Intrinsic value of Mattel, Inc. - MAT

Previous Close

$10.73

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$10.73

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of MAT 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  -4.31
  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
  5,457
  4,601
  4,707
  4,828
  4,964
  5,114
  5,279
  5,459
  5,654
  5,864
  6,089
  6,329
  6,586
  6,860
  7,150
  7,459
  7,786
  8,132
  8,498
  8,884
  9,292
  9,723
  10,177
  10,656
  11,161
  11,692
  12,251
  12,840
  13,460
  14,112
  14,797
Variable operating expenses, $m
 
  4,921
  5,031
  5,156
  5,297
  5,454
  5,625
  5,812
  6,015
  6,232
  6,466
  6,578
  6,845
  7,129
  7,431
  7,752
  8,091
  8,451
  8,831
  9,233
  9,657
  10,105
  10,577
  11,075
  11,599
  12,151
  12,733
  13,345
  13,988
  14,666
  15,379
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
  4,937
  4,921
  5,031
  5,156
  5,297
  5,454
  5,625
  5,812
  6,015
  6,232
  6,466
  6,578
  6,845
  7,129
  7,431
  7,752
  8,091
  8,451
  8,831
  9,233
  9,657
  10,105
  10,577
  11,075
  11,599
  12,151
  12,733
  13,345
  13,988
  14,666
  15,379
Operating income, $m
  519
  -319
  -323
  -328
  -334
  -339
  -346
  -353
  -361
  -369
  -378
  -249
  -259
  -269
  -281
  -293
  -306
  -319
  -334
  -349
  -365
  -382
  -400
  -419
  -438
  -459
  -481
  -504
  -529
  -554
  -581
EBITDA, $m
  782
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  13
  13
  14
  15
Interest expense (income), $m
  85
  174
  180
  186
  194
  202
  212
  222
  233
  245
  258
  272
  287
  303
  319
  337
  357
  377
  398
  421
  445
  470
  497
  525
  554
  585
  618
  653
  689
  728
  768
Earnings before tax, $m
  410
  -494
  -503
  -515
  -527
  -542
  -557
  -575
  -594
  -614
  -636
  -520
  -545
  -572
  -600
  -630
  -662
  -696
  -732
  -770
  -810
  -852
  -896
  -943
  -993
  -1,045
  -1,100
  -1,157
  -1,218
  -1,282
  -1,349
Tax expense, $m
  92
  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
  318
  -494
  -503
  -515
  -527
  -542
  -557
  -575
  -594
  -614
  -636
  -520
  -545
  -572
  -600
  -630
  -662
  -696
  -732
  -770
  -810
  -852
  -896
  -943
  -993
  -1,045
  -1,100
  -1,157
  -1,218
  -1,282
  -1,349

