Intrinsic value of ATN International, Inc. - ATNI

Previous Close

$55.15

  Intrinsic Value

$54.06

stock screener

  Rating & Target

hold

-2%

Previous close

$55.15

 
Intrinsic value

$54.06

 
Up/down potential

-2%

 
Rating

hold

We calculate the intrinsic value of ATNI 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 0.9

 

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
  460
  471
  483
  496
  511
  528
  546
  565
  586
  609
  633
  658
  686
  715
  746
  778
  813
  850
  888
  929
  972
  1,018
  1,065
  1,116
  1,169
  1,225
  1,284
  1,346
  1,411
  1,479
Variable operating expenses, $m
  406
  414
  423
  433
  444
  456
  470
  484
  500
  517
  472
  491
  512
  533
  556
  581
  606
  634
  663
  693
  725
  759
  795
  832
  872
  914
  958
  1,004
  1,052
  1,104
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
  406
  414
  423
  433
  444
  456
  470
  484
  500
  517
  472
  491
  512
  533
  556
  581
  606
  634
  663
  693
  725
  759
  795
  832
  872
  914
  958
  1,004
  1,052
  1,104
Operating income, $m
  54
  57
  60
  63
  67
  71
  76
  81
  86
  92
  161
  167
  174
  182
  189
  198
  207
  216
  226
  236
  247
  258
  271
  283
  297
  311
  326
  342
  358
  376
EBITDA, $m
  195
  199
  205
  210
  217
  224
  231
  240
  248
  258
  268
  279
  291
  303
  316
  330
  345
  360
  376
  394
  412
  431
  452
  473
  495
  519
  544
  570
  598
  627
Interest expense (income), $m
  4
  6
  6
  7
  8
  9
  9
  10
  11
  13
  14
  15
  17
  18
  20
  21
  23
  25
  27
  29
  32
  34
  36
  39
  42
  45
  48
  51
  55
  58
  62
Earnings before tax, $m
  48
  50
  53
  56
  59
  62
  66
  69
  74
  78
  146
  151
  156
  162
  168
  175
  181
  189
  196
  204
  213
  222
  232
  242
  252
  263
  275
  287
  300
  314
Tax expense, $m
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  39
  41
  42
  44
  45
  47
  49
  51
  53
  55
  58
  60
  63
  65
  68
  71
  74
  78
  81
  85
Net income, $m
  35
  37
  39
  41
  43
  45
  48
  51
  54
  57
  106
  110
  114
  118
  123
  127
  132
  138
  143
  149
  155
  162
  169
  176
  184
  192
  201
  210
  219
  229

