Intrinsic value of Ascent Capital Group Series A - ASCMA

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$0.85

  Intrinsic Value

$0.00

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  Rating & Target

str. sell

-100%

Previous close

$0.85

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of ASCMA 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 0.0

 

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
  565
  578
  592
  609
  627
  648
  670
  694
  719
  747
  777
  808
  842
  877
  915
  955
  998
  1,043
  1,090
  1,140
  1,193
  1,249
  1,307
  1,369
  1,434
  1,503
  1,575
  1,651
  1,731
  1,815
Variable operating expenses, $m
  101
  102
  103
  105
  106
  108
  109
  111
  113
  115
  61
  63
  66
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  107
  112
  117
  123
  129
  135
  141
Fixed operating expenses, $m
  430
  440
  449
  459
  469
  480
  490
  501
  512
  523
  535
  547
  559
  571
  584
  596
  609
  623
  637
  651
  665
  680
  694
  710
  725
  741
  758
  774
  791
  809
Total operating expenses, $m
  531
  542
  552
  564
  575
  588
  599
  612
  625
  638
  596
  610
  625
  639
  655
  670
  687
  704
  722
  740
  758
  777
  796
  817
  837
  858
  881
  903
  926
  950
Operating income, $m
  33
  36
  40
  45
  52
  60
  70
  82
  94
  108
  181
  198
  217
  238
  260
  284
  310
  338
  369
  401
  435
  472
  511
  553
  597
  645
  695
  748
  805
  865
EBITDA, $m
  113
  116
  121
  127
  134
  144
  154
  166
  180
  195
  212
  231
  251
  273
  297
  323
  350
  380
  412
  446
  483
  522
  564
  608
  655
  705
  758
  815
  875
  938
Interest expense (income), $m
  121
  154
  150
  154
  158
  163
  168
  174
  180
  187
  194
  202
  211
  219
  229
  239
  250
  261
  273
  286
  299
  314
  329
  344
  361
  379
  397
  417
  437
  459
  481
Earnings before tax, $m
  -121
  -115
  -114
  -113
  -111
  -108
  -104
  -99
  -93
  -86
  -21
  -12
  -2
  9
  21
  35
  49
  65
  83
  101
  122
  143
  167
  192
  219
  248
  278
  311
  347
  384
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2
  6
  9
  13
  18
  22
  27
  33
  39
  45
  52
  59
  67
  75
  84
  94
  104
Net income, $m
  -121
  -115
  -114
  -113
  -111
  -108
  -104
  -99
  -93
  -86
  -21
  -12
  -2
  7
  16
  25
  36
  48
  60
  74
  89
  105
  122
  140
  160
  181
  203
  227
  253
  280