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  870
  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
  6,494
  5,350
  5,473
  5,614
  5,772
  5,947
  6,139
  6,348
  6,574
  6,818
  7,080
  7,360
  7,658
  7,976
  8,314
  8,673
  9,053
  9,455
  9,881
  10,330
  10,805
  11,306
  11,834
  12,391
  12,978
  13,595
  14,246
  14,930
  15,651
  16,409
  17,206
Adjusted assets (=assets-cash), $m
  5,624
  5,350
  5,473
  5,614
  5,772
  5,947
  6,139
  6,348
  6,574
  6,818
  7,080
  7,360
  7,658
  7,976
  8,314
  8,673
  9,053
  9,455
  9,881
  10,330
  10,805
  11,306
  11,834
  12,391
  12,978
  13,595
  14,246
  14,930
  15,651
  16,409
  17,206
Revenue / Adjusted assets
  0.970
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
Average production assets, $m
  1,438
  1,445
  1,478
  1,516
  1,559
  1,606
  1,658
  1,714
  1,775
  1,841
  1,912
  1,987
  2,068
  2,154
  2,245
  2,342
  2,445
  2,553
  2,668
  2,790
  2,918
  3,053
  3,196
  3,346
  3,504
  3,671
  3,847
  4,032
  4,226
  4,431
  4,646
Working capital, $m
  1,434
  520
  532
  546
  561
  578
  597
  617
  639
  663
  688
  715
  744
  775
  808
  843
  880
  919
  960
  1,004
  1,050
  1,099
  1,150
  1,204
  1,261
  1,321
  1,384
  1,451
  1,521
  1,595
  1,672
Total debt, $m
  2,326
  2,947
  3,055
  3,177
  3,315
  3,468
  3,635
  3,817
  4,015
  4,227
  4,455
  4,700
  4,960
  5,237
  5,532
  5,845
  6,176
  6,527
  6,898
  7,290
  7,704
  8,141
  8,601
  9,087
  9,598
  10,137
  10,704
  11,301
  11,930
  12,591
  13,286
Total liabilities, $m
  4,086
  4,665
  4,773
  4,895
  5,033
  5,186
  5,353
  5,535
  5,733
  5,945
  6,174
  6,418
  6,678
  6,955
  7,250
  7,563
  7,894
  8,245
  8,616
  9,008
  9,422
  9,859
  10,319
  10,805
  11,316
  11,855
  12,422
  13,019
  13,648
  14,309
  15,004
Total equity, $m
  2,408
  685
  701
  719
  739
  761
  786
  813
  842
  873
  906
  942
  980
  1,021
  1,064
  1,110
  1,159
  1,210
  1,265
  1,322
  1,383
  1,447
  1,515
  1,586
  1,661
  1,740
  1,823
  1,911
  2,003
  2,100
  2,202
Total liabilities and equity, $m
  6,494
  5,350
  5,474
  5,614
  5,772
  5,947
  6,139
  6,348
  6,575
  6,818
  7,080
  7,360
  7,658
  7,976
  8,314
  8,673
  9,053
  9,455
  9,881
  10,330
  10,805
  11,306
  11,834
  12,391
  12,977
  13,595
  14,245
  14,930
  15,651
  16,409
  17,206
Debt-to-equity ratio
  0.966
  4.300
  4.360
  4.420
  4.490
  4.560
  4.630
  4.700
  4.770
  4.840
  4.920
  4.990
  5.060
  5.130
  5.200
  5.260
  5.330
  5.390
  5.450
  5.510
  5.570
  5.630
  5.680
  5.730
  5.780
  5.830
  5.870
  5.910
  5.950
  5.990
  6.030
Adjusted equity ratio
  0.308
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128
  0.128

