Intrinsic value of Malibu Boats Cl A - MBUU

Previous Close

$25.92

  Intrinsic Value

$49.77

stock screener

  Rating & Target

str. buy

+92%

  Value-price divergence*

-13%

Previous close

$25.92

 
Intrinsic value

$49.77

 
Up/down potential

+92%

 
Rating

str. buy

 
Value-price divergence*

-13%

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

We calculate the intrinsic value of MBUU 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 0.5

 

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, %
  10.48
  11.60
  10.94
  10.35
  9.81
  9.33
  8.90
  8.51
  8.16
  7.84
  7.56
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
Revenue, $m
  253
  282
  313
  346
  380
  415
  452
  490
  530
  572
  615
  660
  707
  755
  806
  858
  913
  969
  1,029
  1,090
  1,154
  1,221
  1,291
  1,364
  1,441
  1,520
  1,603
  1,690
  1,781
  1,877
  1,976
Variable operating expenses, $m
 
  235
  261
  288
  316
  345
  376
  408
  441
  475
  511
  547
  586
  626
  668
  712
  757
  804
  853
  904
  957
  1,013
  1,071
  1,131
  1,195
  1,261
  1,330
  1,402
  1,477
  1,556
  1,639
Fixed operating expenses, $m
 
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  13
Total operating expenses, $m
  217
  241
  267
  294
  323
  352
  383
  415
  448
  482
  519
  555
  594
  634
  676
  721
  766
  813
  862
  914
  967
  1,023
  1,081
  1,142
  1,206
  1,272
  1,341
  1,414
  1,489
  1,568
  1,652
Operating income, $m
  36
  41
  46
  51
  57
  63
  69
  75
  82
  89
  96
  105
  113
  121
  129
  138
  147
  156
  166
  177
  187
  198
  210
  222
  235
  248
  262
  277
  292
  308
  325
EBITDA, $m
  41
  45
  51
  57
  63
  69
  75
  82
  89
  97
  104
  112
  121
  129
  138
  148
  157
  168
  178
  189
  201
  213
  225
  238
  252
  266
  281
  296
  313
  330
  348
Interest expense (income), $m
  0
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  15
  16
  18
  19
  20
  22
  24
  25
  27
  29
  31
  33
  35
  37
  40
  42
  44
  47
Earnings before tax, $m
  32
  38
  43
  47
  52
  57
  62
  68
  73
  79
  85
  93
  99
  106
  113
  120
  128
  136
  144
  153
  162
  171
  181
  191
  202
  213
  225
  237
  250
  264
  278
Tax expense, $m
  12
  10
  12
  13
  14
  15
  17
  18
  20
  21
  23
  25
  27
  29
  31
  32
  35
  37
  39
  41
  44
  46
  49
  52
  55
  58
  61
  64
  68
  71
  75
Net income, $m
  18
  28
  31
  35
  38
  42
  45
  49
  53
  58
  62
  68
  72
  77
  82
  88
  93
  99
  105
  112
  118
  125
  132
  140
  148
  156
  164
  173
  183
  192
  203

