Intrinsic value of Carbonite, Inc. - CARB

Previous Close

$15.08

  Intrinsic Value

$48.35

stock screener

  Rating & Target

str. buy

+221%

Previous close

$15.08

 
Intrinsic value

$48.35

 
Up/down potential

+221%

 
Rating

str. buy

We calculate the intrinsic value of CARB 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, %
  24.80
  22.82
  21.04
  19.43
  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
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
Revenue, $m
  369
  454
  549
  656
  774
  903
  1,043
  1,194
  1,356
  1,527
  1,709
  1,901
  2,102
  2,313
  2,534
  2,764
  3,003
  3,253
  3,512
  3,781
  4,061
  4,353
  4,655
  4,969
  5,296
  5,637
  5,990
  6,359
  6,743
  7,143
Variable operating expenses, $m
  269
  329
  398
  475
  559
  652
  753
  861
  977
  1,101
  1,228
  1,366
  1,511
  1,662
  1,820
  1,986
  2,158
  2,337
  2,523
  2,717
  2,918
  3,127
  3,345
  3,571
  3,806
  4,050
  4,304
  4,569
  4,845
  5,132
Fixed operating expenses, $m
  81
  83
  84
  86
  88
  90
  92
  94
  96
  98
  100
  103
  105
  107
  109
  112
  114
  117
  119
  122
  125
  128
  130
  133
  136
  139
  142
  145
  148
  152
Total operating expenses, $m
  350
  412
  482
  561
  647
  742
  845
  955
  1,073
  1,199
  1,328
  1,469
  1,616
  1,769
  1,929
  2,098
  2,272
  2,454
  2,642
  2,839
  3,043
  3,255
  3,475
  3,704
  3,942
  4,189
  4,446
  4,714
  4,993
  5,284
Operating income, $m
  20
  42
  67
  95
  126
  161
  198
  239
  282
  328
  381
  433
  487
  544
  604
  666
  731
  799
  869
  942
  1,018
  1,098
  1,180
  1,266
  1,355
  1,447
  1,544
  1,645
  1,750
  1,859
EBITDA, $m
  53
  82
  114
  151
  192
  237
  286
  338
  395
  455
  518
  586
  656
  730
  808
  889
  973
  1,061
  1,152
  1,247
  1,346
  1,448
  1,555
  1,666
  1,781
  1,901
  2,027
  2,157
  2,293
  2,434
Interest expense (income), $m
  0
  12
  19
  28
  38
  49
  61
  74
  88
  104
  121
  138
  157
  176
  197
  219
  241
  265
  290
  315
  342
  369
  398
  428
  459
  491
  525
  560
  596
  634
  673
Earnings before tax, $m
  8
  22
  39
  57
  78
  100
  124
  150
  178
  208
  243
  276
  310
  347
  385
  425
  466
  509
  554
  601
  649
  700
  752
  807
  863
  923
  984
  1,049
  1,116
  1,186
Tax expense, $m
  2
  6
  10
  15
  21
  27
  34
  41
  48
  56
  66
  74
  84
  94
  104
  115
  126
  137
  150
  162
  175
  189
  203
  218
  233
  249
  266
  283
  301
  320
Net income, $m
  6
  16
  28
  42
  57
  73
  91
  110
  130
  152
  177
  201
  227
  253
  281
  310
  340
  372
  404
  438
  474
  511
  549
  589
  630
  674
  719
  765
  814
  865