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  318
  -494
  -503
  -515
  -527
  -542
  -557
  -575
  -594
  -614
  -636
  -520
  -545
  -572
  -600
  -630
  -662
  -696
  -732
  -770
  -810
  -852
  -896
  -943
  -993
  -1,045
  -1,100
  -1,157
  -1,218
  -1,282
  -1,349
Depreciation, amort., depletion, $m
  263
  324
  328
  333
  338
  344
  351
  358
  366
  375
  384
  255
  265
  276
  288
  300
  313
  327
  342
  358
  374
  391
  410
  429
  449
  471
  493
  517
  542
  568
  596
Funds from operations, $m
  554
  -170
  -175
  -182
  -189
  -197
  -206
  -216
  -227
  -239
  -252
  -266
  -280
  -296
  -312
  -330
  -349
  -369
  -390
  -412
  -436
  -460
  -487
  -514
  -543
  -574
  -606
  -640
  -676
  -714
  -754
Change in working capital, $m
  -41
  10
  12
  14
  15
  17
  19
  20
  22
  24
  25
  27
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  51
  54
  57
  60
  63
  67
  70
  74
  77
Cash from operations, $m
  595
  -180
  -187
  -195
  -204
  -214
  -225
  -237
  -249
  -263
  -277
  -293
  -309
  -327
  -345
  -365
  -386
  -408
  -431
  -456
  -482
  -509
  -538
  -568
  -600
  -634
  -670
  -707
  -746
  -788
  -831
Maintenance CAPEX, $m
  0
  -182
  -185
  -189
  -194
  -200
  -206
  -213
  -220
  -228
  -236
  -245
  -255
  -265
  -276
  -288
  -300
  -313
  -327
  -342
  -358
  -374
  -391
  -410
  -429
  -449
  -471
  -493
  -517
  -542
  -568
New CAPEX, $m
  -262
  -28
  -33
  -38
  -43
  -47
  -52
  -56
  -61
  -66
  -71
  -76
  -81
  -86
  -91
  -97
  -103
  -109
  -115
  -121
  -128
  -135
  -143
  -150
  -158
  -167
  -176
  -185
  -195
  -205
  -215
Cash from investing activities, $m
  -312
  -210
  -218
  -227
  -237
  -247
  -258
  -269
  -281
  -294
  -307
  -321
  -336
  -351
  -367
  -385
  -403
  -422
  -442
  -463
  -486
  -509
  -534
  -560
  -587
  -616
  -647
  -678
  -712
  -747
  -783
Free cash flow, $m
  283
  -389
  -406
  -423
  -441
  -461
  -483
  -506
  -530
  -556
  -584
  -613
  -645
  -678
  -713
  -750
  -789
  -830
  -873
  -919
  -968
  -1,018
  -1,072
  -1,128
  -1,188
  -1,250
  -1,316
  -1,385
  -1,458
  -1,534
  -1,614
Issuance/(repayment) of debt, $m
  225
  91
  107
  123
  138
  153
  167
  182
  197
  213
  228
  244
  260
  277
  295
  313
  331
  351
  371
  392
  414
  437
  461
  485
  512
  539
  567
  597
  628
  661
  695
Issuance/(repurchase) of shares, $m
  34
  509
  519
  533
  548
  564
  582
  602
  622
  645
  669
  556
  584
  613
  644
  676
  711
  748
  786
  827
  870
  916
  964
  1,014
  1,068
  1,124
  1,183
  1,245
  1,310
  1,379
  1,451
Cash from financing (excl. dividends), $m  
  238
  600
  626
  656
  686
  717
  749
  784
  819
  858
  897
  800
  844
  890
  939
  989
  1,042
  1,099
  1,157
  1,219
  1,284
  1,353
  1,425
  1,499
  1,580
  1,663
  1,750
  1,842
  1,938
  2,040
  2,146
Total cash flow (excl. dividends), $m
  496
  211
  221
  232
  244
  255
  267
  278
  290
  301
  313
  187
  199
  212
  226
  239
  254
  269
  284
  300
  317
  334
  353
  372
  391
  412
  434
  457
  481
  506
  532
Retained Cash Flow (-), $m
  225
  -509
  -519
  -533
  -548
  -564
  -582
  -602
  -622
  -645
  -669
  -556
  -584
  -613
  -644
  -676
  -711
  -748
  -786
  -827
  -870
  -916
  -964
  -1,014
  -1,068
  -1,124
  -1,183
  -1,245
  -1,310
  -1,379
  -1,451
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
 
  -298
  -298
  -300
  -304
  -309
  -315
  -323
  -333
  -344
  -356
  -369
  -384
  -400
  -418
  -437
  -457
  -479
  -502
  -527
  -554
  -582
  -611
  -643
  -676
  -711
  -749
  -788
  -829
  -873
  -919
Discount rate, %
 
  11.10
  11.66
  12.24
  12.85
  13.49
  14.17
  14.88
  15.62
  16.40
  17.22
  18.08
  18.98
  19.93
  20.93
  21.98
  23.08
  24.23
  25.44
  26.71
  28.05
  29.45
  30.92
  32.47
  34.09
  35.80
  37.59
  39.47
  41.44
  43.51
  45.69
PV of cash for distribution, $m
 
