Intrinsic value of Quotient Technology - QUOT

Previous Close

$16.05

  Intrinsic Value

$4.01

stock screener

  Rating & Target

str. sell

-75%

Previous close

$16.05

 
Intrinsic value

$4.01

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of QUOT 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 1.5

 

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, %
  16.03
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
Revenue, $m
  275
  304
  334
  365
  397
  431
  467
  503
  542
  581
  622
  665
  710
  756
  804
  855
  907
  961
  1,018
  1,077
  1,139
  1,203
  1,270
  1,341
  1,414
  1,491
  1,571
  1,655
  1,743
  1,835
  1,932
Variable operating expenses, $m
 
  207
  227
  248
  270
  293
  316
  341
  366
  393
  420
  444
  474
  505
  537
  571
  606
  642
  680
  719
  761
  804
  849
  896
  945
  996
  1,050
  1,106
  1,164
  1,226
  1,290
Fixed operating expenses, $m
 
  113
  116
  118
  121
  124
  128
  131
  134
  137
  141
  144
  148
  152
  155
  159
  163
  167
  172
  176
  180
  185
  189
  194
  199
  204
  209
  214
  220
  225
  231
Total operating expenses, $m
  295
  320
  343
  366
  391
  417
  444
  472
  500
  530
  561
  588
  622
  657
  692
  730
  769
  809
  852
  895
  941
  989
  1,038
  1,090
  1,144
  1,200
  1,259
  1,320
  1,384
  1,451
  1,521
Operating income, $m
  -20
  -16
  -9
  -2
  6
  14
  23
  32
  41
  51
  61
  77
  88
  99
  112
  124
  138
  152
  166
  182
  198
  215
  232
  251
  271
  291
  313
  335
  359
  384
  411
EBITDA, $m
  3
  0
  8
  17
  26
  35
  45
  56
  66
  78
  90
  102
  115
  128
  142
  157
  172
  188
  205
  223
  241
  261
  281
  302
  325
  348
  373
  399
  426
  454
  484
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  10
  10
Earnings before tax, $m
  -19
  -16
  -9
  -2
  6
  14
  22
  31
  40
  49
  59
  74
  85
  97
  108
  121
  134
  148
  162
  177
  193
  209
  226
  245
  264
  284
  305
  327
  350
  375
  400
Tax expense, $m
  0
  0
  0
  0
  1
  4
  6
  8
  11
  13
  16
  20
  23
  26
  29
  33
  36
  40
  44
  48
  52
  56
  61
  66
  71
  77
  82
  88
  95
  101
  108
Net income, $m
  -19
  -16
  -9
  -2
  4
  10
  16
  22
  29
  36
  43
  54
  62
  71
  79
  88
  98
  108
  118
  129
  141
  153
  165
  179
  192
  207
  222
  239
  256
  274
  292

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  175
  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
  363
  208
  228
  249
  272
  295
  319
  344
  370
  397
  425
  455
  485
  517
  550
  584
  620
  657
  696
  736
  778
  822
  868
  916
  967
  1,019
  1,074
  1,131
  1,192
  1,254
  1,320
Adjusted assets (=assets-cash), $m
  188
  208
  228
  249
  272
  295
  319
  344
  370
  397
  425
  455
  485
  517
  550
  584
  620
  657
  696
  736
  778
  822
  868
  916
  967
  1,019
  1,074
  1,131
  1,192
  1,254
  1,320
Revenue / Adjusted assets
  1.463
  1.462
  1.465
  1.466
  1.460
  1.461
  1.464
  1.462
  1.465
  1.463
  1.464
  1.462
  1.464
  1.462
  1.462
  1.464
  1.463
  1.463
  1.463
  1.463
  1.464
  1.464
  1.463
  1.464
  1.462
  1.463
  1.463
  1.463
  1.462
  1.463
  1.464
Average production assets, $m
  53
  58
  64
  70
  76
  82
  89
  96
  103
  111
  119
  127
  136
  144
  154
  163
  173
  184
  194
  206
  217
  230
  243
  256
  270
  285
  300
  316
  333
  351
  369
Working capital, $m
  208
  36
  40
  44
  48
  52
  56
  60
  65
  70
  75
  80
  85
  91
  97
  103
  109
  115
  122
  129
  137
  144
  152
  161
  170
  179
  189
  199
  209
  220
  232
Total debt, $m
  0
  5
  11
  17
  23
  29
  35
  42
  49
  57
  64
  72
  80
  89
  98
  107
  117
  127
  138
  148
  160
  172
  184
  197
  211
  225
  240
  256
  272
  289
  307
Total liabilities, $m
  51
  56
  62
  68
  74
  80
  86
  93
  100
  108
  115
  123
  131
  140
  149
  158
  168
  178
  189
  199
  211
  223
  235
  248
  262
  276
  291
  307
  323
  340
  358
Total equity, $m
  312
  151
  166
  182
  198
  215
  233
  251
  270
  290
  310
  332
  354
  377
  401
  426
  452
  479
  507
  537
  567
  599
  633
  668
  705
  743
  783
  825
  869
  915
  963
Total liabilities and equity, $m
  363
  207
  228
  250
  272
  295
  319
  344
  370
  398
  425
  455
  485
  517
  550
  584
  620
  657
  696
  736
  778
  822
  868
  916
  967
  1,019
  1,074
  1,132
  1,192
  1,255
  1,321
Debt-to-equity ratio
  0.000
  0.030
  0.060
  0.090
  0.110
  0.130
  0.150
  0.170
  0.180
  0.200
  0.210
  0.220
  0.230
  0.240
  0.240
  0.250
  0.260
  0.270
  0.270
  0.280
  0.280
  0.290
  0.290
  0.300
  0.300
  0.300
  0.310
  0.310
  0.310
  0.320
  0.320
Adjusted equity ratio
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729
  0.729

