Intrinsic value of Boston Omaha Corporation - BOMN

Previous Close

$22.94

  Intrinsic Value

$1.57

stock screener

  Rating & Target

str. sell

-93%

Previous close

$22.94

 
Intrinsic value

$1.57

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of BOMN 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 0.5

 

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
  14
  22
  33
  48
  68
  94
  126
  165
  212
  268
  333
  407
  491
  584
  687
  799
  920
  1,051
  1,190
  1,338
  1,494
  1,659
  1,831
  2,012
  2,201
  2,398
  2,603
  2,817
  3,038
  3,269
Variable operating expenses, $m
  23
  36
  53
  77
  108
  148
  198
  260
  334
  421
  522
  638
  769
  915
  1,076
  1,252
  1,442
  1,646
  1,864
  2,096
  2,341
  2,599
  2,870
  3,153
  3,449
  3,758
  4,079
  4,414
  4,761
  5,123
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
  23
  36
  53
  77
  108
  148
  198
  260
  334
  421
  522
  638
  769
  915
  1,076
  1,252
  1,442
  1,646
  1,864
  2,096
  2,341
  2,599
  2,870
  3,153
  3,449
  3,758
  4,079
  4,414
  4,761
  5,123
Operating income, $m
  -9
  -14
  -20
  -28
  -40
  -54
  -72
  -94
  -121
  -153
  -189
  -231
  -278
  -331
  -389
  -453
  -522
  -596
  -675
  -758
  -847
  -940
  -1,038
  -1,141
  -1,248
  -1,360
  -1,476
  -1,597
  -1,723
  -1,854
EBITDA, $m
  -5
  -8
  -11
  -17
  -23
  -32
  -43
  -56
  -73
  -92
  -114
  -139
  -168
  -200
  -235
  -273
  -315
  -359
  -407
  -458
  -511
  -568
  -627
  -689
  -753
  -821
  -891
  -964
  -1,040
  -1,119
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  2
  3
  4
  6
  8
  10
  12
  15
  18
  22
  26
  30
  35
  40
  45
  50
  56
  63
  69
  76
  83
  91
  99
  107
  115
Earnings before tax, $m
  -9
  -14
  -20
  -29
  -41
  -56
  -75
  -99
  -127
  -161
  -199
  -243
  -293
  -349
  -411
  -479
  -552
  -630
  -714
  -803
  -898
  -997
  -1,101
  -1,210
  -1,324
  -1,443
  -1,567
  -1,696
  -1,830
  -1,969
Tax expense, $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
Net income, $m
  -9
  -14
  -20
  -29
  -41
  -56
  -75
  -99
  -127
  -161
  -199
  -243
  -293
  -349
  -411
  -479
  -552
  -630
  -714
  -803
  -898
  -997
  -1,101
  -1,210
  -1,324
  -1,443
  -1,567
  -1,696
  -1,830
  -1,969

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
  107
  165
  246
  358
  505
  694
  931
  1,222
  1,573
  1,987
  2,467
  3,016
  3,636
  4,326
  5,086
  5,917
  6,816
  7,782
  8,813
  9,909
  11,067
  12,286
  13,566
  14,905
  16,304
  17,763
  19,283
  20,863
  22,507
  24,216
Adjusted assets (=assets-cash), $m
  107
  165
  246
  358
  505
  694
  931
  1,222
  1,573
  1,987
  2,467
  3,016
  3,636
  4,326
  5,086
  5,917
  6,816
  7,782
  8,813
  9,909
  11,067
  12,286
  13,566
  14,905
  16,304
  17,763
  19,283
  20,863
  22,507
  24,216
Revenue / Adjusted assets
  0.131
  0.133
  0.134
  0.134
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
  0.135
Average production assets, $m
  34
  52
  78
  113
  159
  219
  294
  386
  496
  627
  779
  952
  1,148
  1,365
  1,605
  1,868
  2,151
  2,456
  2,782
  3,127
  3,493
  3,878
  4,282
  4,704
  5,146
  5,607
  6,086
  6,585
  7,104
  7,643
Working capital, $m
  -5
  -8
  -12
  -17
  -24
  -33
  -44
  -58
  -75
  -95
  -118
  -144
  -173
  -206
  -242
  -282
  -325
  -371
  -420
  -472
  -527
  -585
  -646
  -710
  -777
  -847
  -919
  -994
  -1,073
  -1,154
Total debt, $m
  4
  9
  17
  28
  42
  60
  82
  110
  143
  182
  228
  280
  339
  405
  477
  556
  641
  733
  831
  935
  1,045
  1,161
  1,282
  1,410
  1,543
  1,681
  1,826
  1,976
  2,132
  2,294
Total liabilities, $m
  10
  16
  23
  34
  48
  66
  88
  116
  149
  189
  234
  287
  345
  411
  483
  562
  647
  739
  837
  941
  1,051
  1,167
  1,289
  1,416
  1,549
  1,688
  1,832
  1,982
  2,138
  2,300
Total equity, $m
  97
  149
  223
  324
  457
  628
  843
  1,106
  1,424
  1,798
  2,233
  2,730
  3,290
  3,915
  4,603
  5,355
  6,168
  7,042
  7,976
  8,967
  10,015
  11,119
  12,277
  13,489
  14,755
  16,076
  17,451
  18,881
  20,369
  21,915
Total liabilities and equity, $m
  107
  165
  246
  358
  505
  694
  931
  1,222
  1,573
  1,987
  2,467
  3,017
  3,635
  4,326
  5,086
  5,917
  6,815
  7,781
  8,813
  9,908
  11,066
  12,286
  13,566
  14,905
  16,304
  17,764
  19,283
  20,863
  22,507
  24,215
Debt-to-equity ratio
  0.040
  0.060
  0.080
  0.090
  0.090
  0.090
  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
Adjusted equity ratio
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905
  0.905

