Intrinsic value of ClubCorp Holdings - MYCC

Previous Close

$17.15

  Intrinsic Value

$5.57

stock screener

  Rating & Target

str. sell

-68%

  Value-price divergence*

+20%

Previous close

$17.15

 
Intrinsic value

$5.57

 
Up/down potential

-68%

 
Rating

str. sell

 
Value-price divergence*

+20%

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

We calculate the intrinsic value of MYCC 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 1.1

 

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, %
  3.32
  2.60
  2.84
  3.06
  3.25
  3.43
  3.58
  3.72
  3.85
  3.97
  4.07
  4.16
  4.25
  4.32
  4.39
  4.45
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.76
  4.79
  4.81
  4.83
  4.84
  4.86
  4.87
  4.89
Revenue, $m
  1,088
  1,116
  1,148
  1,183
  1,222
  1,263
  1,309
  1,357
  1,410
  1,466
  1,525
  1,589
  1,656
  1,728
  1,804
  1,884
  1,969
  2,058
  2,153
  2,253
  2,358
  2,469
  2,586
  2,710
  2,839
  2,976
  3,120
  3,271
  3,430
  3,597
  3,773
Variable operating expenses, $m
 
  210
  215
  221
  227
  234
  241
  249
  257
  266
  276
  255
  265
  277
  289
  302
  315
  330
  345
  361
  378
  396
  414
  434
  455
  477
  500
  524
  550
  576
  604
Fixed operating expenses, $m
 
  837
  858
  880
  902
  924
  947
  971
  995
  1,020
  1,046
  1,072
  1,099
  1,126
  1,154
  1,183
  1,213
  1,243
  1,274
  1,306
  1,339
  1,372
  1,407
  1,442
  1,478
  1,515
  1,553
  1,591
  1,631
  1,672
  1,714
Total operating expenses, $m
  997
  1,047
  1,073
  1,101
  1,129
  1,158
  1,188
  1,220
  1,252
  1,286
  1,322
  1,327
  1,364
  1,403
  1,443
  1,485
  1,528
  1,573
  1,619
  1,667
  1,717
  1,768
  1,821
  1,876
  1,933
  1,992
  2,053
  2,115
  2,181
  2,248
  2,318
Operating income, $m
  92
  69
  74
  82
  93
  105
  120
  137
  157
  179
  204
  262
  292
  325
  360
  399
  440
  485
  534
  586
  642
  702
  765
  834
  907
  984
  1,067
  1,155
  1,249
  1,349
  1,454
EBITDA, $m
  199
  192
  200
  211
  224
  240
  259
  280
  304
  331
  360
  393
  428
  467
  508
  554
  602
  655
  711
  771
  836
  904
  978
  1,056
  1,140
  1,229
  1,323
  1,424
  1,531
  1,644
  1,764
Interest expense (income), $m
  57
  55
  51
  54
  57
  61
  64
  68
  73
  77
  82
  87
  93
  99
  105
  112
  119
  126
  134
  143
  151
  161
  170
  181
  192
  203
  215
  228
  241
  255
  270
Earnings before tax, $m
  5
  13
  23
  28
  35
  45
  56
  69
  84
  102
  122
  175
  199
  226
  255
  287
  322
  359
  400
  443
  490
  541
  595
  653
  715
  781
  852
  928
  1,008
  1,094
  1,185
Tax expense, $m
  1
  4
  6
  8
  10
  12
  15
  19
  23
  28
  33
  47
  54
  61
  69
  77
  87
  97
  108
  120
  132
  146
  161
  176
  193
  211
  230
  250
  272
  295
  320
Net income, $m
  4
  10
  17
  21
  26
  33
  41
  50
  62
  74
  89
  128
  145
  165
  186
  209
  235
  262
  292
  324
  358
  395
  434
  477
  522
  570
  622
  677
  736
  798
  865

