Intrinsic value of C.H. Robinson Worldwide, Inc. - CHRW

Previous Close

$89.99

  Intrinsic Value

$76.69

stock screener

  Rating & Target

hold

-15%

Previous close

$89.99

 
Intrinsic value

$76.69

 
Up/down potential

-15%

 
Rating

hold

We calculate the intrinsic value of CHRW 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 12.3

 

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, %
  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
  4.87
  4.89
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
  4.95
  4.95
  4.96
  4.96
  4.96
  4.97
  4.97
  4.97
  4.98
Revenue, $m
  17,379
  18,170
  19,005
  19,886
  20,815
  21,794
  22,826
  23,913
  25,057
  26,261
  27,529
  28,862
  30,264
  31,739
  33,290
  34,920
  36,634
  38,435
  40,328
  42,317
  44,407
  46,603
  48,910
  51,334
  53,880
  56,555
  59,364
  62,315
  65,415
  68,670
Variable operating expenses, $m
  16,023
  16,751
  17,519
  18,330
  19,186
  20,087
  21,037
  22,038
  23,091
  24,200
  25,344
  26,571
  27,862
  29,220
  30,647
  32,148
  33,726
  35,384
  37,127
  38,958
  40,882
  42,904
  45,028
  47,260
  49,604
  52,066
  54,653
  57,369
  60,223
  63,220
Fixed operating expenses, $m
  396
  404
  413
  422
  431
  441
  451
  461
  471
  481
  492
  502
  514
  525
  536
  548
  560
  573
  585
  598
  611
  625
  638
  652
  667
  681
  696
  712
  727
  743
Total operating expenses, $m
  16,419
  17,155
  17,932
  18,752
  19,617
  20,528
  21,488
  22,499
  23,562
  24,681
  25,836
  27,073
  28,376
  29,745
  31,183
  32,696
  34,286
  35,957
  37,712
  39,556
  41,493
  43,529
  45,666
  47,912
  50,271
  52,747
  55,349
  58,081
  60,950
  63,963
Operating income, $m
  961
  1,015
  1,073
  1,133
  1,198
  1,266
  1,338
  1,415
  1,495
  1,581
  1,693
  1,788
  1,889
  1,994
  2,106
  2,223
  2,347
  2,478
  2,616
  2,761
  2,913
  3,074
  3,244
  3,422
  3,610
  3,807
  4,015
  4,234
  4,465
  4,707
EBITDA, $m
  1,042
  1,099
  1,159
  1,222
  1,290
  1,362
  1,437
  1,517
  1,602
  1,691
  1,785
  1,885
  1,989
  2,100
  2,217
  2,340
  2,470
  2,606
  2,750
  2,902
  3,061
  3,230
  3,407
  3,593
  3,789
  3,996
  4,213
  4,442
  4,683
  4,936
Interest expense (income), $m
  29
  78
  85
  92
  100
  108
  116
  125
  135
  145
  155
  166
  178
  190
  203
  217
  231
  246
  262
  278
  296
  314
  333
  354
  375
  397
  420
  445
  471
  498
  527
Earnings before tax, $m
  883
  931
  981
  1,034
  1,090
  1,150
  1,213
  1,280
  1,351
  1,425
  1,527
  1,610
  1,698
  1,791
  1,889
  1,992
  2,101
  2,216
  2,337
  2,465
  2,599
  2,741
  2,890
  3,047
  3,213
  3,387
  3,570
  3,763
  3,966
  4,180
Tax expense, $m
  239
  251
  265
  279
  294
  310
  328
  346
  365
  385
  412
  435
  459
  484
  510
  538
  567
  598
  631
  666
  702
  740
  780
  823
  867
  914
  964
  1,016
  1,071
  1,129
Net income, $m
  645
  679
  716
  755
  796
  839
  885
  934
  986
  1,040
  1,115
  1,176
  1,240
  1,308
  1,379
  1,454
  1,534
  1,618
  1,706
  1,799
  1,898
  2,001
  2,110
  2,224
  2,345
  2,472
  2,606
  2,747
  2,896
  3,052

