Intrinsic value of IXYS - IXYS

Previous Close

$24.40

  Intrinsic Value

$20.20

stock screener

  Rating & Target

hold

-17%

  Value-price divergence*

-11%

Previous close

$24.40

 
Intrinsic value

$20.20

 
Up/down potential

-17%

 
Rating

hold

 
Value-price divergence*

-11%

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

We calculate the intrinsic value of IXYS 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 0.8

 

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, %
  1.58
  3.70
  3.83
  3.95
  4.05
  4.15
  4.23
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
Revenue, $m
  322
  334
  347
  360
  375
  391
  407
  425
  443
  463
  484
  506
  529
  553
  579
  606
  635
  665
  697
  731
  766
  803
  842
  883
  926
  972
  1,019
  1,069
  1,122
  1,177
  1,236
Variable operating expenses, $m
 
  134
  139
  144
  150
  156
  162
  169
  176
  184
  192
  196
  205
  215
  225
  235
  246
  258
  271
  284
  297
  312
  327
  343
  359
  377
  395
  415
  435
  457
  479
Fixed operating expenses, $m
 
  172
  177
  181
  185
  190
  195
  200
  205
  210
  215
  220
  226
  232
  237
  243
  249
  256
  262
  269
  275
  282
  289
  296
  304
  311
  319
  327
  335
  344
  352
Total operating expenses, $m
  293
  306
  316
  325
  335
  346
  357
  369
  381
  394
  407
  416
  431
  447
  462
  478
  495
  514
  533
  553
  572
  594
  616
  639
  663
  688
  714
  742
  770
  801
  831
Operating income, $m
  29
  28
  31
  35
  40
  45
  50
  56
  62
  69
  77
  89
  98
  107
  117
  128
  139
  152
  165
  179
  194
  209
  226
  244
  263
  283
  305
  327
  351
  377
  404
EBITDA, $m
  40
  38
  42
  46
  51
  56
  62
  68
  75
  82
  90
  98
  107
  117
  128
  139
  151
  164
  177
  192
  207
  224
  241
  260
  280
  301
  323
  347
  372
  398
  426
Interest expense (income), $m
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  15
  16
Earnings before tax, $m
  29
  25
  29
  32
  37
  41
  46
  52
  58
  65
  72
  84
  92
  101
  111
  121
  132
  144
  157
  170
  185
  200
  216
  233
  252
  271
  292
  314
  337
  362
  388
Tax expense, $m
  8
  7
  8
  9
  10
  11
  13
  14
  16
  17
  19
  23
  25
  27
  30
  33
  36
  39
  42
  46
  50
  54
  58
  63
  68
  73
  79
  85
  91
  98
  105
Net income, $m
  21
  18
  21
  24
  27
  30
  34
  38
  42
  47
  52
  61
  67
  74
  81
  88
  97
  105
  114
  124
  135
  146
  158
  170
  184
  198
  213
  229
  246
  264
  283

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  168
  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
  434
  276
  286
  298
  310
  322
  336
  351
  366
  382
  399
  418
  437
  457
  478
  501
  525
  549
  576
  603
  633
  663
  695
  729
  765
  802
  842
  883
  927
  972
  1,020
Adjusted assets (=assets-cash), $m
  266
  276
  286
  298
  310
  322
  336
  351
  366
  382
  399
  418
  437
  457
  478
  501
  525
  549
  576
  603
  633
  663
  695
  729
  765
  802
  842
  883
  927
  972
  1,020
Revenue / Adjusted assets
  1.211
  1.210
  1.213
  1.208
  1.210
  1.214
  1.211
  1.211
  1.210
  1.212
  1.213
  1.211
  1.211
  1.210
  1.211
  1.210
  1.210
  1.211
  1.210
  1.212
  1.210
  1.211
  1.212
  1.211
  1.210
  1.212
  1.210
  1.211
  1.210
  1.211
  1.212
Average production assets, $m
  48
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  75
  79
  82
  86
  90
  95
  99
  104
  109
  114
  120
  125
  132
  138
  145
  152
  159
  167
  175
  184
Working capital, $m
  266
  103
  106
  111
  115
  120
  125
  130
  136
  142
  148
  155
  162
  170
  178
  186
  195
  204
  214
  224
  235
  247
  259
  271
  284
  298
  313
  328
  344
  361
  379
Total debt, $m
  78
  82
  87
  93
  99
  106
  113
  120
  128
  136
  145
  154
  164
  174
  185
  196
  208
  221
  234
  249
  263
  279
  295
  312
  331
  350
  370
  391
  413
  436
  460
Total liabilities, $m
  136
  140
  145
  151
  157
  164
  171
  178
  186
  194
  203
  212
  222
  232
  243
  254
  266
  279
  292
  307
  321
  337
  353
  370
  389
  408
  428
  449
  471
  494
  518
Total equity, $m
  298
  136
  141
  146
  152
  159
  165
  173
  180
  188
  197
  205
  215
  225
  235
  246
  258
  270
  283
  297
  311
  326
  342
  359
  376
  395
  414
  434
  456
  478
  502
Total liabilities and equity, $m
  434
  276
  286
  297
  309
  323
  336
  351
  366
  382
  400
  417
  437
  457
  478
  500
  524
  549
  575
  604
  632
  663
  695
  729
  765
  803
  842
  883
  927
  972
  1,020
Debt-to-equity ratio
  0.262
  0.600
  0.620
  0.640
  0.650
  0.670
  0.680
  0.700
  0.710
  0.720
  0.740
  0.750
  0.760
  0.770
  0.790
  0.800
  0.810
  0.820
  0.830
  0.840
  0.850
  0.850
  0.860
  0.870
  0.880
  0.890
  0.890
  0.900
  0.910
  0.910
  0.920
Adjusted equity ratio
  0.489
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492
  0.492