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
  2,068
  2,115
  2,170
  2,231
  2,298
  2,373
  2,453
  2,541
  2,635
  2,736
  2,844
  2,960
  3,083
  3,213
  3,352
  3,499
  3,654
  3,819
  3,993
  4,176
  4,370
  4,574
  4,789
  5,016
  5,255
  5,506
  5,771
  6,049
  6,342
  6,650
Adjusted assets (=assets-cash), $m
  2,068
  2,115
  2,170
  2,231
  2,298
  2,373
  2,453
  2,541
  2,635
  2,736
  2,844
  2,960
  3,083
  3,213
  3,352
  3,499
  3,654
  3,819
  3,993
  4,176
  4,370
  4,574
  4,789
  5,016
  5,255
  5,506
  5,771
  6,049
  6,342
  6,650
Revenue / Adjusted assets
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
  0.273
Average production assets, $m
  679
  695
  713
  733
  755
  779
  806
  834
  865
  899
  934
  972
  1,012
  1,055
  1,101
  1,149
  1,200
  1,254
  1,311
  1,372
  1,435
  1,502
  1,573
  1,647
  1,726
  1,808
  1,895
  1,987
  2,083
  2,184
Working capital, $m
  -68
  -70
  -72
  -74
  -76
  -78
  -81
  -84
  -87
  -90
  -94
  -98
  -102
  -106
  -111
  -116
  -121
  -126
  -132
  -138
  -144
  -151
  -158
  -166
  -174
  -182
  -191
  -200
  -209
  -220
Total debt, $m
  1,749
  1,792
  1,841
  1,895
  1,956
  2,023
  2,096
  2,175
  2,259
  2,350
  2,448
  2,552
  2,662
  2,780
  2,905
  3,037
  3,177
  3,325
  3,481
  3,646
  3,820
  4,004
  4,198
  4,402
  4,617
  4,843
  5,081
  5,332
  5,596
  5,873
Total liabilities, $m
  1,861
  1,904
  1,953
  2,008
  2,069
  2,135
  2,208
  2,287
  2,372
  2,463
  2,560
  2,664
  2,775
  2,892
  3,017
  3,149
  3,289
  3,437
  3,593
  3,759
  3,933
  4,116
  4,310
  4,514
  4,729
  4,955
  5,194
  5,444
  5,708
  5,985
Total equity, $m
  207
  212
  217
  223
  230
  237
  245
  254
  264
  274
  284
  296
  308
  321
  335
  350
  365
  382
  399
  418
  437
  457
  479
  502
  525
  551
  577
  605
  634
  665
Total liabilities and equity, $m
  2,068
  2,116
  2,170
  2,231
  2,299
  2,372
  2,453
  2,541
  2,636
  2,737
  2,844
  2,960
  3,083
  3,213
  3,352
  3,499
  3,654
  3,819
  3,992
  4,177
  4,370
  4,573
  4,789
  5,016
  5,254
  5,506
  5,771
  6,049
  6,342
  6,650
Debt-to-equity ratio
  8.460
  8.470
  8.480
  8.500
  8.510
  8.530
  8.540
  8.560
  8.570
  8.590
  8.610
  8.620
  8.640
  8.650
  8.670
  8.680
  8.690
  8.710
  8.720
  8.730
  8.740
  8.750
  8.770
  8.780
  8.790
  8.800
  8.810
  8.810
  8.820
  8.830
Adjusted equity ratio
  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
  -121
  -115
  -114
  -113
  -111
  -108
  -104
  -99
  -93
  -86
  -21
  -12
  -2
  7
  16
  25
  36
  48
  60
  74
  89
  105
  122
  140
  160
  181
  203
  227
  253
  280
Depreciation, amort., depletion, $m
  80
  80
  81
  81
  82
  83
  84
  85
  86
  87
  31
  32
  34
  35
  37
  38
  40
  42
  44
  46
  48
  50
  52
  55
  58
  60
  63
  66
  69
  73
Funds from operations, $m
  -41
  -34
  -34
  -32
  -29
  -25
  -20
  -14
  -7
  1
  10
  20
  32
  42
  52
  64
  76
  89
  104
  120
  137
  155
  174
  195
  217
  241
  266
  294
  322
  353
Change in working capital, $m
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
Cash from operations, $m
  -40
  -33
  -32
  -30
  -26
  -22
  -17
  -11
  -4
  4
  14
  24
  36
  46
  57
  68
  81
  95
  110
  126
  143
  161
  181
  202
  225
  249
  275
  303
  332
  363
Maintenance CAPEX, $m
  -22
  -23
  -23
  -24
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -58
  -60
  -63
  -66
  -69
New CAPEX, $m
  -14
  -16
  -18
  -20
  -22
  -24
  -27
  -29
  -31
  -33
  -36
  -38
  -40
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -64
  -67
  -71
  -74
  -78
  -83
  -87
  -91
  -96
  -101
Cash from investing activities, $m
  -36
  -39
  -41
  -44
  -46
  -49
  -53
  -56
  -59
  -62
  -66
  -69
  -72
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -110
  -115
  -121
  -126
  -133
  -141
  -147
  -154
  -162
  -170
Free cash flow, $m
  -76
  -71
  -73
  -73
  -73
  -72
  -70
  -67
  -63
  -58
  -52
  -45
  -37
  -31
  -24
  -16
  -8
  1
  11
  22
  34
  47
  60
  76
  92
  109
  128
  148
  170
  193
Issuance/(repayment) of debt, $m
  -40
  43
  49
  55
  61
  67
  73
  79
  85
  91
  97
  104
  111
  118
  125
  132
  140
  148
  156
  165
  174
  184
  194
  204
  215
  226
  238
  251
  264
  277
Issuance/(repurchase) of shares, $m
  200
  119
  120
  119
  118
  115
  112
  107
  102
  96
  32
  24
  14
  6
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  160
  162
  169
  174
  179
  182
  185
  186
  187
  187
  129
  128
  125
  124
  125
  132
  140
  148
  156
  165
  174
  184
  194
  204
  215
  226
  238
  251
  264
  277
Total cash flow (excl. dividends), $m
  83
  91
  96
  101
  105
  110
  115
  120
  124
  129
  77
  83
  88
  93
  101
  116
  132
  149
  167
  187
  208
  230
  254
  280
  307
  336
  366
  399
  433
  470
Retained Cash Flow (-), $m
  -200
  -119
  -120
  -119
  -118
  -115
  -112
  -107
  -102
  -96
  -32
  -24
  -14
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -31
Prev. year cash balance distribution, $m
  15
  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
  -101
  -28
  -24
  -18
  -12
  -5
  3
  12
  22
  33
  46
  59
  74
  80
  87
  101
  116
  132
  150
  169
  189
  210
  233
  257
  283
  310
  340
  371
  404
  439
Discount rate, %
  12.80
  13.44
  14.11
  14.82
  15.56
  16.34
  17.15
  18.01
  18.91
  19.86
  20.85
  21.89
  22.99
  24.14
  25.34
  26.61
  27.94
  29.34
  30.80
  32.34
  33.96
  35.66
  37.44
  39.32
  41.28
  43.35
  45.51
  47.79
  50.18
  52.69
PV of cash for distribution, $m
  -90
  -22
  -16
  -11
  -6
  -2
  1
  3
  5
  5
  6
  5
  5
  4
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  30.9
  17.0
  9.4
  5.3
  3.0
  1.7
  1.0
  0.6
  0.4
  0.3
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2
  0.2

