Intrinsic value of MaxPoint Interactive - MXPT

Previous Close

$5.42

  Intrinsic Value

$1.47

stock screener

  Rating & Target

str. sell

-73%

  Value-price divergence*

0%

Previous close

$5.42

 
Intrinsic value

$1.47

 
Up/down potential

-73%

 
Rating

str. sell

 
Value-price divergence*

0%

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

We calculate the intrinsic value of MXPT 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, %
  6.43
  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
  149
  152
  155
  159
  164
  169
  174
  180
  187
  194
  201
  209
  218
  227
  236
  246
  257
  269
  281
  293
  307
  321
  336
  352
  369
  386
  405
  424
  445
  466
  489
Variable operating expenses, $m
 
  85
  87
  89
  91
  94
  97
  100
  104
  108
  112
  116
  121
  126
  132
  137
  143
  150
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  248
  260
  272
Fixed operating expenses, $m
 
  87
  89
  92
  94
  96
  99
  101
  104
  106
  109
  112
  114
  117
  120
  123
  126
  129
  133
  136
  139
  143
  146
  150
  154
  158
  162
  166
  170
  174
  178
Total operating expenses, $m
  166
  172
  176
  181
  185
  190
  196
  201
  208
  214
  221
  228
  235
  243
  252
  260
  269
  279
  289
  299
  310
  322
  333
  346
  359
  373
  387
  402
  418
  434
  450
Operating income, $m
  -17
  -20
  -20
  -21
  -21
  -21
  -21
  -21
  -21
  -20
  -20
  -19
  -18
  -17
  -15
  -14
  -12
  -10
  -8
  -6
  -3
  0
  3
  6
  10
  13
  18
  22
  27
  33
  38
EBITDA, $m
  -7
  -19
  -19
  -20
  -20
  -20
  -20
  -20
  -20
  -19
  -18
  -18
  -17
  -15
  -14
  -12
  -11
  -9
  -6
  -4
  -1
  2
  5
  8
  12
  16
  20
  25
  30
  36
  41
Interest expense (income), $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
Earnings before tax, $m
  -18
  -20
  -21
  -21
  -21
  -22
  -22
  -21
  -21
  -21
  -20
  -19
  -18
  -17
  -16
  -15
  -13
  -11
  -9
  -7
  -4
  -2
  1
  5
  8
  12
  16
  21
  25
  31
  36
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  2
  3
  4
  6
  7
  8
  10
Net income, $m
  -18
  -20
  -21
  -21
  -21
  -22
  -22
  -21
  -21
  -21
  -20
  -19
  -18
  -17
  -16
  -15
  -13
  -11
  -9
  -7
  -4
  -2
  1
  3
  6
  9
  12
  15
  19
  22
  26

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  24
  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
  89
  66
  68
  70
  72
  74
  76
  79
  81
  85
  88
  91
  95
  99
  103
  107
  112
  117
  122
  128
  134
  140
  147
  154
  161
  168
  177
  185
  194
  203
  213
Adjusted assets (=assets-cash), $m
  65
  66
  68
  70
  72
  74
  76
  79
  81
  85
  88
  91
  95
  99
  103
  107
  112
  117
  122
  128
  134
  140
  147
  154
  161
  168
  177
  185
  194
  203
  213
Revenue / Adjusted assets
  2.292
  2.303
  2.279
  2.271
  2.278
  2.284
  2.289
  2.278
  2.309
  2.282
  2.284
  2.297
  2.295
  2.293
  2.291
  2.299
  2.295
  2.299
  2.303
  2.289
  2.291
  2.293
  2.286
  2.286
  2.292
  2.298
  2.288
  2.292
  2.294
  2.296
  2.296
Average production assets, $m
  10
  10
  10
  10
  10
  11
  11
  12
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
Working capital, $m
  19
  22
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  40
  42
  43
  45
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
Total debt, $m
  27
  4
  4
  5
  6
  6
  7
  8
  10
  11
  12
  13
  15
  17
  18
  20
  22
  24
  26
  28
  31
  33
  36
  38
  41
  44
  48
  51
  55
  58
  62
Total liabilities, $m
  51
  27
  27
  28
  29
  29
  30
  31
  33
  34
  35
  36
  38
  40
  41
  43
  45
  47
  49
  51
  54
  56
  59
  61
  64
  67
  71
  74
  78
  81
  85
Total equity, $m
  39
  40
  41
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  77
  80
  84
  88
  92
  97
  101
  106
  111
  116
  122
  128
Total liabilities and equity, $m
  90
  67
  68
  70
  72
  73
  76
  78
  82
  85
  88
  91
  95
  99
  103
  107
  112
  117
  122
  128
  134
  140
  147
  153
  161
  168
  177
  185
  194
  203
  213
Debt-to-equity ratio
  0.692
  0.090
  0.100
  0.120
  0.130
  0.150
  0.160
  0.180
  0.200
  0.210
  0.230
  0.250
  0.260
  0.280
  0.290
  0.310
  0.330
  0.340
  0.350
  0.370
  0.380
  0.390
  0.410
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
Adjusted equity ratio
  0.231
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600
  0.600

