selection of jewelry and accessories, including footwear. The Company operates in the Retail Operations segment, which includes the operation of its retail stores, outlet stores, online and mobile. The Retail Operations segment includes activities generated by the Company's retail store locations (Missy Petite Women (MPW), Outlet stores, Christopher & Banks (CB), and C.J. Banks (CJ)), as well as the e-commerce business. Its merchandise is developed for women of all sizes, age 40 and older.

FINANCIAL RATIOS  of  Christopher&Banks (CBK)

Valuation Ratios
P/E Ratio -2.8
Price to Sales 0.1
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 5.1
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -0.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -61.5%
Cap. Spend. - 3 Yr. Gr. Rate 2.1%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -12.6%
Ret/ On Assets - 3 Yr. Avg. -4.5%
Return On Total Capital -22.6%
Ret/ On T. Cap. - 3 Yr. Avg. -8.1%
Return On Equity -22.6%
Return On Equity - 3 Yr. Avg. -8.1%
Asset Turnover 2.7
Profitability Ratios
Gross Margin 33.5%
Gross Margin - 3 Yr. Avg. 34.1%
EBITDA Margin -1.6%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin -4.7%
Oper. Margin - 3 Yr. Avg. -1.7%
Pre-Tax Margin -4.7%
Pre-Tax Margin - 3 Yr. Avg. -1.8%
Net Profit Margin -4.7%
Net Profit Margin - 3 Yr. Avg. -2.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -255.9%
Payout Ratio 0%

CBK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBK stock intrinsic value calculation we used $382 million for the last fiscal year's total revenue generated by Christopher&Banks. The default revenue input number comes from 2017 income statement of Christopher&Banks. 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 CBK 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 4.3%, whose default value for CBK is calculated based on our internal credit rating of Christopher&Banks, 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 Christopher&Banks.
    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 CBK stock the variable cost ratio is equal to 102.9%.

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 CBK 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 3.5% for Christopher&Banks.

Corporate tax rate of 27% is the nominal tax rate for Christopher&Banks. 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 CBK 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 CBK are equal to 14.9%.

Life of production assets of 4.8 years is the average useful life of capital assets used in Christopher&Banks 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 CBK is equal to -1%. 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 - $71 million for Christopher&Banks - 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 40.313 million for Christopher&Banks 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 Christopher&Banks at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Strategist Porter Says Turkey Market Just a Flash Crash   [Oct-09-17 06:13AM  Bloomberg Video]
▶ Christopher & Banks reports 2Q loss   [Aug-29-17 09:52PM  Associated Press]
▶ Christopher & Banks reports 1Q loss   [May-25-17 06:36AM  Associated Press]
▶ European stocks gain ground as German trade data impress   [May-09-17 10:26AM  MarketWatch]
▶ Chief Economist French Sees Data Holding Down Yields   [Mar-14-17 06:28AM  Bloomberg Video]
▶ The Global Leadership Vacuum of Trump's 'America First'   [Feb-21-17 05:42AM  Bloomberg Video]
▶ HSBC Shares Tumble on Unexpected Revenue Drop   [05:23AM  Bloomberg Video]
▶ Financial Services: Berkshire Is Bigger Than Buffett   [Oct-04-16 07:00AM  at Morningstar]
▶ Financial ETFs Flinch on Deutsche Bank Worries   [Sep-29-16 03:09PM  at Barrons.com]
▶ CopperBank Chairman Updates on Fall Activities   [Sep-06-16 12:05PM  Accesswire]
Financial statements of CBK
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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