Intrinsic value of Cinedigm Cl A - CIDM

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$1.71

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$1.71

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence* premium content

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

We calculate the intrinsic value of CIDM 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 0.0

 

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, %
  -0.95
  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
  104
  106
  109
  111
  114
  118
  122
  126
  130
  135
  140
  146
  152
  158
  165
  172
  179
  187
  196
  205
  214
  224
  235
  246
  257
  270
  282
  296
  310
  325
  341
Variable operating expenses, $m
 
  115
  118
  121
  124
  128
  132
  137
  141
  147
  152
  157
  164
  171
  178
  185
  194
  202
  211
  221
  231
  242
  253
  265
  277
  291
  305
  319
  335
  351
  368
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
  127
  115
  118
  121
  124
  128
  132
  137
  141
  147
  152
  157
  164
  171
  178
  185
  194
  202
  211
  221
  231
  242
  253
  265
  277
  291
  305
  319
  335
  351
  368
Operating income, $m
  -22
  -9
  -9
  -10
  -10
  -10
  -10
  -11
  -11
  -11
  -12
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
EBITDA, $m
  21
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  13
Interest expense (income), $m
  15
  13
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
  19
  21
  22
  23
  25
  26
  28
  29
  31
  33
Earnings before tax, $m
  -42
  -22
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
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
  -42
  -22
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  25
  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
  209
  188
  192
  197
  203
  209
  215
  223
  231
  239
  248
  258
  269
  280
  292
  304
  318
  332
  347
  363
  379
  397
  415
  435
  455
  477
  500
  524
  549
  576
  604
Adjusted assets (=assets-cash), $m
  184
  188
  192
  197
  203
  209
  215
  223
  231
  239
  248
  258
  269
  280
  292
  304
  318
  332
  347
  363
  379
  397
  415
  435
  455
  477
  500
  524
  549
  576
  604
Revenue / Adjusted assets
  0.565
  0.564
  0.568
  0.563
  0.562
  0.565
  0.567
  0.565
  0.563
  0.565
  0.565
  0.566
  0.565
  0.564
  0.565
  0.566
  0.563
  0.563
  0.565
  0.565
  0.565
  0.564
  0.566
  0.566
  0.565
  0.566
  0.564
  0.565
  0.565
  0.564
  0.565
Average production assets, $m
  60
  61
  63
  64
  66
  68
  70
  73
  75
  78
  81
  84
  88
  91
  95
  99
  104
  108
  113
  118
  124
  129
  135
  142
  148
  156
  163
  171
  179
  188
  197
Working capital, $m
  1
  5
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
Total debt, $m
  203
  91
  95
  99
  104
  110
  116
  122
  130
  137
  146
  154
  164
  174
  185
  196
  208
  221
  234
  248
  263
  279
  296
  313
  332
  351
  372
  394
  416
  440
  465
Total liabilities, $m
  281
  169
  173
  177
  182
  188
  194
  200
  208
  215
  224
  232
  242
  252
  263
  274
  286
  299
  312
  326
  341
  357
  374
  391
  410
  429
  450
  472
  494
  518
  543
Total equity, $m
  -72
  19
  19
  20
  20
  21
  22
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  43
  46
  48
  50
  52
  55
  58
  60
Total liabilities and equity, $m
  209
  188
  192
  197
  202
  209
  216
  222
  231
  239
  249
  258
  269
  280
  292
  304
  318
  332
  347
  362
  379
  397
  416
  434
  456
  477
  500
  524
  549
  576
  603
Debt-to-equity ratio
  -2.819
  4.850
  4.940
  5.040
  5.150
  5.260
  5.380
  5.500
  5.620
  5.740
  5.860
  5.980
  6.100
  6.210
  6.330
  6.440
  6.540
  6.650
  6.750
  6.850
  6.940
  7.030
  7.120
  7.210
  7.290
  7.370
  7.440
  7.510
  7.580
  7.650
  7.710
Adjusted equity ratio
  -0.527
  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
  -42
  -22
  -16
  -17
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
Depreciation, amort., depletion, $m
  43
  13
  13
  14
  14
  15
  15
  15
  16
  17
  17
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
  38
  39
Funds from operations, $m
  24
  -9
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
Change in working capital, $m
  -2
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  26
  19
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -21
Maintenance CAPEX, $m
  0
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -38
New CAPEX, $m
  -1
  -1
  -1
  -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
  -9
Cash from investing activities, $m
  -1
  -13
  -13
  -15
  -15
  -15
  -16
  -16
  -18
  -18
  -19
  -19
  -20
  -22
  -22
  -23
  -24
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -37
  -38
  -41
  -42
  -45
  -47
Free cash flow, $m
  25
  5
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
Issuance/(repayment) of debt, $m
  4
  -87
  4
  4
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
Issuance/(repurchase) of shares, $m
  -14
  172
  13
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  30
  31
  33
  35
  36
  38
  40
  43
  45
Cash from financing (excl. dividends), $m  
  -18
  85
  17
  17
  18
  20
  20
  22
  22
  24
  24
  26
  27
  29
  31
  32
  34
  36
  37
  39
  42
  44
  47
  49
  52
  55
  57
  60
  63
  67
  70
Total cash flow (excl. dividends), $m
  6
  -82
  -13
  -13
  -13
  -13
  -14
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -23
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
Retained Cash Flow (-), $m
  53
  -91
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
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
 
