Intrinsic value of Caseys General Stores, Inc. - CASY

Previous Close

$154.03

  Intrinsic Value

$112.39

stock screener

  Rating & Target

sell

-27%

Previous close

$154.03

 
Intrinsic value

$112.39

 
Up/down potential

-27%

 
Rating

sell

We calculate the intrinsic value of CASY 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 5.6

 

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, %
  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
  8,559
  8,756
  8,981
  9,233
  9,513
  9,820
  10,155
  10,517
  10,907
  11,325
  11,773
  12,251
  12,760
  13,301
  13,874
  14,482
  15,126
  15,807
  16,526
  17,285
  18,086
  18,931
  19,822
  20,760
  21,748
  22,789
  23,884
  25,037
  26,249
  27,525
Variable operating expenses, $m
  8,202
  8,384
  8,592
  8,826
  9,084
  9,368
  9,677
  10,012
  10,373
  10,760
  10,883
  11,325
  11,795
  12,295
  12,825
  13,387
  13,982
  14,612
  15,276
  15,978
  16,719
  17,500
  18,323
  19,191
  20,104
  21,066
  22,079
  23,144
  24,265
  25,444
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
  8,202
  8,384
  8,592
  8,826
  9,084
  9,368
  9,677
  10,012
  10,373
  10,760
  10,883
  11,325
  11,795
  12,295
  12,825
  13,387
  13,982
  14,612
  15,276
  15,978
  16,719
  17,500
  18,323
  19,191
  20,104
  21,066
  22,079
  23,144
  24,265
  25,444
Operating income, $m
  357
  372
  389
  408
  429
  452
  477
  505
  534
  566
  890
  926
  965
  1,005
  1,049
  1,095
  1,143
  1,195
  1,249
  1,307
  1,367
  1,431
  1,498
  1,569
  1,644
  1,723
  1,806
  1,893
  1,984
  2,081
EBITDA, $m
  867
  887
  909
  935
  963
  994
  1,028
  1,065
  1,104
  1,147
  1,192
  1,240
  1,292
  1,347
  1,405
  1,466
  1,532
  1,600
  1,673
  1,750
  1,831
  1,917
  2,007
  2,102
  2,202
  2,308
  2,418
  2,535
  2,658
  2,787
Interest expense (income), $m
  41
  73
  75
  78
  81
  85
  89
  93
  98
  103
  108
  114
  121
  127
  135
  142
  150
  159
  168
  178
  188
  199
  210
  222
  235
  248
  262
  277
  292
  308
  326
Earnings before tax, $m
  284
  296
  311
  327
  344
  363
  384
  407
  431
  457
  776
  805
  837
  871
  907
  944
  984
  1,027
  1,071
  1,119
  1,169
  1,221
  1,276
  1,335
  1,396
  1,461
  1,529
  1,601
  1,676
  1,755
Tax expense, $m
  77
  80
  84
  88
  93
  98
  104
  110
  116
  124
  209
  217
  226
  235
  245
  255
  266
  277
  289
  302
  316
  330
  345
  360
  377
  394
  413
  432
  452
  474
Net income, $m
  207
  216
  227
  238
  251
  265
  281
  297
  315
  334
  566
  588
  611
  636
  662
  689
  719
  750
  782
  817
  853
  891
  932
  974
  1,019
  1,066
  1,116
  1,168
  1,223
  1,281

