Intrinsic value of Continental Building Products, Inc. - CBPX

Previous Close

$25.38

  Intrinsic Value

$50.59

stock screener

  Rating & Target

str. buy

+99%

Previous close

$25.38

 
Intrinsic value

$50.59

 
Up/down potential

+99%

 
Rating

str. buy

We calculate the intrinsic value of CBPX 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 0.9

 

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, %
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
Revenue, $m
  565
  604
  645
  687
  731
  777
  824
  873
  925
  979
  1,035
  1,093
  1,155
  1,219
  1,285
  1,355
  1,428
  1,505
  1,585
  1,668
  1,756
  1,848
  1,944
  2,045
  2,150
  2,261
  2,377
  2,499
  2,627
  2,761
Variable operating expenses, $m
  307
  327
  347
  369
  391
  415
  439
  464
  490
  518
  528
  558
  589
  622
  656
  692
  729
  768
  809
  851
  896
  943
  992
  1,044
  1,097
  1,154
  1,213
  1,275
  1,341
  1,409
Fixed operating expenses, $m
  139
  142
  145
  148
  152
  155
  158
  162
  165
  169
  173
  177
  180
  184
  188
  193
  197
  201
  206
  210
  215
  220
  224
  229
  234
  239
  245
  250
  256
  261
Total operating expenses, $m
  446
  469
  492
  517
  543
  570
  597
  626
  655
  687
  701
  735
  769
  806
  844
  885
  926
  969
  1,015
  1,061
  1,111
  1,163
  1,216
  1,273
  1,331
  1,393
  1,458
  1,525
  1,597
  1,670
Operating income, $m
  120
  136
  152
  170
  188
  207
  227
  248
  269
  292
  334
  359
  385
  412
  441
  471
  502
  536
  570
  607
  645
  685
  728
  772
  819
  868
  919
  974
  1,031
  1,091
EBITDA, $m
  176
  194
  214
  234
  255
  277
  300
  324
  349
  376
  403
  432
  462
  494
  527
  561
  598
  636
  676
  718
  762
  809
  857
  909
  962
  1,019
  1,078
  1,141
  1,206
  1,275
Interest expense (income), $m
  0
  14
  16
  17
  18
  20
  21
  23
  25
  26
  28
  30
  32
  34
  36
  38
  41
  43
  46
  49
  51
  54
  57
  61
  64
  67
  71
  75
  79
  83
  88
Earnings before tax, $m
  105
  120
  135
  151
  168
  186
  204
  223
  243
  264
  304
  327
  351
  376
  402
  430
  459
  490
  522
  555
  591
  628
  667
  708
  751
  797
  844
  894
  947
  1,003
Tax expense, $m
  28
  32
  37
  41
  45
  50
  55
  60
  66
  71
  82
  88
  95
  102
  109
  116
  124
  132
  141
  150
  160
  170
  180
  191
  203
  215
  228
  242
  256
  271
Net income, $m
  77
  88
  99
  111
  123
  135
  149
  163
  177
  193
  222
  239
  256
  274
  294
  314
  335
  357
  381
  405
  431
  458
  487
  517
  548
  582
  616
  653
  691
  732