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -9
  -14
  -20
  -29
  -41
  -56
  -75
  -99
  -127
  -161
  -199
  -243
  -293
  -349
  -411
  -479
  -552
  -630
  -714
  -803
  -898
  -997
  -1,101
  -1,210
  -1,324
  -1,443
  -1,567
  -1,696
  -1,830
  -1,969
Depreciation, amort., depletion, $m
  4
  6
  8
  12
  16
  22
  29
  38
  49
  61
  75
  92
  110
  131
  154
  180
  207
  236
  267
  301
  336
  373
  412
  452
  495
  539
  585
  633
  683
  735
Funds from operations, $m
  -5
  -8
  -12
  -17
  -25
  -34
  -46
  -61
  -79
  -100
  -124
  -152
  -183
  -218
  -257
  -299
  -345
  -394
  -447
  -503
  -562
  -624
  -689
  -758
  -829
  -904
  -982
  -1,062
  -1,146
  -1,234
Change in working capital, $m
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -17
  -20
  -23
  -26
  -30
  -33
  -36
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -72
  -75
  -78
  -81
Cash from operations, $m
  -3
  -5
  -8
  -12
  -18
  -25
  -35
  -47
  -62
  -80
  -101
  -125
  -154
  -185
  -221
  -260
  -302
  -348
  -398
  -450
  -507
  -566
  -628
  -694
  -763
  -834
  -909
  -987
  -1,068
  -1,152
Maintenance CAPEX, $m
  -2
  -3
  -5
  -7
  -11
  -15
  -21
  -28
  -37
  -48
  -60
  -75
  -92
  -110
  -131
  -154
  -180
  -207
  -236
  -267
  -301
  -336
  -373
  -412
  -452
  -495
  -539
  -585
  -633
  -683
New CAPEX, $m
  -13
  -18
  -26
  -35
  -46
  -60
  -75
  -92
  -111
  -131
  -152
  -173
  -195
  -218
  -240
  -262
  -284
  -305
  -326
  -346
  -365
  -385
  -404
  -423
  -442
  -460
  -480
  -499
  -519
  -539
Cash from investing activities, $m
  -15
  -21
  -31
  -42
  -57
  -75
  -96
  -120
  -148
  -179
  -212
  -248
  -287
  -328
  -371
  -416
  -464
  -512
  -562
  -613
  -666
  -721
  -777
  -835
  -894
  -955
  -1,019
  -1,084
  -1,152
  -1,222
Free cash flow, $m
  -18
  -27
  -39
  -55
  -75
  -100
  -131
  -167
  -210
  -258
  -313
  -374
  -441
  -513
  -592
  -676
  -765
  -860
  -959
  -1,064
  -1,173
  -1,287
  -1,405
  -1,528
  -1,657
  -1,790
  -1,928
  -2,071
  -2,220
  -2,375
Issuance/(repayment) of debt, $m
  4
  6
  8
  11
  14
  18
  23
  28
  33
  39
  46
  52
  59
  66
  72
  79
  85
  92
  98
  104
  110
  116
  122
  127
  133
  139
  144
  150
  156
  162
Issuance/(repurchase) of shares, $m
  45
  66
  94
  130
  174
  227
  290
  363
  444
  535
  633
  740
  854
  974
  1,100
  1,230
  1,365
  1,504
  1,648
  1,795
  1,946
  2,100
  2,259
  2,422
  2,590
  2,763
  2,942
  3,126
  3,317
  3,515
Cash from financing (excl. dividends), $m  
  49
  72
  102
  141
  188
  245
  313
  391
  477
  574
  679
  792
  913
  1,040
  1,172
  1,309
  1,450
  1,596
  1,746
  1,899
  2,056
  2,216
  2,381
  2,549
  2,723
  2,902
  3,086
  3,276
  3,473
  3,677
Total cash flow (excl. dividends), $m
  32
  45
  63
  86
  113
  145
  182
  223
  268
  316
  366
  419
  472
  526
  580
  633
  685
  736
  786
  835
  883
  930
  976
  1,021
  1,067
  1,112
  1,158
  1,205
  1,253
  1,302
Retained Cash Flow (-), $m
  -45
  -66
  -94
  -130
  -174
  -227
  -290
  -363
  -444
  -535
  -633
  -740
  -854
  -974
  -1,100
  -1,230
  -1,365
  -1,504
  -1,648
  -1,795
  -1,946
  -2,100
  -2,259
  -2,422
  -2,590
  -2,763
  -2,942
  -3,126
  -3,317
  -3,515
Prev. year cash balance distribution, $m
  87
  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
  73
  -21
  -31
  -44
  -61
  -82
  -108
  -140
  -176
  -219
  -267
  -322
  -382
  -448
  -520
  -597
  -680
  -768
  -861
  -960
  -1,063
  -1,171
  -1,284
  -1,401
  -1,524
  -1,651
  -1,783
  -1,921
  -2,064
  -2,212
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
  70
  -19
  -27
  -36
  -47
  -60
  -73
  -87
  -101
  -115
  -127
  -137
  -145
  -150
  -153
  -152
  -148
  -141
  -133
  -122
  -110
  -97
  -84
  -71
  -59
  -48
  -38
  -30
  -23
  -17
Current shareholders' claim on cash, %
  82.0
  68.4
  57.8
  49.4
  42.7
  37.3
  32.9
  29.2
  26.2
  23.6
  21.4
  19.5
  17.9
  16.5
  15.2
  14.1
  13.2
  12.3
  11.5
  10.8
  10.2
  9.6
  9.0
  8.6
  8.1
  7.7
  7.3
  6.9
  6.6
  6.3

