Intrinsic value of New York - NWY

Previous Close

$1.86

  Intrinsic Value

$0.30

stock screener

  Rating & Target

str. sell

-84%

  Value-price divergence*

-81%

Previous close

$1.86

 
Intrinsic value

$0.30

 
Up/down potential

-84%

 
Rating

str. sell

 
Value-price divergence*

-81%

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

We calculate the intrinsic value of NWY 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 2017), $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 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -2.21
  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
  929
  948
  969
  994
  1,022
  1,053
  1,087
  1,124
  1,164
  1,208
  1,254
  1,303
  1,356
  1,413
  1,473
  1,536
  1,603
  1,675
  1,750
  1,830
  1,914
  2,002
  2,096
  2,195
  2,298
  2,408
  2,523
  2,644
  2,772
  2,906
  3,047
Variable operating expenses, $m
 
  631
  646
  662
  681
  701
  724
  749
  775
  804
  835
  868
  903
  941
  981
  1,023
  1,068
  1,115
  1,166
  1,219
  1,275
  1,334
  1,396
  1,462
  1,531
  1,604
  1,680
  1,761
  1,846
  1,936
  2,030
Fixed operating expenses, $m
 
  341
  350
  359
  368
  377
  386
  396
  406
  416
  426
  437
  448
  459
  471
  482
  494
  507
  519
  532
  546
  559
  573
  588
  602
  617
  633
  649
  665
  681
  698
Total operating expenses, $m
  944
  972
  996
  1,021
  1,049
  1,078
  1,110
  1,145
  1,181
  1,220
  1,261
  1,305
  1,351
  1,400
  1,452
  1,505
  1,562
  1,622
  1,685
  1,751
  1,821
  1,893
  1,969
  2,050
  2,133
  2,221
  2,313
  2,410
  2,511
  2,617
  2,728
Operating income, $m
  -15
  -25
  -26
  -27
  -26
  -25
  -23
  -20
  -17
  -13
  -7
  -2
  5
  13
  21
  31
  41
  53
  65
  79
  94
  109
  127
  145
  165
  187
  210
  235
  261
  289
  319
EBITDA, $m
  8
  -4
  -5
  -4
  -3
  -2
  1
  5
  9
  14
  20
  27
  35
  44
  54
  65
  77
  90
  104
  119
  136
  154
  173
  194
  216
  240
  266
  293
  323
  354
  387
Interest expense (income), $m
  1
  1
  -1
  -1
  0
  0
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  15
  16
  18
  20
  21
  23
  25
  27
  29
  31
Earnings before tax, $m
  -17
  -26
  -25
  -26
  -26
  -25
  -24
  -21
  -19
  -15
  -11
  -5
  0
  7
  15
  23
  33
  43
  54
  67
  80
  95
  110
  127
  146
  166
  187
  210
  234
  260
  288
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2
  4
  6
  9
  12
  15
  18
  22
  26
  30
  34
  39
  45
  50
  57
  63
  70
  78
Net income, $m
  -17
  -26
  -25
  -26
  -26
  -25
  -24
  -21
  -19
  -15
  -11
  -5
  0
  5
  11
  17
  24
  31
  40
  49
  58
  69
  81
  93
  106
  121
  136
  153
  171
  190
  210

