Intrinsic value of Beasley Broadcast Group Cl A - BBGI

Previous Close

$6.35

  Intrinsic Value

$86.35

stock screener

  Rating & Target

str. buy

+999%

Previous close

$6.35

 
Intrinsic value

$86.35

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of BBGI 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 0.1

 

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
  237
  242
  248
  255
  263
  272
  281
  291
  302
  313
  326
  339
  353
  368
  384
  401
  419
  437
  457
  478
  500
  524
  548
  574
  602
  631
  661
  693
  726
  762
Variable operating expenses, $m
  130
  132
  134
  136
  139
  141
  144
  148
  151
  155
  109
  113
  118
  123
  128
  134
  140
  146
  153
  160
  167
  175
  183
  192
  201
  211
  221
  232
  243
  255
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
  130
  132
  134
  136
  139
  141
  144
  148
  151
  155
  109
  113
  118
  123
  128
  134
  140
  146
  153
  160
  167
  175
  183
  192
  201
  211
  221
  232
  243
  255
Operating income, $m
  107
  111
  115
  120
  125
  130
  136
  143
  150
  158
  217
  226
  235
  245
  255
  267
  279
  291
  304
  318
  333
  349
  365
  382
  400
  420
  440
  461
  483
  507
EBITDA, $m
  168
  172
  176
  181
  187
  193
  199
  207
  214
  222
  231
  241
  251
  261
  273
  284
  297
  310
  325
  340
  355
  372
  389
  408
  427
  448
  469
  492
  516
  541
Interest expense (income), $m
  6
  17
  18
  18
  19
  20
  21
  22
  23
  24
  26
  27
  29
  30
  32
  34
  36
  38
  40
  43
  45
  48
  51
  54
  57
  60
  63
  67
  71
  75
  79
Earnings before tax, $m
  90
  93
  97
  100
  105
  109
  115
  120
  126
  132
  190
  197
  205
  213
  221
  231
  240
  251
  262
  273
  285
  298
  311
  326
  340
  356
  373
  390
  408
  428
Tax expense, $m
  24
  25
  26
  27
  28
  30
  31
  32
  34
  36
  51
  53
  55
  57
  60
  62
  65
  68
  71
  74
  77
  80
  84
  88
  92
  96
  101
  105
  110
  115
Net income, $m
  66
  68
  71
  73
  76
  80
  84
  88
  92
  97
  138
  144
  149
  155
  162
  168
  175
  183
  191
  199
  208
  217
  227
  238
  249
  260
  272
  285
  298
  312

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
  669
  684
  702
  722
  744
  768
  794
  822
  853
  885
  920
  958
  997
  1,040
  1,084
  1,132
  1,182
  1,236
  1,292
  1,351
  1,414
  1,480
  1,549
  1,623
  1,700
  1,781
  1,867
  1,957
  2,052
  2,151
Adjusted assets (=assets-cash), $m
  669
  684
  702
  722
  744
  768
  794
  822
  853
  885
  920
  958
  997
  1,040
  1,084
  1,132
  1,182
  1,236
  1,292
  1,351
  1,414
  1,480
  1,549
  1,623
  1,700
  1,781
  1,867
  1,957
  2,052
  2,151
Revenue / Adjusted assets
  0.354
  0.354
  0.353
  0.353
  0.353
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
  0.354
Average production assets, $m
  315
  322
  331
  340
  350
  362
  374
  387
  402
  417
  434
  451
  470
  490
  511
  533
  557
  582
  609
  637
  666
  697
  730
  765
  801
  839
  880
  922
  967
  1,014
Working capital, $m
  45
  46
  47
  49
  50
  52
  53
  55
  57
  60
  62
  64
  67
  70
  73
  76
  80
  83
  87
  91
  95
  100
  104
  109
  114
  120
  126
  132
  138
  145
Total debt, $m
  223
  232
  241
  253
  265
  278
  293
  309
  326
  345
  364
  385
  408
  432
  457
  484
  512
  542
  573
  607
  642
  679
  719
  760
  803
  849
  897
  948
  1,001
  1,057
Total liabilities, $m
  377
  385
  395
  406
  419
  432
  447
  463
  480
  498
  518
  539
  562
  585
  611
  637
  666
  696
  727
  761
  796
  833
  872
  914
  957
  1,003
  1,051
  1,102
  1,155
  1,211
Total equity, $m
  292
  299
  307
  315
  325
  335
  347
  359
  373
  387
  402
  418
  436
  454
  474
  495
  517
  540
  564
  590
  618
  647
  677
  709
  743
  778
  816
  855
  897
  940
Total liabilities and equity, $m
  669
  684
  702
  721
  744
  767
  794
  822
  853
  885
  920
  957
  998
  1,039
  1,085
  1,132
  1,183
  1,236
  1,291
  1,351
  1,414
  1,480
  1,549
  1,623
  1,700
  1,781
  1,867
  1,957
  2,052
  2,151
Debt-to-equity ratio
  0.760
  0.770
  0.790
  0.800
  0.820
  0.830
  0.850
  0.860
  0.880
  0.890
  0.910
  0.920
  0.940
  0.950
  0.960
  0.980
  0.990
  1.000
  1.020
  1.030
  1.040
  1.050
  1.060
  1.070
  1.080
  1.090
  1.100
  1.110
  1.120
  1.120
Adjusted equity ratio
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437
  0.437