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -18
  -20
  -21
  -21
  -21
  -22
  -22
  -21
  -21
  -21
  -20
  -19
  -18
  -17
  -16
  -15
  -13
  -11
  -9
  -7
  -4
  -2
  1
  3
  6
  9
  12
  15
  19
  22
  26
Depreciation, amort., depletion, $m
  10
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
Funds from operations, $m
  -8
  -19
  -20
  -20
  -20
  -20
  -20
  -20
  -20
  -19
  -19
  -18
  -17
  -16
  -15
  -13
  -11
  -9
  -7
  -5
  -2
  0
  3
  6
  8
  11
  14
  18
  21
  25
  30
Change in working capital, $m
  -2
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
Cash from operations, $m
  -6
  -19
  -20
  -21
  -21
  -21
  -21
  -21
  -21
  -20
  -20
  -19
  -18
  -17
  -16
  -15
  -13
  -11
  -9
  -7
  -4
  -2
  1
  3
  6
  9
  12
  15
  18
  22
  26
Maintenance CAPEX, $m
  0
  -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
  -2
  -3
  -3
  -3
  -3
New CAPEX, $m
  -9
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from investing activities, $m
  -8
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
Free cash flow, $m
  -14
  -21
  -21
  -22
  -22
  -23
  -23
  -23
  -22
  -22
  -22
  -21
  -20
  -19
  -18
  -17
  -15
  -13
  -12
  -9
  -7
  -4
  -2
  0
  3
  5
  8
  11
  14
  18
  22
Issuance/(repayment) of debt, $m
  -4
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
Issuance/(repurchase) of shares, $m
  0
  21
  21
  22
  23
  23
  23
  23
  23
  23
  22
  21
  21
  20
  19
  17
  16
  14
  12
  10
  8
  5
  3
  1
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -3
  22
  22
  23
  24
  24
  24
  24
  24
  24
  23
  22
  22
  22
  21
  19
  18
  16
  14
  12
  10
  7
  6
  4
  3
  3
  3
  3
  4
  4
  4
Total cash flow (excl. dividends), $m
  -17
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  5
  8
  11
  14
  18
  22
  26
Retained Cash Flow (-), $m
  13
  -21
  -21
  -22
  -23
  -23
  -23
  -23
  -23
  -23
  -22
  -21
  -21
  -20
  -19
  -17
  -16
  -14
  -12
  -10
  -8
  -5
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
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
 
  -20
  -21
  -21
  -21
  -22
  -22
  -22
  -21
  -21
  -20
  -20
  -19
  -18
  -16
  -15
  -13
  -11
  -9
  -7
  -5
  -2
  0
  0
  1
  4
  6
  9
  13
  16
  20
Discount rate, %
 
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
 
  -19
  -18
  -17
  -16
  -15
  -14
  -12
  -11
  -9
  -8
  -7
  -6
  -4
  -3
  -3
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  63.5
  40.0
  25.2
  15.9
  10.1
  6.4
  4.2
  2.7
  1.8
  1.2
  0.9
  0.6
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1
  0.1

MaxPoint Interactive, Inc. operates as a marketing technology company in the United States and Europe. The company offers business intelligence and marketing automation software service that enables national brands to drive local in-store sales. It sells its solution directly to enterprises in consumer products, retail, automotive, financial services, healthcare, telecommunications, and entertainment industries; and advertising agencies. MaxPoint Interactive, Inc. was founded in 2006 and is headquartered in Morrisville, North Carolina.