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  26
  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
  222
  248
  275
  303
  333
  364
  396
  430
  465
  502
  540
  579
  620
  662
  707
  753
  801
  850
  902
  956
  1,013
  1,071
  1,133
  1,197
  1,264
  1,333
  1,406
  1,483
  1,563
  1,646
  1,734
Adjusted assets (=assets-cash), $m
  196
  248
  275
  303
  333
  364
  396
  430
  465
  502
  540
  579
  620
  662
  707
  753
  801
  850
  902
  956
  1,013
  1,071
  1,133
  1,197
  1,264
  1,333
  1,406
  1,483
  1,563
  1,646
  1,734
Revenue / Adjusted assets
  1.291
  1.137
  1.138
  1.142
  1.141
  1.140
  1.141
  1.140
  1.140
  1.139
  1.139
  1.140
  1.140
  1.140
  1.140
  1.139
  1.140
  1.140
  1.141
  1.140
  1.139
  1.140
  1.139
  1.140
  1.140
  1.140
  1.140
  1.140
  1.139
  1.140
  1.140
Average production assets, $m
  29
  32
  36
  40
  44
  48
  52
  56
  61
  66
  71
  76
  81
  87
  93
  99
  105
  111
  118
  125
  133
  140
  149
  157
  166
  175
  184
  194
  205
  216
  227
Working capital, $m
  17
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
Total debt, $m
  71
  87
  111
  137
  164
  192
  221
  251
  283
  316
  350
  385
  422
  460
  500
  541
  585
  629
  676
  725
  775
  828
  883
  941
  1,001
  1,064
  1,130
  1,198
  1,270
  1,345
  1,424
Total liabilities, $m
  207
  223
  247
  273
  300
  328
  357
  387
  419
  452
  486
  521
  558
  596
  636
  677
  721
  765
  812
  861
  911
  964
  1,019
  1,077
  1,137
  1,200
  1,266
  1,334
  1,406
  1,481
  1,560
Total equity, $m
  15
  25
  27
  30
  33
  36
  40
  43
  47
  50
  54
  58
  62
  66
  71
  75
  80
  85
  90
  96
  101
  107
  113
  120
  126
  133
  141
  148
  156
  165
  173
Total liabilities and equity, $m
  222
  248
  274
  303
  333
  364
  397
  430
  466
  502
  540
  579
  620
  662
  707
  752
  801
  850
  902
  957
  1,012
  1,071
  1,132
  1,197
  1,263
  1,333
  1,407
  1,482
  1,562
  1,646
  1,733
Debt-to-equity ratio
  4.733
  3.510
  4.050
  4.510
  4.920
  5.260
  5.570
  5.840
  6.080
  6.290
  6.480
  6.650
  6.810
  6.950
  7.080
  7.190
  7.300
  7.400
  7.490
  7.580
  7.660
  7.730
  7.800
  7.860
  7.920
  7.980
  8.030
  8.080
  8.130
  8.170
  8.220
Adjusted equity ratio
  -0.056
  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
  18
  28
  31
  35
  38
  42
  45
  49
  53
  58
  62
  68
  72
  77
  82
  88
  93
  99
  105
  112
  118
  125
  132
  140
  148
  156
  164
  173
  183
  192
  203
Depreciation, amort., depletion, $m
  5
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  8
  9
  9
  10
  10
  11
  12
  13
  13
  14
  15
  16
  17
  17
  18
  19
  20
  22
  23
Funds from operations, $m
  34
  32
  36
  40
  44
  48
  52
  56
  61
  65
  70
  75
  80
  86
  92
  98
  104
  110
  117
  124
  131
  139
  147
  155
  164
  173
  183
  193
  203
  214
  225
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
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from operations, $m
  36
  33
  36
  40
  44
  48
  52
  56
  61
  66
  71
  75
  81
  86
  92
  98
  104
  111
  117
  124
  132
  139
  147
  156
  164
  174
  183
  193
  204
  214
  226
Maintenance CAPEX, $m
  0
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -22
New CAPEX, $m
  -6
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
Cash from investing activities, $m
  -6
  -6
  -7
  -8
  -8
  -8
  -9
  -9
  -11
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -29
  -31
  -33
Free cash flow, $m
  30
  26
  29
  33
  36
  39
  43
  47
  51
  55
  59
  63
  68
  72
  77
  83
  88
  94
  99
  105
  112
  118
  125
  132
  140
  148
  156
  165
  174
  183
  193
Issuance/(repayment) of debt, $m
  -7
  16
  24
  26
  27
  28
  29
  30
  32
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  75
  79
Issuance/(repurchase) of shares, $m
  -4
  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  
  -12
  16
  24
  26
  27
  28
  29
  30
  32
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  75
  79
Total cash flow (excl. dividends), $m
  18
  42
  54
  58
  63
  67
  72
  77
  82
  88
  93
  99
  105
  111
  117
  124
  131
  138
  146
  154
  163
  171
  180
  190
  200
  211
  222
  233
  245
  258
  272
Retained Cash Flow (-), $m
  -18
  -10
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
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
 
  32
  51
  55
  60
  64
  69
  74
  79
  84
  89
  95
  100
  107
  113
  119
  126
  133
  141
  149
  157
  165
  174
  184
  193
  204
  214
  226
  237
  250
  263
Discount rate, %
 
  4.40
  4.62
  4.85
  5.09
  5.35
  5.62
  5.90
  6.19
  6.50
  6.83
  7.17
  7.53
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
PV of cash for distribution, $m
 
  31
  47
  48
  49
  50
  50
  49
  49
  48
  46
  44
  42
  40
  37
  34
  31
  28
  25
  22
  19
  16
  14
  11
  9
  7
  6
  4
  3
  2
  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
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Malibu Boats, Inc. designs, manufactures, markets, distributes, and sells sport boats. The company provides boats for use in water sports, including water skiing, wakeboarding, and wake surfing, as well as general recreational boating. It also offers various accessories and aftermarket parts. The company sells its performance boats under the Malibu and Axis brands through a network of independent dealers in North America, South America, Europe, Asia, Australia, and New Zealand markets. Malibu Boats, Inc. was founded in 1982 and is based in Loudon, Tennessee.

