Intrinsic value of Alico - ALCO

Previous Close

$33.36

  Intrinsic Value

$4.83

stock screener

  Rating & Target

str. sell

-86%

Previous close

$33.36

 
Intrinsic value

$4.83

 
Up/down potential

-86%

 
Rating

str. sell

We calculate the intrinsic value of ALCO 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 0001), $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 0.3

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  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
  132
  135
  139
  143
  147
  152
  157
  163
  169
  175
  182
  190
  197
  206
  215
  224
  234
  245
  256
  267
  280
  293
  307
  321
  337
  353
  370
  387
  406
  426
Variable operating expenses, $m
  112
  115
  118
  121
  124
  129
  133
  138
  143
  148
  154
  160
  167
  174
  181
  189
  198
  206
  216
  226
  236
  247
  259
  271
  284
  298
  312
  327
  343
  360
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
  112
  115
  118
  121
  124
  129
  133
  138
  143
  148
  154
  160
  167
  174
  181
  189
  198
  206
  216
  226
  236
  247
  259
  271
  284
  298
  312
  327
  343
  360
Operating income, $m
  20
  21
  21
  22
  23
  23
  24
  25
  26
  27
  28
  30
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  52
  55
  58
  60
  63
  66
EBITDA, $m
  36
  37
  38
  39
  40
  41
  43
  44
  46
  48
  50
  52
  54
  56
  58
  61
  64
  67
  70
  73
  76
  80
  84
  87
  92
  96
  101
  106
  111
  116
Interest expense (income), $m
  8
  10
  10
  11
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  31
  32
  34
  36
  38
  40
Earnings before tax, $m
  10
  11
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
Tax expense, $m
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
Net income, $m
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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 assets, $m
  427
  437
  448
  461
  475
  490
  507
  525
  544
  565
  588
  611
  637
  664
  692
  723
  755
  789
  825
  863
  903
  945
  989
  1,036
  1,085
  1,137
  1,192
  1,250
  1,310
  1,374
Adjusted assets (=assets-cash), $m
  427
  437
  448
  461
  475
  490
  507
  525
  544
  565
  588
  611
  637
  664
  692
  723
  755
  789
  825
  863
  903
  945
  989
  1,036
  1,085
  1,137
  1,192
  1,250
  1,310
  1,374
Revenue / Adjusted assets
  0.309
  0.309
  0.310
  0.310
  0.309
  0.310
  0.310
  0.310
  0.311
  0.310
  0.310
  0.311
  0.309
  0.310
  0.311
  0.310
  0.310
  0.311
  0.310
  0.309
  0.310
  0.310
  0.310
  0.310
  0.311
  0.310
  0.310
  0.310
  0.310
  0.310
Average production assets, $m
  372
  381
  391
  402
  414
  427
  442
  457
  474
  493
  512
  533
  555
  578
  603
  630
  658
  687
  719
  752
  787
  823
  862
  903
  946
  991
  1,039
  1,089
  1,142
  1,197
Working capital, $m
  53
  54
  55
  57
  58
  60
  62
  65
  67
  70
  72
  75
  78
  82
  85
  89
  93
  97
  102
  106
  111
  116
  122
  128
  134
  140
  147
  154
  161
  169
Total debt, $m
  190
  196
  203
  211
  219
  229
  239
  250
  262
  275
  289
  303
  319
  336
  353
  372
  392
  413
  435
  458
  483
  509
  537
  565
  596
  628
  662
  697
  735
  774
Total liabilities, $m
  264
  270
  277
  284
  293
  302
  313
  324
  336
  349
  363
  377
  393
  410
  427
  446
  466
  487
  509
  532
  557
  583
  610
  639
  670
  702
  736
  771
  808
  848
Total equity, $m
  164
  167
  172
  177
  182
  188
  194
  201
  208
  216
  225
  234
  244
  254
  265
  277
  289
  302
  316
  330
  346
  362
  379
  397
  416
  436
  457
  479
  502
  526
Total liabilities and equity, $m
  428
  437
  449
  461
  475
  490
  507
  525
  544
  565
  588
  611
  637
  664
  692
  723
  755
  789
  825
  862
  903
  945
  989
  1,036
  1,086
  1,138
  1,193
  1,250
  1,310
  1,374
Debt-to-equity ratio
  1.160
  1.170
  1.180
  1.190
  1.200
  1.220
  1.230
  1.240
  1.260
  1.270
  1.280
  1.300
  1.310
  1.320
  1.330
  1.340
  1.360
  1.370
  1.380
  1.390
  1.400
  1.410
  1.420
  1.420
  1.430
  1.440
  1.450
  1.460
  1.460
  1.470
Adjusted equity ratio
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383
  0.383