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  85
  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
  2,129
  2,098
  2,158
  2,224
  2,296
  2,375
  2,460
  2,551
  2,650
  2,755
  2,867
  2,986
  3,113
  3,248
  3,390
  3,541
  3,701
  3,869
  4,047
  4,235
  4,433
  4,642
  4,862
  5,093
  5,337
  5,594
  5,864
  6,148
  6,447
  6,761
  7,091
Adjusted assets (=assets-cash), $m
  2,044
  2,098
  2,158
  2,224
  2,296
  2,375
  2,460
  2,551
  2,650
  2,755
  2,867
  2,986
  3,113
  3,248
  3,390
  3,541
  3,701
  3,869
  4,047
  4,235
  4,433
  4,642
  4,862
  5,093
  5,337
  5,594
  5,864
  6,148
  6,447
  6,761
  7,091
Revenue / Adjusted assets
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
  0.532
Average production assets, $m
  1,574
  1,614
  1,660
  1,711
  1,766
  1,827
  1,892
  1,963
  2,038
  2,119
  2,205
  2,297
  2,395
  2,498
  2,608
  2,724
  2,847
  2,977
  3,113
  3,258
  3,410
  3,571
  3,740
  3,918
  4,106
  4,303
  4,511
  4,729
  4,959
  5,201
  5,455
Working capital, $m
  -159
  -231
  -238
  -245
  -253
  -262
  -271
  -281
  -292
  -303
  -316
  -329
  -343
  -358
  -373
  -390
  -408
  -426
  -446
  -466
  -488
  -511
  -535
  -561
  -588
  -616
  -646
  -677
  -710
  -745
  -781
Total debt, $m
  1,086
  987
  1,041
  1,100
  1,165
  1,236
  1,313
  1,395
  1,484
  1,578
  1,679
  1,787
  1,901
  2,022
  2,150
  2,286
  2,430
  2,581
  2,742
  2,911
  3,089
  3,277
  3,475
  3,683
  3,902
  4,133
  4,376
  4,632
  4,901
  5,184
  5,481
Total liabilities, $m
  1,986
  1,888
  1,942
  2,001
  2,066
  2,137
  2,214
  2,296
  2,385
  2,479
  2,580
  2,688
  2,802
  2,923
  3,051
  3,187
  3,331
  3,482
  3,643
  3,812
  3,990
  4,178
  4,376
  4,584
  4,803
  5,034
  5,277
  5,533
  5,802
  6,085
  6,382
Total equity, $m
  142
  210
  216
  222
  230
  237
  246
  255
  265
  275
  287
  299
  311
  325
  339
  354
  370
  387
  405
  424
  443
  464
  486
  509
  534
  559
  586
  615
  645
  676
  709
Total liabilities and equity, $m
  2,128
  2,098
  2,158
  2,223
  2,296
  2,374
  2,460
  2,551
  2,650
  2,754
  2,867
  2,987
  3,113
  3,248
  3,390
  3,541
  3,701
  3,869
  4,048
  4,236
  4,433
  4,642
  4,862
  5,093
  5,337
  5,593
  5,863
  6,148
  6,447
  6,761
  7,091
Debt-to-equity ratio
  7.648
  4.710
  4.820
  4.950
  5.080
  5.210
  5.340
  5.470
  5.600
  5.730
  5.860
  5.980
  6.110
  6.230
  6.340
  6.460
  6.570
  6.670
  6.770
  6.870
  6.970
  7.060
  7.150
  7.230
  7.310
  7.390
  7.460
  7.530
  7.600
  7.670
  7.730
Adjusted equity ratio
  0.028
  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
  4
  10
  17
  21
  26
  33
  41
  50
  62
  74
  89
  128
  145
  165
  186
  209
  235
  262
  292
  324
  358
  395
  434
  477
  522
  570
  622
  677
  736
  798
  865
Depreciation, amort., depletion, $m
  107
  123
  126
  129
  132
  135
  139
  143
  147
  152
  157
  131
  136
  142
  148
  155
  162
  169
  177
  185
  194
  203
  213
  223
  233
  244
  256
  269
  282
  296
  310
Funds from operations, $m
  154
  133
  142
  149
  158
  168
  180
  193
  209
  226
  245
  258
  281
  307
  334
  364
  397
  431
  469
  509
  552
  598
  647
  699
  755
  815
  878
  946
  1,018
  1,094
  1,175
Change in working capital, $m
  -4
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
  -36
Cash from operations, $m
  158
  139
  149
  156
  166
  176
  189
  203
  220
  238
  258
  271
  295
  322
  350
  381
  414
  450
  488
  529
  574
  621
  671
  725
  782
  843
  908
  977
  1,051
  1,129
  1,211
Maintenance CAPEX, $m
  0
  -89
  -92
  -94
  -97
  -100
  -104
  -108
  -112
  -116
  -120
  -125
  -131
  -136
  -142
  -148
  -155
  -162
  -169
  -177
  -185
  -194
  -203
  -213
  -223
  -233
  -244
  -256
  -269
  -282
  -296
New CAPEX, $m
  -109
  -41
  -46
  -51
  -56
  -61
  -65
  -70
  -76
  -81
  -86
  -92
  -98
  -104
  -110
  -116
  -123
  -130
  -137
  -144
  -152
  -161
  -169
  -178
  -188
  -197
  -208
  -219
  -230
  -242
  -254
Cash from investing activities, $m
  -105
  -130
  -138
  -145
  -153
  -161
  -169
  -178
  -188
  -197
  -206
  -217
  -229
  -240
  -252
  -264
  -278
  -292
  -306
  -321
  -337
  -355
  -372
  -391
  -411
  -430
  -452
  -475
  -499
  -524
  -550
Free cash flow, $m
  53
  8
  11
  11
  13
  16
  20
  25
  32
  41
  51
  54
  67
  82
  98
  117
  137
  158
  182
  208
  236
  266
  299
  334
  372
  413
  456
  502
  552
  605
  662
Issuance/(repayment) of debt, $m
  -43
  -80
  54
  59
  65
  71
  77
  82
  88
  95
  101
  107
  114
  121
  128
  136
  144
  152
  160
  169
  178
  188
  198
  208
  219
  231
  243
  256
  269
  283
  297
Issuance/(repurchase) of shares, $m
  -2
  124
  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  
  -51
  44
  54
  59
  65
  71
  77
  82
  88
  95
  101
  107
  114
  121
  128
  136
  144
  152
  160
  169
  178
  188
  198
  208
  219
  231
  243
  256
  269
  283
  297
Total cash flow (excl. dividends), $m
  2
  53
  65
  71
  78
  86
  96
  108
  121
  136
  152
  162
  181
  203
  227
  252
  280
  310
  342
  377
  414
  454
  497
  543
  591
  644
  699
  758
  821
  888
  959
Retained Cash Flow (-), $m
  26
  -134
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
Prev. year cash balance distribution, $m
 