  -268
  -239
  -212
  -187
  -164
  -142
  -122
  -104
  -88
  -73
  -59
  -48
  -38
  -29
  -22
  -16
  -12
  -8
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  87.9
  77.3
  68.0
  59.8
  52.5
  46.2
  40.6
  35.6
  31.3
  27.5
  24.8
  22.3
  20.0
  18.0
  16.1
  14.4
  12.9
  11.6
  10.4
  9.3
  8.3
  7.4
  6.6
  5.9
  5.2
  4.7
  4.1
  3.7
  3.3
  2.9

Mattel, Inc. manufactures and markets a range of toy products around the world. The Company's segments are North America; International, and American Girl. Its portfolio of brands and products are grouped into approximately four major brand categories, including Mattel Girls & Boys Brands, Fisher-Price Brands, American Girl Brands and Construction and Arts & Crafts Brands. The Mattel Girls & Boys Brands category includes Barbie fashion dolls, Monster High, Disney Classics, Ever After High, Little Mommy, and Polly Pocket, Hot Wheels and Matchbox vehicles and play sets, and CARS, Disney Planes, BOOMco, Toy Story, Max Steel, WWE Wrestling and DC Comics. The Fisher-Price Brands category includes Fisher-Price, Little People, BabyGear, Laugh & Learn, Imaginext, Thomas & Friends, Blaze and The Monster Machines, Shimmer and Shine, Mickey Mouse Clubhouse, Minnie Mouse, Octonauts, and Power Wheels. The Construction and Arts & Crafts Brands category includes MEGA BLOKS, RoseArt and Board Dudes.

FINANCIAL RATIOS  of  Mattel, Inc. (MAT)

Valuation Ratios
P/E Ratio 11.6
Price to Sales 0.7
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 6.2
Price to Free Cash Flow 11
Growth Rates
Sales Growth Rate -4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.1%
Cap. Spend. - 3 Yr. Gr. Rate 0.8%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 88.6%
Total Debt to Equity 96.6%
Interest Coverage 6
Management Effectiveness
Return On Assets 5.9%
Ret/ On Assets - 3 Yr. Avg. 7%
Return On Total Capital 6.7%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity 12.6%
Return On Equity - 3 Yr. Avg. 14%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 46.8%
Gross Margin - 3 Yr. Avg. 48.6%
EBITDA Margin 13.9%
EBITDA Margin - 3 Yr. Avg. 14.4%
Operating Margin 9.5%
Oper. Margin - 3 Yr. Avg. 10%
Pre-Tax Margin 7.5%
Pre-Tax Margin - 3 Yr. Avg. 8.5%
Net Profit Margin 5.8%
Net Profit Margin - 3 Yr. Avg. 6.9%
Effective Tax Rate 22.4%
Eff/ Tax Rate - 3 Yr. Avg. 19.3%
Payout Ratio 163.2%

MAT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MAT stock intrinsic value calculation we used $4511 million for the last fiscal year's total revenue generated by Mattel, Inc.. The default revenue input number comes from 2016 income statement of Mattel, Inc.. 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 MAT 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 11.1%, whose default value for MAT is calculated based on our internal credit rating of Mattel, Inc., 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 Mattel, Inc..
    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 MAT stock the variable cost ratio is equal to 107%.

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 MAT 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 6.1% for Mattel, Inc..

Corporate tax rate of 27% is the nominal tax rate for Mattel, Inc.. 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 MAT 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 MAT are equal to 31.4%.

Life of production assets of 7.8 years is the average useful life of capital assets used in Mattel, Inc. 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 MAT is equal to 11.3%. 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 - $669.465 million for Mattel, Inc. - 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 345.543 million for Mattel, Inc. 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 Mattel, Inc. at the current share price and the inputted number of shares is $3.7 billion.

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