Intrinsic value of Polaris Industries - PII

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$81.86

  Intrinsic Value

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  Rating & Target

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  Value-price divergence*

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Previous close

$81.86

 
Intrinsic value

$143.93

 
Up/down potential

+76%

 
Rating

str. buy

 
Value-price divergence* premium content

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

We calculate the intrinsic value of PII 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 5.2

 

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, %
  -4.28
  10.10
  9.59
  9.13
  8.72
  8.35
  8.01
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
  6.05
  5.95
  5.85
  5.77
  5.69
  5.62
  5.56
  5.50
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
Revenue, $m
  4,517
  4,973
  5,450
  5,948
  6,466
  7,006
  7,567
  8,151
  8,757
  9,387
  10,042
  10,723
  11,430
  12,167
  12,933
  13,730
  14,561
  15,427
  16,329
  17,271
  18,253
  19,279
  20,350
  21,470
  22,641
  23,865
  25,145
  26,486
  27,888
  29,357
  30,896
Variable operating expenses, $m
 
  4,213
  4,613
  5,030
  5,465
  5,918
  6,389
  6,878
  7,386
  7,915
  8,464
  8,993
  9,586
  10,204
  10,846
  11,515
  12,212
  12,938
  13,695
  14,484
  15,308
  16,168
  17,067
  18,006
  18,988
  20,014
  21,088
  22,212
  23,389
  24,621
  25,911
Fixed operating expenses, $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
Total operating expenses, $m
  4,166
  4,213
  4,613
  5,030
  5,465
  5,918
  6,389
  6,878
  7,386
  7,915
  8,464
  8,993
  9,586
  10,204
  10,846
  11,515
  12,212
  12,938
  13,695
  14,484
  15,308
  16,168
  17,067
  18,006
  18,988
  20,014
  21,088
  22,212
  23,389
  24,621
  25,911
Operating income, $m
  350
  760
  837
  917
  1,001
  1,088
  1,179
  1,273
  1,371
  1,472
  1,578
  1,730
  1,844
  1,963
  2,087
  2,215
  2,349
  2,489
  2,635
  2,786
  2,945
  3,111
  3,283
  3,464
  3,653
  3,850
  4,057
  4,273
  4,500
  4,737
  4,985
EBITDA, $m
  518
  930
  1,019
  1,112
  1,209
  1,310
  1,414
  1,524
  1,637
  1,755
  1,877
  2,004
  2,137
  2,274
  2,417
  2,566
  2,722
  2,884
  3,052
  3,228
  3,412
  3,604
  3,804
  4,013
  4,232
  4,461
  4,700
  4,951
  5,213
  5,487
  5,775
Interest expense (income), $m
  16
  40
  48
  56
  65
  74
  83
  93
  103
  113
  124
  135
  147
  159
  172
  185
  199
  213
  228
  244
  260
  277
  295
  313
  333
  353
  374
  396
  420
  444
  469
Earnings before tax, $m
  313
  720
  789
  861
  936
  1,015
  1,096
  1,180
  1,268
  1,359
  1,454
  1,595
  1,697
  1,804
  1,915
  2,030
  2,150
  2,276
  2,406
  2,542
  2,685
  2,833
  2,988
  3,151
  3,320
  3,497
  3,683
  3,877
  4,080
  4,293
  4,516
Tax expense, $m
  100
  194
  213
  233
  253
  274
  296
  319
  342
  367
  393
  431
  458
  487
  517
  548
  581
  614
  650
  686
  725
  765
  807
  851
  896
  944
  994
  1,047
  1,102
  1,159
  1,219
Net income, $m
  213
  526
  576
  629
  684
  741
  800
  862
  926
  992
  1,061
  1,164
  1,239
  1,317
  1,398
  1,482
  1,570
  1,661
  1,757
  1,856
  1,960
  2,068
  2,182
  2,300
  2,424
  2,553
  2,688
  2,830
  2,978
  3,134
  3,296