Ascent Capital Group, Inc. is a holding company. The Company's subsidiaries include Monitronics International, Inc. (MONI) and LiveWatch Security, LLC (LiveWatch). The Company's segments include MONI, LiveWatch and Other Activities. The MONI segment is primarily engaged in the business of providing security alarm monitoring services: monitoring signals arising from burglaries, fires, medical alerts and other events through security systems at subscribers' premises, as well as providing customer service and technical support. LiveWatch is a do-it-yourself home security provider offering professionally monitored security services through a direct-to-consumer sales channel. LiveWatch offers a differentiated go-to-market strategy through direct response television, Internet and radio advertising. When a customer initiates the process to obtain monitoring services, LiveWatch pre-configures the alarm monitoring system based on customer specifications.

FINANCIAL RATIOS  of  Ascent Capital Group Series A (ASCMA)

Valuation Ratios
P/E Ratio -0.1
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0.1
Price to Free Cash Flow -0.5
Growth Rates
Sales Growth Rate 1.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -24.4%
Cap. Spend. - 3 Yr. Gr. Rate -2.9%
Financial Strength
Quick Ratio 1
Current Ratio 0.9
LT Debt to Equity 733.9%
Total Debt to Equity 738.5%
Interest Coverage 0
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 0.6%
Return On Total Capital -4.5%
Ret/ On T. Cap. - 3 Yr. Avg. -3.5%
Return On Equity -32.3%
Return On Equity - 3 Yr. Avg. -20.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 76.7%
Gross Margin - 3 Yr. Avg. 79.1%
EBITDA Margin 51.2%
EBITDA Margin - 3 Yr. Avg. 49.1%
Operating Margin 8.1%
Oper. Margin - 3 Yr. Avg. 10.2%
Pre-Tax Margin -14.7%
Pre-Tax Margin - 3 Yr. Avg. -11.8%
Net Profit Margin -16%
Net Profit Margin - 3 Yr. Avg. -12.6%
Effective Tax Rate -8.3%
Eff/ Tax Rate - 3 Yr. Avg. -8.2%
Payout Ratio 0%

ASCMA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ASCMA stock intrinsic value calculation we used $553.455 million for the last fiscal year's total revenue generated by Ascent Capital Group Series A. The default revenue input number comes from 0001 income statement of Ascent Capital Group Series A. 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 ASCMA 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 12.8%, whose default value for ASCMA is calculated based on our internal credit rating of Ascent Capital Group Series A, 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 Ascent Capital Group Series A.
    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 ASCMA stock the variable cost ratio is equal to 18.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $421 million in the base year in the intrinsic value calculation for ASCMA 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 8.6% for Ascent Capital Group Series A.

Corporate tax rate of 27% is the nominal tax rate for Ascent Capital Group Series A. 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 ASCMA 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 ASCMA are equal to 120.3%.

Life of production assets of 146.9 years is the average useful life of capital assets used in Ascent Capital Group Series A 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 ASCMA is equal to -12.1%. 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 - $142.672 million for Ascent Capital Group Series A - 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 12.049 million for Ascent Capital Group Series A 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 Ascent Capital Group Series A at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
BCO Brink's 67.80 115.33  buy
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COMPANY NEWS

▶ Monitronics International Announces Exchange Offer   [Nov-05-18 08:53AM  GlobeNewswire]
▶ Ascent Capital: 3Q Earnings Snapshot   [08:25AM  Associated Press]
▶ Investment funds sue struggling Brinks parent company over debt plan   [Aug-28-18 01:23PM  American City Business Journals]
▶ Ascent Capital: 2Q Earnings Snapshot   [Aug-02-18 05:17PM  Associated Press]
▶ Ascent Capital: 1Q Earnings Snapshot   [May-08-18 07:33PM  Associated Press]
▶ Ascent Capital Group Announces Executive Leadership Changes   [Apr-05-18 05:00PM  GlobeNewswire]
▶ 8 Stocks That Will Hit All-Time Lows in 2018   [Jan-19-18 01:08PM  InvestorPlace]
▶ Ascent Capital reports 3Q loss   [Nov-02-17 07:03PM  Associated Press]
▶ Ascent Capital reports 2Q loss   [Aug-09-17 10:23PM  Associated Press]
▶ Ascent Capital reports 1Q loss   [May-09-17 06:06PM  Associated Press]
▶ MONI Receives A+ Rating From Better Business Bureau   [Feb-06-17 12:15PM  PR Newswire]
▶ MONI Smart Security Introduces Customer Bill Of Rights   [Jan-24-17 06:00AM  PR Newswire]
▶ Hedge Funds Are Piling Into Ascent Capital Group Inc (ASCMA)   [Dec-04-16 03:31PM  at Insider Monkey]

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