FINANCIAL RATIOS  of  MaxPoint Interactive (MXPT)

Valuation Ratios
P/E Ratio -2
Price to Sales 0.2
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow -6
Price to Free Cash Flow -2.4
Growth Rates
Sales Growth Rate 6.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -40%
Cap. Spend. - 3 Yr. Gr. Rate 17.6%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 69.2%
Interest Coverage -17
Management Effectiveness
Return On Assets -17.3%
Ret/ On Assets - 3 Yr. Avg. -20.4%
Return On Total Capital -24.2%
Ret/ On T. Cap. - 3 Yr. Avg. -31.1%
Return On Equity -39.6%
Return On Equity - 3 Yr. Avg. -107.5%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 52.3%
Gross Margin - 3 Yr. Avg. 51.3%
EBITDA Margin -4.7%
EBITDA Margin - 3 Yr. Avg. -8%
Operating Margin -11.4%
Oper. Margin - 3 Yr. Avg. -12.3%
Pre-Tax Margin -12.1%
Pre-Tax Margin - 3 Yr. Avg. -13.4%
Net Profit Margin -12.1%
Net Profit Margin - 3 Yr. Avg. -13.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

MXPT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MXPT stock intrinsic value calculation we used $149 million for the last fiscal year's total revenue generated by MaxPoint Interactive. The default revenue input number comes from 2016 income statement of MaxPoint Interactive. 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 MXPT 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 6.2%, whose default value for MXPT is calculated based on our internal credit rating of MaxPoint Interactive, 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 MaxPoint Interactive.
    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 MXPT stock the variable cost ratio is equal to 55.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $85 million in the base year in the intrinsic value calculation for MXPT 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 MaxPoint Interactive.

Corporate tax rate of 27% is the nominal tax rate for MaxPoint Interactive. 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 MXPT 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 MXPT are equal to 6.4%.

Life of production assets of 10 years is the average useful life of capital assets used in MaxPoint Interactive 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 MXPT is equal to 14.8%. 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 - $39 million for MaxPoint Interactive - 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 6.631 million for MaxPoint Interactive 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 MaxPoint Interactive at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ MaxPoint CEO reaffirms profitability projections   [Aug-15-17 09:05AM  American City Business Journals]
▶ MaxPoint shares up following Adobe partnership news   [Mar-16-17 01:00PM  at bizjournals.com]
▶ MaxPoint shares up following Adobe partnership news   [01:00PM  American City Business Journals]
▶ MaxPoint Interactive to Participate at Upcoming Conferences   [Dec-01-16 04:01PM  GlobeNewswire]
▶ Does MaxPoint have a path to profitability?   [Nov-11-16 10:46AM  at bizjournals.com]
▶ Trade Desk IPO Inspires Other Adtech Names   [Sep-21-16 12:30PM  at Forbes]
▶ CEO: A more 'normalized' first quarter for MaxPoint   [06:10PM  at bizjournals.com]
▶ MaxPoint pulls trigger on reverse stock split   [Apr-26-16 05:28PM  at American City Business Journals]
▶ The best-run public companies in the Research Triangle area   [Apr-15-16 03:10PM  at bizjournals.com]
▶ MaxPoint's plan to save its stock price: Reverse stock split   [Mar-21-16 12:15PM  at bizjournals.com]
▶ MaxPoint execs predict 'profitability' in 2017   [Mar-09-16 06:40PM  at bizjournals.com]
Stock chart of MXPT Financial statements of MXPT
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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