Intrinsic value of Cardtronics Cl A - CATM

Previous Close

$30.30

  Intrinsic Value

$36.26

stock screener

  Rating & Target

hold

+20%

Previous close

$30.30

 
Intrinsic value

$36.26

 
Up/down potential

+20%

 
Rating

hold

We calculate the intrinsic value of CATM 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 1.4

 

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
  1,538
  1,573
  1,614
  1,659
  1,709
  1,764
  1,825
  1,890
  1,960
  2,035
  2,115
  2,201
  2,293
  2,390
  2,493
  2,602
  2,718
  2,840
  2,969
  3,106
  3,250
  3,401
  3,561
  3,730
  3,908
  4,094
  4,291
  4,498
  4,716
  4,945
Variable operating expenses, $m
  1,359
  1,388
  1,421
  1,458
  1,499
  1,545
  1,594
  1,647
  1,705
  1,766
  1,734
  1,804
  1,879
  1,959
  2,043
  2,133
  2,228
  2,328
  2,434
  2,546
  2,664
  2,788
  2,919
  3,057
  3,203
  3,356
  3,517
  3,687
  3,866
  4,054
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
  1,359
  1,388
  1,421
  1,458
  1,499
  1,545
  1,594
  1,647
  1,705
  1,766
  1,734
  1,804
  1,879
  1,959
  2,043
  2,133
  2,228
  2,328
  2,434
  2,546
  2,664
  2,788
  2,919
  3,057
  3,203
  3,356
  3,517
  3,687
  3,866
  4,054
Operating income, $m
  179
  185
  192
  201
  210
  220
  231
  242
  255
  268
  381
  397
  413
  431
  450
  469
  490
  512
  535
  560
  586
  613
  642
  673
  705
  738
  774
  811
  850
  892
EBITDA, $m
  402
  411
  422
  434
  447
  461
  477
  494
  512
  532
  553
  575
  599
  624
  651
  680
  710
  742
  776
  812
  849
  889
  931
  975
  1,021
  1,070
  1,121
  1,176
  1,232
  1,292
Interest expense (income), $m
  17
  50
  51
  53
  55
  57
  60
  63
  66
  70
  73
  77
  81
  86
  91
  96
  101
  107
  113
  120
  126
  134
  141
  149
  158
  166
  176
  186
  196
  207
  218
Earnings before tax, $m
  129
  134
  140
  146
  152
  160
  168
  176
  185
  195
  304
  315
  327
  340
  354
  368
  383
  399
  416
  434
  452
  472
  493
  515
  538
  562
  588
  615
  643
  673
Tax expense, $m
  35
  36
  38
  39
  41
  43
  45
  48
  50
  53
  82
  85
  88
  92
  95
  99
  103
  108
  112
  117
  122
  127
  133
  139
  145
  152
  159
  166
  174
  182
Net income, $m
  94
  98
  102
  106
  111
  117
  122
  129
  135
  142
  222
  230
  239
  248
  258
  269
  280
  291
  304
  317
  330
  345
  360
  376
  393
  411
  429
  449
  470
  492