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  127
  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
  3,100
  3,274
  3,588
  3,916
  4,257
  4,612
  4,982
  5,366
  5,765
  6,180
  6,611
  7,059
  7,525
  8,010
  8,514
  9,039
  9,586
  10,156
  10,750
  11,370
  12,017
  12,692
  13,397
  14,134
  14,905
  15,711
  16,554
  17,436
  18,360
  19,327
  20,340
Adjusted assets (=assets-cash), $m
  2,973
  3,274
  3,588
  3,916
  4,257
  4,612
  4,982
  5,366
  5,765
  6,180
  6,611
  7,059
  7,525
  8,010
  8,514
  9,039
  9,586
  10,156
  10,750
  11,370
  12,017
  12,692
  13,397
  14,134
  14,905
  15,711
  16,554
  17,436
  18,360
  19,327
  20,340
Revenue / Adjusted assets
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
  1.519
Average production assets, $m
  602
  661
  725
  791
  860
  932
  1,006
  1,084
  1,165
  1,249
  1,336
  1,426
  1,520
  1,618
  1,720
  1,826
  1,937
  2,052
  2,172
  2,297
  2,428
  2,564
  2,707
  2,856
  3,011
  3,174
  3,344
  3,523
  3,709
  3,905
  4,109
Working capital, $m
  231
  119
  131
  143
  155
  168
  182
  196
  210
  225
  241
  257
  274
  292
  310
  330
  349
  370
  392
  414
  438
  463
  488
  515
  543
  573
  603
  636
  669
  705
  741
Total debt, $m
  1,142
  1,365
  1,600
  1,846
  2,102
  2,368
  2,645
  2,933
  3,233
  3,544
  3,867
  4,203
  4,553
  4,916
  5,294
  5,688
  6,098
  6,526
  6,971
  7,436
  7,921
  8,428
  8,957
  9,510
  10,088
  10,692
  11,324
  11,986
  12,679
  13,404
  14,164
Total liabilities, $m
  2,233
  2,456
  2,691
  2,937
  3,193
  3,459
  3,736
  4,024
  4,324
  4,635
  4,958
  5,294
  5,644
  6,007
  6,385
  6,779
  7,189
  7,617
  8,062
  8,527
  9,012
  9,519
  10,048
  10,601
  11,179
  11,783
  12,415
  13,077
  13,770
  14,495
  15,255
Total equity, $m
  867
  819
  897
  979
  1,064
  1,153
  1,245
  1,341
  1,441
  1,545
  1,653
  1,765
  1,881
  2,002
  2,128
  2,260
  2,396
  2,539
  2,687
  2,842
  3,004
  3,173
  3,349
  3,534
  3,726
  3,928
  4,138
  4,359
  4,590
  4,832
  5,085
Total liabilities and equity, $m
  3,100
  3,275
  3,588
  3,916
  4,257
  4,612
  4,981
  5,365
  5,765
  6,180
  6,611
  7,059
  7,525
  8,009
  8,513
  9,039
  9,585
  10,156
  10,749
  11,369
  12,016
  12,692
  13,397
  14,135
  14,905
  15,711
  16,553
  17,436
  18,360
  19,327
  20,340
Debt-to-equity ratio
  1.317
  1.670
  1.780
  1.890
  1.970
  2.050
  2.120
  2.190
  2.240
  2.290
  2.340
  2.380
  2.420
  2.460
  2.490
  2.520
  2.540
  2.570
  2.590
  2.620
  2.640
  2.660
  2.670
  2.690
  2.710
  2.720
  2.740
  2.750
  2.760
  2.770
  2.790
Adjusted equity ratio
  0.249
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  213
  526
  576
  629
  684
  741
  800
  862
  926
  992
  1,061
  1,164
  1,239
  1,317
  1,398
  1,482
  1,570
  1,661
  1,757
  1,856
  1,960
  2,068
  2,182
  2,300
  2,424
  2,553
  2,688
