Intrinsic value of Boot Barn Holdings, Inc. - BOOT

Previous Close

$35.44

  Intrinsic Value

$29.21

stock screener

  Rating & Target

hold

-18%

Previous close

$35.44

 
Intrinsic value

$29.21

 
Up/down potential

-18%

 
Rating

hold

We calculate the intrinsic value of BOOT 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 1.0

 

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, %
  13.00
  12.20
  11.48
  10.83
  10.25
  9.72
  9.25
  8.83
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
  5.52
  5.47
  5.42
  5.38
Revenue, $m
  766
  860
  958
  1,062
  1,171
  1,285
  1,404
  1,528
  1,657
  1,791
  1,930
  2,075
  2,226
  2,382
  2,545
  2,714
  2,890
  3,073
  3,264
  3,462
  3,669
  3,885
  4,110
  4,344
  4,589
  4,845
  5,112
  5,392
  5,684
  5,989
Variable operating expenses, $m
  628
  701
  779
  861
  946
  1,036
  1,129
  1,227
  1,328
  1,434
  1,518
  1,632
  1,750
  1,873
  2,001
  2,134
  2,272
  2,416
  2,566
  2,722
  2,885
  3,054
  3,231
  3,416
  3,608
  3,809
  4,019
  4,239
  4,469
  4,709
Fixed operating expenses, $m
  77
  78
  80
  82
  84
  85
  87
  89
  91
  93
  95
  97
  100
  102
  104
  106
  109
  111
  113
  116
  118
  121
  124
  126
  129
  132
  135
  138
  141
  144
Total operating expenses, $m
  705
  779
  859
  943
  1,030
  1,121
  1,216
  1,316
  1,419
  1,527
  1,613
  1,729
  1,850
  1,975
  2,105
  2,240
  2,381
  2,527
  2,679
  2,838
  3,003
  3,175
  3,355
  3,542
  3,737
  3,941
  4,154
  4,377
  4,610
  4,853
Operating income, $m
  62
  80
  99
  120
  141
  164
  187
  212
  237
  264
  317
  346
  376
  408
  440
  474
  509
  546
  584
  624
  666
  709
  755
  802
  852
  904
  958
  1,015
  1,074
  1,136
EBITDA, $m
  99
  119
  140
  162
  185
  209
  235
  261
  289
  318
  348
  379
  411
  445
  480
  517
  555
  595
  636
  679
  724
  771
  820
  871
  924
  980
  1,039
  1,100
  1,164
  1,231
Interest expense (income), $m
  14
  14
  18
  21
  25
  29
  33
  37
  42
  46
  51
  56
  61
  67
  72
  78
  84
  91
  97
  104
  111
  119
  126
  134
  143
  152
  161
  170
  180
  191
  202
Earnings before tax, $m
  47
  62
  78
  95
  112
  131
  150
  170
  191
  213
  261
  285
  310
  335
  362
  390
  419
  449
  480
  513
  547
  583
  620
  659
  700
  743
  787
  834
  883
  934
Tax expense, $m
  13
  17
  21
  26
  30
  35
  40
  46
  52
  57
  71
  77
  84
  91
  98
  105
  113
  121
  130
  139
  148
  157
  167
  178
  189
  201
  213
  225
  238
  252
Net income, $m
  34
  45
  57
  69
  82
  95
  109
  124
  139
  155
  191
  208
  226
  245
  264
  284
  306
  328
  351
  374
  399
  426
  453
  481
  511
  542
  575
  609
  645
  682

