Intrinsic value of Calgon Carbon - CCC

Previous Close

$21.40

  Intrinsic Value

$1.55

stock screener

  Rating & Target

str. sell

-93%

Previous close

$21.40

 
Intrinsic value

$1.55

 
Up/down potential

-93%

 
Rating

str. sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CCC 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -3.93
  31.50
  28.85
  26.47
  24.32
  22.39
  20.65
  19.08
  17.67
  16.41
  15.27
  14.24
  13.32
  12.48
  11.74
  11.06
  10.46
  9.91
  9.42
  8.98
  8.58
  8.22
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
Revenue, $m
  514
  676
  871
  1,101
  1,369
  1,676
  2,022
  2,408
  2,833
  3,298
  3,801
  4,343
  4,921
  5,535
  6,185
  6,869
  7,588
  8,340
  9,125
  9,944
  10,797
  11,685
  12,608
  13,568
  14,565
  15,601
  16,678
  17,797
  18,961
  20,172
  21,433
Variable operating expenses, $m
 
  592
  761
  961
  1,193
  1,458
  1,758
  2,092
  2,461
  2,863
  3,299
  3,762
  4,262
  4,795
  5,357
  5,950
  6,572
  7,223
  7,904
  8,613
  9,352
  10,121
  10,921
  11,752
  12,615
  13,513
  14,446
  15,415
  16,424
  17,472
  18,564
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
  490
  592
  761
  961
  1,193
  1,458
  1,758
  2,092
  2,461
  2,863
  3,299
  3,762
  4,262
  4,795
  5,357
  5,950
  6,572
  7,223
  7,904
  8,613
  9,352
  10,121
  10,921
  11,752
  12,615
  13,513
  14,446
  15,415
  16,424
  17,472
  18,564
Operating income, $m
  25
  84
  110
  141
  177
  218
  264
  316
  373
  435
  502
  581
  659
  741
  828
  919
  1,016
  1,116
  1,221
  1,331
  1,445
  1,564
  1,688
  1,816
  1,949
  2,088
  2,232
  2,382
  2,538
  2,700
  2,869
EBITDA, $m
  63
  135
  173
  219
  273
  334
  403
  479
  564
  657
  757
  865
  980
  1,102
  1,232
  1,368
  1,511
  1,661
  1,817
  1,980
  2,150
  2,327
  2,511
  2,702
  2,900
  3,106
  3,321
  3,544
  3,776
  4,017
  4,268
Interest expense (income), $m
  3
  8
  12
  17
  23
  30
  39
  48
  58
  69
  82
  95
  109
  125
  141
  158
  176
  195
  215
  236
  258
  280
  304
  328
  354
  380
  408
  436
  466
  497
  529
Earnings before tax, $m
  20
  76
  98
  124
  153
  187
  225
  268
  315
  366
  421
  486
  549
  616
  687
  761
  839
  921
  1,006
  1,095
  1,187
  1,284
  1,384
  1,488
  1,596
  1,708
  1,824
  1,946
  2,072
  2,203
  2,340
Tax expense, $m
  6
  21
  26
  33
  41
  51
  61
  72
  85
  99
  114
  131
  148
  166
  185
  206
  227
  249
  272
  296
  321
  347
  374
  402
  431
  461
  493
  525
  559
  595
  632
Net income, $m
  14
  56
  72
  90
  112
  137
  165
  196
  230
  267
  307
  355
  401
  450
  501
  556
  613
  672
  734
  799
  867
  937
  1,010
  1,086
  1,165
  1,247
  1,332
  1,420
  1,512
  1,608
  1,708

