Intrinsic value of Cool Holdings Inc. - AWSM

Previous Close

$1.70

  Intrinsic Value

$9.67

stock screener

  Rating & Target

str. buy

+469%

Previous close

$1.70

 
Intrinsic value

$9.67

 
Up/down potential

+469%

 
Rating

str. buy

We calculate the intrinsic value of AWSM 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  37
  57
  85
  123
  174
  239
  321
  422
  543
  685
  851
  1,041
  1,254
  1,492
  1,755
  2,041
  2,351
  2,685
  3,041
  3,418
  3,818
  4,239
  4,680
  5,142
  5,625
  6,128
  6,653
  7,198
  7,765
  8,354
Variable operating expenses, $m
  30
  47
  70
  102
  144
  198
  265
  348
  448
  566
  703
  860
  1,036
  1,233
  1,449
  1,686
  1,942
  2,218
  2,511
  2,824
  3,154
  3,501
  3,866
  4,248
  4,646
  5,062
  5,495
  5,945
  6,414
  6,901
Fixed operating expenses, $m
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
Total operating expenses, $m
  38
  55
  79
  111
  153
  207
  274
  358
  458
  576
  713
  870
  1,047
  1,244
  1,460
  1,697
  1,954
  2,230
  2,523
  2,836
  3,167
  3,514
  3,879
  4,261
  4,660
  5,076
  5,509
  5,960
  6,429
  6,916
Operating income, $m
  -2
  2
  6
  13
  21
  33
  47
  64
  85
  109
  138
  171
  208
  249
  294
  344
  398
  455
  517
  582
  652
  725
  801
  881
  965
  1,052
  1,143
  1,238
  1,336
  1,438
EBITDA, $m
  -2
  2
  7
  13
  22
  33
  48
  65
  87
  112
  141
  175
  212
  254
  301
  352
  406
  465
  528
  595
  666
  741
  819
  901
  986
  1,075
  1,168
  1,265
  1,365
  1,470
Interest expense (income), $m
  0
  1
  1
  2
  3
  5
  8
  11
  15
  19
  25
  32
  40
  49
  59
  70
  83
  96
  111
  127
  144
  162
  181
  201
  221
  243
  266
  290
  315
  341
  368
Earnings before tax, $m
  -2
  0
  4
  9
  16
  25
  36
  49
  65
  84
  106
  131
  159
  190
  224
  261
  301
  344
  390
  439
  490
  544
  601
  660
  722
  786
  853
  923
  995
  1,070
Tax expense, $m
  0
  0
  1
  3
  4
  7
  10
  13
  18
  23
  29
  35
  43
  51
  61
  71
  81
  93
  105
  118
  132
  147
  162
  178
  195
  212
  230
  249
  269
  289
Net income, $m
  -2
  0
  3
  7
  12
  18
  26
  36
  48
  61
  77
  96
  116
  139
  164
  191
  220
  251
  285
  320
  358
  397
  438
  482
  527
  574
  623
  674
  726
  781

