Intrinsic value of Boston Omaha - BOMN

Previous Close

$26.95

  Intrinsic Value

$1.35

stock screener

  Rating & Target

str. sell

-95%

Previous close

$26.95

 
Intrinsic value

$1.35

 
Up/down potential

-95%

 
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 0.6

 

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, %
  51.00
  46.40
  42.26
  38.53
  35.18
  32.16
  29.45
  27.00
  24.80
  22.82
  21.04
  19.44
  17.99
  16.69
  15.52
  14.47
  13.52
  12.67
  11.90
  11.21
  10.59
  10.03
  9.53
  9.08
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
Revenue, $m
  14
  20
  28
  39
  53
  70
  91
  115
  144
  177
  214
  256
  302
  352
  407
  465
  528
  595
  666
  741
  819
  902
  987
  1,077
  1,170
  1,268
  1,369
  1,474
  1,583
  1,696
Variable operating expenses, $m
  21
  29
  40
  54
  72
  94
  121
  152
  189
  231
  276
  330
  389
  454
  524
  600
  681
  768
  859
  955
  1,056
  1,162
  1,273
  1,389
  1,509
  1,634
  1,765
  1,900
  2,041
  2,187
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
  21
  29
  40
  54
  72
  94
  121
  152
  189
  231
  276
  330
  389
  454
  524
  600
  681
  768
  859
  955
  1,056
  1,162
  1,273
  1,389
  1,509
  1,634
  1,765
  1,900
  2,041
  2,187
Operating income, $m
  -7
  -9
  -12
  -15
  -19
  -24
  -30
  -37
  -45
  -55
  -62
  -74
  -87
  -102
  -118
  -135
  -153
  -172
  -193
  -214
  -237
  -261
  -286
  -312
  -339
  -367
  -396
  -426
  -458
  -491
EBITDA, $m
  -1
  -1
  -2
  -3
  -3
  -5
  -6
  -7
  -9
  -11
  -14
  -16
  -19
  -23
  -26
  -30
  -34
  -38
  -43
  -48
  -53
  -58
  -64
  -70
  -76
  -82
  -88
  -95
  -102
  -110
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  2
  2
  3
  4
  5
  6
  8
  9
  11
  13
  15
  17
  20
  22
  25
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
Earnings before tax, $m
  -7
  -9
  -12
  -16
  -20
  -25
  -32
  -40
  -49
  -60
  -68
  -82
  -97
  -113
  -131
  -150
  -170
  -192
  -215
  -239
  -265
  -292
  -320
  -349
  -379
  -411
  -444
  -478
  -514
  -551
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
  -7
  -9
  -12
  -16
  -20
  -25
  -32
  -40
  -49
  -60
  -68
  -82
  -97
  -113
  -131
  -150
  -170
  -192
  -215
  -239
  -265
  -292
  -320
  -349
  -379
  -411
  -444
  -478
  -514
  -551