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  21
  18
  21
  24
  27
  30
  34
  38
  42
  47
  52
  61
  67
  74
  81
  88
  97
  105
  114
  124
  135
  146
  158
  170
  184
  198
  213
  229
  246
  264
  283
Depreciation, amort., depletion, $m
  11
  10
  10
  11
  11
  11
  12
  12
  12
  13
  13
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
  21
  22
Funds from operations, $m
  18
  29
  31
  34
  38
  41
  45
  50
  55
  60
  65
  70
  77
  84
  91
  100
  108
  117
  127
  138
  149
  161
  173
  186
  201
  216
  232
  249
  267
  286
  306
Change in working capital, $m
  -17
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
Cash from operations, $m
  35
  25
  27
  30
  33
  37
  40
  44
  49
  54
  59
  64
  70
  76
  84
  91
  99
  108
  117
  127
  138
  149
  161
  174
  187
  202
  217
  233
  250
  269
  288
Maintenance CAPEX, $m
  0
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -19
  -20
  -21
New CAPEX, $m
  -7
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
Cash from investing activities, $m
  -11
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -11
  -11
  -11
  -12
  -12
  -14
  -14
  -15
  -15
  -17
  -17
  -18
  -18
  -20
  -21
  -21
  -22
  -24
  -25
  -26
  -27
  -28
  -30
Free cash flow, $m
  24
  17
  19
  22
  24
  27
  31
  34
  38
  43
  48
  52
  57
  63
  70
  77
  84
  92
  101
  110
  119
  130
  141
  152
  165
  178
  192
  207
  223
  240
  258
Issuance/(repayment) of debt, $m
  -9
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
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  
  -6
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
Total cash flow (excl. dividends), $m
  14
  22
  25
  28
  31
  34
  38
  42
  46
  51
  56
  61
  67
  73
  80
  88
  96
  105
  114
  124
  134
  145
  157
  170
  183
  197
  212
  228
  245
  263
  282
Retained Cash Flow (-), $m
  -19
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -24
Prev. year cash balance distribution, $m
 
  167
  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
 
  185
  20
  22
  25
  28
  31
  35
  39
  43
  48
  52
  57
  63
  70
  77
  84
  92
  101
  110
  120
  130
  141
  153
  166
  179
  193
  208
  224
  241
  259
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
 
  177
  18
  19
  20
  21
  22
  23
  24
  25
  25
  25
  25
  24
  23
  23
  21
  20
  19
  17
  15
  13
  12
  10
  8
  7
  6
  4
  3
  3
  2
Current shareholders' claim on cash, %
  100
  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
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IXYS Corporation (IXYS) is a multi-market integrated semiconductor company. The Company is engaged in the development, manufacture and marketing of power semiconductors, mixed-signal integrated circuits (ICs), application specific integrated circuits (ASICs), microcontrollers, systems and radio frequency (RF) power semiconductors. Its power semiconductors are sold separately and are also packaged in high power modules that consist of multiple semiconductor dies. Its power metal-oxide-silicon (MOS) transistors operate at greater switching speeds than bipolar transistors. Its ICs address the demand for analog, mixed-signal and digital interface solutions in communication and other industries and include microcontrollers, mixed-signal application-specific ICs. RF power devices switch electricity at the high rates necessary to enable the amplification or reception of radio frequencies. It manufactures and sells laser diode drivers, high voltage pulse generators and modulators.

