Exa Corporation develops, sells, and supports simulation software and services for vehicle manufacturers worldwide. The company primarily offers PowerFLOW and a suite of related software products for simulating complex fluid flow problems, including aerodynamics, thermal management, aeroacoustics, or wind noise. Its software suite comprises PowerDELTA with PowerCLAY that streamlines and automates simulation model preparation process; PowerCASE, which creates, edits, and compiles a complete PowerFLOW simulation case that controls the construction of the simulation grid; PowerTHERM to predict surface temperatures and heat fluxes generated by thermal radiation and conduction; and PowerCOOL to calculate the heat transfer between a heat exchanger and the cooling airflow. The companys software suite also includes PowerINSIGHT, a graphical user interface, which provides a library of user configurable templates and generates comparative results; PowerVIZ, a visualization and analysis application used for processing simulation results from PowerFLOW and spectral analysis results from PowerACOUSTICS; PowerACOUSTICS that enables pressure fluctuation prediction, noise source identification, wind noise transmission to interior, and sound package parameter study capabilities; and ExaCLOUD, which offers PowerFLOW simulation preparation and analysis functionality through a browser, as well as manages the simulation server in the cloud. Its products are used in various applications, such as aerodynamics, thermal management, aeroacoustics, climate control, and powertrain, as well as provide consulting and training services. The company sells its products and project services to aerospace, oil and gas production, chemical processing, architecture, engineering and construction, power generation, biomedical, and electronics industries through direct sales force, distributors, and sales agents. Exa Corporation was founded in 1991 and is headquartered in Burlington, Massachusetts.
FINANCIAL RATIOS of Exa (EXA)
Valuation Ratios 

P/E Ratio  201.2 
Price to Sales  2.8 
Price to Book  10.6 
Price to Tangible Book  
Price to Cash Flow  67.1 
Price to Free Cash Flow  201.2 
Growth Rates 

Sales Growth Rate  12.3% 
Sales  3 Yr. Growth Rate  % 
EPS Growth Rate  % 
EPS  3 Yr. Growth Rate  % 
Capital Spending Gr. Rate  100% 
Cap. Spend.  3 Yr. Gr. Rate  32% 
Financial Strength 

Quick Ratio  13 
Current Ratio  0 
LT Debt to Equity  5.3% 
Total Debt to Equity  15.8% 
Interest Coverage  0 
Management Effectiveness 

Return On Assets  1.4% 
Ret/ On Assets  3 Yr. Avg.  11.4% 
Return On Total Capital  4.5% 
Ret/ On T. Cap.  3 Yr. Avg.  28.7% 
Return On Equity  5.6% 
Return On Equity  3 Yr. Avg.  34.1% 
Asset Turnover  1 
Profitability Ratios 

Gross Margin  72.6% 
Gross Margin  3 Yr. Avg.  70.8% 
EBITDA Margin  5.5% 
EBITDA Margin  3 Yr. Avg.  2.9% 
Operating Margin  1.4% 
Oper. Margin  3 Yr. Avg.  2.7% 
PreTax Margin  0% 
PreTax Margin  3 Yr. Avg.  2.6% 
Net Profit Margin  1.4% 
Net Profit Margin  3 Yr. Avg.  13.4% 
Effective Tax Rate  0% 
Eff/ Tax Rate  3 Yr. Avg.  305.6% 
Payout Ratio  0% 
EXA stock valuation input parameters
Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EXA stock intrinsic value calculation we used $73 million for the last fiscal year's total revenue generated by Exa. The default revenue input number comes from 2017 income statement of Exa. 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 EXA stock valuation model: a) initial revenue growth rate of 12.3% 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 EXA is calculated based on our internal credit rating of Exa, 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 Exa.
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 EXA stock the variable cost ratio is equal to 50.7%.
Fixed operating expenses is just that  expenses that are not dependant on the volume of production. They are set to $36 million in the base year in the intrinsic value calculation for EXA stock. These expenses increase with the level of inflation in subsequent years.
Interest rate on debt is the average allin rate of interest paid by the company on its debt. It is set at 3.5% for Exa.
Corporate tax rate of 27% is the nominal tax rate for Exa. 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 optionsrelated 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 EXA 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 EXA are equal to 20.5%.
Life of production assets of 10 years is the average useful life of capital assets used in Exa 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 EXA is equal to 10%. 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 inkind financing to others or is not good at managing its inventories.
Book value of equity  $19 million for Exa  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 14.823 million for Exa 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 Exa at the current share price and the inputted number of shares is $0.2 billion.