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
  101
  148
  210
  291
  393
  520
  673
  854
  1,066
  1,310
  1,585
  1,893
  2,234
  2,607
  3,012
  3,447
  3,914
  4,410
  4,934
  5,488
  6,069
  6,678
  7,314
  7,978
  8,670
  9,390
  10,138
  10,917
  11,725
  12,565
Adjusted assets (=assets-cash), $m
  101
  148
  210
  291
  393
  520
  673
  854
  1,066
  1,310
  1,585
  1,893
  2,234
  2,607
  3,012
  3,447
  3,914
  4,410
  4,934
  5,488
  6,069
  6,678
  7,314
  7,978
  8,670
  9,390
  10,138
  10,917
  11,725
  12,565
Revenue / Adjusted assets
  0.139
  0.135
  0.133
  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
  32
  47
  66
  92
  124
  164
  212
  270
  337
  413
  500
  598
  705
  823
  951
  1,088
  1,235
  1,392
  1,557
  1,732
  1,916
  2,108
  2,309
  2,518
  2,737
  2,964
  3,200
  3,446
  3,701
  3,966
Working capital, $m
  -5
  -7
  -10
  -14
  -19
  -25
  -32
  -41
  -51
  -62
  -76
  -90
  -106
  -124
  -144
  -164
  -187
  -210
  -235
  -262
  -289
  -318
  -349
  -380
  -413
  -447
  -483
  -520
  -559
  -599
Total debt, $m
  3
  8
  14
  21
  31
  43
  58
  75
  95
  118
  144
  174
  206
  241
  280
  321
  365
  413
  462
  515
  570
  628
  689
  752
  817
  886
  957
  1,031
  1,108
  1,187
Total liabilities, $m
  10
  14
  20
  28
  37
  49
  64
  81
  101
  124
  151
  180
  212
  248
  286
  328
  372
  419
  469
  521
  577
  634
  695
  758
  824
  892
  963
  1,037
  1,114
  1,194
Total equity, $m
  91
  134
  190
  263
  356
  470
  609
  773
  965
  1,185
  1,435
  1,713
  2,022
  2,359
  2,725
  3,120
  3,542
  3,991
  4,466
  4,966
  5,493
  6,044
  6,620
  7,220
  7,846
  8,498
  9,175
  9,879
  10,611
  11,372
Total liabilities and equity, $m
  101
  148
  210
  291
  393
  519
  673
  854
  1,066
  1,309
  1,586
  1,893
  2,234
  2,607
  3,011
  3,448
  3,914
  4,410
  4,935
  5,487
  6,070
  6,678
  7,315
  7,978
  8,670
  9,390
  10,138
  10,916
  11,725
  12,566
Debt-to-equity ratio
  0.040
  0.060
  0.070
  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
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
  -7
  -9
  -12
  -16
  -20
  -25
  -32
  -40
  -49
  -60
  -68
  -82
  -97
  -113
  -131
  -150
  -170
  -192
  -215
  -239
  -265
  -292
  -320
  -349
  -379
  -411
  -444
  -478
  -514
  -551
Depreciation, amort., depletion, $m
  6
  8
  10
  12
  15
  19
  24
  29
  36
  43
  48
  57
  68
  79
  91
  105
  119
  134
  150
  167
  184
  203
  222
  242
  263
  285
  308
  331
  356
  381
Funds from operations, $m
  -1
  -1
  -2
  -3
  -5
  -6
  -8
  -11
  -13
  -17
  -20
  -24
  -29
  -34
  -39
  -45
  -51
  -58
  -65
  -73
  -81
  -89
  -98
  -107
  -116
  -126
  -136
  -147
  -158
  -169
Change in working capital, $m
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -39
  -40
Cash from operations, $m
  1
  1
  1
  1
  0
  0
  -1
  -2
  -3
  -5
  -7
  -10
  -13
  -16
  -20
  -24
  -29
  -35
  -40
  -46
  -53
  -60
  -67
  -75
  -83
  -92
  -101
  -110
  -119
  -129
Maintenance CAPEX, $m
  -2
  -3
  -4
  -6
  -9
  -12
  -16
  -20
  -26
  -32
  -40
  -48
  -57
  -68
  -79
  -91
  -105
  -119
  -134
  -150
  -167
  -184
  -203
  -222
  -242
  -263
  -285
  -308
  -331
  -356
New CAPEX, $m
  -11
  -15
  -20
  -26
  -32
  -40
  -48
  -57
  -67
  -77
  -87
  -97
  -108
  -118
  -128
  -138
  -147
  -157
  -166
  -175
  -183
  -192
  -201
  -210
  -218
  -227
  -236
  -246
  -255
  -265
Cash from investing activities, $m
  -13
  -18
  -24
  -32
  -41
  -52
  -64
  -77
  -93
  -109
  -127
  -145
  -165
  -186
  -207
  -229
  -252
  -276
  -300
  -325
  -350
  -376
  -404
  -432
  -460
  -490
  -521
  -554
  -586
  -621
Free cash flow, $m
  -12
  -17
  -23
  -31
  -41
  -52
  -65
  -80
  -96
  -114
  -134
  -155
  -178
  -202
  -227
  -253
  -281
  -310
  -340
  -371
  -403
  -436
  -471
  -507
  -544
  -582
  -622
  -663
  -706
  -750
Issuance/(repayment) of debt, $m
  3
  4
  6
  8
  10
  12
  15
  17
  20
  23
  26
  29
  32
  35
  38
  41
  44
  47
  50
  53
  55
  58
  60
  63
  66
  68
  71
  74
  77
  80
Issuance/(repurchase) of shares, $m
  38
  52
  68
  89
  113
  140
  171
  204
  241
  280
  318
  361
  405
  450
  497
  544
  592
  641
  690
  740
  791
  843
  896
  950
  1,005
  1,062
  1,121
  1,182
  1,246
  1,311
Cash from financing (excl. dividends), $m  
  41
  56
  74
  97
  123
  152
  186
  221
  261
  303
  344
  390
  437
  485
  535
  585
  636
  688
  740
  793
  846
  901
  956
  1,013
  1,071
  1,130
  1,192
  1,256
  1,323
  1,391
Total cash flow (excl. dividends), $m
  30
  39
  51
  65
  81
  100
  120
  142
  165
  189
  210
  235
  260
  284
  309
  332
  355
  378
  400
  422
  443
  464
  485
  506
  527
  549
  571
  593
  616
  641
Retained Cash Flow (-), $m
  -38
  -52
  -68
  -89
  -113
  -140
  -171
  -204
  -241
  -280
  -318
  -361
  -405
  -450
  -497
  -544
  -592
  -641
  -690
  -740
  -791
  -843
  -896
  -950
  -1,005
  -1,062
  -1,121
  -1,182
  -1,246
  -1,311
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
  78
  -13
  -18
  -24
  -31
  -40
  -50
  -62
  -76
  -91
  -108
  -126
  -145
  -166
  -188
  -212
  -237
  -263
  -290
  -318
  -348
  -379
  -410
  -444
  -478
  -514
  -551
  -589
  -629
  -671
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
  75
  -12
  -15
  -19
  -24
  -29
  -34
  -39
  -44
  -48
  -51
  -54
  -55
  -56
  -55
  -54
  -52
  -48
  -45
  -40
  -36
  -31
  -27
  -23
  -19
  -15
  -12
  -9
  -7
  -5
Current shareholders' claim on cash, %
  85.7
  74.7
  65.9
  58.7
  52.8
  47.9
  43.8
  40.2
  37.2
  34.6
  32.3
  30.4
  28.6
  27.0
  25.6
  24.3
  23.2
  22.1
  21.2
  20.3
  19.5
  18.8
  18.1
  17.4
  16.8
  16.2
  15.7
  15.2
  14.7
  14.2