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
  1,898
  1,942
  1,992
  2,048
  2,110
  2,178
  2,252
  2,333
  2,419
  2,512
  2,611
  2,717
  2,830
  2,950
  3,077
  3,212
  3,355
  3,506
  3,666
  3,834
  4,012
  4,199
  4,397
  4,605
  4,824
  5,055
  5,298
  5,554
  5,822
  6,105
Adjusted assets (=assets-cash), $m
  1,898
  1,942
  1,992
  2,048
  2,110
  2,178
  2,252
  2,333
  2,419
  2,512
  2,611
  2,717
  2,830
  2,950
  3,077
  3,212
  3,355
  3,506
  3,666
  3,834
  4,012
  4,199
  4,397
  4,605
  4,824
  5,055
  5,298
  5,554
  5,822
  6,105
Revenue / Adjusted assets
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
Average production assets, $m
  872
  892
  915
  941
  969
  1,000
  1,034
  1,071
  1,111
  1,154
  1,199
  1,248
  1,300
  1,355
  1,413
  1,475
  1,541
  1,610
  1,684
  1,761
  1,842
  1,929
  2,019
  2,115
  2,216
  2,322
  2,433
  2,551
  2,674
  2,804
Working capital, $m
  -171
  -175
  -179
  -184
  -190
  -196
  -203
  -210
  -218
  -226
  -235
  -244
  -254
  -265
  -277
  -289
  -302
  -315
  -330
  -345
  -361
  -378
  -395
  -414
  -434
  -454
  -476
  -499
  -523
  -549
Total debt, $m
  945
  980
  1,019
  1,063
  1,113
  1,166
  1,225
  1,288
  1,357
  1,430
  1,509
  1,592
  1,681
  1,776
  1,877
  1,983
  2,096
  2,215
  2,341
  2,474
  2,615
  2,763
  2,919
  3,083
  3,257
  3,439
  3,631
  3,833
  4,045
  4,269
Total liabilities, $m
  1,500
  1,534
  1,574
  1,618
  1,667
  1,721
  1,779
  1,843
  1,911
  1,985
  2,063
  2,147
  2,236
  2,331
  2,431
  2,538
  2,651
  2,770
  2,896
  3,029
  3,169
  3,317
  3,473
  3,638
  3,811
  3,993
  4,185
  4,387
  4,600
  4,823
Total equity, $m
  399
  408
  418
  430
  443
  457
  473
  490
  508
  528
  548
  571
  594
  620
  646
  675
  705
  736
  770
  805
  842
  882
  923
  967
  1,013
  1,062
  1,113
  1,166
  1,223
  1,282
Total liabilities and equity, $m
  1,899
  1,942
  1,992
  2,048
  2,110
  2,178
  2,252
  2,333
  2,419
  2,513
  2,611
  2,718
  2,830
  2,951
  3,077
  3,213
  3,356
  3,506
  3,666
  3,834
  4,011
  4,199
  4,396
  4,605
  4,824
  5,055
  5,298
  5,553
  5,823
  6,105
Debt-to-equity ratio
  2.370
  2.400
  2.440
  2.470
  2.510
  2.550
  2.590
  2.630
  2.670
  2.710
  2.750
  2.790
  2.830
  2.870
  2.900
  2.940
  2.970
  3.010
  3.040
  3.070
  3.100
  3.130
  3.160
  3.190
  3.210
  3.240
  3.260
  3.290
  3.310
  3.330
Adjusted equity ratio
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  94
  98
  102
  106
  111
  117
  122
  129
  135
  142
  222
  230
  239
  248
  258
  269
  280
  291
  304
  317
  330
  345
  360
  376
  393
  411
  429
  449
  470
  492
Depreciation, amort., depletion, $m
  223
  226
  229
  233
  237
  241
  246
  252
  257
  263
  171
  178
  186
  194
  202
  211
  220
  230
  241
  252
  263
  276
  288
  302
  317
  332
  348
  364
  382
  401
Funds from operations, $m
  317
  324
  331
  339
  348
  358
  369
  380
  392
  406
  393
  409
  425
  442
  460
  479
  500
  521
  544
  568
  593
  620
  648
  678
  709
  742
  777
  813
  852
  892
Change in working capital, $m
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
Cash from operations, $m
  321
  328
  336
  344
  354
  364
  375
  387
  400
  414
  402
  418
  435
  453
  471
  491
  513
  535
  558
  583
  609
  637
  666
  697
  729
  763
  799
  836
  876
  918
Maintenance CAPEX, $m
  -122
  -125
  -127
  -131
  -134
  -138
  -143
  -148
  -153
  -159
  -165
  -171
  -178
  -186
  -194
  -202
  -211
  -220
  -230
  -241
  -252
  -263
  -276
  -288
  -302
  -317
  -332
  -348
  -364
  -382
New CAPEX, $m
  -17
  -20
  -23
  -26
  -29
  -31
  -34
  -37
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -62
  -66
  -69
  -73
  -77
  -82
  -86
  -91
  -96
  -101
  -106
  -112
  -117
  -124
  -130
Cash from investing activities, $m
  -139
  -145
  -150
  -157
  -163
  -169
  -177
  -185
  -193
  -202
  -211
  -220
  -230
  -241
  -252
  -264
  -277
  -289
  -303
  -318
  -334
  -349
  -367
  -384
  -403
  -423
  -444
  -465
  -488
  -512
Free cash flow, $m
  182
  183
  185
  188
  191
  194
  198
  203
  207
  213
  192
  198
  205
  212
  219
  228
  236
  245
  255
  265
  276
  288
  300
  313
  326
  340
  356
  371
  388
  406
Issuance/(repayment) of debt, $m
  28
  34
  39
  44
  49
  54
  59
  63
  68
  73
  78
  84
  89
  95
  101
  107
  113
  119
  126
  133
  140
  148
  156
  164
  173
  182
  192
  202
  212
  223
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  
  28
  34
  39
  44
  49
  54
  59
  63
  68
  73
  78
  84
  89
  95
  101
  107
  113
  119
  126
  133
  140
  148
  156
  164
  173
  182
  192
  202
  212
  223
Total cash flow (excl. dividends), $m
  209
  218
  225
  232
  240
  248
  257
  266
  276
  286
  270
  282
  294
  307
  320
  334
  349
  365
  381
  398
  417
  436
  456
  477
  499
  523
  547
  573
  601
  629
Retained Cash Flow (-), $m
  -8
  -9
  -10
  -12
  -13
  -14
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -48
  -51
  -54
  -56
  -59
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
  201
  208
  214
  220
  227
  234
  241
  249
  258
  267
  250
  260
  270
  281
  293
  306
  319
  333
  348
  363
  379
  396
  414
  433
  453
  474
  496
  520
  544
  570
Discount rate, %
  8.20
  8.61
  9.04
  9.49
  9.97
  10.47
  10.99
  11.54
  12.12
  12.72
  13.36
  14.02
  14.73
  15.46
  16.24
  17.05
  17.90
  18.79
  19.73
  20.72
  21.76
  22.84
  23.99
  25.19
  26.45
  27.77
  29.16
  30.61
  32.15
  33.75
PV of cash for distribution, $m
  186
  177
  165
  153
  141
  129
  116
  104
  92
  81
  63
  54
  45
  38
  31
  25
  19
  15
  11
  8
  6
  4
  3
  2
  1
  1
  0
  0
  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

