Intrinsic value of Exa - EXA

Previous Close

$13.51

  Intrinsic Value

$24.91

stock screener

  Rating & Target

str. buy

+84%

  Value-price divergence*

+57%

Previous close

$13.51

 
Intrinsic value

$24.91

 
Up/down potential

+84%

 
Rating

str. buy

 
Value-price divergence*

+57%

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

We calculate the intrinsic value of EXA 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 0.2

 

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, %
  12.31
  12.30
  11.57
  10.91
  10.32
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
  6.86
  6.67
  6.50
  6.35
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
Revenue, $m
  73
  82
  91
  101
  112
  123
  134
  146
  159
  172
  185
  199
  213
  229
  244
  261
  277
  295
  313
  333
  352
  373
  395
  417
  441
  466
  491
  518
  546
  576
  606
Variable operating expenses, $m
 
  42
  46
  51
  57
  62
  68
  74
  80
  87
  94
  101
  108
  116
  124
  132
  141
  150
  159
  169
  179
  189
  200
  212
  224
  236
  249
  263
  277
  292
  307
Fixed operating expenses, $m
 
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  50
  51
  52
  53
  55
  56
  58
  59
  60
  62
  64
  65
  67
  68
  70
  72
  74
  76
Total operating expenses, $m
  72
  79
  84
  90
  97
  103
  110
  117
  124
  132
  140
  148
  156
  166
  175
  184
  194
  205
  215
  227
  238
  249
  262
  276
  289
  303
  317
  333
  349
  366
  383
Operating income, $m
  0
  4
  7
  11
  15
  20
  24
  29
  34
  40
  45
  51
  57
  63
  70
  76
  83
  91
  98
  106
  115
  124
  133
  142
  152
  163
  174
  185
  197
  210
  223
EBITDA, $m
  4
  5
  9
  13
  18
  22
  27
  32
  38
  43
  49
  55
  61
  68
  75
  82
  89
  97
  105
  113
  122
  131
  141
  151
  161
  172
  184
  196
  209
  222
  236
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  7
  7
  7
  8
  9
  9
  10
  10
  11
Earnings before tax, $m
  0
  3
  7
  11
  15
  19
  23
  28
  33
  38
  43
  48
  54
  60
  66
  73
  79
  86
  94
  101
  109
  117
  126
  135
  145
  155
  165
  176
  188
  200
  213
Tax expense, $m
  1
  1
  2
  3
  4
  5
  6
  8
  9
  10
  12
  13
  15
  16
  18
  20
  21
  23
  25
  27
  29
  32
  34
  37
  39
  42
  45
  48
  51
  54
  57
Net income, $m
  -1
  3
  5
  8
  11
  14
  17
  20
  24
  28
  31
  35
  40
  44
  48
  53
  58
  63
  68
  74
  80
  86
  92
  99
  106
  113
  121
  129
  137
  146
  155