  66
  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
 
  -15
  59
  64
  71
  78
  88
  99
  111
  125
  141
  150
  169
  190
  213
  237
  264
  293
  325
  358
  395
  433
  475
  520
  567
  618
  672
  730
  791
  856
  926
Discount rate, %
 
  11.50
  12.08
  12.68
  13.31
  13.98
  14.68
  15.41
  16.18
  16.99
  17.84
  18.73
  19.67
  20.65
  21.68
  22.77
  23.91
  25.10
  26.36
  27.68
  29.06
  30.51
  32.04
  33.64
  35.32
  37.09
  38.94
  40.89
  42.93
  45.08
  47.34
PV of cash for distribution, $m
 
  -13
  47
  45
  43
  41
  39
  36
  33
  30
  27
  23
  20
  17
  14
  11
  9
  7
  5
  3
  2
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9

ClubCorp Holdings, Inc., incorporated on November 10, 2010, is engaged in membership-based leisure business. The Company is also the owner-operator of private golf and country clubs, and business, sports and alumni clubs in North America. The Company operates through two segments: golf and country clubs, and business, sports and alumni clubs. The golf and country club segment includes private country clubs, golf clubs and public golf facilities. The business, sports and alumni club segment includes business clubs, business/sports clubs, sports clubs and alumni clubs. As of April 12, 2017 it owned or operated a portfolio of over 200 golf and country clubs, business clubs, sports clubs, and alumni clubs in 27 states, the District of Columbia and two foreign countries that serve over 430,000 members. The Company's facilities are located in areas, such as Los Angeles, San Francisco, Atlanta, Columbus, Houston, Las Vegas and Richmond.

FINANCIAL RATIOS  of  ClubCorp Holdings (MYCC)

Valuation Ratios
P/E Ratio 280
Price to Sales 1
Price to Book 7.9
Price to Tangible Book
Price to Cash Flow 7.1
Price to Free Cash Flow 22.9
Growth Rates
Sales Growth Rate 3.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 3.8%
Cap. Spend. - 3 Yr. Gr. Rate 12.7%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 751.4%
Total Debt to Equity 764.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.3%
Ret/ On Assets - 3 Yr. Avg. 1.6%
Return On Total Capital 0.3%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity 2.6%
Return On Equity - 3 Yr. Avg. 1.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 26.8%
Gross Margin - 3 Yr. Avg. 26.5%
EBITDA Margin 15.5%
EBITDA Margin - 3 Yr. Avg. 13.1%
Operating Margin 8.4%
Oper. Margin - 3 Yr. Avg. 5.9%
Pre-Tax Margin 0.5%
Pre-Tax Margin - 3 Yr. Avg. -1.2%
Net Profit Margin 0.4%
Net Profit Margin - 3 Yr. Avg. 0.3%
Effective Tax Rate 20%
Eff/ Tax Rate - 3 Yr. Avg. 47.1%
Payout Ratio 850%

MYCC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MYCC stock intrinsic value calculation we used $1088 million for the last fiscal year's total revenue generated by ClubCorp Holdings. The default revenue input number comes from 2016 income statement of ClubCorp Holdings. 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 MYCC stock valuation model: a) initial revenue growth rate of 2.6% 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 11.5%, whose default value for MYCC is calculated based on our internal credit rating of ClubCorp Holdings, 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 ClubCorp Holdings.
    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 MYCC stock the variable cost ratio is equal to 18.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $817 million in the base year in the intrinsic value calculation for MYCC 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 5.2% for ClubCorp Holdings.

Corporate tax rate of 27% is the nominal tax rate for ClubCorp Holdings. 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 MYCC 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 MYCC are equal to 144.6%.

Life of production assets of 17.6 years is the average useful life of capital assets used in ClubCorp Holdings 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 MYCC is equal to -20.7%. 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 - $142 million for ClubCorp Holdings - 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 65.689 million for ClubCorp Holdings 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 ClubCorp Holdings at the current share price and the inputted number of shares is $1.1 billion.

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Financial statements of MYCC
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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