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  66
  68
  71
  73
  76
  80
  84
  88
  92
  97
  138
  144
  149
  155
  162
  168
  175
  183
  191
  199
  208
  217
  227
  238
  249
  260
  272
  285
  298
  312
Depreciation, amort., depletion, $m
  61
  61
  62
  62
  62
  63
  63
  63
  64
  64
  14
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
Funds from operations, $m
  127
  129
  132
  135
  139
  142
  147
  151
  156
  161
  153
  159
  165
  172
  179
  186
  194
  202
  211
  221
  230
  241
  252
  263
  275
  288
  301
  316
  330
  346
Change in working capital, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
Cash from operations, $m
  126
  128
  131
  134
  137
  141
  145
  149
  154
  159
  150
  156
  162
  169
  176
  183
  191
  199
  207
  217
  226
  236
  247
  258
  270
  283
  296
  309
  324
  339
Maintenance CAPEX, $m
  -10
  -11
  -11
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
New CAPEX, $m
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -45
  -47
Cash from investing activities, $m
  -16
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -37
  -39
  -42
  -44
  -45
  -48
  -51
  -53
  -56
  -59
  -61
  -65
  -68
  -71
  -76
  -79
Free cash flow, $m
  109
  110
  112
  114
  116
  118
  120
  123
  126
  130
  120
  124
  129
  133
  138
  143
  149
  155
  162
  168
  175
  183
  191
  199
  208
  218
  227
  238
  249
  260
Issuance/(repayment) of debt, $m
  8
  9
  10
  11
  12
  14
  15
  16
  17
  18
  20
  21
  22
  24
  25
  27
  28
  30
  32
  33
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
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
  9
  10
  11
  12
  14
  15
  16
  17
  18
  20
  21
  22
  24
  25
  27
  28
  30
  32
  33
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
Total cash flow (excl. dividends), $m
  117
  119
  122
  125
  128
  131
  135
  139
  144
  148
  140
  145
  151
  157
  163
  170
  177
  185
  193
  202
  211
  220
  230
  241
  252
  263
  276
  288
  302
  316
Retained Cash Flow (-), $m
  -6
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -34
  -36
  -37
  -39
  -41
  -44
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
  111
  112
  114
  116
  118
  121
  124
  127
  130
  134
  125
  129
  134
  139
  144
  149
  155
  162
  169
  176
  183
  191
  200
  209
  218
  228
  238
  249
  261
  273
Discount rate, %
  7.40
  7.77
  8.16
  8.57
  8.99
  9.44
  9.92
  10.41
  10.93
  11.48
  12.05
  12.66
  13.29
  13.95
  14.65
  15.38
  16.15
  16.96
  17.81
  18.70
  19.63
  20.62
  21.65
  22.73
  23.87
  25.06
  26.31
  27.63
  29.01
  30.46
PV of cash for distribution, $m
  104
  97
  90
  83
  77
  70
  64
  57
  51
  45
  36
  31
  26
  22
  18
  15
  12
  10
  7
  6
  4
  3
  2
  2
  1
  1
  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
  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

Beasley Broadcast Group, Inc. is a radio broadcasting company. The Company's primary business is operating radio stations throughout the United States. As of December 31, 2016, the Company owned and operated 63 radio stations in various radio markets, Atlanta and Augusta in Georgia; Boston, Massachusetts; Charlotte, North Carolina; Detroit, Michigan; Fayetteville, North Carolina; Fort Myers-Naples, Florida; Las Vegas, Nevada; Middlesex, New Jersey; Monmouth, New Jersey; Morristown, New Jersey; Philadelphia, Pennsylvania; Tampa-Saint Petersburg, Florida; West Palm Beach-Boca Raton, Florida, and Wilmington, Delaware. The Company operates its radio stations in clusters to capture a range of demographic listener groups.