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
  4,627
  4,838
  5,060
  5,294
  5,542
  5,803
  6,077
  6,367
  6,671
  6,992
  7,329
  7,684
  8,058
  8,450
  8,863
  9,297
  9,753
  10,233
  10,737
  11,266
  11,823
  12,408
  13,022
  13,667
  14,345
  15,057
  15,805
  16,591
  17,416
  18,283
Adjusted assets (=assets-cash), $m
  4,627
  4,838
  5,060
  5,294
  5,542
  5,803
  6,077
  6,367
  6,671
  6,992
  7,329
  7,684
  8,058
  8,450
  8,863
  9,297
  9,753
  10,233
  10,737
  11,266
  11,823
  12,408
  13,022
  13,667
  14,345
  15,057
  15,805
  16,591
  17,416
  18,283
Revenue / Adjusted assets
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
  3.756
Average production assets, $m
  973
  1,018
  1,064
  1,114
  1,166
  1,220
  1,278
  1,339
  1,403
  1,471
  1,542
  1,616
  1,695
  1,777
  1,864
  1,956
  2,051
  2,152
  2,258
  2,370
  2,487
  2,610
  2,739
  2,875
  3,017
  3,167
  3,324
  3,490
  3,663
  3,846
Working capital, $m
  1,078
  1,127
  1,178
  1,233
  1,291
  1,351
  1,415
  1,483
  1,554
  1,628
  1,707
  1,789
  1,876
  1,968
  2,064
  2,165
  2,271
  2,383
  2,500
  2,624
  2,753
  2,889
  3,032
  3,183
  3,341
  3,506
  3,681
  3,864
  4,056
  4,258
Total debt, $m
  1,567
  1,702
  1,844
  1,995
  2,153
  2,320
  2,496
  2,681
  2,876
  3,081
  3,297
  3,524
  3,763
  4,014
  4,278
  4,556
  4,848
  5,155
  5,478
  5,817
  6,173
  6,547
  6,940
  7,353
  7,787
  8,243
  8,721
  9,224
  9,752
  10,307
Total liabilities, $m
  2,961
  3,096
  3,238
  3,388
  3,547
  3,714
  3,889
  4,075
  4,270
  4,475
  4,691
  4,918
  5,157
  5,408
  5,672
  5,950
  6,242
  6,549
  6,872
  7,211
  7,567
  7,941
  8,334
  8,747
  9,181
  9,637
  10,115
  10,618
  11,146
  11,701
Total equity, $m
  1,666
  1,742
  1,822
  1,906
  1,995
  2,089
  2,188
  2,292
  2,402
  2,517
  2,639
  2,766
  2,901
  3,042
  3,191
  3,347
  3,511
  3,684
  3,865
  4,056
  4,256
  4,467
  4,688
  4,920
  5,164
  5,421
  5,690
  5,973
  6,270
  6,582
Total liabilities and equity, $m
  4,627
  4,838
  5,060
  5,294
  5,542
  5,803
  6,077
  6,367
  6,672
  6,992
  7,330
  7,684
  8,058
  8,450
  8,863
  9,297
  9,753
  10,233
  10,737
  11,267
  11,823
  12,408
  13,022
  13,667
  14,345
  15,058
  15,805
  16,591
  17,416
  18,283
Debt-to-equity ratio
  0.940
  0.980
  1.010
  1.050
  1.080
  1.110
  1.140
  1.170
  1.200
  1.220
  1.250
  1.270
  1.300
  1.320
  1.340
  1.360
  1.380
  1.400
  1.420
  1.430
  1.450
  1.470
  1.480
  1.490
  1.510
  1.520
  1.530
  1.540
  1.560
  1.570
Adjusted equity ratio
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  645
  679
  716
  755
  796
  839
  885
  934
  986
  1,040
  1,115
  1,176
  1,240
  1,308
  1,379
  1,454
  1,534
  1,618
  1,706
  1,799
  1,898
  2,001
  2,110
  2,224
  2,345
  2,472
  2,606
  2,747
  2,896
  3,052
Depreciation, amort., depletion, $m
  81
  83
  86
  89
  92
  95
  99
  103
  106
  110
  92
  96
  101
  106
  111
  116
  122
  128
  134
  141
  148
  155
  163
  171
  180
  189
  198
  208
  218
  229
Funds from operations, $m