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
  664
  746
  831
  921
  1,016
  1,114
  1,217
  1,325
  1,437
  1,553
  1,674
  1,800
  1,930
  2,066
  2,207
  2,354
  2,507
  2,665
  2,831
  3,003
  3,182
  3,369
  3,564
  3,768
  3,980
  4,202
  4,434
  4,676
  4,929
  5,195
Adjusted assets (=assets-cash), $m
  664
  746
  831
  921
  1,016
  1,114
  1,217
  1,325
  1,437
  1,553
  1,674
  1,800
  1,930
  2,066
  2,207
  2,354
  2,507
  2,665
  2,831
  3,003
  3,182
  3,369
  3,564
  3,768
  3,980
  4,202
  4,434
  4,676
  4,929
  5,195
Revenue / Adjusted assets
  1.154
  1.153
  1.153
  1.153
  1.153
  1.154
  1.154
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
  1.153
Average production assets, $m
  242
  272
  303
  336
  370
  406
  444
  483
  523
  566
  610
  656
  703
  753
  804
  858
  913
  971
  1,031
  1,094
  1,159
  1,228
  1,299
  1,373
  1,450
  1,531
  1,615
  1,704
  1,796
  1,893
Working capital, $m
  116
  130
  145
  160
  177
  194
  212
  231
  250
  270
  291
  313
  336
  360
  384
  410
  436
  464
  493
  523
  554
  587
  621
  656
  693
  732
  772
  814
  858
  904
Total debt, $m
  260
  312
  366
  423
  483
  546
  611
  679
  750
  824
  901
  981
  1,064
  1,150
  1,240
  1,333
  1,430
  1,531
  1,636
  1,745
  1,859
  1,978
  2,101
  2,231
  2,366
  2,506
  2,654
  2,808
  2,968
  3,137
Total liabilities, $m
  422
  473
  528
  585
  645
  708
  773
  841
  912
  986
  1,063
  1,143
  1,226
  1,312
  1,402
  1,495
  1,592
  1,693
  1,798
  1,907
  2,021
  2,139
  2,263
  2,392
  2,527
  2,668
  2,815
  2,969
  3,130
  3,299
Total equity, $m
  243
  272
  303
  336
  371
  407
  444
  484
  524
  567
  611
  657
  705
  754
  806
  859
  915
  973
  1,033
  1,096
  1,162
  1,230
  1,301
  1,375
  1,453
  1,534
  1,618
  1,707
  1,799
  1,896
Total liabilities and equity, $m
  665
  745
  831
  921
  1,016
  1,115
  1,217
  1,325
  1,436
  1,553
  1,674
  1,800
  1,931
  2,066
  2,208
  2,354
  2,507
  2,666
  2,831
  3,003
  3,183
  3,369
  3,564
  3,767
  3,980
  4,202
  4,433
  4,676
  4,929
  5,195
Debt-to-equity ratio
  1.070
  1.150
  1.210
  1.260
  1.300
  1.340
  1.380
  1.410
  1.430
  1.450
  1.470
  1.490
  1.510
  1.530
  1.540
  1.550
  1.560
  1.570
  1.580
  1.590
  1.600
  1.610
  1.620
  1.620
  1.630
  1.630
  1.640
  1.640
  1.650
  1.650
Adjusted equity ratio
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365
  0.365

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  34
  45
  57
  69
  82
  95
  109
  124
  139
  155
  191
  208
  226
  245
  264
  284
  306
  328
  351
  374
  399
  426
  453
  481
  511
  542
  575
  609
  645
  682
Depreciation, amort., depletion, $m
  38
  39
  41
  42
  44
  46
  48
  50
  52
  54
  30
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65
  69
  73
  77
  81
  85
  90
  95
Funds from operations, $m
  72
  85
  98
  112
  126
  141
  157
  174
  191
  209
  221
  241
  261
  282
  304
  327
  351
  376
  402
  429
  457
  487
  518
  550
  584
  619
  656
  694
  734
  777
Change in working capital, $m
  13
  14
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  39
  40
  42
  44
  46
Cash from operations, $m
  59
  70
  83
  96
  110
  124
  139
  155
  172
  189
  200
  219
  238
  259
  280
  302
  325
  348
  373
  399
  426
  454
  484
  514
  547
  580
  615
  652
  690
  731
Maintenance CAPEX, $m
  -11
  -12
  -14
  -15
  -17
  -19
  -20
  -22
  -24
  -26
  -28
  -30
  -33
  -35
  -38
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -61
  -65
  -69
  -73
  -77
  -81
  -85
  -90
New CAPEX, $m
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -49
  -51
  -53
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -97
Cash from investing activities, $m
  -39
  -42
  -45
  -48
  -51
  -55
  -58
  -61
  -65
  -68
  -72
  -76
  -81
  -84
  -89
  -93
  -99
  -104
  -109
  -115
  -120
  -126
  -132
  -139
  -146
  -154
  -161
  -169
  -177
  -187
Free cash flow, $m
  20
  29
  38
  48
  58
  70
  81
  94
  107
  120
  128
  143
  158
  174
  191
  208
  226
  245
  265
  285
  306
  328
  351
  375
  401
  427
  454
  483
  513
  544
Issuance/(repayment) of debt, $m
  49
  51
  54
  57
  60
  63
  65
  68
  71
  74
  77
  80
  83
  86
  90
  93
  97
  101
  105
  109
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
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  
  49
  51
  54
  57
  60
  63
  65
  68
  71
  74
  77
  80
  83
  86
  90
  93
  97
  101
  105
  109
  114
  119
  124
  129
  135
  141
  147
  154
  161
  168
Total cash flow (excl. dividends), $m
  69
  80
  92
  105
  118
  132
  147
  162
  178
  194
  205
  222
  241
  260
  280
  301
  323
  346
  370
  394
  420
  447
  475
  505
  535
  568
  601
  637
  674
  712
Retained Cash Flow (-), $m
  -28
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -88
  -92
  -97
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
  41
  51
  61
  72
  84
  96
  109
  123
  137
  152
  160
  177
  193
  211
  229
  248
  267
  288
  309
  331
  355
  379
  404
  430
  458
  487
  517
  548
  581
  616
Discount rate, %
  7.30
  7.67
  8.05
  8.45
  8.87
  9.32
  9.78
  10.27
  10.79
  11.32
  11.89
  12.49
  13.11
  13.77
  14.45
  15.18
  15.93
  16.73
  17.57
  18.45
  19.37
  20.34
  21.35
  22.42
  23.54
  24.72
  25.96
  27.25
  28.62
  30.05
PV of cash for distribution, $m
  38
  44
  48
  52
  55
  56
  57
  56
  55
  52
  47
  43
  39
  35
  30
  26
  22
  18
  14
  11
  9
  6
  5
  3
  2
  2
  1
  1
  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