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
  3,540
  3,621
  3,714
  3,819
  3,934
  4,061
  4,200
  4,349
  4,511
  4,684
  4,869
  5,067
  5,277
  5,501
  5,738
  5,989
  6,256
  6,537
  6,834
  7,148
  7,480
  7,829
  8,198
  8,586
  8,994
  9,425
  9,878
  10,354
  10,856
  11,383
Adjusted assets (=assets-cash), $m
  3,540
  3,621
  3,714
  3,819
  3,934
  4,061
  4,200
  4,349
  4,511
  4,684
  4,869
  5,067
  5,277
  5,501
  5,738
  5,989
  6,256
  6,537
  6,834
  7,148
  7,480
  7,829
  8,198
  8,586
  8,994
  9,425
  9,878
  10,354
  10,856
  11,383
Revenue / Adjusted assets
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
  2.418
Average production assets, $m
  2,833
  2,898
  2,973
  3,056
  3,149
  3,251
  3,361
  3,481
  3,610
  3,749
  3,897
  4,055
  4,224
  4,402
  4,592
  4,794
  5,007
  5,232
  5,470
  5,721
  5,987
  6,266
  6,561
  6,872
  7,199
  7,543
  7,906
  8,287
  8,689
  9,111
Working capital, $m
  -111
  -114
  -117
  -120
  -124
  -128
  -132
  -137
  -142
  -147
  -153
  -159
  -166
  -173
  -180
  -188
  -197
  -205
  -215
  -225
  -235
  -246
  -258
  -270
  -283
  -296
  -310
  -325
  -341
  -358
Total debt, $m
  1,392
  1,444
  1,503
  1,569
  1,642
  1,723
  1,811
  1,905
  2,008
  2,117
  2,235
  2,360
  2,494
  2,635
  2,786
  2,945
  3,114
  3,292
  3,481
  3,680
  3,890
  4,112
  4,345
  4,591
  4,850
  5,123
  5,410
  5,713
  6,031
  6,365
Total liabilities, $m
  2,244
  2,296
  2,355
  2,421
  2,494
  2,575
  2,663
  2,758
  2,860
  2,970
  3,087
  3,212
  3,346
  3,487
  3,638
  3,797
  3,966
  4,144
  4,333
  4,532
  4,742
  4,964
  5,197
  5,443
  5,702
  5,975
  6,262
  6,565
  6,883
  7,217
Total equity, $m
  1,296
  1,325
  1,359
  1,398
  1,440
  1,486
  1,537
  1,592
  1,651
  1,714
  1,782
  1,854
  1,931
  2,013
  2,100
  2,192
  2,290
  2,393
  2,501
  2,616
  2,738
  2,866
  3,000
  3,142
  3,292
  3,449
  3,615
  3,790
  3,973
  4,166
Total liabilities and equity, $m
  3,540
  3,621
  3,714
  3,819
  3,934
  4,061
  4,200
  4,350
  4,511
  4,684
  4,869
  5,066
  5,277
  5,500
  5,738
  5,989
  6,256
  6,537
  6,834
  7,148
  7,480
  7,830
  8,197
  8,585
  8,994
  9,424
  9,877
  10,355
  10,856
  11,383
Debt-to-equity ratio
  1.070
  1.090
  1.110
  1.120
  1.140
  1.160
  1.180
  1.200
  1.220
  1.240
  1.250
  1.270
  1.290
  1.310
  1.330
  1.340
  1.360
  1.380
  1.390
  1.410
  1.420
  1.430
  1.450
  1.460
  1.470
  1.490
  1.500
  1.510
  1.520
  1.530
Adjusted equity ratio
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  207
  216
  227
  238
  251
  265
  281
  297
  315
  334
  566
  588
  611
  636
  662
  689
  719
  750
  782
  817
  853
  891
  932
  974
  1,019
  1,066
  1,116
  1,168
  1,223
  1,281
Depreciation, amort., depletion, $m
  510
  515
  521
  527
  534
  542
  551
  560
  570
  581
  302
  314
  327
  341
  356
  372
  388
  406
  424
  444
  464
  486
  509
  533
  558
  585
  613
  642
  674
  706
Funds from operations, $m
  717
  731
  748
  766
  786
  808
  831
  857
  885
  915
  868
  902
  939
  977
  1,018
  1,061
  1,107
  1,155
  1,206
  1,260
  1,317
  1,377
  1,440
  1,507
  1,577
  1,651
  1,729
  1,811
  1,897
  1,988
Change in working capital, $m
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
Cash from operations, $m
  719
  734
  750
  769
  789
  812
  836
  862
  890
  920
  874
  909
  945
  984
  1,025
  1,069
  1,115
  1,164
  1,216
  1,270
  1,328
  1,388
  1,452
  1,519
  1,590
  1,665
  1,743
  1,826
  1,913
  2,004
Maintenance CAPEX, $m
  -215
  -220
  -225
  -230
  -237
  -244
  -252
  -261
  -270
  -280
  -291
  -302
  -314
  -327
  -341
  -356
  -372
  -388
  -406
  -424
  -444
  -464
  -486
  -509
  -533
  -558
  -585
  -613
  -642
  -674
New CAPEX, $m
  -57
  -65
  -74
  -84
  -93
  -102
  -111
  -120
  -129
  -139
  -148
  -158
  -168
  -179
  -190
  -201
  -213
  -225
  -238
  -251
  -265
  -280
  -295
  -311
  -327
  -344
  -363
  -381
  -401
  -422
Cash from investing activities, $m
  -272
  -285
  -299
  -314
  -330
  -346
  -363
  -381
  -399
  -419
  -439
  -460
  -482
  -506
  -531
  -557
  -585
  -613
  -644
  -675
  -709
  -744
  -781
  -820
  -860
  -902
  -948
  -994
  -1,043
  -1,096
Free cash flow, $m
  448
  449
  451
  455
  460
  466
  473
  482
  491
  502
  435
  448
  462
  478
  494
  512
  530
  551
  572
  595
  619
  644
  671
  700
  730
  762
  796
  831
  869
  908
Issuance/(repayment) of debt, $m
  45
  52
  59
  66
  73
  81
  88
  95
  102
  110
  117
  125
  133
  142
  150
  159
  169
  178
  189
  199
  210
  222
  234
  246
  259
  273
  287
  302
  318
  334
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  
  45
  52
  59
  66
  73
  81
  88
  95
  102
  110
  117
  125
  133
  142
  150
  159
  169
  178
  189
  199
  210
  222
  234
  246
  259
  273
  287
  302
  318
  334
Total cash flow (excl. dividends), $m
  493
  501
  510
  521
  533
  546
  561
  576
  593
  612
  553
  574
  596
  619
  644
  671
  699
  729
  761
  794
  829
  866
  905
  946
  989
  1,035
  1,083
  1,134
  1,187
  1,243
Retained Cash Flow (-), $m
  -24
  -30
  -34
  -38
  -42
  -46
  -51
  -55
  -59
  -63
  -68
  -72
  -77
  -82
  -87
  -92
  -97
  -103
  -109
  -115
  -121
  -128
  -135
  -142
  -150
  -158
  -166
  -174
  -184
  -193
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
  469
  471
  476
  483
  491
  500
  510
  522
  534
  548
  485
  501
  519
  538
  558
  579
  602
  626
  652
  679
  708
  738
  770
  804
  840
  878
  917
  959
  1,003
  1,050
Discount rate, %
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
  439
  411
  385
  358
  332
  306
  279
  254
  229
  204
  155
  136
  118
  102
  86
  72
  59
  48
  38
  30
  23
  17
  13
  9
  6
  4
  3
  2
  1
  1
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