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -19
  -16
  -9
  -2
  4
  10
  16
  22
  29
  36
  43
  54
  62
  71
  79
  88
  98
  108
  118
  129
  141
  153
  165
  179
  192
  207
  222
  239
  256
  274
  292
Depreciation, amort., depletion, $m
  23
  16
  17
  18
  20
  21
  22
  24
  25
  27
  28
  25
  27
  29
  31
  33
  35
  37
  39
  41
  43
  46
  49
  51
  54
  57
  60
  63
  67
  70
  74
Funds from operations, $m
  10
  0
  8
  16
  24
  31
  38
  46
  54
  63
  72
  80
  89
  99
  110
  121
  132
  144
  157
  170
  184
  199
  214
  230
  246
  264
  282
  302
  322
  344
  366
Change in working capital, $m
  -12
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
Cash from operations, $m
  22
  -4
  4
  12
  20
  27
  34
  42
  50
  58
  67
  75
  84
  94
  104
  115
  126
  138
  150
  163
  177
  191
  206
  221
  238
  255
  273
  292
  312
  333
  355
Maintenance CAPEX, $m
  0
  -11
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -46
  -49
  -51
  -54
  -57
  -60
  -63
  -67
  -70
New CAPEX, $m
  -6
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
Cash from investing activities, $m
  -51
  -16
  -18
  -19
  -20
  -21
  -23
  -25
  -26
  -29
  -30
  -32
  -34
  -36
  -38
  -41
  -43
  -45
  -48
  -50
  -53
  -55
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -85
  -88
Free cash flow, $m
  -29
  -20
  -13
  -6
  0
  5
  11
  17
  23
  30
  37
  43
  50
  58
  66
  75
  84
  93
  103
  113
  124
  135
  147
  159
  172
  186
  201
  216
  232
  248
  266
Issuance/(repayment) of debt, $m
  0
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
Issuance/(repurchase) of shares, $m
  0
  31
  24
  18
  12
  7
  2
  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
  36
  30
  24
  18
  13
  9
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
Total cash flow (excl. dividends), $m
  -29
  16
  17
  17
  18
  18
  19
  24
  30
  37
  44
  50
  58
  66
  75
  84
  93
  103
  113
  124
  135
  147
  159
  172
  186
  200
  215
  231
  248
  265
  284
Retained Cash Flow (-), $m
  -47
  -31
  -24
  -18
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
Prev. year cash balance distribution, $m
 
  175
  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
 
  160
  -8
  0
  2
  1
  1
  5
  11
  17
  24
  29
  36
  43
  51
  59
  67
  76
  85
  94
  104
  115
  126
  137
  149
  162
  175
  189
  204
  220
  236
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
 
  154
  -7
  0
  1
  1
  1
  4
  7
  10
  12
  14
  15
  16
  17
  17
  17
  17
  16
  15
  13
  12
  10
  9
  8
  6
  5
  4
  3
  2
  2
Current shareholders' claim on cash, %
  100
  95.5
  92.4
  90.3
  89.1
  88.4
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3
  88.3