Boot Barn Holdings, Inc. is a lifestyle retailer of western and work-related footwear, apparel and accessories for men, women and children. The Company's stores are located in or near neighborhood shopping centers with trade areas of approximately five or more miles, and it has opened stores in malls and outlet center locations. The Company's stores average an area of approximately 11,490 square feet and feature an assortment of brands and styles. It also carries assortments of denim, western shirts, cowboy hats, belts and belt buckles, western-style jewelry and accessories. The Company's western assortment includes various brands, such as Ariat, Dan Post, Justin, Levi Strauss, Lucchese, Miss Me, Montana Silversmiths, Resistol and Wrangler. Its work assortment includes rugged footwear, outerwear, overalls, denim and shirts. Its other brands include Carhartt, Georgia, Timberland Pro and Wolverine. As of September 12, 2017, the Company operated 218 stores in 31 states.

FINANCIAL RATIOS  of  Boot Barn Holdings, Inc. (BOOT)

Valuation Ratios
P/E Ratio 67.2
Price to Sales 1.5
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow 23
Price to Free Cash Flow 49.5
Growth Rates
Sales Growth Rate 10.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -38.9%
Cap. Spend. - 3 Yr. Gr. Rate 12.9%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 110.6%
Total Debt to Equity 130%
Interest Coverage 3
Management Effectiveness
Return On Assets 4.1%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.3%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 30.2%
Gross Margin - 3 Yr. Avg. 31.4%
EBITDA Margin 8.6%
EBITDA Margin - 3 Yr. Avg. 8.8%
Operating Margin 6%
Oper. Margin - 3 Yr. Avg. 6.7%
Pre-Tax Margin 3.7%
Pre-Tax Margin - 3 Yr. Avg. 4%
Net Profit Margin 2.2%
Net Profit Margin - 3 Yr. Avg. 2.5%
Effective Tax Rate 39.1%
Eff/ Tax Rate - 3 Yr. Avg. 38.9%
Payout Ratio 0%

BOOT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BOOT stock intrinsic value calculation we used $678 million for the last fiscal year's total revenue generated by Boot Barn Holdings, Inc.. The default revenue input number comes from 0001 income statement of Boot Barn 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 BOOT stock valuation model: a) initial revenue growth rate of 13% 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 7.3%, whose default value for BOOT is calculated based on our internal credit rating of Boot Barn 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 Boot Barn 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 BOOT stock the variable cost ratio is equal to 82.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $75 million in the base year in the intrinsic value calculation for BOOT 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 6.8% for Boot Barn Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for Boot Barn 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 BOOT 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 BOOT are equal to 31.6%.

Life of production assets of 20 years is the average useful life of capital assets used in Boot Barn 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 BOOT is equal to 15.1%. 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 - $214.606 million for Boot Barn 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 28.329 million for Boot Barn 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 Boot Barn Holdings, Inc. at the current share price and the inputted number of shares is $1.0 billion.

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