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
  641
  788
  953
  1,139
  1,344
  1,568
  1,811
  2,073
  2,354
  2,652
  2,968
  3,300
  3,650
  4,016
  4,399
  4,798
  5,214
  5,647
  6,097
  6,565
  7,051
  7,556
  8,082
  8,628
  9,195
  9,786
  10,400
  11,040
  11,706
  12,401
Adjusted assets (=assets-cash), $m
  641
  788
  953
  1,139
  1,344
  1,568
  1,811
  2,073
  2,354
  2,652
  2,968
  3,300
  3,650
  4,016
  4,399
  4,798
  5,214
  5,647
  6,097
  6,565
  7,051
  7,556
  8,082
  8,628
  9,195
  9,786
  10,400
  11,040
  11,706
  12,401
Revenue / Adjusted assets
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
Average production assets, $m
  164
  201
  243
  291
  343
  400
  462
  529
  601
  677
  757
  842
  931
  1,025
  1,122
  1,224
  1,330
  1,441
  1,556
  1,675
  1,799
  1,928
  2,062
  2,201
  2,346
  2,497
  2,654
  2,817
  2,987
  3,164
Working capital, $m
  -136
  -167
  -203
  -242
  -286
  -333
  -385
  -441
  -500
  -564
  -631
  -701
  -776
  -854
  -935
  -1,020
  -1,108
  -1,200
  -1,296
  -1,395
  -1,499
  -1,606
  -1,718
  -1,834
  -1,954
  -2,080
  -2,210
  -2,346
  -2,488
  -2,636
Total debt, $m
  193
  280
  378
  487
  608
  741
  885
  1,040
  1,205
  1,382
  1,568
  1,765
  1,971
  2,188
  2,414
  2,650
  2,896
  3,152
  3,418
  3,694
  3,982
  4,280
  4,591
  4,913
  5,249
  5,598
  5,961
  6,339
  6,733
  7,143
Total liabilities, $m
  379
  466
  563
  673
  794
  927
  1,070
  1,225
  1,391
  1,567
  1,754
  1,950
  2,157
  2,373
  2,600
  2,836
  3,081
  3,337
  3,603
  3,880
  4,167
  4,466
  4,776
  5,099
  5,434
  5,783
  6,146
  6,525
  6,918
  7,329
Total equity, $m
  262
  322
  390
  466
  550
  641
  741
  848
  963
  1,085
  1,214
  1,350
  1,493
  1,643
  1,799
  1,962
  2,132
  2,310
  2,494
  2,685
  2,884
  3,091
  3,305
  3,529
  3,761
  4,002
  4,254
  4,515
  4,788
  5,072
Total liabilities and equity, $m
  641
  788
  953
  1,139
  1,344
  1,568
  1,811
  2,073
  2,354
  2,652
  2,968
  3,300
  3,650
  4,016
  4,399
  4,798
  5,213
  5,647
  6,097
  6,565
  7,051
  7,557
  8,081
  8,628
  9,195
  9,785
  10,400
  11,040
  11,706
  12,401
Debt-to-equity ratio
  0.740
  0.870
  0.970
  1.050
  1.110
  1.160
  1.190
  1.230
  1.250
  1.270
  1.290
  1.310
  1.320
  1.330
  1.340
  1.350
  1.360
  1.360
  1.370
  1.380
  1.380
  1.380
  1.390
  1.390
  1.400
  1.400
  1.400
  1.400
  1.410
  1.410
Adjusted equity ratio
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409
  0.409

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6
  16
  28
  42
  57
  73
  91
  110
  130
  152
  177
  201
  227
  253
  281
  310
  340
  372
  404
  438
  474
  511
  549
  589
  630
  674
  719
  765
  814
  865
Depreciation, amort., depletion, $m
  33
  40
  48
  56
  66
  76
  87
  100
  113
  126
  138
  153
  169
  186
  204
  223
  242
  262
  283
  305
  327
  351
  375
  400
  427
  454
  483
  512
  543
  575
Funds from operations, $m
  39
  56
  76
  98
  122
  149
  178
  209
  243
  278
  315
  354
  396
  440
  485
  533
  582
  634
  687
  743
  801
  861
  924
  989
  1,057
  1,128
  1,201
  1,278
  1,358
  1,441
Change in working capital, $m
  -27
  -31
  -35
  -39
  -44
  -48
  -52
  -56
  -60
  -63
  -67
  -71
  -74
  -78
  -81
  -85
  -88
  -92
  -96
  -99
  -103
  -107
  -112
  -116
  -121
  -125
  -131
  -136
  -142
  -148
Cash from operations, $m
  66
  87
  111
  137
  166
  197
  230
  265
  302
  342
  382
  425
  470
  517
  566
  617
  670
  726
  783
  842
  904
  969
  1,036
  1,105
  1,178
  1,253
  1,332
  1,414
  1,499
  1,588
Maintenance CAPEX, $m
  -24
  -30
  -37
  -44
  -53
  -62
  -73
  -84
  -96
  -109
  -123
  -138
  -153
  -169
  -186
  -204
  -223
  -242
  -262
  -283
  -305
  -327
  -351
  -375
  -400
  -427
  -454
  -483
  -512
  -543
New CAPEX, $m
  -32
  -37
  -42
  -47
  -52
  -57
  -62
  -67
  -72
  -76
  -81
  -85
  -89
  -93
  -98
  -102
  -106
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -177
Cash from investing activities, $m
  -56
  -67
  -79
  -91
  -105
  -119
  -135
  -151
  -168
  -185
  -204
  -223
  -242
  -262
  -284
  -306
  -329
  -352
  -377
  -402
  -429
  -456
  -485
  -514
  -545
  -578
  -611
  -646
  -682
  -720
Free cash flow, $m
  10
  20
  32
  46
  61
  77
  95
  114
  135
  156
  178
  203
  228
  255
  282
  311
  342
  373
  406
  440
  476
  513
  551
  591
  632
  676
  721
  768
  817
  868
Issuance/(repayment) of debt, $m
  75
  86
  98
  110
  121
  133
  144
  155
  166
  176
  187
  197
  207
  216
  226
  236
  246
  256
  266
  277
  287
  299
  310
  323
  335
  349
  363
  378
  394
  410
Issuance/(repurchase) of shares, $m
  46
  43
  39
  34
  27
  19
  9
  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  
  121
  129
  137
  144
  148
  152
  153
  155
  166
  176
  187
  197
  207
  216
  226
  236
  246
  256
  266
  277
  287
  299
  310
  323
  335
  349
  363
  378
  394
  410
Total cash flow (excl. dividends), $m
  131
  150
  170
  189
  209
  229
  248
  269
  300
  332
  365
  399
  435
  471
  509
  547
  588
  629
  672
  717
  763
  811
  861
  913
  968
  1,025
  1,084
  1,146
  1,211
  1,279
Retained Cash Flow (-), $m
  -52
  -60
  -68
  -76
  -84
  -92
  -100
  -107
  -115
  -122
  -129
  -136
  -143
  -150
  -157
  -163
  -170
  -177
  -184
  -191
  -199
  -207
  -215
  -223
  -232
  -241
  -251
  -262
  -273
  -284
Prev. year cash balance distribution, $m
  47
  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
  126
  90
  102
  114
  125
  137
  148
  162
  186
  211
  236
  263
  292
  321
  352
  384
  417
  452
  488
  525
  564
  605
  647
  690
  736
  783
  833
  884
  938
  994
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
  121
  83
  89
  94
  97
  99
  100
  101
  107
  110
  112
  112
  111
  108
  103
  98
  91
  83
  75
  67
  58
  50
  42
  35
  29
  23
  18
  14
  10
  7
Current shareholders' claim on cash, %
  90.2
  83.3
  78.5
  75.3
  73.2
  72.0
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5
  71.5

