Intrinsic value of Command Security - MOC

Previous Close

$3.12

  Intrinsic Value

$158.93

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+5000%

Previous close

$3.12

 
Intrinsic value

$158.93

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+5000%

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

We calculate the intrinsic value of MOC 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 0.0

 

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, %
  -4.32
  26.50
  24.35
  22.42
  20.67
  19.11
  17.70
  16.43
  15.28
  14.26
  13.33
  12.50
  11.75
  11.07
  10.47
  9.92
  9.43
  8.98
  8.59
  8.23
  7.90
  7.61
  7.35
  7.12
  6.91
  6.71
  6.54
  6.39
  6.25
  6.13
  6.01
Revenue, $m
  133
  168
  209
  256
  309
  368
  433
  504
  581
  664
  753
  847
  947
  1,051
  1,161
  1,277
  1,397
  1,522
  1,653
  1,789
  1,931
  2,077
  2,230
  2,389
  2,554
  2,725
  2,904
  3,089
  3,282
  3,483
  3,693
Variable operating expenses, $m
 
  33
  41
  50
  60
  72
  84
  98
  113
  130
  147
  165
  185
  205
  226
  249
  272
  297
  322
  349
  376
  405
  435
  466
  498
  531
  566
  602
  640
  679
  720
Fixed operating expenses, $m
 
  116
  119
  122
  125
  128
  131
  134
  138
  141
  145
  148
  152
  156
  160
  164
  168
  172
  176
  181
  185
  190
  195
  199
  204
  209
  215
  220
  226
  231
  237
Total operating expenses, $m
  137
  149
  160
  172
  185
  200
  215
  232
  251
  271
  292
  313
  337
  361
  386
  413
  440
  469
  498
  530
  561
  595
  630
  665
  702
  740
  781
  822
  866
  910
  957
Operating income, $m
  -4
  20
  50
  84
  124
  168
  218
  272
  330
  394
  461
  534
  610
  691
  775
  864
  957
  1,054
  1,155
  1,260
  1,369
  1,483
  1,601
  1,724
  1,852
  1,984
  2,123
  2,267
  2,417
  2,573
  2,736
EBITDA, $m
  -3
  20
  50
  85
  124
  169
  218
  272
  331
  394
  462
  535
  611
  692
  777
  865
  958
  1,055
  1,156
  1,262
  1,371
  1,485
  1,603
  1,726
  1,854
  1,987
  2,126
  2,270
  2,420
  2,577
  2,740
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  10
  11
  12
  13
  13
  14
  15
Earnings before tax, $m
  -4
  19
  49
  84
  123
  167
  216
  270
  329
  391
  459
  531
  607
  687
  771
  859
  951
  1,048
  1,148
  1,253
  1,361
  1,474
  1,592
  1,714
  1,841
  1,973
  2,111
  2,254
  2,403
  2,559
  2,721
Tax expense, $m
  -1
  5
  13
  23
  33
  45
  58
  73
  89
  106
  124
  143
  164
  185
  208
  232
  257
  283
  310
  338
  368
  398
  430
  463
  497
  533
  570
  609
  649
  691
  735
Net income, $m
  -3
  14
  36
  61
  90
  122
  158
  197
  240
  286
  335
  387
  443
  501
  563
  627
  695
  765
  838
  914
  994
  1,076
  1,162
  1,251
  1,344
  1,441
  1,541
  1,646
  1,754
  1,868
  1,986