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
  69
  57
  64
  71
  78
  85
  93
  102
  110
  119
  129
  138
  148
  159
  170
  181
  193
  205
  218
  231
  245
  260
  275
  290
  307
  324
  342
  360
  380
  400
  422
Adjusted assets (=assets-cash), $m
  44
  57
  64
  71
  78
  85
  93
  102
  110
  119
  129
  138
  148
  159
  170
  181
  193
  205
  218
  231
  245
  260
  275
  290
  307
  324
  342
  360
  380
  400
  422
Revenue / Adjusted assets
  1.659
  1.439
  1.422
  1.423
  1.436
  1.447
  1.441
  1.431
  1.445
  1.445
  1.434
  1.442
  1.439
  1.440
  1.435
  1.442
  1.435
  1.439
  1.436
  1.442
  1.437
  1.435
  1.436
  1.438
  1.436
  1.438
  1.436
  1.439
  1.437
  1.440
  1.436
Average production assets, $m
  15
  17
  19
  21
  23
  25
  28
  30
  33
  35
  38
  41
  44
  47
  50
  53
  57
  60
  64
  68
  72
  77
  81
  86
  90
  95
  101
  106
  112
  118
  124
Working capital, $m
  6
  -8
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -19
  -20
  -21
  -23
  -24
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
Total debt, $m
  3
  4
  10
  16
  23
  30
  37
  45
  52
  60
  69
  78
  87
  96
  106
  116
  127
  138
  149
  161
  174
  187
  200
  214
  229
  244
  260
  277
  295
  313
  333
Total liabilities, $m
  50
  51
  57
  63
  70
  77
  84
  92
  99
  107
  116
  125
  134
  143
  153
  163
  174
  185
  196
  208
  221
  234
  247
  261
  276
  291
  307
  324
  342
  360
  380
Total equity, $m
  19
  6
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  21
  22
  23
  25
  26
  27
  29
  31
  32
  34
  36
  38
  40
  42
Total liabilities and equity, $m
  69
  57
  63
  70
  78
  86
  93
  102
  110
  119
  129
  139
  149
  159
  170
  181
  193
  206
  218
  231
  246
  260
  274
  290
  307
  323
  341
  360
  380
  400
  422
Debt-to-equity ratio
  0.158
  0.760
  1.610
  2.340
  2.960
  3.500
  3.970
  4.380
  4.740
  5.060
  5.350
  5.600
  5.830
  6.040
  6.230
  6.410
  6.560
  6.710
  6.840
  6.970
  7.080
  7.190
  7.290
  7.380
  7.470
  7.550
  7.620
  7.700
  7.760
  7.830
  7.890
Adjusted equity ratio
  -0.136
  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
  -1
  3
  5
  8
  11
  14
  17
  20
  24
  28
  31
  35
  40
  44
  48
  53
  58
  63
  68
  74
  80
  86
  92
  99
  106
  113
  121
  129
  137
  146
  155
Depreciation, amort., depletion, $m
  4
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
Funds from operations, $m
  1
  4
  7
  10
  13
  16
  20
  23
  27
  31
  35
  39
  44
  48
  53
  58
  64
  69
  75
  81
  87
  93
  100
  107
  115
  123
  131
  139
  148
  158
  168
Change in working capital, $m
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
Cash from operations, $m
  3
  5
  8
  11
  14
  18
  21
  25
  28
  32
  37
  41
  45
  50
  55
  60
  65
  71
  77
  83
  89
  95
  102
  110
  117
  125
  133
  142
  151
  161
  171
Maintenance CAPEX, $m
  0
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
New CAPEX, $m
  -4
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
Cash from investing activities, $m
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
Free cash flow, $m
  -1
  2
  4
  7
  10
  13
  16
  19
  23
  27
  30
  34
  38
  43
  47
  52
  56
  61
  67
  72
  78
  84
  90
  97
  104
  111
  118
  126
  135
  143
  153
Issuance/(repayment) of debt, $m
  -3
  3
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  18
  18
  19
Issuance/(repurchase) of shares, $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
Cash from financing (excl. dividends), $m  
  -2
  3
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  18
  18
  19
Total cash flow (excl. dividends), $m
  -3
  6
  10
  13
  17
  20
  23
  27
  31
  35
  39
  43
  47
  52
  57
  62
  67
  73
  78
  84
  90
  97
  104
  111
  118
  126
  135
  143
  152
  162
  172
Retained Cash Flow (-), $m
  -2
  -3
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Prev. year cash balance distribution, $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
  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
 
  19
  10
  13
  16
  19
  22
  26
  30
  34
  38
  42
  46
  51
  56
  61
  66
  71
  77
  83
  89
  96
  102
  109
  117
  125
  133
  141
  150
  160
  170
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
 
  18
  9
  11
  13
  15
  16
  18
  19
  19
  20
  20
  20
  19
  19
  18
  17
  16
  14
  13
  11
  10
  8
  7
  6
  5
  4
  3
  2
  2
  1
Current shareholders' claim on cash, %
  100
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
  98.5
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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 company’s 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%
Pre-Tax Margin 0%
Pre-Tax 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 all-in 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 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 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 in-kind 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.

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COMPANY NEWS

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▶ ETFs with exposure to Exa Corp. : May 30, 2017   [May-30-17 12:27PM  Capital Cube]
▶ Exa reports 1Q loss   [May-24-17 04:15PM  Associated Press]
▶ ETFs with exposure to Exa Corp. : April 7, 2017   [Apr-07-17 04:29PM  Capital Cube]
▶ Exa posts 4Q profit   [04:32PM  Associated Press]
▶ Exa Corporation to Present at the Needham Growth Conference   [Jan-04-17 04:05PM  GlobeNewswire]
▶ Is Exa Corp (EXA) A Good Stock To Buy?   [Dec-15-16 06:18PM  at Insider Monkey]
▶ Exa posts 3Q profit   [Nov-30-16 04:22PM  AP]
▶ Exa reports 2Q loss   [04:17PM  AP]
▶ Exa Corporation to Present at Upcoming Investor Conferences   [May-31-16 04:05PM  GlobeNewswire]
Stock chart of EXA Financial statements of EXA
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