Carbonite, Inc. provides data protection solutions, including cloud, hybrid and on-premise backup and restore, disaster recovery as a service (DRaaS) and e-mail archiving. The Company's solutions provide enterprise-grade data protection and recovery capabilities to its customers. The Company's small and medium-sized businesses (SMBs) plans include Carbonite Computer Backup; Carbonite Server Backup, such as Carbonite Office Power and Carbonite Office Ultimate; EVault Cloud Backup; DRaaS, and e-mail archiving. Carbonite Computer Backup enables users to automatically back up files directly to the cloud. Carbonite Server Backup provides cloud and hybrid backup for physical and virtual servers with management capabilities, including scheduling, retention, bandwidth and compression settings, and monitoring and reporting via a personalized server dashboard. Its e-mail archiving solutions include MailStore Server, MailStore Service Provider Edition and MailStore Home.

FINANCIAL RATIOS  of  Carbonite, Inc. (CARB)

Valuation Ratios
P/E Ratio -103.3
Price to Sales 2
Price to Book 68.8
Price to Tangible Book
Price to Cash Flow 31.8
Price to Free Cash Flow 68.8
Growth Rates
Sales Growth Rate 51.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -30%
Cap. Spend. - 3 Yr. Gr. Rate -6.9%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -3%
Ret/ On Assets - 3 Yr. Avg. -9.2%
Return On Total Capital -114.3%
Ret/ On T. Cap. - 3 Yr. Avg. -151.2%
Return On Equity -114.3%
Return On Equity - 3 Yr. Avg. -151.2%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 70.5%
Gross Margin - 3 Yr. Avg. 70.1%
EBITDA Margin 6.3%
EBITDA Margin - 3 Yr. Avg. 1%
Operating Margin -1.4%
Oper. Margin - 3 Yr. Avg. -7.8%
Pre-Tax Margin -1.4%
Pre-Tax Margin - 3 Yr. Avg. -8.3%
Net Profit Margin -1.9%
Net Profit Margin - 3 Yr. Avg. -8.4%
Effective Tax Rate -33.3%
Eff/ Tax Rate - 3 Yr. Avg. -11.1%
Payout Ratio 0%

CARB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CARB stock intrinsic value calculation we used $296 million for the last fiscal year's total revenue generated by Carbonite, Inc.. The default revenue input number comes from 0001 income statement of Carbonite, 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 CARB stock valuation model: a) initial revenue growth rate of 24.8% 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 CARB is calculated based on our internal credit rating of Carbonite, 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 Carbonite, 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 CARB stock the variable cost ratio is equal to 73%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $79 million in the base year in the intrinsic value calculation for CARB 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 10% for Carbonite, Inc..

Corporate tax rate of 27% is the nominal tax rate for Carbonite, 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 CARB 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 CARB are equal to 44.3%.

Life of production assets of 5.5 years is the average useful life of capital assets used in Carbonite, 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 CARB is equal to -36.9%. 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 - $257.21 million for Carbonite, 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 34.365 million for Carbonite, 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 Carbonite, Inc. at the current share price and the inputted number of shares is $0.5 billion.

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