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
Depreciation, amort., depletion, $m
  16
  16
  16
  17
  17
  18
  19
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  34
  36
  37
  39
  41
  43
  45
  47
  50
Funds from operations, $m
  23
  24
  24
  25
  26
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  39
  41
  43
  44
  46
  48
  51
  53
  55
  58
  60
  63
  66
  69
Change in working capital, $m
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
Cash from operations, $m
  22
  23
  23
  23
  24
  25
  25
  26
  27
  28
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  54
  56
  59
  61
Maintenance CAPEX, $m
  -15
  -15
  -16
  -16
  -17
  -17
  -18
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
New CAPEX, $m
  -7
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -55
Cash from investing activities, $m
  -22
  -24
  -26
  -27
  -29
  -30
  -33
  -34
  -36
  -38
  -39
  -42
  -44
  -47
  -49
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -73
  -77
  -80
  -84
  -89
  -93
  -98
  -102
Free cash flow, $m
  0
  -1
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -42
Issuance/(repayment) of debt, $m
  5
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
Cash from financing (excl. dividends), $m  
  5
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  27
  28
  29
  32
  33
  35
  38
  39
  41
  44
Total cash flow (excl. dividends), $m
  5
  5
  4
  4
  4
  3
  3
  3
  3
  3
  2
  2
  2
  2
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
Retained Cash Flow (-), $m
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
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
  2
  1
  0
  -1
  -2
  -2
  -3
  -4
  -5
  -5
  -6
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  2
  1
  0
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  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
  99.9
  99.8
  99.6
  99.4
  99.1
  98.8
  98.4
  98.0
  97.6
  97.1
  96.7
  96.1
  95.6
  95.1

Alico, Inc. is an agribusiness and natural resources management company. The Company's segments include Orange Co., Conservation and Environmental Resources and, Other Operations. Its principal lines of business are citrus groves, cattle ranching and conservation. The Orange Co. segment includes activities related to planting, owning, cultivating and/or managing citrus groves in order to produce fruit for sale to fresh and processed citrus markets, including activities related to the purchase and resale of fruit and value-added services, which include contracting for the harvesting, marketing and hauling of citrus. The conservation and environmental resources segment includes activities related to cattle grazing, sod, native plant and animal sales, leasing, management and/or conservation of unimproved native pasture land. The other operations segment consists of activities related to rock mining royalties, oil exploration and other insignificant lines of business.

FINANCIAL RATIOS  of  Alico (ALCO)

Valuation Ratios
P/E Ratio -30.5
Price to Sales 2.1
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 9.8
Price to Free Cash Flow 18.3
Growth Rates
Sales Growth Rate -9.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.1%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 1
Current Ratio 1.3
LT Debt to Equity 112.4%
Total Debt to Equity 115.5%
Interest Coverage -1
Management Effectiveness
Return On Assets -0.7%
Ret/ On Assets - 3 Yr. Avg. 2.1%
Return On Total Capital -2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 1.2%
Return On Equity -5.4%
Return On Equity - 3 Yr. Avg. 2.2%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 6.9%
Gross Margin - 3 Yr. Avg. 18.3%
EBITDA Margin 7.7%
EBITDA Margin - 3 Yr. Avg. 20.5%
Operating Margin -4.6%
Oper. Margin - 3 Yr. Avg. 7.7%
Pre-Tax Margin -10%
Pre-Tax Margin - 3 Yr. Avg. 4.7%
Net Profit Margin -6.9%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 23.1%
Eff/ Tax Rate - 3 Yr. Avg. 36.9%
Payout Ratio -22.2%