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
Total assets, $m
  36
  44
  55
  67
  81
  97
  114
  133
  153
  175
  198
  223
  249
  277
  306
  336
  368
  401
  435
  471
  508
  547
  587
  629
  672
  717
  764
  813
  864
  917
  972
Adjusted assets (=assets-cash), $m
  35
  44
  55
  67
  81
  97
  114
  133
  153
  175
  198
  223
  249
  277
  306
  336
  368
  401
  435
  471
  508
  547
  587
  629
  672
  717
  764
  813
  864
  917
  972
Revenue / Adjusted assets
  3.800
  3.818
  3.800
  3.821
  3.815
  3.794
  3.798
  3.789
  3.797
  3.794
  3.803
  3.798
  3.803
  3.794
  3.794
  3.801
  3.796
  3.796
  3.800
  3.798
  3.801
  3.797
  3.799
  3.798
  3.801
  3.801
  3.801
  3.800
  3.799
  3.798
  3.799
Average production assets, $m
  2
  2
  2
  3
  3
  4
  5
  6
  6
  7
  8
  9
  10
  12
  13
  14
  15
  17
  18
  20
  21
  23
  25
  26
  28
  30
  32
  34
  36
  38
  41
Working capital, $m
  10
  20
  25
  31
  37
  44
  52
  61
  70
  80
  90
  102
  114
  126
  139
  153
  168
  183
  198
  215
  232
  249
  268
  287
  306
  327
  348
  371
  394
  418
  443
Total debt, $m
  7
  11
  16
  22
  29
  36
  44
  54
  63
  74
  85
  97
  110
  123
  138
  152
  168
  184
  200
  218
  236
  255
  274
  295
  316
  338
  360
  384
  409
  435
  461
Total liabilities, $m
  18
  22
  27
  33
  40
  47
  55
  65
  74
  85
  96
  108
  121
  134
  149
  163
  179
  195
  211
  229
  247
  266
  285
  306
  327
  349
  371
  395
  420
  446
  472
Total equity, $m
  18
  23
  28
  35
  42
  50
  59
  68
  79
  90
  102
  115
  128
  142
  157
  173
  189
  206
  224
  242
  261
  281
  302
  323
  345
  369
  393
  418
  444
  471
  500
Total liabilities and equity, $m
  36
  45
  55
  68
  82
  97
  114
  133
  153
  175
  198
  223
  249
  276
  306
  336
  368
  401
  435
  471
  508
  547
  587
  629
  672
  718
  764
  813
  864
  917
  972
Debt-to-equity ratio
  0.389
  0.460
  0.560
  0.630
  0.680
  0.720
  0.760
  0.780
  0.810
  0.820
  0.840
  0.850
  0.860
  0.870
  0.880
  0.880
  0.890
  0.890
  0.900
  0.900
  0.900
  0.910
  0.910
  0.910
  0.910
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
Adjusted equity ratio
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3
  14
  36
  61
  90
  122
  158
  197
  240
  286
  335
  387
  443
  501
  563
  627
  695
  765
  838
  914
  994
  1,076
  1,162
  1,251
  1,344
  1,441
  1,541
  1,646
  1,754
  1,868
  1,986
Depreciation, amort., depletion, $m
  1
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
Funds from operations, $m
  1
  14
  36
  62
  90
  123
  158
  198
  240
  287
  336
  388
  444
  502
  564
  629
  696
  767
  840
  916
  996
  1,079
  1,165
  1,254
  1,347
  1,444
  1,544
  1,649
  1,758
  1,872
  1,990
Change in working capital, $m
  2
  4
  5
  6
  6
  7
  8
  9
  9
  10
  11
  11
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
Cash from operations, $m
  -1
  10
  31
  56
  84
  116
  151
  189
  231
  277
  325
  377
  432
  490
  551
  615
  682
  751
  824
  900
  979
  1,061
  1,146
  1,235
  1,327
  1,423
  1,523
  1,627
  1,735
  1,848
  1,965
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
New CAPEX, $m
  0
  0
  0
  -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
  -2
  -2
Cash from investing activities, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
Free cash flow, $m
  -1
  10
  31
  55
  83
  115
  150
  188
  230
  275
  323
  375
  430
  488
  548
  612
  679
  749
  821
  897
  975
  1,057
  1,142
  1,231
  1,323
  1,418
  1,518
  1,621
  1,729
  1,842
  1,959
Issuance/(repayment) of debt, $m
  0
  5
  5
  6
  7
  8
  8
  9
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
Issuance/(repurchase) of shares, $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
  0
Cash from financing (excl. dividends), $m  
  0
  5
  5
  6
  7
  8
  8
  9
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
Total cash flow (excl. dividends), $m
  -1
  14
  36
  61
  90
  122
  158
  197
  240
  286
  335
  387
  443
  501
  563
  627
  694
  765
  838
  914
  993
  1,076
  1,162
  1,251
  1,344
  1,440
  1,541
  1,645
  1,754
  1,867
  1,986
Retained Cash Flow (-), $m
  3
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
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
 
  9
  30
  55
  83
  114
  149
  187
  229
  274
  323
  374
  429
  487
  548
  611
  678
  748
  820
  896
  974
  1,056
  1,141
  1,230
  1,321
  1,417
  1,517
  1,620
  1,728
  1,840
  1,957
Discount rate, %
 
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
 
  9
  26
  43
  59
  74
  86
  96
  103
  107
  107
  105
  101
  94
  86
  77
  67
  57
  47
  38
  30
  23
  18
  13
  9
  6
  4
  3
  2
  1
  1
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

