Intrinsic value of VOXX International - VOXX

Previous Close

$6.50

  Intrinsic Value

$3.47

stock screener

  Rating & Target

sell

-47%

Previous close

$6.50

 
Intrinsic value

$3.47

 
Up/down potential

-47%

 
Rating

sell

We calculate the intrinsic value of VOXX 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 0.2

 

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, %
  0.00
  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
  681
  695
  711
  729
  749
  772
  797
  824
  854
  885
  919
  956
  994
  1,036
  1,079
  1,126
  1,175
  1,228
  1,283
  1,341
  1,403
  1,468
  1,536
  1,609
  1,685
  1,765
  1,850
  1,938
  2,032
  2,130
  2,234
Variable operating expenses, $m
 
  701
  717
  736
  756
  779
  804
  831
  861
  892
  926
  957
  996
  1,038
  1,082
  1,128
  1,178
  1,230
  1,285
  1,344
  1,406
  1,471
  1,540
  1,612
  1,688
  1,769
  1,853
  1,942
  2,036
  2,135
  2,238
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
  681
  701
  717
  736
  756
  779
  804
  831
  861
  892
  926
  957
  996
  1,038
  1,082
  1,128
  1,178
  1,230
  1,285
  1,344
  1,406
  1,471
  1,540
  1,612
  1,688
  1,769
  1,853
  1,942
  2,036
  2,135
  2,238
Operating income, $m
  0
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
EBITDA, $m
  18
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  33
  34
  36
Interest expense (income), $m
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
  26
  27
Earnings before tax, $m
  -1
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
Tax expense, $m
  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
  0
  0
  0
  0
  0
  0
Net income, $m
  4
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1
  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
  668
  680
  696
  714
  734
  756
  781
  807
  836
  867
  900
  936
  974
  1,014
  1,057
  1,103
  1,151
  1,202
  1,256
  1,314
  1,374
  1,438
  1,505
  1,576
  1,650
  1,729
  1,811
  1,899
  1,990
  2,087
  2,188
Adjusted assets (=assets-cash), $m
  667
  680
  696
  714
  734
  756
  781
  807
  836
  867
  900
  936
  974
  1,014
  1,057
  1,103
  1,151
  1,202
  1,256
  1,314
  1,374
  1,438
  1,505
  1,576
  1,650
  1,729
  1,811
  1,899
  1,990
  2,087
  2,188
Revenue / Adjusted assets
  1.021
  1.022
  1.022
  1.021
  1.020
  1.021
  1.020
  1.021
  1.022
  1.021
  1.021
  1.021
  1.021
  1.022
  1.021
  1.021
  1.021
  1.022
  1.021
  1.021
  1.021
  1.021
  1.021
  1.021
  1.021
  1.021
  1.022
  1.021
  1.021
  1.021
  1.021
Average production assets, $m
  170
  174
  178
  182
  187
  193
  199
  206
  213
  221
  230
  239
  249
  259
  270
  282
  294
  307
  321
  335
  351
  367
  384
  402
  421
  441
  462
  485
  508
  533
  558
Working capital, $m
  143
  154
  158
  162
  166
  171
  177
  183
  189
  197
  204
  212
  221
  230
  240
  250
  261
  273
  285
  298
  311
  326
  341
  357
  374
  392
  411
  430
  451
  473
  496
Total debt, $m
  108
  112
  119
  126
  135
  144
  154
  165
  177
  190
  204
  218
  234
  251
  269
  288
  308
  329
  351
  375
  400
  427
  455
  484
  515
  547
  582
  618
  656
  696
  738
Total liabilities, $m
  278
  282
  289
  296
  305
  314
  324
  335
  347
  360
  374
  388
  404
  421
  439
  458
  478
  499
  521
  545
  570
  597
  625
  654
  685
  717
  752
  788
  826
  866
  908
Total equity, $m
  390
  398
  407
  418
  429
  442
  457
  472
  489
  507
  527
  547
  570
  593
  618
  645
  673
  703
  735
  768
  804
  841
  880
  922
  965
  1,011
  1,060
  1,111
  1,164
  1,221
  1,280
Total liabilities and equity, $m
  668
  680
  696
  714
  734
  756
  781
  807
  836
  867
  901
  935
  974
  1,014
  1,057
  1,103
  1,151
  1,202
  1,256
  1,313
  1,374
  1,438
  1,505
  1,576
  1,650
  1,728
  1,812
  1,899
  1,990
  2,087
  2,188
Debt-to-equity ratio
  0.277
  0.280
  0.290
  0.300
  0.310
  0.330
  0.340
  0.350
  0.360
  0.370
  0.390
  0.400
  0.410
  0.420
  0.430
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
  0.510
  0.520
  0.520
  0.530
  0.540
  0.550
  0.560
  0.560
  0.570
  0.580
Adjusted equity ratio
  0.583
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585
  0.585