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  38
  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
  775
  970
  1,250
  1,580
  1,964
  2,404
  2,901
  3,454
  4,065
  4,732
  5,454
  6,231
  7,060
  7,942
  8,874
  9,856
  10,886
  11,965
  13,092
  14,267
  15,491
  16,765
  18,089
  19,466
  20,896
  22,383
  23,928
  25,534
  27,204
  28,942
  30,750
Adjusted assets (=assets-cash), $m
  737
  970
  1,250
  1,580
  1,964
  2,404
  2,901
  3,454
  4,065
  4,732
  5,454
  6,231
  7,060
  7,942
  8,874
  9,856
  10,886
  11,965
  13,092
  14,267
  15,491
  16,765
  18,089
  19,466
  20,896
  22,383
  23,928
  25,534
  27,204
  28,942
  30,750
Revenue / Adjusted assets
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
  0.697
Average production assets, $m
  363
  477
  614
  776
  965
  1,181
  1,425
  1,697
  1,997
  2,325
  2,680
  3,062
  3,469
  3,902
  4,360
  4,843
  5,349
  5,879
  6,433
  7,011
  7,612
  8,238
  8,889
  9,565
  10,268
  10,999
  11,758
  12,547
  13,368
  14,222
  15,110
Working capital, $m
  191
  208
  267
  338
  420
  514
  621
  739
  870
  1,012
  1,167
  1,333
  1,511
  1,699
  1,899
  2,109
  2,329
  2,560
  2,801
  3,053
  3,315
  3,587
  3,871
  4,165
  4,471
  4,789
  5,120
  5,464
  5,821
  6,193
  6,580
Total debt, $m
  225
  343
  491
  665
  868
  1,100
  1,363
  1,655
  1,977
  2,329
  2,711
  3,121
  3,559
  4,024
  4,516
  5,035
  5,579
  6,148
  6,744
  7,364
  8,010
  8,683
  9,382
  10,109
  10,864
  11,649
  12,465
  13,313
  14,195
  15,112
  16,067
Total liabilities, $m
  394
  512
  660
  834
  1,037
  1,269
  1,532
  1,824
  2,146
  2,498
  2,880
  3,290
  3,728
  4,193
  4,685
  5,204
  5,748
  6,317
  6,913
  7,533
  8,179
  8,852
  9,551
  10,278
  11,033
  11,818
  12,634
  13,482
  14,364
  15,281
  16,236
Total equity, $m
  381
  458
  590
  746
  927
  1,135
  1,369
  1,630
  1,919
  2,233
  2,574
  2,941
  3,333
  3,749
  4,188
  4,652
  5,138
  5,647
  6,179
  6,734
  7,312
  7,913
  8,538
  9,188
  9,863
  10,565
  11,294
  12,052
  12,840
  13,660
  14,514
Total liabilities and equity, $m
  775
  970
  1,250
  1,580
  1,964
  2,404
  2,901
  3,454
  4,065
  4,731
  5,454
  6,231
  7,061
  7,942
  8,873
  9,856
  10,886
  11,964
  13,092
  14,267
  15,491
  16,765
  18,089
  19,466
  20,896
  22,383
  23,928
  25,534
  27,204
  28,941
  30,750
Debt-to-equity ratio
  0.591
  0.750
  0.830
  0.890
  0.940
  0.970
  1.000
  1.010
  1.030
  1.040
  1.050
  1.060
  1.070
  1.070
  1.080
  1.080
  1.090
  1.090
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.100
  1.110
  1.110
  1.110
Adjusted equity ratio
  0.465
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472
  0.472