  2,830
  2,978
  3,134
  3,296
Depreciation, amort., depletion, $m
  168
  169
  182
  194
  208
  221
  236
  251
  266
  282
  299
  274
  292
  311
  331
  351
  372
  395
  418
  442
  467
  493
  521
  549
  579
  610
  643
  677
  713
  751
  790
Funds from operations, $m
  752
  695
  758
  823
  891
  962
  1,036
  1,112
  1,192
  1,275
  1,360
  1,438
  1,531
  1,628
  1,728
  1,833
  1,942
  2,056
  2,174
  2,298
  2,427
  2,561
  2,702
  2,849
  3,003
  3,163
  3,332
  3,508
  3,692
  3,885
  4,087
Change in working capital, $m
  180
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
Cash from operations, $m
  572
  1,181
  746
  811
  879
  949
  1,022
  1,098
  1,177
  1,259
  1,345
  1,422
  1,514
  1,610
  1,710
  1,814
  1,922
  2,035
  2,152
  2,275
  2,403
  2,537
  2,676
  2,822
  2,975
  3,134
  3,301
  3,475
  3,658
  3,849
  4,050
Maintenance CAPEX, $m
  0
  -116
  -127
  -139
  -152
  -165
  -179
  -194
  -208
  -224
  -240
  -257
  -274
  -292
  -311
  -331
  -351
  -372
  -395
  -418
  -442
  -467
  -493
  -521
  -549
  -579
  -610
  -643
  -677
  -713
  -751
New CAPEX, $m
  -209
  -59
  -63
  -66
  -69
  -72
  -75
  -78
  -81
  -84
  -87
  -91
  -94
  -98
  -102
  -106
  -110
  -115
  -120
  -125
  -131
  -136
  -143
  -149
  -156
  -163
  -170
  -178
  -187
  -195
  -205
Cash from investing activities, $m
  -909
  -175
  -190
  -205
  -221
  -237
  -254
  -272
  -289
  -308
  -327
  -348
  -368
  -390
  -413
  -437
  -461
  -487
  -515
  -543
  -573
  -603
  -636
  -670
  -705
  -742
  -780
  -821
  -864
  -908
  -956
Free cash flow, $m
  -337
  1,006
  556
  606
  658
  712
  768
  827
  888
  952
  1,018
  1,075
  1,146
  1,220
  1,297
  1,377
  1,460
  1,547
  1,638
  1,732
  1,831
  1,933
  2,041
  2,153
  2,270
  2,392
  2,520
  2,654
  2,794
  2,941
  3,094
Issuance/(repayment) of debt, $m
  679
  227
  235
  246
  256
  266
  277
  288
  299
  311
  323
  336
  349
  363
  378
  394
  410
  427
  446
  465
  485
  506
  529
  553
  578
  604
  632
  662
  693
  725
  760
Issuance/(repurchase) of shares, $m
  -228
  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  
  454
  227
  235
  246
  256
  266
  277
  288
  299
  311
  323
  336
  349
  363
  378
  394
  410
  427
  446
  465
  485
  506
  529
  553
  578
  604
  632
  662
  693
  725
  760
Total cash flow (excl. dividends), $m
  112
  1,233
  791
  851
  914
  978
  1,046
  1,115
  1,188
  1,263
  1,341
  1,411
  1,495
  1,583
  1,675
  1,771
  1,871
  1,975
  2,084
  2,197
  2,316
  2,440
  2,570
  2,706
  2,848
  2,997
  3,152
  3,316
  3,487
  3,666
  3,854
Retained Cash Flow (-), $m
  114
  -75
  -78
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -112
  -116
  -121
  -126
  -131
  -137
  -142
  -149
  -155
  -162
  -169
  -176
  -184
  -193
  -201
  -211
  -221
  -231
  -242
  -253
Prev. year cash balance distribution, $m
 