FINANCIAL RATIOS  of  IXYS (IXYS)

Valuation Ratios
P/E Ratio 37.1
Price to Sales 2.4
Price to Book 2.6
Price to Tangible Book
Price to Cash Flow 22.2
Price to Free Cash Flow 27.8
Growth Rates
Sales Growth Rate 1.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -2.6%
Financial Strength
Quick Ratio 168
Current Ratio 0
LT Debt to Equity 25.8%
Total Debt to Equity 26.2%
Interest Coverage 11
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 5.4%
Return On Total Capital 5.7%
Ret/ On T. Cap. - 3 Yr. Avg. 6%
Return On Equity 7.3%
Return On Equity - 3 Yr. Avg. 7.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 32.9%
Gross Margin - 3 Yr. Avg. 31.5%
EBITDA Margin 13.4%
EBITDA Margin - 3 Yr. Avg. 13.4%
Operating Margin 9%
Oper. Margin - 3 Yr. Avg. 8.5%
Pre-Tax Margin 9%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 6.5%
Net Profit Margin - 3 Yr. Avg. 6.1%
Effective Tax Rate 27.6%
Eff/ Tax Rate - 3 Yr. Avg. 27.5%
Payout Ratio 4.8%

IXYS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IXYS stock intrinsic value calculation we used $322 million for the last fiscal year's total revenue generated by IXYS. The default revenue input number comes from 2017 income statement of IXYS. 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 IXYS stock valuation model: a) initial revenue growth rate of 3.7% 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 IXYS is calculated based on our internal credit rating of IXYS, 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 IXYS.
    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 IXYS stock the variable cost ratio is equal to 40.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $168 million in the base year in the intrinsic value calculation for IXYS 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 3.6% for IXYS.

Corporate tax rate of 27% is the nominal tax rate for IXYS. 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 IXYS 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 IXYS are equal to 14.9%.

Life of production assets of 8.2 years is the average useful life of capital assets used in IXYS 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 IXYS is equal to 30.7%. 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 - $298 million for IXYS - 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 32.706 million for IXYS 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 IXYS at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ IXYS Introduces the SMPD RF Power MOSFET   [Sep-19-17 08:30AM  GlobeNewswire]
▶ IXYS Corp.: Strong price momentum but will it sustain?   [Aug-29-17 05:49PM  Capital Cube]
▶ IXYS Scores Relative Strength Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ IXYS Surges on Incredible Deal   [08:50AM  24/7 Wall St.]
▶ Littelfuse to Acquire IXYS Corporation   [06:00AM  GlobeNewswire]
▶ ETFs with exposure to IXYS Corp. : August 18, 2017   [Aug-18-17 05:19PM  Capital Cube]
▶ IXYS Introduces the IXRFD615 Ultrafast RF MOSFET Driver   [Aug-15-17 08:30AM  GlobeNewswire]
▶ IXYS posts 1Q profit   [12:08AM  Associated Press]
▶ IXYS Corporation Reports Results for the June 2017 Quarter   [Aug-02-17 04:30PM  GlobeNewswire]
▶ ETFs with exposure to IXYS Corp. : July 13, 2017   [Jul-13-17 04:09PM  Capital Cube]
▶ ETFs with exposure to IXYS Corp. : June 26, 2017   [Jun-26-17 04:15PM  Capital Cube]
▶ ETFs with exposure to IXYS Corp. : June 16, 2017   [Jun-16-17 03:58PM  Capital Cube]
▶ IXYS posts 4Q profit   [Jun-02-17 08:55AM  Associated Press]
▶ ETFs with exposure to IXYS Corp. : April 7, 2017   [Apr-07-17 04:56PM  Capital Cube]
▶ IXYS posts 3Q profit   [Feb-02-17 06:14PM  Associated Press]
▶ IXYS to Participate in 19th Annual Needham Conference   [Jan-04-17 08:30AM  GlobeNewswire]
▶ Here is What Hedge Funds Think About IXYS Corporation (IXYS)   [Dec-10-16 10:13AM  at Insider Monkey]
Financial statements of IXYS
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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