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 (BOMN)

Valuation Ratios
P/E Ratio -62
Price to Sales 46.5
Price to Book 3
Price to Tangible Book
Price to Cash Flow -186
Price to Free Cash Flow -93
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 $9.014345 million for the last fiscal year's total revenue generated by Boston Omaha. The default revenue input number comes from 0001 income statement of Boston Omaha. 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 51% 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, 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.
    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.

Corporate tax rate of 27% is the nominal tax rate for Boston Omaha. 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 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 - 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 20.923 million for Boston Omaha 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 at the current share price and the inputted number of shares is $0.6 billion.

COMPANY NEWS

▶ Boston Omaha Reaps the Fruit of Recent Acquisitions   [Nov-13-18 09:46PM  Motley Fool]
▶ Boston Omaha: 3Q Earnings Snapshot   [06:27PM  Associated Press]
▶ The 3 Stocks on the MFM Team's Radar   [Oct-16-18 09:05AM  Motley Fool]
▶ 3 Stocks Your Children Will Brag About Someday   [Aug-28-18 06:50PM  Motley Fool]
▶ Boston Omaha: 2Q Earnings Snapshot   [Aug-13-18 05:14PM  Associated Press]
▶ Boston Omaha: 1Q Earnings Snapshot   [May-14-18 04:56PM  Associated Press]
▶ 1 Top Small-Cap Stock to Buy in April   [Apr-25-18 07:15AM  Motley Fool]
▶ 3 Stocks to Buy and Hold for the Next 50 Years   [Apr-16-18 09:33PM  Motley Fool]
▶ Boston Omaha Details Its Long-Term Thinking   [Apr-02-18 09:35PM  Motley Fool]
▶ 3 Stocks Wall Street Hasn't Heard of Yet   [06:06AM  Motley Fool]
▶ Shorting The Oracle Of (Boston) Omaha?   [Feb-23-18 01:50PM  Forbes]

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