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
Depreciation, amort., depletion, $m
  18
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  35
  37
  39
  40
Funds from operations, $m
  -23
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  8
  8
  8
  8
  8
  8
  8
  8
  9
  9
  9
Change in working capital, $m
  -21
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
Cash from operations, $m
  -2
  4
  3
  3
  3
  2
  2
  1
  1
  0
  0
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
Maintenance CAPEX, $m
  0
  -12
  -13
  -13
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
New CAPEX, $m
  -12
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
Cash from investing activities, $m
  -12
  -16
  -17
  -18
  -18
  -20
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -32
  -32
  -34
  -36
  -38
  -39
  -41
  -44
  -46
  -48
  -51
  -53
  -56
  -58
  -62
  -65
Free cash flow, $m
  -14
  -12
  -13
  -14
  -16
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -64
  -67
  -71
  -75
  -79
Issuance/(repayment) of debt, $m
  10
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  33
  34
  36
  38
  40
  42
Issuance/(repurchase) of shares, $m
  0
  19
  20
  22
  24
  25
  27
  29
  30
  32
  34
  31
  33
  35
  37
  39
  42
  44
  47
  50
  53
  56
  59
  62
  66
  70
  74
  78
  82
  86
  91
Cash from financing (excl. dividends), $m  
  10
  24
  26
  29
  32
  34
  37
  40
  42
  45
  48
  46
  49
  52
  55
  58
  62
  65
  69
  74
  78
  82
  87
  91
  97
  103
  108
  114
  120
  126
  133
Total cash flow (excl. dividends), $m
  -4
  12
  14
  15
  16
  17
  19
  20
  21
  22
  23
  19
  20
  22
  23
  24
  26
  27
  29
  31
  32
  34
  36
  38
  40
  42
  44
  47
  49
  52
  54
Retained Cash Flow (-), $m
  -3
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -66
  -70
  -74
  -78
  -82
  -86
  -91
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
 
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -37
Discount rate, %
 
  6.10
  6.41
  6.73
  7.06
  7.41
  7.79
  8.17
  8.58
  9.01
  9.46
  9.94
  10.43
  10.95
  11.50
  12.08
  12.68
  13.32
  13.98
  14.68
  15.41
  16.19
  16.99
  17.84
  18.74
  19.67
  20.66
  21.69
  22.77
  23.91
  25.11
PV of cash for distribution, $m
 
  -6
  -6
  -6
  -6
  -6
  -5
  -5
  -5
  -5
  -4
  -4
  -4
  -3
  -3
  -3
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  93.5
  87.1
  80.9
  74.8
  69.0
  63.5
  58.3
  53.4
  48.8
  44.5
  41.1
  37.8
  34.8
  31.9
  29.2
  26.8
  24.5
  22.3
  20.3
  18.5
  16.9
  15.3
  13.9
  12.6
  11.4
  10.4
  9.4
  8.5
  7.7
  6.9

VOXX International Corporation is an international manufacturer and distributor in the automotive, audio and consumer accessories industries. The Company's segments include Automotive, Premium Audio and Consumer Accessories. The Automotive segment designs, manufactures, distributes and markets rear-seat entertainment devices, satellite radio products, remote start systems, digital television tuners, mobile antennas, mobile multimedia devices, car link-smartphone telematics application, collision avoidance systems and others. The Premium Audio segment designs, manufactures, distributes and markets home theater systems, outdoor speakers, iPod/computer speakers, business music systems, cinema speakers, flat panel speakers, Bluetooth speakers and others. The Consumer Accessories segment designs and markets remote controls, rechargeable battery packs, wireless and Bluetooth speakers, Singtrix karaoke products, 360 Fly Action Cameras, personal sound amplifiers and others.

FINANCIAL RATIOS  of  VOXX International (VOXX)

Valuation Ratios
P/E Ratio 39.3
Price to Sales 0.2
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -78.5
Price to Free Cash Flow -11.2
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -40%
Cap. Spend. - 3 Yr. Gr. Rate -4.4%
Financial Strength
Quick Ratio 0
Current Ratio 0.4
LT Debt to Equity 25.4%
Total Debt to Equity 27.7%
Interest Coverage 1
Management Effectiveness
Return On Assets 2.4%
Ret/ On Assets - 3 Yr. Avg. 0.5%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 1
Profitability Ratios
Gross Margin 29.7%
Gross Margin - 3 Yr. Avg. 29.3%
EBITDA Margin 3.1%
EBITDA Margin - 3 Yr. Avg. 2.6%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin -0.1%
Pre-Tax Margin - 3 Yr. Avg. -0.4%
Net Profit Margin 0.6%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate -200%
Eff/ Tax Rate - 3 Yr. Avg. 8.3%
Payout Ratio 0%

VOXX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VOXX stock intrinsic value calculation we used $681 million for the last fiscal year's total revenue generated by VOXX International. The default revenue input number comes from 2017 income statement of VOXX International. 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 VOXX 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 6.1%, whose default value for VOXX is calculated based on our internal credit rating of VOXX International, 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 VOXX International.
    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 VOXX stock the variable cost ratio is equal to 101%.

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 VOXX 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 3.9% for VOXX International.

Corporate tax rate of 27% is the nominal tax rate for VOXX International. 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 VOXX 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 VOXX are equal to 25%.

Life of production assets of 13.8 years is the average useful life of capital assets used in VOXX International 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 VOXX is equal to 22.2%. 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 - $390 million for VOXX International - 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 24.182 million for VOXX International 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 VOXX International at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

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Financial statements of VOXX
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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