Boston Omaha Corporation is engaged in the business of various sectors, including advertising, insurance, and real estate. The Company's operations include its ownership of multiple billboards in Alabama, Florida, Georgia, and Wisconsin, and equity method investments in several real estate and real estate service companies. The Company's insurance operations are conducted through its subsidiary, General Indemnity Group, LLC. The Company's operations include both the billboard advertising business and an insurance business that specializes in surety bonds. The Company's subsidiaries include Link Media Holdings, LLC and General Indemnity Direct Insurance Services, LLC.

FINANCIAL RATIOS  of  Boston Omaha Corporation (BOMN)

Valuation Ratios
P/E Ratio -52.8
Price to Sales 39.6
Price to Book 2.6
Price to Tangible Book
Price to Cash Flow -158.3
Price to Free Cash Flow -79.1
Growth Rates
Sales Growth Rate 300%
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 16
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 3.2%
Interest Coverage 0
Management Effectiveness
Return On Assets -6.7%
Ret/ On Assets - 3 Yr. Avg. -5%
Return On Total Capital -6.8%
Ret/ On T. Cap. - 3 Yr. Avg. -5.1%
Return On Equity -7%
Return On Equity - 3 Yr. Avg. -5.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 75%
Gross Margin - 3 Yr. Avg. 25%
EBITDA Margin -25%
EBITDA Margin - 3 Yr. Avg. -41.7%
Operating Margin -75%
Oper. Margin - 3 Yr. Avg. -58.3%
Pre-Tax Margin -75%
Pre-Tax Margin - 3 Yr. Avg. -58.3%
Net Profit Margin -75%
Net Profit Margin - 3 Yr. Avg. -58.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

BOMN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BOMN stock intrinsic value calculation we used $9 million for the last fiscal year's total revenue generated by Boston Omaha Corporation. The default revenue input number comes from 0001 income statement of Boston Omaha Corporation. 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 BOMN 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 4.3%, whose default value for BOMN is calculated based on our internal credit rating of Boston Omaha Corporation, 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 Boston Omaha Corporation.
    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 BOMN stock the variable cost ratio is equal to 166.7%.

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 BOMN 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 Boston Omaha Corporation.

Corporate tax rate of 27% is the nominal tax rate for Boston Omaha Corporation. 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 BOMN 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 BOMN are equal to 233.8%.

Life of production assets of 10.4 years is the average useful life of capital assets used in Boston Omaha Corporation 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 BOMN is equal to -35.3%. 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 - $147.153686 million for Boston Omaha Corporation - 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 22.063 million for Boston Omaha Corporation 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 Boston Omaha Corporation at the current share price and the inputted number of shares is $0.5 billion.

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