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
  676
  722
  771
  821
  873
  928
  984
  1,044
  1,105
  1,169
  1,236
  1,306
  1,380
  1,456
  1,536
  1,619
  1,706
  1,798
  1,893
  1,993
  2,098
  2,208
  2,323
  2,443
  2,569
  2,702
  2,840
  2,986
  3,138
  3,298
Adjusted assets (=assets-cash), $m
  676
  722
  771
  821
  873
  928
  984
  1,044
  1,105
  1,169
  1,236
  1,306
  1,380
  1,456
  1,536
  1,619
  1,706
  1,798
  1,893
  1,993
  2,098
  2,208
  2,323
  2,443
  2,569
  2,702
  2,840
  2,986
  3,138
  3,298
Revenue / Adjusted assets
  0.836
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.836
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
  0.837
Average production assets, $m
  412
  440
  470
  500
  532
  565
  600
  636
  673
  713
  753
  796
  841
  887
  936
  987
  1,040
  1,095
  1,154
  1,215
  1,278
  1,345
  1,415
  1,489
  1,566
  1,646
  1,731
  1,819
  1,912
  2,010
Working capital, $m
  32
  34
  36
  38
  41
  43
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  89
  93
  98
  103
  109
  115
  120
  127
  133
  140
  147
  155
Total debt, $m
  288
  313
  340
  367
  396
  425
  456
  488
  522
  557
  593
  631
  671
  713
  756
  801
  849
  898
  950
  1,005
  1,062
  1,122
  1,184
  1,250
  1,318
  1,390
  1,466
  1,545
  1,628
  1,715
Total liabilities, $m
  368
  393
  419
  447
  475
  505
  536
  568
  601
  636
  673
  711
  750
  792
  835
  881
  928
  978
  1,030
  1,084
  1,141
  1,201
  1,263
  1,329
  1,398
  1,470
  1,545
  1,624
  1,707
  1,794
Total equity, $m
  308
  329
  351
  374
  398
  423
  449
  476
  504
  533
  564
  596
  629
  664
  700
  738
  778
  820
  863
  909
  957
  1,007
  1,059
  1,114
  1,172
  1,232
  1,295
  1,362
  1,431
  1,504
Total liabilities and equity, $m
  676
  722
  770
  821
  873
  928
  985
  1,044
  1,105
  1,169
  1,237
  1,307
  1,379
  1,456
  1,535
  1,619
  1,706
  1,798
  1,893
  1,993
  2,098
  2,208
  2,322
  2,443
  2,570
  2,702
  2,840
  2,986
  3,138
  3,298
Debt-to-equity ratio
  0.940
  0.950
  0.970
  0.980
  0.990
  1.010
  1.020
  1.030
  1.040
  1.040
  1.050
  1.060
  1.070
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.110
  1.110
  1.110
  1.120
  1.120
  1.130
  1.130
  1.130
  1.130
  1.140
  1.140
Adjusted equity ratio
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456
  0.456

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  77
  88
  99
  111
  123
  135
  149
  163
  177
  193
  222
  239
  256
  274
  294
  314
  335
  357
  381
  405
  431
  458
  487
  517
  548
  582
  616
  653
  691
  732
Depreciation, amort., depletion, $m
  56
  59
  61
  64
  67
  70
  73
  77
  80
  84
  69
  73
  77
  81
  86
  91
  95
  100
  106
  111
  117
  123
  130
  137
  144
  151
  159
  167
  175
  184
Funds from operations, $m
  133
  146
  160
  175
  190
  206
  222
  239
  257
  276
  291
  312
  333
  356
  380
  404
  431
  458
  487
  517
  549
  582
  617
  653
  692
  733
  775
  820
  867
  916
Change in working capital, $m
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
Cash from operations, $m
  131
  144
  158
  172
  187
  203
  219
  237
  254
  273
  288
  308
  330
  352
  376
  401
  426
  454
  482
  512
  544
  577
  611
  648
  686
  726
  769
  813
  860
  909
Maintenance CAPEX, $m
  -35
  -38
  -40
  -43
  -46
  -49
  -52
  -55
  -58
  -62
  -65
  -69
  -73
  -77
  -81
  -86
  -91
  -95
  -100
  -106
  -111
  -117
  -123
  -130
  -137
  -144
  -151
  -159
  -167
  -175
New CAPEX, $m
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -81
  -85
  -89
  -93
  -98
Cash from investing activities, $m
  -62
  -66
  -69
  -74
  -78
  -82
  -87
  -91
  -96
  -101
  -106
  -112
  -118
  -124
  -130
  -137
  -144
  -151
  -158
  -167
  -175
  -184
  -193
  -203
  -214
  -225
  -236
  -248
  -260
  -273
Free cash flow, $m
  68
  78
  88
  99
  110
  121
  133
  146
  159
  172
  182
  197
  212
  229
  246
  264
  283
  303
  324
  345
  368
  393
  418
  445
  473
  502
  533
  566
  600
  636
Issuance/(repayment) of debt, $m
  25
  25
  26
  27
  28
  30
  31
  32
  34
  35
  36
  38
  40
  42
  43
  45
  47
  50
  52
  54
  57
  60
  63
  66
  69
  72
  75
  79
  83
  87
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  
  25
  25
  26
  27
  28
  30
  31
  32
  34
  35
  36
  38
  40
  42
  43
  45
  47
  50
  52
  54
  57
  60
  63
  66
  69
  72
  75
  79
  83
  87
Total cash flow (excl. dividends), $m
  93
  103
  114
  126
  138
  151
  164
  178
  192
  207
  218
  235
  252
  270
  289
  309
  330
  352
  375
  400
  425
  452
  480
  510
  541
  574
  609
  645
  683
  723
Retained Cash Flow (-), $m
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -58
  -60
  -63
  -66
  -70
  -73
Prev. year cash balance distribution, $m
  40
  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
  113
  82
  92
  103
  114
  126
  138
  151
  164
  178
  188
  203
  219
  235
  253
  271
  290
  311
  332
  354
  378
  402
  428
  455
  484
  514
  545
  578
  613
  650
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
  108
  75
  80
  85
  89
  91
  93
  94
  94
  93
  89
  87
  83
  79
  74
  69
  63
  57
  51
  45
  39
  33
  28
  23
  19
  15
  12
  9
  7
  5
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
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Continental Building Products, Inc. is a manufacturer of gypsum wallboard and complementary finishing products. The Company operates through wallboard segment. Gypsum wallboard is a primary building material used in residential and commercial construction and in repair and remodel (R&R). It offers customers a range of gypsum wallboard products, including LiftLite, its lightweight product designed to lift and install; its Mold Defense line of products designed for protection against mold and mildew, and its Weather Defense line of moisture and mold-resistant exterior sheathing. The Company also operates a finishing products business that manufactures a line of joint compounds at its plant in Silver Grove (Kentucky) and its joint compound plant in Chambly (Quebec). The Company manufactures gypsum wallboard related products for commercial and residential buildings and houses. The Company's manufacturing facilities are concentrated in the eastern United States and eastern Canada.