  123
  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
 
  1,281
  713
  769
  828
  890
  953
  1,019
  1,088
  1,159
  1,233
  1,299
  1,379
  1,462
  1,549
  1,640
  1,734
  1,832
  1,935
  2,042
  2,154
  2,271
  2,393
  2,521
  2,655
  2,795
  2,942
  3,095
  3,256
  3,424
  3,601
Discount rate, %
 
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
 
  1,202
  623
  623
  617
  605
  587
  563
  535
  502
  465
  422
  382
  341
  300
  260
  222
  186
  153
  124
  99
  77
  58
  43
  32
  22
  16
  10
  7
  4
  3
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

Polaris Industries Inc. designs, engineers, manufactures, and markets power sports vehicles worldwide. It operates through four segments: Off-Road Vehicles (ORVs)/Snowmobiles, Motorcycles, Global Adjacent Markets, and Other. The company provides ORVs, including all-terrain vehicles and side-by-side vehicles for recreational, military, and utility use; snowmobiles and technical riding gears; three-wheel motorcycles; and low emission, light duty hauling, passenger, commercial, and industrial vehicles. It also produces or supplies various replacement parts and accessories consisting of winches, bumpers/brush guards, plows, racks, wheels, mowers, tires, lighting and audio systems, pull-behinds, cabs systems, cargo box accessories, tracks, and oils for ORVs; covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oils, and lubricants for snowmobiles; and saddle bags, handlebars, backrests, exhausts, windshields, seats, oils, and various chrome accessories for motorcycles. In addition, the company sells recreational apparel, such as helmets, jackets, pants, hats, goggles, gloves, boots, bibs, and leathers through a network of independent dealers and distributors, as well as through online. Polaris Industries Inc. markets its products under the GEM, Goupil, Aixam, Taylor-Dunn, Klim, Timbersled, Indian Motorcycle, and kolpin brands, as well as under the BRUTUS, RZR, RANGER, GENERAL, Sportsman, Polaris ACE, RIDE COMMAND, Pro Armor, AXYS, DAGOR, Sportsman MV, MRZR, and Slingshot names. Further, it manufactures, distributes, retails, and installs aftermarket parts and accessories for light trucks, jeeps, sport-utility vehicles, and other four-wheel drive vehicles under the Pro Comp, Smittybilt, Rubicon Express, Poison Spyder, Trail Master, LRG, and G2 Axle & Gear brands through its stores, call centers, and e-commerce sites. Polaris Industries Inc. was founded in 1954 and is headquartered in Medina, Minnesota.

FINANCIAL RATIOS  of  Polaris Industries (PII)

Valuation Ratios
P/E Ratio 24.3
Price to Sales 1.1
Price to Book 6
Price to Tangible Book
Price to Cash Flow 9
Price to Free Cash Flow 14.2
Growth Rates
Sales Growth Rate -4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -16.1%
Cap. Spend. - 3 Yr. Gr. Rate -3.6%
Financial Strength
Quick Ratio 32
Current Ratio 0
LT Debt to Equity 131.3%
Total Debt to Equity 131.7%
Interest Coverage 21
Management Effectiveness
Return On Assets 8.2%
Ret/ On Assets - 3 Yr. Avg. 17.8%
Return On Total Capital 12.3%
Ret/ On T. Cap. - 3 Yr. Avg. 31.9%
Return On Equity 23.1%
Return On Equity - 3 Yr. Avg. 45.8%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 24.5%
Gross Margin - 3 Yr. Avg. 27.4%
EBITDA Margin 11%
EBITDA Margin - 3 Yr. Avg. 15.9%
Operating Margin 7.8%
Oper. Margin - 3 Yr. Avg. 13%
Pre-Tax Margin 6.9%
Pre-Tax Margin - 3 Yr. Avg. 12.4%
Net Profit Margin 4.7%
Net Profit Margin - 3 Yr. Avg. 8.2%
Effective Tax Rate 31.9%
Eff/ Tax Rate - 3 Yr. Avg. 33.6%
Payout Ratio 65.7%

PII stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PII stock intrinsic value calculation we used $4517 million for the last fiscal year's total revenue generated by Polaris Industries. The default revenue input number comes from 2016 income statement of Polaris Industries. 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 PII stock valuation model: a) initial revenue growth rate of 10.1% 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 6.6%, whose default value for PII is calculated based on our internal credit rating of Polaris Industries, 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 Polaris Industries.
    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 PII stock the variable cost ratio is equal to 84.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for PII 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 Polaris Industries.

Corporate tax rate of 27% is the nominal tax rate for Polaris Industries. 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 PII 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 PII are equal to 13.3%.