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  88
  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
  302
  218
  223
  229
  235
  243
  250
  259
  268
  278
  289
  300
  312
  325
  339
  354
  369
  386
  403
  421
  441
  461
  483
  506
  529
  555
  581
  609
  639
  669
  702
Adjusted assets (=assets-cash), $m
  214
  218
  223
  229
  235
  243
  250
  259
  268
  278
  289
  300
  312
  325
  339
  354
  369
  386
  403
  421
  441
  461
  483
  506
  529
  555
  581
  609
  639
  669
  702
Revenue / Adjusted assets
  4.341
  4.349
  4.345
  4.341
  4.349
  4.333
  4.348
  4.340
  4.343
  4.345
  4.339
  4.343
  4.346
  4.348
  4.345
  4.339
  4.344
  4.339
  4.342
  4.347
  4.340
  4.343
  4.340
  4.338
  4.344
  4.339
  4.343
  4.342
  4.338
  4.344
  4.340
Average production assets, $m
  103
  105
  108
  110
  113
  117
  121
  125
  129
  134
  139
  145
  151
  157
  163
  171
  178
  186
  194
  203
  212
  222
  233
  244
  255
  267
  280
  294
  308
  323
  338
Working capital, $m
  60
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -46
  -49
  -51
  -53
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
Total debt, $m
  12
  -15
  -10
  -5
  1
  7
  14
  22
  30
  39
  49
  59
  70
  82
  94
  107
  121
  136
  152
  168
  186
  204
  224
  244
  266
  288
  312
  337
  364
  392
  421
Total liabilities, $m
  222
  196
  201
  206
  212
  218
  225
  233
  241
  250
  260
  270
  281
  293
  305
  318
  332
  347
  363
  379
  397
  415
  435
  455
  477
  499
  523
  548
  575
  603
  632
Total equity, $m
  79
  22
  22
  23
  24
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  39
  40
  42
  44
  46
  48
  51
  53
  55
  58
  61
  64
  67
  70
Total liabilities and equity, $m
  301
  218
  223
  229
  236
  242
  250
  259
  268
  278
  289
  300
  312
  326
  339
  353
  369
  386
  403
  421
  441
  461
  483
  506
  530
  554
  581
  609
  639
  670
  702
Debt-to-equity ratio
  0.152
  -0.670
  -0.450
  -0.210
  0.040
  0.300
  0.580
  0.850
  1.130
  1.410
  1.700
  1.970
  2.250
  2.520
  2.780
  3.040
  3.290
  3.530
  3.770
  3.990
  4.210
  4.430
  4.630
  4.830
  5.010
  5.200
  5.370
  5.540
  5.700
  5.850
  5.990
Adjusted equity ratio
  -0.042
  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
  -17
  -26
  -25
  -26
  -26
  -25
  -24
  -21
  -19
  -15
  -11
  -5
  0
  5
  11
  17
  24
  31
  40
  49
  58
  69
  81
  93
  106
  121
  136
  153
  171
  190
  210
Depreciation, amort., depletion, $m
  23
  21
  22
  22
  23
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  36
  37
  39
  41
  42
  44
  47
  49
  51
  53
  56
  59
  62
  65
  68
Funds from operations, $m
  87
  -5
  -3
  -4
  -3
  -2
  1
  3
  7
  12
  17
  23
  30
  37
  43
  51
  59
  69
  78
  89
  101
  114
  127
  142
  157
  174
  192
  212
  232
  254
  278
Change in working capital, $m
  38
  -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
  -4
Cash from operations, $m
  49
  -4
  -3
  -3
  -2
  -1
  1
  5
  8
  13
  19
  25
  32
  38
  45
  53
  61
  71
  81
  92
  103
  116
  130
  145
  161
  178
  196
  215
  236
  258
  282
Maintenance CAPEX, $m
  0
  -21
  -21
  -22
  -22
  -23
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -42
  -44
  -47
  -49
  -51
  -53
  -56
  -59
  -62
  -65
New CAPEX, $m
  -18
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
Cash from investing activities, $m
  -18
  -23
  -23
  -25
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -36
  -38
  -40
  -41
  -44
  -45
  -48
  -50
  -52
  -54
  -58
  -61
  -63
  -66
  -69
  -73
  -77
  -81
Free cash flow, $m
  31
  -27
  -26
  -27
  -27
  -27
  -26
  -24
  -21
  -18
  -13
  -8
  -3
  2
  7
  13
  20
  27
  35
  44
  53
  64
  75
  87
  100
  114
  130
  146
  163
  182
  202
Issuance/(repayment) of debt, $m
  -2
  -26
  5
  5
  6
  6
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  17
  17
  18
  19
  20
  22
  23
  24
  25
  26
  28
  29
Issuance/(repurchase) of shares, $m
  -1
  56
  25
  26
  26
  26
  24
  22
  20
  16
  12
  7
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -4
  30
  30
  31
  32
  32
  31
  30
  28
  25
  22
  17
  12
  12
  12
  13
  14
  15
  16
  17
  17
  18
  19
  20
  22
  23
  24
  25
  26
  28
  29
Total cash flow (excl. dividends), $m
  27
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  14
  20
  26
  34
  42
  51
  60
  71
  82
  94
  108
  122
  137
  153
  171
  190
  210
  231
Retained Cash Flow (-), $m
  15
  -56
  -25
  -26
  -26
  -26
  -24
  -22
  -20
  -16
  -12
  -7
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
Prev. year cash balance distribution, $m
 
