Intrinsic value of CalAmp Corp. - CAMP

Previous Close

$10.72

  Intrinsic Value

$5.40

stock screener

  Rating & Target

sell

-50%

Previous close

$10.72

 
Intrinsic value

$5.40

 
Up/down potential

-50%

 
Rating

sell

We calculate the intrinsic value of CAMP 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 0.4

 

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
  373
  382
  392
  403
  415
  428
  443
  459
  476
  494
  514
  534
  557
  580
  605
  632
  660
  689
  721
  754
  789
  826
  865
  906
  949
  994
  1,042
  1,092
  1,145
  1,201
Variable operating expenses, $m
  174
  178
  183
  188
  194
  200
  206
  214
  222
  230
  237
  246
  257
  268
  279
  291
  304
  318
  332
  348
  364
  381
  399
  418
  438
  459
  481
  504
  528
  554
Fixed operating expenses, $m
  195
  199
  204
  208
  213
  218
  222
  227
  232
  237
  243
  248
  253
  259
  265
  271
  277
  283
  289
  295
  302
  308
  315
  322
  329
  336
  344
  351
  359
  367
Total operating expenses, $m
  369
  377
  387
  396
  407
  418
  428
  441
  454
  467
  480
  494
  510
  527
  544
  562
  581
  601
  621
  643
  666
  689
  714
  740
  767
  795
  825
  855
  887
  921
Operating income, $m
  4
  4
  5
  7
  8
  11
  14
  18
  22
  27
  34
  40
  46
  54
  61
  70
  79
  89
  100
  111
  123
  137
  151
  166
  182
  199
  218
  237
  258
  280
EBITDA, $m
  19
  20
  21
  23
  25
  28
  32
  36
  41
  46
  52
  59
  66
  74
  83
  92
  102
  113
  125
  138
  151
  166
  182
  198
  216
  235
  255
  276
  299
  323
Interest expense (income), $m
  3
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
  25
  27
  29
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
Earnings before tax, $m
  -7
  -7
  -6
  -5
  -4
  -2
  0
  3
  7
  11
  17
  22
  27
  33
  40
  47
  55
  63
  73
  82
  93
  105
  117
  130
  144
  159
  175
  192
  210
  230
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  1
  2
  3
  5
  6
  7
  9
  11
  13
  15
  17
  20
  22
  25
  28
  32
  35
  39
  43
  47
  52
  57
  62
Net income, $m
  -7
  -7
  -6
  -5
  -4
  -2
  0
  2
  5
  8
  12
  16
  20
  24
  29
  34
  40
  46
  53
  60
  68
  76
  85
  95
  105
  116
  128
  140
  154
  168

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
  421
  431
  442
  454
  468
  483
  499
  517
  536
  557
  579
  602
  627
  654
  682
  712
  744
  777
  813
  850
  889
  931
  975
  1,021
  1,069
  1,121
  1,175
  1,231
  1,291
  1,354
Adjusted assets (=assets-cash), $m
  421
  431
  442
  454
  468
  483
  499
  517
  536
  557
  579
  602
  627
  654
  682
  712
  744
  777
  813
  850
  889
  931
  975
  1,021
  1,069
  1,121
  1,175
  1,231
  1,291
  1,354
Revenue / Adjusted assets
  0.886
  0.886
  0.887
  0.888
  0.887
  0.886
  0.888
  0.888
  0.888
  0.887
  0.888
  0.887
  0.888
  0.887
  0.887
  0.888
  0.887
  0.887
  0.887
  0.887
  0.888
  0.887
  0.887
  0.887
  0.888
  0.887
  0.887
  0.887
  0.887
  0.887
Average production assets, $m
  89
  91
  94
  96
  99
  102
  106
  110
  114
  118
  123
  128
  133
  139
  145
  151
  158
  165
  172
  180
  189
  197
  207
  216
  227
  238
  249
  261
  274
  287
Working capital, $m
  25
  26
  26
  27
  28
  29
  30
  31
  32
  33
  34
  36
  37
  39
  41
  42
  44
  46
  48
  51
  53
  55
  58
  61
  64
  67
  70
  73
  77
  80
Total debt, $m
  160
  166
  173
  182
  191
  201
  212
  224
  236
  250
  265
  280
  297
  315
  333
  353
  374
  396
  420
  445
  471
  498
  527
  558
  590
  624
  660
  698
  737
  779
Total liabilities, $m
  279
  286
  293
  301
  311
  321
  332
  343
  356
  370
  384
  400
  417
  434
  453
  473
  494
  516
  540
  564
  591
  618
  647
  678
  710
  744
  780
  818
  857
  899
Total equity, $m
  141
  145
  148
  153
  157
  162
  168
  174
  180
  187
  195
  202
  211
  220
  229
  239
  250
  261
  273
  286
  299
  313
  328
  343
  359
  377
  395
  414
  434
  455
Total liabilities and equity, $m
  420
  431
  441
  454
  468
  483
  500
  517
  536
  557
  579
  602
  628
  654
  682
  712
  744
  777
  813
  850
  890
  931
  975
  1,021
  1,069
  1,121
  1,175
  1,232
  1,291
  1,354
Debt-to-equity ratio
  1.130
  1.150
  1.170
  1.190
  1.210
  1.240
  1.260
  1.290
  1.310
  1.340
  1.360
  1.380
  1.410
  1.430
  1.450
  1.480
  1.500
  1.520
  1.540
  1.560
  1.580
  1.590
  1.610
  1.630
  1.640
  1.660
  1.670
  1.690
  1.700
  1.710
Adjusted equity ratio
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336
  0.336