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
  1,070
  1,094
  1,123
  1,154
  1,189
  1,228
  1,269
  1,315
  1,363
  1,416
  1,472
  1,531
  1,595
  1,663
  1,734
  1,810
  1,891
  1,976
  2,066
  2,161
  2,261
  2,366
  2,478
  2,595
  2,718
  2,849
  2,985
  3,130
  3,281
  3,440
Adjusted assets (=assets-cash), $m
  1,070
  1,094
  1,123
  1,154
  1,189
  1,228
  1,269
  1,315
  1,363
  1,416
  1,472
  1,531
  1,595
  1,663
  1,734
  1,810
  1,891
  1,976
  2,066
  2,161
  2,261
  2,366
  2,478
  2,595
  2,718
  2,849
  2,985
  3,130
  3,281
  3,440
Revenue / Adjusted assets
  0.430
  0.431
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
  0.430
Average production assets, $m
  734
  751
  770
  792
  816
  842
  871
  902
  936
  972
  1,010
  1,051
  1,095
  1,141
  1,190
  1,242
  1,298
  1,356
  1,418
  1,483
  1,551
  1,624
  1,700
  1,781
  1,866
  1,955
  2,049
  2,148
  2,252
  2,361
Working capital, $m
  -55
  -56
  -57
  -59
  -61
  -63
  -65
  -67
  -70
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -97
  -101
  -106
  -111
  -116
  -121
  -127
  -133
  -139
  -146
  -153
  -160
  -168
  -176
Total debt, $m
  99
  108
  119
  132
  145
  160
  176
  194
  213
  233
  255
  278
  303
  329
  357
  386
  417
  450
  485
  522
  561
  602
  645
  691
  739
  789
  842
  898
  957
  1,019
Total liabilities, $m
  415
  425
  436
  448
  461
  476
  492
  510
  529
  549
  571
  594
  619
  645
  673
  702
  734
  767
  801
  838
  877
  918
  961
  1,007
  1,055
  1,105
  1,158
  1,214
  1,273
  1,335
Total equity, $m
  655
  670
  687
  706
  728
  751
  777
  805
  834
  866
  901
  937
  976
  1,017
  1,061
  1,108
  1,157
  1,209
  1,264
  1,322
  1,384
  1,448
  1,516
  1,588
  1,664
  1,743
  1,827
  1,915
  2,008
  2,106
Total liabilities and equity, $m
  1,070
  1,095
  1,123
  1,154
  1,189
  1,227
  1,269
  1,315
  1,363
  1,415
  1,472
  1,531
  1,595
  1,662
  1,734
  1,810
  1,891
  1,976
  2,065
  2,160
  2,261
  2,366
  2,477
  2,595
  2,719
  2,848
  2,985
  3,129
  3,281
  3,441
Debt-to-equity ratio
  0.150
  0.160
  0.170
  0.190
  0.200
  0.210
  0.230
  0.240
  0.250
  0.270
  0.280
  0.300
  0.310
  0.320
  0.340
  0.350
  0.360
  0.370
  0.380
  0.390
  0.410
  0.420
  0.430
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.480
Adjusted equity ratio
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612
  0.612

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  35
  37
  39
  41
  43
  45
  48
  51
  54
  57
  106
  110
  114
  118
  123
  127
  132
  138
  143
  149
  155
  162
  169
  176
  184
  192
  201
  210
  219
  229
Depreciation, amort., depletion, $m
  141
  143
  145
  147
  150
  152
  155
  159
  162
  166
  107
  112
  116
  121
  127
  132
  138
  144
  151
  158
  165
  173
  181
  189
  198
  208
  218
  228
  240
  251
Funds from operations, $m
  176
  179
  183
  188
  192
  198
  203
  209
  216
  223
  214
  222
  230
  240
  249
  260
  270
  282
  294
  307
  321
  335
  350
  366
  382
  400
  419
  438
  459
  480
Change in working capital, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
Cash from operations, $m
  177
  181
  185
  189
  194
  200
  205
  212
  218
  226
  217
  225
  234
  243
  253
  263
  275
  286
  299
  312
  326
  340
  356
  372
  389
  407
  426
  445
  466
  488
Maintenance CAPEX, $m
  -77
  -78
  -80
  -82
  -84
  -87
  -90
  -93
  -96
  -100
  -103
  -107
  -112
  -116
  -121
  -127
  -132
  -138
  -144
  -151
  -158
  -165
  -173
  -181
  -189
  -198
  -208
  -218
  -228
  -240
New CAPEX, $m
  -15
  -17
  -19
  -22
  -24
  -26
  -29
  -31
  -33
  -36
  -38
  -41
  -44
  -46
  -49
  -52
  -55
  -58
  -62
  -65
  -69
  -72
  -76
  -80
  -85
  -89
  -94
  -99
  -104
  -109
Cash from investing activities, $m
  -92
  -95
  -99
  -104
  -108
  -113
  -119
  -124
  -129
  -136
  -141
  -148
  -156
  -162
  -170
  -179
  -187
  -196
  -206
  -216
  -227
  -237
  -249
  -261
  -274
  -287
  -302
  -317
  -332
  -349
Free cash flow, $m
  86
  86
  85
  86
  86
  86
  87
  88
  89
  90
  75
  76
  78
  80
  82
  85
  87
  90
  93
  96
  99
  103
  106
  110
  115
  119
  124
  129
  134
  139
Issuance/(repayment) of debt, $m
  8
  10
  11
  12
  14
  15
  16
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  43
  46
  48
  50
  53
  56
  59
  62
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  8
  10
  11
  12
  14
  15
  16
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  43
  46
  48
  50
  53
  56
  59
  62
Total cash flow (excl. dividends), $m
  94
  95
  96
  98
  99
  101
  103
  106
  108
  111
  97
  100
  103
  106
  110
  114
  118
  123
  128
  133
  138
  144
  150
  156
  162
  169
  177
  185
  193
  201
Retained Cash Flow (-), $m
  -12
  -15
  -17
  -19
  -21
  -23
  -26
  -28
  -30
  -32
  -34
  -37
  -39
  -41
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -76
  -80
  -84
  -88
  -93
  -98
Prev. year cash balance distribution, $m
  53
  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
  135
  80
  79
  78
  78
  78
  78
  78
  78
  79
  62
  63
  64
  65
  66
  68
  69
  71
  73
  75
  77
  79
  81
  84
  87
  90
  93
  96
  100
  104
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
  129
  73
  69
  65
  60
  56
  52
  49
  45
  41
  30
  27
  24
  22
  19
  17
  15
  13
  11
  9
  8
  7
  5
  4
  3
  3
  2
  1
  1
  1
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
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ATN International, Inc. (ATN), formerly Atlantic Tele-Network, Inc., is a holding company. The Company's segments include U.S. Telecom, International Telecom and Renewable Energy. In the United States, it provides wholesale wireless voice and data roaming services in rural markets to national, regional, local and selected international wireless carriers. Its wholesale networks are located principally in the western United States. It provides wireless voice and data service to retail and business customers in Bermuda under the One name, in Guyana under the GTT name and in the United States Virgin Islands under the Innovative and Choice brand names. The Company offers voice services that include local exchange, regional and long distance calling and voice messaging services in Bermuda, Guyana, the United States Virgin Islands, and in other smaller markets in the Caribbean and the United States. It offers services, which include Wireless, Wireline and Renewable Energy.