Life of production assets of 5.2 years is the average useful life of capital assets used in Polaris Industries 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 PII is equal to 2.4%. 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 - $867 million for Polaris Industries - 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 63.126 million for Polaris Industries 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 Polaris Industries at the current share price and the inputted number of shares is $5.2 billion.


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COMPANY NEWS

▶ 10 Cheap Stocks Set to Grow Their Dividends   [Apr-19-17 06:00AM  Morningstar]
▶ How Polaris Industries Inc. Makes Most of Its Money   [Apr-18-17 10:49AM  Motley Fool]
▶ Harley-Davidson partners with Sailor Jerry Spiced Rum   [Apr-13-17 02:15PM  American City Business Journals]
▶ Another Year, Another Recall Mess for Polaris Industries   [Mar-28-17 09:41AM  Motley Fool]
▶ Polaris Industries to recall about 19,200 ATVs   [Mar-21-17 12:59PM  Reuters]
▶ This Stock Could Be the Next Dividend Aristocrat   [Mar-17-17 04:08PM  at Motley Fool]
▶ 2 Top Dividend Stocks to Buy in March   [Mar-14-17 03:23PM  at Motley Fool]
▶ Polaris unveils 2018 snowmobile model lineup (slideshow)   [Mar-10-17 12:45PM  at bizjournals.com]
▶ 2018 Polaris® Snowmobile and Timbersled Lineup   [Mar-07-17 02:13PM  Business Wire]
▶ Polaris Rides with gr8 People   [11:30AM  GlobeNewswire]
▶ 12 Motorcycle Statistics That'll Floor You   [Mar-05-17 10:16AM  at Motley Fool]
▶ Polaris CEO Scott Wine's compensation tumbles again   [Feb-24-17 03:51PM  at bizjournals.com]
▶ Polaris lathers on the leather for new Indian Roadmaster   [Feb-23-17 07:55PM  at bizjournals.com]
▶ Baja On Two Wheels With EagleRider   [Feb-22-17 04:50PM  at Forbes]
▶ [$$] Polaris Hopes New Focus Will Rev Up Motorcycle Sales   [12:05AM  at The Wall Street Journal]
▶ Better Buy: Polaris Industries Inc. vs. Arctic Cat   [Feb-09-17 12:53PM  at Motley Fool]
▶ Why Harley-Davidson Can't Benefit From Victory's Demise   [Feb-07-17 07:05PM  at Motley Fool]
▶ [$$] Polaris Hopes New Focus Will Rev Up Motorcycle Sales   [07:00AM  at The Wall Street Journal]
▶ Post Earnings Coverage as Polaris Sales Up 10%   [Feb-01-17 08:15AM  Accesswire]
▶ 4 Reasons Polaris Industries Inc. Stock Could Rise   [Jan-30-17 03:58PM  at Motley Fool]
▶ Is Harley-Davidson About to Be Hit by a Major Recall?   [Jan-27-17 09:31AM  at Motley Fool]
▶ Polaris Industries Declares Increase in Cash Dividend   [Jan-26-17 05:39PM  Business Wire]
▶ Motorcycle Sales Plunge at Polaris Industries   [Jan-25-17 02:01PM  at Investopedia]
▶ Polaris Industries Looks Ahead After a Tough Year   [Jan-24-17 07:35PM  at Motley Fool]
▶ Polaris Industries Inc.'s Best Business Segment in 2016   [Jan-21-17 02:11PM  at Motley Fool]
▶ Will 2017 Be Polaris Industries Inc.'s Worst Year Yet?   [Jan-14-17 09:02AM  at Motley Fool]
▶ Polaris Industries Kills Off Victory Motorcycles   [Jan-11-17 03:51PM  at Forbes]
▶ Why Polaris Industries Is Shutting Down Victory Motorcycles   [Jan-10-17 09:09PM  at Motley Fool]
▶ Polaris Industries Inc.'s Biggest Failure in 2016   [Jan-07-17 12:12PM  at Motley Fool]
▶ Really, Polaris Industries? Another ATV Recall?   [Jan-05-17 10:11AM  at Investopedia]
Stock chart of PII Financial statements of PII
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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