Casey's General Stores, Inc. and its subsidiaries, operate convenience stores under the name Casey's General Store in approximately 10 Midwestern states, in Iowa, Missouri, and Illinois. The Company also operates approximately two stores selling primarily tobacco products. The stores carry a range of food, including freshly prepared foods such as pizza, donuts, and sandwiches, beverages, tobacco products, health and beauty aids, automotive products and other nonfood items. The Company operates approximately 1,930 stores. It operates approximately two distribution centers, through which the Company supply grocery and general merchandise items to its stores. Its general store typically carries over 3,000 food and nonfood items. The Company's stores sell regional brands of dairy and bakery products, and approximately 90% of the stores offer beer. Its non-food items include tobacco products, health and beauty aids, school supplies, housewares, pet supplies, and automotive products.

FINANCIAL RATIOS  of  Caseys General Stores, Inc. (CASY)

Valuation Ratios
P/E Ratio 33.7
Price to Sales 0.8
Price to Book 5
Price to Tangible Book
Price to Cash Flow 13
Price to Free Cash Flow 229.7
Growth Rates
Sales Growth Rate 5.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 10.2%
Cap. Spend. - 3 Yr. Gr. Rate 7%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 76.2%
Total Debt to Equity 77.6%
Interest Coverage 8
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 8.5%
Return On Total Capital 8.8%
Ret/ On T. Cap. - 3 Yr. Avg. 10.7%
Return On Equity 15.6%
Return On Equity - 3 Yr. Avg. 20.5%
Asset Turnover 2.6
Profitability Ratios
Gross Margin 22.4%
Gross Margin - 3 Yr. Avg. 21.2%
EBITDA Margin 6.8%
EBITDA Margin - 3 Yr. Avg. 6.9%
Operating Margin 4.2%
Oper. Margin - 3 Yr. Avg. 4.6%
Pre-Tax Margin 3.6%
Pre-Tax Margin - 3 Yr. Avg. 4%
Net Profit Margin 2.4%
Net Profit Margin - 3 Yr. Avg. 2.6%
Effective Tax Rate 34.4%
Eff/ Tax Rate - 3 Yr. Avg. 35.2%
Payout Ratio 20.9%

CASY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CASY stock intrinsic value calculation we used $8391 million for the last fiscal year's total revenue generated by Caseys General Stores, Inc.. The default revenue input number comes from 0001 income statement of Caseys General Stores, 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 CASY 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 6.7%, whose default value for CASY is calculated based on our internal credit rating of Caseys General Stores, 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 Caseys General Stores, 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 CASY stock the variable cost ratio is equal to 95.9%.

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 CASY 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 Caseys General Stores, Inc..

Corporate tax rate of 27% is the nominal tax rate for Caseys General Stores, 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 CASY 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 CASY are equal to 33.1%.

Life of production assets of 12.9 years is the average useful life of capital assets used in Caseys General Stores, 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 CASY is equal to -1.3%. 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 - $1271.141 million for Caseys General Stores, 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 36.657 million for Caseys General Stores, 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 Caseys General Stores, Inc. at the current share price and the inputted number of shares is $5.6 billion.

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