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  14
  56
  72
  90
  112
  137
  165
  196
  230
  267
  307
  355
  401
  450
  501
  556
  613
  672
  734
  799
  867
  937
  1,010
  1,086
  1,165
  1,247
  1,332
  1,420
  1,512
  1,608
  1,708
Depreciation, amort., depletion, $m
  38
  51
  63
  78
  96
  116
  139
  164
  192
  222
  255
  283
  321
  361
  404
  448
  495
  544
  596
  649
  705
  763
  823
  886
  951
  1,018
  1,089
  1,162
  1,238
  1,317
  1,399
Funds from operations, $m
  83
  106
  135
  169
  208
  253
  303
  359
  421
  489
  562
  639
  722
  811
  905
  1,004
  1,108
  1,217
  1,330
  1,448
  1,572
  1,700
  1,833
  1,972
  2,116
  2,265
  2,421
  2,582
  2,750
  2,925
  3,107
Change in working capital, $m
  14
  50
  60
  71
  82
  94
  106
  118
  131
  143
  155
  166
  178
  189
  199
  210
  221
  231
  241
  251
  262
  273
  283
  295
  306
  318
  331
  344
  357
  372
  387
Cash from operations, $m
  69
  57
  75
  98
  126
  159
  197
  241
  291
  346
  407
  472
  545
  623
  706
  794
  887
  986
  1,089
  1,197
  1,310
  1,427
  1,550
  1,677
  1,809
  1,947
  2,090
  2,238
  2,393
  2,553
  2,720
Maintenance CAPEX, $m
  0
  -34
  -44
  -57
  -72
  -89
  -109
  -132
  -157
  -185
  -215
  -248
  -283
  -321
  -361
  -404
  -448
  -495
  -544
  -596
  -649
  -705
  -763
  -823
  -886
  -951
  -1,018
  -1,089
  -1,162
  -1,238
  -1,317
New CAPEX, $m
  -32
  -114
  -137
  -162
  -189
  -216
  -244
  -272
  -300
  -328
  -355
  -382
  -408
  -433
  -458
  -482
  -506
  -530
  -554
  -578
  -602
  -626
  -651
  -676
  -703
  -730
  -759
  -789
  -821
  -854
  -889
Cash from investing activities, $m
  -184
  -148
  -181
  -219
  -261
  -305
  -353
  -404
  -457
  -513
  -570
  -630
  -691
  -754
  -819
  -886
  -954
  -1,025
  -1,098
  -1,174
  -1,251
  -1,331
  -1,414
  -1,499
  -1,589
  -1,681
  -1,777
  -1,878
  -1,983
  -2,092
  -2,206
Free cash flow, $m
  -115
  -91
  -107
  -121
  -135
  -147
  -156
  -163
  -167
  -167
  -163
  -157
  -146
  -132
  -114
  -92
  -67
  -40
  -9
  24
  59
  97
  136
  178
  221
  266
  312
  361
  410
  462
  515
Issuance/(repayment) of debt, $m
  114
  123
  148
  175
  203
  232
  262
  292
  322
  352
  381
  410
  438
  465
  492
  518
  544
  570
  595
  621
  646
  672
  699
  727
  755
  785
  816
  848
  882
  917
  955
Issuance/(repurchase) of shares, $m
  -8
  54
  61
  66
  69
  71
  70
  66
  58
  48
  34
  12
  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  
  111
  177
  209
  241
  272
  303
  332
  358
  380
  400
  415
  422
  438
  465
  492
  518
  544
  570
  595
  621
  646
  672
  699
  727
  755
  785
  816
  848
  882
  917
  955
Total cash flow (excl. dividends), $m
  -6
  86
  102
  119
  137
  156
  175
  195
  214
  233
  252
  264
  292
  334
  379
  426
  477
  530
  586
  644
  705
  769
  835
  904
  976
  1,051
  1,128
  1,209
  1,292
  1,379
  1,469
Retained Cash Flow (-), $m
  13
  -110
  -132
  -156
  -181
  -208
  -234
  -261
  -288
  -315
  -341
  -367
  -392
  -416
  -440
  -463
  -486
  -509
  -532
  -555
  -578
  -601
  -625
  -650
  -675
  -702
  -729
  -758
  -788
  -820
  -854
Prev. year cash balance distribution, $m
 
  33
  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
 
  9
  -30
  -37
  -44
  -51
  -59
  -66
  -74
  -81
  -89
  -102
  -100
  -82
  -61
  -37
  -10
  21
  54
  90
  128
  168
  210
  255
  301
  349
  399
  451
  504
  559
  616
Discount rate, %
 