Command Security Corporation provides uniformed security officers and aviation security services in the United States. The company operates through Security and Aviation Safeguards divisions. The Security division offers armed and unarmed uniformed security personnel for access control, loss prevention, mobile patrol, traffic control, security console/system operators, and fire safety directors, as well as personnel for reception, concierge, and front desk/doorman operations. This division serves governmental, quasi-governmental, and financial institutions; colleges and universities; and healthcare, residential, commercial real estate, industrial, distribution, logistics, and retail sectors. The Aviation Safeguards division provides various uniformed services for domestic and international air carriers, including security for airlines, aircraft, passengers, and cargo; and baggage screening, wheelchair escort, special escort, and skycap services. This division serves approximately 50 domestic and international airlines, airports, airport authorities, and the general aviation community at approximately 9 international airports. It also offers labor and operations management services, such as scheduling, reporting, payroll, billing, and training management services. Command Security Corporation was founded in 1980 and is based in Herndon, Virginia.

FINANCIAL RATIOS  of  Command Security (MOC)

Valuation Ratios
P/E Ratio -10.2
Price to Sales 0.2
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow -30.5
Price to Free Cash Flow -30.5
Growth Rates
Sales Growth Rate -4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 38.9%
Interest Coverage 0
Management Effectiveness
Return On Assets -8.2%
Ret/ On Assets - 3 Yr. Avg. -1%
Return On Total Capital -11.3%
Ret/ On T. Cap. - 3 Yr. Avg. -1.5%
Return On Equity -15.4%
Return On Equity - 3 Yr. Avg. -1.6%
Asset Turnover 3.6
Profitability Ratios
Gross Margin 11.3%
Gross Margin - 3 Yr. Avg. 12.8%
EBITDA Margin -2.3%
EBITDA Margin - 3 Yr. Avg. 0.6%
Operating Margin -3%
Oper. Margin - 3 Yr. Avg. 0.1%
Pre-Tax Margin -3%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin -2.3%
Net Profit Margin - 3 Yr. Avg. -0.3%
Effective Tax Rate 25%
Eff/ Tax Rate - 3 Yr. Avg. 41.7%
Payout Ratio 0%

MOC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MOC stock intrinsic value calculation we used $133 million for the last fiscal year's total revenue generated by Command Security. The default revenue input number comes from 2016 income statement of Command Security. 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 MOC stock valuation model: a) initial revenue growth rate of 26.5% 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 7.5%, whose default value for MOC is calculated based on our internal credit rating of Command Security, 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 Command Security.
    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 MOC stock the variable cost ratio is equal to 19.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $113 million in the base year in the intrinsic value calculation for MOC 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 Command Security.

Corporate tax rate of 27% is the nominal tax rate for Command Security. 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 MOC 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 MOC are equal to 1.1%.

Life of production assets of 10 years is the average useful life of capital assets used in Command Security 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 MOC is equal to 12%. 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 - $18 million for Command Security - 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 9.39 million for Command Security 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 Command Security at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
ABM ABM Industries 43.04 35.49  hold

COMPANY NEWS

▶ Command Security Corporation Announces $50M Contract Award   [May-16-17 08:00AM  GlobeNewswire]
▶ Command Security Corporation Announces $80M Contract Award   [May-02-17 08:00AM  GlobeNewswire]
▶ Here's Why Command Security (MOC) Stock Gained 29% Today   [Jun-06-16 04:51PM  TheStreet.com]
▶ Heres Why These Five Stocks Are Surging Today   [11:21AM  Insider Monkey]
▶ Heres Why These Five Stocks Are Surging Today   [11:21AM  at Insider Monkey]
▶ 10-Q for Command Security Corp.   [Aug-09  08:13PM  at Company Spotlight]
▶ JFK, La Guardia Airport Workers Call Off Job Action   [01:39PM  at The Wall Street Journal]
▶ Airport Workers to go on Strike at LGA and JFK   [10:22AM  at Fox Business]
▶ 10-K for Command Security Corp.   [Jun-28  08:09PM  at Company Spotlight]
▶ 10-Q for Command Security Corp.   [Feb-19  07:07PM  Company Spotlight]
▶ 10-Q for Command Security Corp.   [Nov-14  07:09PM  Company Spotlight]
▶ COMMAND SECURITY CORP Files SEC form 10-K, Annual Report   [Jun-16  04:32PM  EDGAR Online]
▶ TASER Gets $5.8M Foreign Orders   [Dec-11  04:20PM  Zacks]
▶ Command Security Announces Contract Award   [Oct-21  04:55PM  Business Wire]
▶ Command Security announces contract award   [09:38AM  theflyonthewall.com]
Stock chart of MOC Financial statements of MOC
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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