  87
  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
 
  35
  -22
  -22
  -22
  -20
  -19
  -16
  -13
  -9
  -4
  2
  8
  12
  18
  25
  32
  40
  49
  59
  69
  80
  92
  105
  119
  135
  151
  168
  187
  207
  228
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  33
  -20
  -19
  -18
  -16
  -14
  -11
  -8
  -5
  -2
  1
  3
  5
  6
  7
  8
  9
  9
  9
  9
  8
  8
  7
  6
  5
  4
  4
  3
  2
  2
Current shareholders' claim on cash, %
  100
  50.0
  28.5
  16.2
  9.2
  5.4
  3.3
  2.1
  1.4
  1.0
  0.8
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7
  0.7

New York & Company, Inc. is a specialty retailer of women's fashion apparel and accessories. The Company's branded New York & Company merchandise is sold through its national network of retail stores and online at www.nyandcompany.com. It operates approximately 490 stores, including over 80 outlet stores in over 40 states. It offers brands, including NY&C, City Style, NY Style, Soho Jeans, Lerner and Lerner New York. It offers a merchandise assortment consisting of wear-to-work, casual apparel and accessories, including pants, dresses, jackets, knit tops, blouses, sweaters, denim, t-shirts, activewear, handbags, jewelry and shoes. Its stores are located in shopping malls, lifestyle centers, outlet centers, and off-mall locations, including urban street locations. The outlet stores offer a merchandise mix consisting of apparel and accessories.

FINANCIAL RATIOS  of  New York (NWY)

Valuation Ratios
P/E Ratio -7
Price to Sales 0.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 2.4
Price to Free Cash Flow 3.9
Growth Rates
Sales Growth Rate -2.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33.3%
Cap. Spend. - 3 Yr. Gr. Rate -1.1%
Financial Strength
Quick Ratio 88
Current Ratio 0
LT Debt to Equity 13.9%
Total Debt to Equity 15.2%
Interest Coverage -16
Management Effectiveness
Return On Assets -5.5%
Ret/ On Assets - 3 Yr. Avg. -4.8%
Return On Total Capital -17.2%
Ret/ On T. Cap. - 3 Yr. Avg. -13.8%
Return On Equity -19.7%
Return On Equity - 3 Yr. Avg. -15.4%
Asset Turnover 3.2
Profitability Ratios
Gross Margin 28.4%
Gross Margin - 3 Yr. Avg. 27.8%
EBITDA Margin 0.8%
EBITDA Margin - 3 Yr. Avg. 1.2%
Operating Margin -1.6%
Oper. Margin - 3 Yr. Avg. -1.4%
Pre-Tax Margin -1.8%
Pre-Tax Margin - 3 Yr. Avg. -1.5%
Net Profit Margin -1.8%
Net Profit Margin - 3 Yr. Avg. -1.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -5.8%
Payout Ratio 0%

NWY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NWY stock intrinsic value calculation we used $929 million for the last fiscal year's total revenue generated by New York. The default revenue input number comes from 2017 income statement of New York. 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 NWY 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 4.3%, whose default value for NWY is calculated based on our internal credit rating of New York, 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 New York.
    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 NWY stock the variable cost ratio is equal to 66.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $333 million in the base year in the intrinsic value calculation for NWY 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 8% for New York.

Corporate tax rate of 27% is the nominal tax rate for New York. 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 NWY 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 NWY are equal to 11.1%.

Life of production assets of 4.5 years is the average useful life of capital assets used in New York 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 NWY is equal to -2.9%. 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 - $79 million for New York - 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 65.5 million for New York 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 New York at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Eva Mendes Introduces Plus Sizes at New York & Company   [Sep-13-17 08:55AM  Business Wire]
▶ Markets rally as Irma is downgraded   [Sep-11-17 08:54AM  Yahoo Finance]
▶ Eva Mendes, Gabrielle Union labels help retailer to big earnings jump   [Aug-18-17 06:40PM  American City Business Journals]
▶ ETFs with exposure to New York & Co., Inc. : June 9, 2017   [Jun-09-17 01:48PM  Capital Cube]
▶ New York & Co. reports 1Q loss   [May-18-17 04:08PM  Associated Press]
▶ Eva Mendes Debuts New Clothing Line in First Public Appearance in 6 Months   [Mar-17-17 02:16PM  Entertainment Tonight Videos]
▶ Have New York & Co. investors given up hope?   [May-22-16 12:53PM  at MarketWatch]
Financial statements of NWY
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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