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
 
  9
  -27
  -31
  -34
  -36
  -38
  -39
  -39
  -38
  -36
  -37
  -31
  -22
  -14
  -7
  -1
  3
  5
  7
  8
  8
  7
  6
  5
  4
  3
  2
  2
  1
  1
Current shareholders' claim on cash, %
  100
  94.8
  90.6
  87.2
  84.4
  82.2
  80.5
  79.2
  78.2
  77.5
  77.1
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0
  77.0

Calgon Carbon Corporation is a manufacturer of activated carbon, with capabilities in ultraviolet (UV) light disinfection. The Company provides purification solutions for drinking water, wastewater, pollution abatement, and a range of industrial and commercial manufacturing processes. The Company operates through four segments: Activated Carbon and Service, Equipment, Consumer and Other. The Company's products and services are designed to protect human health and the environment from harmful contaminants in water, and air. The Company provides purification solutions for drinking water, wastewater, pollution abatement, and a range of industrial and commercial manufacturing processes. The Company operates in the United States, Europe, Japan, Africa, Canada, China, India, Latin America, and in other parts of Asia.

FINANCIAL RATIOS  of  Calgon Carbon (CCC)

Valuation Ratios
P/E Ratio 77.6
Price to Sales 2.1
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 15.7
Price to Free Cash Flow 29.4
Growth Rates
Sales Growth Rate -3.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -48.4%
Cap. Spend. - 3 Yr. Gr. Rate 1.3%
Financial Strength
Quick Ratio 8
Current Ratio 0.1
LT Debt to Equity 57.7%
Total Debt to Equity 59.1%
Interest Coverage 8
Management Effectiveness
Return On Assets 2.2%
Ret/ On Assets - 3 Yr. Avg. 5.8%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 7.3%
Return On Equity 3.6%
Return On Equity - 3 Yr. Avg. 8.8%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 32.7%
Gross Margin - 3 Yr. Avg. 34.5%
EBITDA Margin 11.9%
EBITDA Margin - 3 Yr. Avg. 16.4%
Operating Margin 4.7%
Oper. Margin - 3 Yr. Avg. 10.1%
Pre-Tax Margin 3.9%
Pre-Tax Margin - 3 Yr. Avg. 9.6%
Net Profit Margin 2.7%
Net Profit Margin - 3 Yr. Avg. 6.5%
Effective Tax Rate 30%
Eff/ Tax Rate - 3 Yr. Avg. 31.5%
Payout Ratio 71.4%

CCC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CCC stock intrinsic value calculation we used $514 million for the last fiscal year's total revenue generated by Calgon Carbon. The default revenue input number comes from 2016 income statement of Calgon Carbon. 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 CCC stock valuation model: a) initial revenue growth rate of 31.5% 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%, whose default value for CCC is calculated based on our internal credit rating of Calgon Carbon, 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 Calgon Carbon.
    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 CCC stock the variable cost ratio is equal to 87.9%.

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 CCC 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 3.5% for Calgon Carbon.

Corporate tax rate of 27% is the nominal tax rate for Calgon Carbon. 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 CCC 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 CCC are equal to 70.5%.

Life of production assets of 10.8 years is the average useful life of capital assets used in Calgon Carbon 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 CCC is equal to 30.7%. 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 - $381 million for Calgon Carbon - 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 50.704 million for Calgon Carbon 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 Calgon Carbon at the current share price and the inputted number of shares is $1.1 billion.

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COMPANY NEWS

▶ Calgon misses 3Q profit forecasts   [Nov-06-17 07:55AM  Associated Press]
▶ Calgon Carbon: Kuraray Pays Up.Big   [11:27AM  Barrons.com]
▶ Calgon meets 2Q profit forecasts   [Aug-04-17 10:38PM  Associated Press]
▶ ETFs with exposure to Calgon Carbon Corp. : July 7, 2017   [Jul-07-17 02:42PM  Capital Cube]
Financial statements of CCC
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