Quotient Technology Inc. is a provider of digital platform that enables consumer packaged goods (CPG) brands and retailers to engage shoppers through personalized and targeted promotions and media. Through the Company's platform, CPGs and retailers are able to use online and in-store point-of-sale (POS) shopper data and analytics. The Company's network includes its Website and mobile properties of its consumer brand, Coupons.com, as well as its other owned and operated properties, and thousands of its publisher partners. In addition, the Company operates its platform, Retailer iQ, on a co-branded or white label basis with its retailer partners, providing them a digital platform to directly engage their shoppers across their Websites, mobile, e-commerce, and social channels. Retailer iQ integrates with retailers' POS technology and leverages a set of shopper insights, including online behaviors, purchase, and purchase intent data to drive personalized and targeted promotions and media.

FINANCIAL RATIOS  of  Quotient Technology (QUOT)

Valuation Ratios
P/E Ratio -74.8
Price to Sales 5.2
Price to Book 4.6
Price to Tangible Book
Price to Cash Flow 64.6
Price to Free Cash Flow 88.8
Growth Rates
Sales Growth Rate 16%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -57.1%
Cap. Spend. - 3 Yr. Gr. Rate -15.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -5.6%
Ret/ On Assets - 3 Yr. Avg. -7.7%
Return On Total Capital -6.6%
Ret/ On T. Cap. - 3 Yr. Avg. -9.5%
Return On Equity -6.6%
Return On Equity - 3 Yr. Avg. -10%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 58.2%
Gross Margin - 3 Yr. Avg. 60.2%
EBITDA Margin 1.5%
EBITDA Margin - 3 Yr. Avg. -1.8%
Operating Margin -7.3%
Oper. Margin - 3 Yr. Avg. -9.9%
Pre-Tax Margin -6.9%
Pre-Tax Margin - 3 Yr. Avg. -9.4%
Net Profit Margin -6.9%
Net Profit Margin - 3 Yr. Avg. -9.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -1.5%
Payout Ratio 0%

QUOT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QUOT stock intrinsic value calculation we used $275 million for the last fiscal year's total revenue generated by Quotient Technology. The default revenue input number comes from 2016 income statement of Quotient Technology. 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 QUOT stock valuation model: a) initial revenue growth rate of 10.4% 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 QUOT is calculated based on our internal credit rating of Quotient Technology, 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 Quotient Technology.
    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 QUOT stock the variable cost ratio is equal to 68.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $110 million in the base year in the intrinsic value calculation for QUOT 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 Quotient Technology.

Corporate tax rate of 27% is the nominal tax rate for Quotient Technology. 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 QUOT 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 QUOT are equal to 19.1%.

Life of production assets of 4.2 years is the average useful life of capital assets used in Quotient Technology 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 QUOT 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 - $312 million for Quotient Technology - 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 92.073 million for Quotient Technology 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 Quotient Technology at the current share price and the inputted number of shares is $1.5 billion.

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COMPANY NEWS

▶ Quotient Tech reports 2Q loss   [Aug-01-17 11:13PM  Associated Press]
▶ Coupa Narrows Q1 Loss As Revenue Tops Estimates; Shares Rise   [Jun-05-17 04:46PM  Investor's Business Daily]
▶ Quotient Completes Acquisition of Crisp Media   [Jun-01-17 07:00AM  Business Wire]
▶ Quotient Helps Obtain Patent Win for Retailers   [May-25-17 07:00AM  Business Wire]
▶ Coupons.Com App Wins MediaPost Appy Award   [May-18-17 07:00AM  Business Wire]
▶ Quotient Tech reports 1Q loss   [May-02-17 06:45PM  Associated Press]
▶ Vetr Crowd Downgrades Coupa Following Offering   [Apr-13-17 12:08PM  Benzinga]
▶ Coupa Software Gears Up for Secondary Offering   [Apr-11-17 11:25AM  24/7 Wall St.]
▶ Coupons.com Unveils America's 25 Most Frugal Cities   [Mar-30-17 09:00AM  Business Wire]
▶ Why Coupa Software Stock Dropped 11% on Tuesday   [Mar-14-17 09:30PM  Motley Fool]
▶ Quotient Tech tops Street 4Q forecasts   [Feb-09-17 06:27PM  Associated Press]
▶ Is Quotient Technology Inc (QUOT) A Good Stock To Buy?   [Dec-14-16 01:42AM  at Insider Monkey]
▶ Quotient Launches Digital Coupons through Samsung Pay   [Sep-27-16 07:29PM  PR Newswire]
Financial statements of QUOT
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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