FINANCIAL RATIOS  of  Beasley Broadcast Group Cl A (BBGI)

Valuation Ratios
P/E Ratio 3.9
Price to Sales 1.3
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 10.8
Price to Free Cash Flow 13.1
Growth Rates
Sales Growth Rate 29.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -15.6%
Financial Strength
Quick Ratio 3
Current Ratio 0.6
LT Debt to Equity 122.3%
Total Debt to Equity 125.7%
Interest Coverage 10
Management Effectiveness
Return On Assets 10.7%
Ret/ On Assets - 3 Yr. Avg. 9.5%
Return On Total Capital 13.9%
Ret/ On T. Cap. - 3 Yr. Avg. 11.7%
Return On Equity 28%
Return On Equity - 3 Yr. Avg. 22.7%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 29.2%
Gross Margin - 3 Yr. Avg. 29.3%
EBITDA Margin 49.6%
EBITDA Margin - 3 Yr. Avg. 26.7%
Operating Margin 45.3%
Oper. Margin - 3 Yr. Avg. 22.6%
Pre-Tax Margin 40.9%
Pre-Tax Margin - 3 Yr. Avg. 17.3%
Net Profit Margin 34.3%
Net Profit Margin - 3 Yr. Avg. 35.9%
Effective Tax Rate 16.1%
Eff/ Tax Rate - 3 Yr. Avg. 18.7%
Payout Ratio 8.5%

BBGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BBGI stock intrinsic value calculation we used $232.179463 million for the last fiscal year's total revenue generated by Beasley Broadcast Group Cl A. The default revenue input number comes from 0001 income statement of Beasley Broadcast Group Cl 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 BBGI 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 7.4%, whose default value for BBGI is calculated based on our internal credit rating of Beasley Broadcast Group Cl 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 Beasley Broadcast Group Cl 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 BBGI stock the variable cost ratio is equal to 55.2%.

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 BBGI 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 7.9% for Beasley Broadcast Group Cl A.

Corporate tax rate of 27% is the nominal tax rate for Beasley Broadcast Group Cl 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 BBGI 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 BBGI are equal to 133.1%.

Life of production assets of 91 years is the average useful life of capital assets used in Beasley Broadcast Group Cl 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 BBGI is equal to 19%. 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 - $286.1662 million for Beasley Broadcast Group Cl 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 10.844 million for Beasley Broadcast Group Cl 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 Beasley Broadcast Group Cl A at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Beasley: 3Q Earnings Snapshot   [Nov-02-18 07:26AM  Associated Press]
▶ Flyers renew radio broadcast deal with Beasley, The Fanatic   [Oct-03-18 01:08PM  American City Business Journals]
▶ 97.5 The Fanatic hires new morning show host, shifts Gargano to middays   [Oct-01-18 02:30PM  American City Business Journals]
▶ Beasley: 2Q Earnings Snapshot   [07:17AM  Associated Press]
▶ Owner of WMMR, WMGK and The Fanatic sees stock price plummet   [Jul-25-18 08:06AM  American City Business Journals]
▶ Why Beasley Broadcast Group Inc Stock Plunged Today   [Jul-24-18 02:01PM  Motley Fool]
▶ Why Florida-based Beasley bought Phila. country station WXTU 4 years after selling it   [Jul-19-18 02:15PM  American City Business Journals]
▶ 3 Top Stocks That Aren't on Wall Street's Radar   [Jul-15-18 06:16AM  Motley Fool]
▶ Why Beasley Broadcast Group Inc (NASDAQ:BBGI) Could Be A Buy   [Jun-22-18 10:00AM  Simply Wall St.]
▶ Ratings tampering trial for Tampa shock jock Bubba the Love Sponge set for June   [Jun-01-18 06:37AM  American City Business Journals]
▶ Beasley: 1Q Earnings Snapshot   [07:16AM  Associated Press]
▶ When Should You Buy BBGI Sicav SA. (LON:BBGI)?   [Mar-20-18 08:30AM  Simply Wall St.]
▶ Benzinga Pro's 5 Stocks To Watch Today   [Mar-05-18 08:42AM  Benzinga]
▶ Beasley posts 4Q profit   [07:55AM  Associated Press]
▶ 'Lightning rod' sports radio host signs multiyear deal with Beasley   [Jan-02-18 02:38PM  American City Business Journals]
▶ Entercom, CBS Radio to divest Boston radio stations as part of merger deal   [Nov-01-17 02:31PM  American City Business Journals]
▶ Does BBGI Sicav SAs (LSE:BBGI) PE Ratio Warrant A Buy?   [Oct-30-17 10:51AM  Simply Wall St.]
▶ Beasley posts 3Q profit   [07:13AM  Associated Press]
▶ REPEAT/Gabelli & Companys Broadcasting Symposium   [Aug-02-17 07:00AM  Business Wire]
▶ Beasley posts 2Q profit   [Jul-31-17 10:16PM  Associated Press]
▶ Gabelli & Companys Broadcasting Symposium   [Jul-20-17 07:00AM  Business Wire]
▶ Beasley posts 1Q profit   [May-03-17 05:02AM  Associated Press]

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