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
  36
  56
  83
  120
  170
  234
  314
  412
  530
  669
  831
  1,016
  1,225
  1,457
  1,714
  1,993
  2,296
  2,622
  2,969
  3,338
  3,728
  4,139
  4,570
  5,022
  5,493
  5,985
  6,497
  7,029
  7,583
  8,159
Adjusted assets (=assets-cash), $m
  36
  56
  83
  120
  170
  234
  314
  412
  530
  669
  831
  1,016
  1,225
  1,457
  1,714
  1,993
  2,296
  2,622
  2,969
  3,338
  3,728
  4,139
  4,570
  5,022
  5,493
  5,985
  6,497
  7,029
  7,583
  8,159
Revenue / Adjusted assets
  1.028
  1.018
  1.024
  1.025
  1.024
  1.021
  1.022
  1.024
  1.025
  1.024
  1.024
  1.025
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
  1.024
Average production assets, $m
  3
  5
  7
  11
  15
  21
  28
  37
  48
  60
  75
  92
  110
  131
  154
  180
  207
  236
  268
  301
  336
  373
  412
  453
  495
  539
  585
  633
  683
  735
Working capital, $m
  2
  3
  5
  7
  10
  14
  19
  25
  33
  41
  51
  62
  75
  90
  105
  122
  141
  161
  182
  205
  229
  254
  281
  309
  337
  368
  399
  432
  466
  501
Total debt, $m
  20
  38
  63
  96
  141
  198
  270
  359
  465
  590
  736
  903
  1,090
  1,300
  1,530
  1,782
  2,055
  2,347
  2,660
  2,992
  3,344
  3,713
  4,101
  4,507
  4,932
  5,374
  5,835
  6,314
  6,813
  7,331
Total liabilities, $m
  32
  50
  75
  108
  153
  210
  282
  371
  477
  602
  748
  915
  1,102
  1,312
  1,542
  1,794
  2,067
  2,360
  2,672
  3,004
  3,356
  3,725
  4,113
  4,520
  4,944
  5,386
  5,847
  6,326
  6,825
  7,343
Total equity, $m
  4
  6
  8
  12
  17
  23
  31
  41
  53
  67
  83
  102
  122
  146
  171
  199
  230
  262
  297
  334
  373
  414
  457
  502
  549
  598
  650
  703
  758
  816
Total liabilities and equity, $m
  36
  56
  83
  120
  170
  233
  313
  412
  530
  669
  831
  1,017
  1,224
  1,458
  1,713
  1,993
  2,297
  2,622
  2,969
  3,338
  3,729
  4,139
  4,570
  5,022
  5,493
  5,984
  6,497
  7,029
  7,583
  8,159
Debt-to-equity ratio
  5.630
  6.820
  7.540
  7.990
  8.290
  8.480
  8.610
  8.710
  8.770
  8.820
  8.850
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
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
  -2
  0
  3
  7
  12
  18
  26
  36
  48
  61
  77
  96
  116
  139
  164
  191
  220
  251
  285
  320
  358
  397
  438
  482
  527
  574
  623
  674
  726
  781
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  5
  6
  7
  8
  9
  10
  11
  13
  14
  16
  18
  19
  21
  23
  25
  27
  29
  31
Funds from operations, $m
  -2
  1
  3
  7
  12
  19
  27
  38
  50
  64
  81
  100
  121
  144
  170
  198
  229
  261
  296
  333
  372
  413
  456
  501
  548
  597
  648
  701
  756
  813
Change in working capital, $m
  1
  1
  2
  2
  3
  4
  5
  6
  7
  9
  10
  11
  13
  14
  16
  17
  19
  20
  21
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  35
Cash from operations, $m
  -3
  -1
  2
  5
  9
  15
  22
  32
  42
  55
  71
  88
  108
  130
  154
  181
  210
  241
  275
  311
  348
  388
  430
  473
  519
  567
  616
  668
  722
  777
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
New CAPEX, $m
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
Cash from investing activities, $m
  -1
  -2
  -2
  -3
  -4
  -7
  -8
  -10
  -13
  -15
  -18
  -20
  -23
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -48
  -51
  -55
  -59
  -61
  -65
  -69
  -73
  -77
  -81
Free cash flow, $m
  -4
  -3
  -1
  1
  4
  9
  14
  21
  30
  41
  54
  68
  85
  104
  126
  149
  175
  203
  234
  266
  300
  336
  375
  415
  457
  501
  547
  595
  645
  696
Issuance/(repayment) of debt, $m
  8
  18
  25
  34
  45
  57
  72
  88
  106
  125
  146
  167
  188
  209
  231
  252
  273
  293
  313
  332
  351
  370
  388
  406
  424
  442
  461
  479
  498
  518
Issuance/(repurchase) of shares, $m
  8
  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
Cash from financing (excl. dividends), $m  
  16
  20
  25
  34
  45
  57
  72
  88
  106
  125
  146
  167
  188
  209
  231
  252
  273
  293
  313
  332
  351
  370
  388
  406
  424
  442
  461
  479
  498
  518
Total cash flow (excl. dividends), $m
  12
  17
  24
  35
  49
  66
  86
  110
  137
  166
  199
  235
  273
  314
  356
  401
  448
  496
  546
  598
  651
  706
  763
  821
  881
  944
  1,008
  1,074
  1,143
  1,214
Retained Cash Flow (-), $m
  -8
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -16
  -19
  -21
  -23
  -26
  -28
  -30
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
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
  3
  15
  21
  31
  44
  60
  78
  100
  125
  152
  183
  216
  252
  290
  331
  373
  418
  464
  512
  561
  612
  665
  720
  776
  834
  894
  957
  1,021
  1,088
  1,157
Discount rate, %
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
  32.85
  34.49
  36.21
  38.02
  39.93
  41.92
  44.02
  46.22
  48.53
  50.96
  53.50
  56.18
  58.99
  61.94
  65.03
PV of cash for distribution, $m
  3
  11
  13
  16
  18
  20
  20
  20
  19
  17
  15
  12
  10
  8
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  34.4
  34.4
  34.4
  34.4
  34.4
  34.4
  34.4
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FINANCIAL RATIOS  of  Cool Holdings Inc. (AWSM)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

AWSM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AWSM stock intrinsic value calculation we used $23 million for the last fiscal year's total revenue generated by Cool Holdings Inc.. The default revenue input number comes from 0001 income statement of Cool Holdings 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 AWSM stock valuation model: a) initial revenue growth rate of 60% 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 15.8%, whose default value for AWSM is calculated based on our internal credit rating of Cool Holdings 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 Cool Holdings 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 AWSM stock the variable cost ratio is equal to 82.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8 million in the base year in the intrinsic value calculation for AWSM 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 Cool Holdings Inc..

Corporate tax rate of 27% is the nominal tax rate for Cool Holdings 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 AWSM 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 AWSM are equal to 8.8%.

Life of production assets of 23.4 years is the average useful life of capital assets used in Cool Holdings 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 AWSM is equal to 6%. 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 - $-2.335 million for Cool Holdings 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 7.792 million for Cool Holdings 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 Cool Holdings Inc. at the current share price and the inputted number of shares is $0.0 billion.

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