  726
  763
  802
  844
  888
  935
  984
  1,037
  1,092
  1,151
  1,206
  1,272
  1,341
  1,413
  1,490
  1,571
  1,656
  1,746
  1,841
  1,940
  2,046
  2,156
  2,273
  2,396
  2,525
  2,661
  2,804
  2,955
  3,114
  3,281
Change in working capital, $m
  46
  49
  52
  55
  58
  61
  64
  67
  71
  75
  79
  83
  87
  91
  96
  101
  106
  112
  117
  123
  130
  136
  143
  150
  158
  166
  174
  183
  192
  202
Cash from operations, $m
  679
  714
  750
  789
  830
  874
  920
  969
  1,021
  1,076
  1,128
  1,189
  1,254
  1,322
  1,394
  1,470
  1,550
  1,634
  1,723
  1,817
  1,916
  2,020
  2,130
  2,245
  2,367
  2,495
  2,630
  2,772
  2,921
  3,079
Maintenance CAPEX, $m
  -55
  -58
  -61
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -88
  -92
  -96
  -101
  -106
  -111
  -116
  -122
  -128
  -134
  -141
  -148
  -155
  -163
  -171
  -180
  -189
  -198
  -208
  -218
New CAPEX, $m
  -45
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -91
  -96
  -101
  -106
  -111
  -117
  -123
  -129
  -136
  -143
  -150
  -157
  -165
  -174
  -182
Cash from investing activities, $m
  -100
  -102
  -108
  -112
  -118
  -124
  -131
  -137
  -144
  -151
  -159
  -167
  -175
  -184
  -193
  -202
  -212
  -223
  -234
  -245
  -258
  -271
  -284
  -299
  -314
  -330
  -346
  -363
  -382
  -400
Free cash flow, $m
  579
  611
  643
  676
  712
  750
  790
  832
  877
  925
  969
  1,023
  1,079
  1,138
  1,201
  1,268
  1,337
  1,411
  1,489
  1,571
  1,658
  1,749
  1,845
  1,947
  2,053
  2,166
  2,284
  2,409
  2,540
  2,678
Issuance/(repayment) of debt, $m
  129
  135
  142
  150
  158
  167
  176
  185
  195
  205
  216
  227
  239
  251
  264
  278
  292
  307
  323
  339
  356
  374
  393
  413
  434
  456
  479
  503
  528
  555
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  
  129
  135
  142
  150
  158
  167
  176
  185
  195
  205
  216
  227
  239
  251
  264
  278
  292
  307
  323
  339
  356
  374
  393
  413
  434
  456
  479
  503
  528
  555
Total cash flow (excl. dividends), $m
  708
  746
  785
  827
  870
  917
  966
  1,018
  1,072
  1,130
  1,185
  1,250
  1,318
  1,390
  1,465
  1,545
  1,629
  1,718
  1,812
  1,910
  2,014
  2,123
  2,238
  2,360
  2,487
  2,621
  2,763
  2,912
  3,068
  3,233
Retained Cash Flow (-), $m
  -71
  -76
  -80
  -84
  -89
  -94
  -99
  -104
  -110
  -115
  -121
  -128
  -134
  -141
  -149
  -156
  -164
  -173
  -181
  -191
  -200
  -210
  -221
  -232
  -244
  -256
  -269
  -283
  -297
  -312
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
  637
  670
  705
  742
  781
  823
  867
  913
  963
  1,015
  1,064
  1,122
  1,183
  1,248
  1,317
  1,389
  1,465
  1,546
  1,630
  1,720
  1,814
  1,913
  2,017
  2,127
  2,243
  2,365
  2,494
  2,629
  2,771
  2,921
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
  611
  614
  614
  611
  606
  597
  586
  571
  553
  532
  505
  479
  450
  419
  387
  353
  319
  285
  251
  219
  188
  159
  132
  108
  87
  69
  54
  41
  30
  22
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