ALCO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ALCO stock intrinsic value calculation we used $129.829 million for the last fiscal year's total revenue generated by Alico. The default revenue input number comes from 0001 income statement of Alico. 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 ALCO 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 8.3%, whose default value for ALCO is calculated based on our internal credit rating of Alico, 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 Alico.
    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 ALCO stock the variable cost ratio is equal to 84.6%.

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 ALCO 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 5.4% for Alico.

Corporate tax rate of 27% is the nominal tax rate for Alico. 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 ALCO 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 ALCO are equal to 281.1%.

Life of production assets of 24.1 years is the average useful life of capital assets used in Alico 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 ALCO is equal to 39.7%. 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 - $160.641 million for Alico - 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 8.2 million for Alico 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 Alico at the current share price and the inputted number of shares is $0.3 billion.

RELATED COMPANIES Price Int.Val. Rating
LMNR Limoneira 24.54 1.97  str.sell
FDP Fresh Del Mont 30.60 7.72  str.sell

COMPANY NEWS

▶ Alico, Inc. Announces Final Results Of Tender Offer   [Oct-09-18 08:35AM  GlobeNewswire]
▶ Alico, Inc. Announces Preliminary Results Of Tender Offer   [Oct-04-18 07:30AM  GlobeNewswire]
▶ Who Are Alico Incs (NASDAQ:ALCO) Major Shareholders?   [Sep-25-18 01:44PM  Simply Wall St.]
▶ Alico: Fiscal 3Q Earnings Snapshot   [Aug-06-18 04:15PM  Associated Press]
▶ Alico: Fiscal 2Q Earnings Snapshot   [May-07-18 07:33PM  Associated Press]
▶ Alico posts 1Q profit   [Feb-06-18 04:59PM  Associated Press]
▶ ETFs with exposure to Alico, Inc. : December 27, 2017   [Dec-27-17 10:57AM  Capital Cube]
▶ ETFs with exposure to Alico, Inc. : December 12, 2017   [Dec-12-17 12:41PM  Capital Cube]
▶ Alico reports 4Q loss   [Dec-11-17 05:13PM  Associated Press]
▶ ETFs with exposure to Alico, Inc. : November 3, 2017   [Nov-03-17 11:50AM  Capital Cube]
▶ ETFs with exposure to Alico, Inc. : October 18, 2017   [Oct-18-17 09:35AM  Capital Cube]
▶ Alico posts 3Q profit   [Aug-07-17 07:27PM  Associated Press]
▶ ETFs with exposure to Alico, Inc. : July 7, 2017   [Jul-07-17 02:24PM  Capital Cube]
▶ Alico posts 2Q profit   [May-08-17 04:10PM  Associated Press]
▶ ETFs with exposure to Alico, Inc. : April 20, 2017   [Apr-20-17 02:11PM  Capital Cube]
▶ ETFs with exposure to Alico, Inc. : April 5, 2017   [Apr-05-17 04:16PM  Capital Cube]
▶ Alico reports 1Q loss   [Feb-06-17 04:28PM  Associated Press]
▶ ETFs with exposure to Alico, Inc. : January 24, 2017   [Jan-24-17 11:55AM  Capital Cube]
▶ New CEO at the Florida company that grows the oranges in your juice   [07:39AM  American City Business Journals]
▶ Should You Buy Alico, Inc. (ALCO)?   [Dec-20-16 04:05PM  Insider Monkey]
▶ Alico Inc (ALCO): GMT Capital Trims Some Shares   [Oct-28-16 09:09AM  at Insider Monkey]
▶ Here is What Hedge Funds Think About Alico, Inc. (ALCO)   [Nov-28  07:05AM  at Insider Monkey]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.