FINANCIAL RATIOS  of  Malibu Boats Cl A (MBUU)

Valuation Ratios
P/E Ratio 25.5
Price to Sales 1.8
Price to Book 30.6
Price to Tangible Book
Price to Cash Flow 12.7
Price to Free Cash Flow 15.3
Growth Rates
Sales Growth Rate 10.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 20%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 420%
Total Debt to Equity 473.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 8.5%
Ret/ On Assets - 3 Yr. Avg. 4.1%
Return On Total Capital 22.5%
Ret/ On T. Cap. - 3 Yr. Avg. 13%
Return On Equity 300%
Return On Equity - 3 Yr. Avg. 154%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 26.5%
Gross Margin - 3 Yr. Avg. 26.5%
EBITDA Margin 14.6%
EBITDA Margin - 3 Yr. Avg. 10.8%
Operating Margin 14.2%
Oper. Margin - 3 Yr. Avg. 9.4%
Pre-Tax Margin 12.6%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 7.1%
Net Profit Margin - 3 Yr. Avg. 3.7%
Effective Tax Rate 37.5%
Eff/ Tax Rate - 3 Yr. Avg. 44.1%
Payout Ratio 0%

MBUU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MBUU stock intrinsic value calculation we used $253 million for the last fiscal year's total revenue generated by Malibu Boats Cl A. The default revenue input number comes from 2016 income statement of Malibu Boats 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 MBUU stock valuation model: a) initial revenue growth rate of 11.6% 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 4.4%, whose default value for MBUU is calculated based on our internal credit rating of Malibu Boats 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 Malibu Boats 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 MBUU stock the variable cost ratio is equal to 83.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $6 million in the base year in the intrinsic value calculation for MBUU 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 Malibu Boats Cl A.

Corporate tax rate of 27% is the nominal tax rate for Malibu Boats 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 MBUU 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 MBUU are equal to 11.5%.

Life of production assets of 10 years is the average useful life of capital assets used in Malibu Boats 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 MBUU is equal to -0.4%. 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 - $15 million for Malibu Boats 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 17.426 million for Malibu Boats 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 Malibu Boats Cl A at the current share price and the inputted number of shares is $0.5 billion.

RELATED COMPANIES Price Int.Val. Rating
MCFT MCBC Holdings 17.13 8.79  str.sell
MPX Marine Product 14.76 8.53  sell
BC Brunswick 51.49 98.50  str.buy
TWIN Twin Disc 16.93 2.69  str.sell

COMPANY NEWS

▶ Top Ranked Growth Stocks to Buy for August 14th   [Aug-14-17 08:22AM  Zacks]
▶ Axis Wake Research Launches New A24 for 2018   [Aug-03-17 04:30PM  Marketwired]
▶ 3 Stocks With Tesla-like Return Potential   [Aug-01-17 07:15AM  Motley Fool]
▶ Four Stocks At Your Leisure   [Jul-05-17 01:02PM  Zacks]
▶ Best Stocks For The Second Half of 2017   [Jul-03-17 11:43AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for June 30th   [Jun-30-17 09:43AM  Zacks]
▶ Top Ranked Growth Stocks to Buy for June 22nd   [Jun-22-17 10:10AM  Zacks]
▶ 3 Stocks With Tesla-Like Return Potential   [Jun-17-17 10:32AM  Motley Fool]
▶ ETFs with exposure to Malibu Boats, Inc. : May 26, 2017   [May-26-17 01:16PM  Capital Cube]
▶ Amaya Announces Nomination of Two New Directors   [May-23-17 07:30AM  CNW Group]
▶ ETFs with exposure to Malibu Boats, Inc. : May 12, 2017   [May-12-17 04:12PM  Capital Cube]
▶ Malibu Boats tops Street 3Q forecasts   [May-03-17 07:59AM  Associated Press]
▶ Malibu Wins Innovation of the Year   [Mar-10-17 02:00PM  Marketwired]
▶ Malibu Lands on Australia's Legendary Gold Coast   [Feb-10-17 02:00PM  Marketwired]
▶ Malibu Boats beats Street 2Q forecasts   [07:14AM  Associated Press]
▶ Malibu Boats Inc (MBUU): Are Hedge Funds Right About This Stock?   [Dec-05-16 01:41PM  at Insider Monkey]
Stock chart of MBUU Financial statements of MBUU
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.