FINANCIAL RATIOS  of  ATN International, Inc. (ATNI)

Valuation Ratios
P/E Ratio 74.2
Price to Sales 1.9
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 7.9
Price to Free Cash Flow -38.7
Growth Rates
Sales Growth Rate 28.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 107.7%
Cap. Spend. - 3 Yr. Gr. Rate 14.4%
Financial Strength
Quick Ratio 23
Current Ratio 0
LT Debt to Equity 21.4%
Total Debt to Equity 23.2%
Interest Coverage 12
Management Effectiveness
Return On Assets 1.3%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital 1.6%
Ret/ On T. Cap. - 3 Yr. Avg. 3.7%
Return On Equity 1.8%
Return On Equity - 3 Yr. Avg. 3.8%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 71.3%
Gross Margin - 3 Yr. Avg. 73.7%
EBITDA Margin 27.4%
EBITDA Margin - 3 Yr. Avg. 33.9%
Operating Margin 10.9%
Oper. Margin - 3 Yr. Avg. 19.4%
Pre-Tax Margin 9.8%
Pre-Tax Margin - 3 Yr. Avg. 17.1%
Net Profit Margin 2.6%
Net Profit Margin - 3 Yr. Avg. 7.2%
Effective Tax Rate 46.7%
Eff/ Tax Rate - 3 Yr. Avg. 40.7%
Payout Ratio 175%

ATNI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATNI stock intrinsic value calculation we used $451 million for the last fiscal year's total revenue generated by ATN International, Inc.. The default revenue input number comes from 0001 income statement of ATN International, Inc.. 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 ATNI 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 4.3%, whose default value for ATNI is calculated based on our internal credit rating of ATN International, Inc., 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 ATN International, Inc..
    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 ATNI stock the variable cost ratio is equal to 88.5%.

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 ATNI 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 6.5% for ATN International, Inc..

Corporate tax rate of 27% is the nominal tax rate for ATN International, Inc.. 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 ATNI 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 ATNI are equal to 159.6%.

Life of production assets of 9.4 years is the average useful life of capital assets used in ATN International, Inc. 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 ATNI is equal to -11.9%. 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 - $695.387 million for ATN International, Inc. - 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 16.003 million for ATN International, Inc. 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 ATN International, Inc. at the current share price and the inputted number of shares is $0.9 billion.

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