  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
Discount rate, %
 
  13.90
  14.60
  15.32
  16.09
  16.90
  17.74
  18.63
  19.56
  20.54
  21.56
  22.64
  23.77
  24.96
  26.21
  27.52
  28.90
  30.34
  31.86
  33.45
  35.12
  36.88
  38.72
  40.66
  42.69
  44.83
  47.07
  49.42
  51.90
  54.49
  57.21
PV of cash for 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
Current shareholders' claim on cash, %
  100
  50.0
  29.5
  17.5
  10.4
  6.2
  3.7
  2.2
  1.3
  0.8
  0.5
  0.3
  0.2
  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
  0.0
  0.0
  0.0
  0.0
  0.0

Cinedigm Corp., together with its subsidiaries, distributes and aggregates independent movie, television, and other short form content in the United States. It operates through four segments: Phase I Deployment, Phase II Deployment, Services, and Content & Entertainment. The company is involved in the collection of virtual print fees from motion picture studios and distributors, and alternative content fees from alternative content providers and theatrical exhibitors. It also provides monitoring, billing, collection, verification, and other management services to the company’s Phase I Deployment and Phase II Deployment, as well as to exhibitors, who purchase their own equipment. In addition, the company distributes content in the home entertainment markets through various distribution channels, including digital and video-on-demand, as well as physical goods, including DVD and Blu-ray discs; and theatrical distribution of third party feature movies and alternative content. It manages a library of distribution rights to various titles and episodes released across digital, physical, theatrical, home, and mobile entertainment platforms, as well as services digital cinema assets in approximately 12,000 movie screens in North America and various international countries. The company was formerly known as Cinedigm Digital Cinema Corp. and changed its name to Cinedigm Corp. in September 2013. Cinedigm Corp. was founded in 2000 and is based in New York, New York.

FINANCIAL RATIOS  of  Cinedigm Cl A (CIDM)

Valuation Ratios
P/E Ratio -0.3
Price to Sales 0.1
Price to Book -0.2
Price to Tangible Book
Price to Cash Flow 0.5
Price to Free Cash Flow 0.5
Growth Rates
Sales Growth Rate -1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate -36.9%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity -241.7%
Total Debt to Equity -281.9%
Interest Coverage -2
Management Effectiveness
Return On Assets -11.1%
Ret/ On Assets - 3 Yr. Avg. -5.4%
Return On Total Capital -26.8%
Ret/ On T. Cap. - 3 Yr. Avg. -17.2%
Return On Equity 92.3%
Return On Equity - 3 Yr. Avg. 508%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 70.2%
Gross Margin - 3 Yr. Avg. 71.2%
EBITDA Margin 15.4%
EBITDA Margin - 3 Yr. Avg. 31.6%
Operating Margin -22.1%
Oper. Margin - 3 Yr. Avg. -8.3%
Pre-Tax Margin -40.4%
Pre-Tax Margin - 3 Yr. Avg. -27.2%
Net Profit Margin -40.4%
Net Profit Margin - 3 Yr. Avg. -31.6%
Effective Tax Rate -2.4%
Eff/ Tax Rate - 3 Yr. Avg. -0.8%
Payout Ratio 0%

CIDM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIDM stock intrinsic value calculation we used $104 million for the last fiscal year's total revenue generated by Cinedigm Cl A. The default revenue input number comes from 2016 income statement of Cinedigm Cl A. 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 CIDM 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 13.9%, whose default value for CIDM is calculated based on our internal credit rating of Cinedigm Cl A, 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 Cinedigm Cl A.
    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 CIDM stock the variable cost ratio is equal to 108.7%.

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 CIDM 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 7.4% for Cinedigm Cl A.

Corporate tax rate of 27% is the nominal tax rate for Cinedigm Cl A. 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 CIDM 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 CIDM are equal to 57.7%.

Life of production assets of 1.8 years is the average useful life of capital assets used in Cinedigm Cl A 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 CIDM is equal to 4.8%. 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 - $-72 million for Cinedigm Cl A - 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 11.994 million for Cinedigm Cl A 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 Cinedigm Cl A at the current share price and the inputted number of shares is $0.0 billion.


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COMPANY NEWS

▶ Cinedigm to launch Dove Kids childrens network   [May-01-17 05:55PM  American City Business Journals]
▶ ETFs with exposure to Cinedigm Corp. : April 5, 2017   [Apr-05-17 04:30PM  Capital Cube]
▶ Cinedigm Announces Major OTT Platform Expansions For 2017   [Mar-31-17 09:00AM  Business Wire]
▶ Cinedigm teams with WHAM on e-sports streaming network   [Mar-02-17 01:15PM  at bizjournals.com]
▶ Cinedigm teams with WHAM on e-sports streaming network   [01:15PM  American City Business Journals]
▶ Dove Channel Available Now on Apple TV   [Jan-17-17 12:48PM  Business Wire]
▶ Cinedigms Dove Channel forms homeschooling partnership   [Nov-22-16 06:45PM  at bizjournals.com]
▶ CONtv Partners with Stan Lees Los Angeles Comic Con 2016   [Oct-25-16 02:33PM  Business Wire]
▶ Why UniPixel Inc (UNXL)s Stock Is Deep in Red Today?   [May-27-16 02:10PM  at Insider Monkey]
Stock chart of CIDM Financial statements of CIDM Annual reports of CIDM
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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