Cardtronics plc, formerly Cardtronics, Inc., provides automated consumer financial services through its network of automated teller machines (ATMS) and multi-function financial services kiosks. The Company's operations consists of its North America, Europe, and Corporate & Other segments. Its ATM operations in the United States, Canada, Mexico and Puerto Rico are included in its North America segment. Its ATM operations in the United Kingdom, Ireland, Germany, Poland, Spain and i-design are included in its Europe segment. Its transaction processing operations, which service its North American and European operations, along with external customers, and the Company's corporate general and administrative functions comprise the Corporate & Other segment. As of December 31, 2016, it provided services to approximately 203,000 ATMs throughout the United States (including the United States territory of Puerto Rico), the United Kingdom, Ireland, Germany, Poland, Spain, Canada and Mexico.

FINANCIAL RATIOS  of  Cardtronics Cl A (CATM)

Valuation Ratios
P/E Ratio 15.6
Price to Sales 1.1
Price to Book 3
Price to Tangible Book
Price to Cash Flow 5.1
Price to Free Cash Flow 9.5
Growth Rates
Sales Growth Rate 5.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -11.3%
Cap. Spend. - 3 Yr. Gr. Rate 10.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 110.1%
Total Debt to Equity 110.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 7.5%
Ret/ On Assets - 3 Yr. Avg. 6%
Return On Total Capital 9.3%
Ret/ On T. Cap. - 3 Yr. Avg. 7%
Return On Equity 21.3%
Return On Equity - 3 Yr. Avg. 18.4%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 35.7%
Gross Margin - 3 Yr. Avg. 34.6%
EBITDA Margin 20.6%
EBITDA Margin - 3 Yr. Avg. 19.9%
Operating Margin 11.5%
Oper. Margin - 3 Yr. Avg. 10.8%
Pre-Tax Margin 9.1%
Pre-Tax Margin - 3 Yr. Avg. 7.9%
Net Profit Margin 7%
Net Profit Margin - 3 Yr. Avg. 5.3%
Effective Tax Rate 23.5%
Eff/ Tax Rate - 3 Yr. Avg. 35%
Payout Ratio 0%

CATM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CATM stock intrinsic value calculation we used $1507.599 million for the last fiscal year's total revenue generated by Cardtronics Cl A. The default revenue input number comes from 0001 income statement of Cardtronics Cl A. 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 CATM 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 8.2%, whose default value for CATM is calculated based on our internal credit rating of Cardtronics Cl A, 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 Cardtronics Cl A.
    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 CATM stock the variable cost ratio is equal to 88.5%.

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 CATM 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 Cardtronics Cl A.

Corporate tax rate of 27% is the nominal tax rate for Cardtronics Cl A. 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 CATM 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 CATM are equal to 56.7%.

Life of production assets of 7 years is the average useful life of capital assets used in Cardtronics Cl A 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 CATM is equal to -11.1%. 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 - $390.472 million for Cardtronics Cl A - 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 46.09 million for Cardtronics Cl A 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 Cardtronics Cl A at the current share price and the inputted number of shares is $1.4 billion.

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COMPANY NEWS

▶ Financial tech company doubles Frisco offices in Hall Park   [07:53AM  American City Business Journals]
▶ Is Cardtronics plcs (NASDAQ:CATM) ROE Of 6.2% Concerning?   [Nov-13-18 01:18PM  Simply Wall St.]
▶ Global ATM giants chairman leaves board, successor appointed   [08:54AM  American City Business Journals]
▶ Cardtronics: 3Q Earnings Snapshot   [05:04AM  Associated Press]
▶ 3 Payment Stocks to Gain From Solid Retail Sales   [Aug-30-18 12:00PM  InvestorPlace]
▶ New Strong Buy Stocks for August 7th   [Aug-07-18 11:09AM  Zacks]
▶ Cardtronics: 2Q Earnings Snapshot   [05:14AM  Associated Press]
▶ Cardtronics stock rallies as company tops views   [Aug-02-18 05:50PM  MarketWatch]
▶ Are Cardtronics plcs (NASDAQ:CATM) Interest Costs Too High?   [Jun-26-18 02:35PM  Simply Wall St.]
▶ Former TechnipFMC employee joins Cardtronics C-suite   [May-18-18 05:00PM  American City Business Journals]
▶ Cardtronics: 1Q Earnings Snapshot   [May-03-18 05:12PM  Associated Press]

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