FINANCIAL RATIOS  of  Continental Building Products, Inc. (CBPX)

Valuation Ratios
P/E Ratio 22.9
Price to Sales 2.2
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 8.7
Price to Free Cash Flow 9.7
Growth Rates
Sales Growth Rate 9.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 20%
Cap. Spend. - 3 Yr. Gr. Rate 19.1%
Financial Strength
Quick Ratio 26
Current Ratio 0
LT Debt to Equity 85.4%
Total Debt to Equity 86.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 6.9%
Ret/ On Assets - 3 Yr. Avg. 4.5%
Return On Total Capital 7.6%
Ret/ On T. Cap. - 3 Yr. Avg. 4.2%
Return On Equity 14.4%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 27.1%
Gross Margin - 3 Yr. Avg. 25%
EBITDA Margin 24.7%
EBITDA Margin - 3 Yr. Avg. 22.2%
Operating Margin 18.9%
Oper. Margin - 3 Yr. Avg. 14.6%
Pre-Tax Margin 14.5%
Pre-Tax Margin - 3 Yr. Avg. 8.9%
Net Profit Margin 9.5%
Net Profit Margin - 3 Yr. Avg. 5.8%
Effective Tax Rate 34.3%
Eff/ Tax Rate - 3 Yr. Avg. 35.8%
Payout Ratio 0%

CBPX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CBPX stock intrinsic value calculation we used $528 million for the last fiscal year's total revenue generated by Continental Building Products, Inc.. The default revenue input number comes from 0001 income statement of Continental Building Products, 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 CBPX stock valuation model: a) initial revenue growth rate of 7.1% 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 CBPX is calculated based on our internal credit rating of Continental Building Products, 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 Continental Building Products, 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 CBPX stock the variable cost ratio is equal to 54.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $136 million in the base year in the intrinsic value calculation for CBPX 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 Continental Building Products, Inc..

Corporate tax rate of 27% is the nominal tax rate for Continental Building Products, 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 CBPX 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 CBPX are equal to 72.8%.

Life of production assets of 10.9 years is the average useful life of capital assets used in Continental Building Products, 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 CBPX is equal to 5.6%. 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 - $327.747 million for Continental Building Products, 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 35.594 million for Continental Building Products, 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 Continental Building Products, Inc. at the current share price and the inputted number of shares is $0.9 billion.

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