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7
  -7
  -6
  -5
  -4
  -2
  0
  2
  5
  8
  12
  16
  20
  24
  29
  34
  40
  46
  53
  60
  68
  76
  85
  95
  105
  116
  128
  140
  154
  168
Depreciation, amort., depletion, $m
  15
  16
  16
  16
  17
  17
  18
  18
  19
  20
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
  43
Funds from operations, $m
  9
  9
  10
  11
  13
  15
  18
  21
  24
  27
  31
  35
  40
  45
  51
  57
  64
  71
  79
  87
  96
  106
  116
  127
  139
  152
  165
  179
  194
  211
Change in working capital, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
Cash from operations, $m
  8
  8
  9
  10
  12
  15
  17
  20
  23
  26
  29
  34
  38
  43
  49
  55
  62
  69
  77
  85
  94
  103
  114
  124
  136
  149
  162
  176
  191
  207
Maintenance CAPEX, $m
  -13
  -13
  -14
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
New CAPEX, $m
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
Cash from investing activities, $m
  -15
  -15
  -16
  -17
  -17
  -18
  -18
  -20
  -20
  -21
  -23
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -41
  -42
  -45
  -46
  -49
  -52
  -54
Free cash flow, $m
  -6
  -7
  -7
  -6
  -5
  -3
  -2
  0
  2
  5
  7
  10
  14
  18
  22
  27
  33
  38
  45
  51
  59
  66
  75
  84
  93
  104
  115
  127
  139
  153
Issuance/(repayment) of debt, $m
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
Issuance/(repurchase) of shares, $m
  10
  10
  10
  9
  8
  7
  5
  4
  2
  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  
  15
  16
  17
  17
  17
  17
  16
  16
  15
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  28
  29
  31
  32
  34
  36
  38
  40
  42
Total cash flow (excl. dividends), $m
  9
  9
  11
  12
  13
  14
  15
  16
  17
  19
  22
  26
  31
  36
  41
  47
  54
  60
  68
  76
  85
  94
  104
  114
  126
  138
  151
  164
  179
  194
Retained Cash Flow (-), $m
  -10
  -10
  -10
  -9
  -8
  -7
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
Prev. year cash balance distribution, $m
  60
  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
  59
  -1
  1
  2
  4
  7
  9
  10
  10
  12
  14
  18
  22
  27
  32
  37
  43
  49
  56
  63
  71
  80
  89
  99
  109
  121
  133
  145
  159
  173
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
  57
  0
  0
  2
  3
  5
  6
  6
  6
  6
  7
  8
  8
  9
  9
  9
  9
  9
  9
  8
  7
  7
  6
  5
  4
  4
  3
  2
  2
  1
Current shareholders' claim on cash, %
  96.4
  92.8
  89.5
  86.5
  84.0
  82.0
  80.6
  79.7
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3
  79.3

CalAmp Corp. (CalAmp) is a provider of wireless communications solutions for a range of applications to customers globally. The Company operates through two business segments: Wireless DataCom and Satellite. The Company's Wireless DataCom segment offers solutions for mobile resource management (MRM) applications, the machine-to-machine (M2M) communications space and other markets that require connectivity anytime and anywhere. The Company's MRM and M2M solutions collect, monitor and report data and intelligence from remote and mobile assets. The Company delivers products, software services and solutions for energy, government, transportation and automotive vertical markets. The Company's Satellite segment develops, manufactures and sells direct-broadcast satellite (DBS) outdoor customer premise equipment and whole home video networking devices enabling the delivery of digital and high definition satellite television services. Its satellite products are sold primarily to EchoStar.

FINANCIAL RATIOS  of  CalAmp Corp. (CAMP)

Valuation Ratios
P/E Ratio -47.3
Price to Sales 1.1
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 14.6
Price to Free Cash Flow 21
Growth Rates
Sales Growth Rate 24.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate 32%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 90.2%
Total Debt to Equity 90.2%
Interest Coverage -2
Management Effectiveness
Return On Assets -1.4%
Ret/ On Assets - 3 Yr. Avg. 4.6%
Return On Total Capital -2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 5.5%
Return On Equity -4.5%
Return On Equity - 3 Yr. Avg. 5.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 40.7%
Gross Margin - 3 Yr. Avg. 37.4%
EBITDA Margin 5.1%
EBITDA Margin - 3 Yr. Avg. 10.4%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 6.6%
Pre-Tax Margin -2.3%
Pre-Tax Margin - 3 Yr. Avg. 5.2%
Net Profit Margin -2.3%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate 12.5%
Eff/ Tax Rate - 3 Yr. Avg. 20.9%
Payout Ratio 0%

CAMP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CAMP stock intrinsic value calculation we used $366 million for the last fiscal year's total revenue generated by CalAmp Corp.. The default revenue input number comes from 0001 income statement of CalAmp Corp.. 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 CAMP 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 4.3%, whose default value for CAMP is calculated based on our internal credit rating of CalAmp Corp., 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 CalAmp Corp..
    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 CAMP stock the variable cost ratio is equal to 46.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $191 million in the base year in the intrinsic value calculation for CAMP 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 CalAmp Corp..

Corporate tax rate of 27% is the nominal tax rate for CalAmp Corp.. 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 CAMP 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 CAMP are equal to 23.9%.

Life of production assets of 6.7 years is the average useful life of capital assets used in CalAmp Corp. 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 CAMP is equal to 6.7%. 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 - $198.916 million for CalAmp Corp. - 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 34.259 million for CalAmp Corp. 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 CalAmp Corp. at the current share price and the inputted number of shares is $0.4 billion.

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