C.H. Robinson Worldwide, Inc. is a provider of transportation services and logistics solutions through a network of offices operating in North America, Europe, Asia, Australia, New Zealand and South America. The Company's segments include North American Surface Transportation (NAST), Global Forwarding, Robinson Fresh, and All Other and Corporate. The NAST segment provides freight transportation services across North America through a network of offices in the United States, Canada and Mexico. The primary services provided by Global Forwarding segment include ocean freight services, air freight services, and customs brokerage. The Robinson Fresh segment provides sourcing under the trade name Robinson Fresh. The All Other and Corporate segment primarily consists of Managed Services and Other Surface Transportation outside of North America. It develops global transportation and distribution networks to provide transportation and supply chain services throughout the world.

FINANCIAL RATIOS  of  C.H. Robinson Worldwide, Inc. (CHRW)

Valuation Ratios
P/E Ratio 24.8
Price to Sales 1
Price to Book 10.1
Price to Tangible Book
Price to Cash Flow 24
Price to Free Cash Flow 29
Growth Rates
Sales Growth Rate -2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 102.2%
Cap. Spend. - 3 Yr. Gr. Rate 13.6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 39.7%
Total Debt to Equity 105.1%
Interest Coverage 29
Management Effectiveness
Return On Assets 15.5%
Ret/ On Assets - 3 Yr. Avg. 15.8%
Return On Total Capital 21.5%
Ret/ On T. Cap. - 3 Yr. Avg. 22.2%
Return On Equity 42.6%
Return On Equity - 3 Yr. Avg. 44.8%
Asset Turnover 3.8
Profitability Ratios
Gross Margin 17.3%
Gross Margin - 3 Yr. Avg. 16.4%
EBITDA Margin 7%
EBITDA Margin - 3 Yr. Avg. 6.6%
Operating Margin 6.6%
Oper. Margin - 3 Yr. Avg. 6.3%
Pre-Tax Margin 6.2%
Pre-Tax Margin - 3 Yr. Avg. 5.9%
Net Profit Margin 3.9%
Net Profit Margin - 3 Yr. Avg. 3.7%
Effective Tax Rate 36.8%
Eff/ Tax Rate - 3 Yr. Avg. 37.5%
Payout Ratio 47.8%

CHRW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CHRW stock intrinsic value calculation we used $16631 million for the last fiscal year's total revenue generated by C.H. Robinson Worldwide, Inc.. The default revenue input number comes from 0001 income statement of C.H. Robinson Worldwide, 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 CHRW stock valuation model: a) initial revenue growth rate of 4.5% 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 4.3%, whose default value for CHRW is calculated based on our internal credit rating of C.H. Robinson Worldwide, 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 C.H. Robinson Worldwide, 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 CHRW stock the variable cost ratio is equal to 92.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $387 million in the base year in the intrinsic value calculation for CHRW 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 C.H. Robinson Worldwide, Inc..

Corporate tax rate of 27% is the nominal tax rate for C.H. Robinson Worldwide, 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 CHRW 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 CHRW are equal to 5.6%.

Life of production assets of 16.8 years is the average useful life of capital assets used in C.H. Robinson Worldwide, 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 CHRW is equal to 6.2%. 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 - $1595.087 million for C.H. Robinson Worldwide, 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 136.854 million for C.H. Robinson Worldwide, 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 C.H. Robinson Worldwide, Inc. at the current share price and the inputted number of shares is $12.3 billion.

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