Intrinsic value of Cision Ltd. - CISN

Previous Close

$6.41

  Intrinsic Value

$13.68

stock screener

  Rating & Target

str. buy

+113%

Previous close

$6.41

 
Intrinsic value

$13.68

 
Up/down potential

+113%

 
Rating

str. buy

We calculate the intrinsic value of CISN 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, %
  10.30
  9.77
  9.29
  8.86
  8.48
  8.13
  7.82
  7.53
  7.28
  7.05
  6.85
  6.66
  6.50
  6.35
  6.21
  6.09
  5.98
  5.88
  5.80
  5.72
  5.64
  5.58
  5.52
  5.47
  5.42
  5.38
  5.34
  5.31
  5.28
  5.25
Revenue, $m
  805
  884
  966
  1,052
  1,141
  1,234
  1,330
  1,430
  1,534
  1,642
  1,755
  1,872
  1,994
  2,120
  2,252
  2,389
  2,532
  2,681
  2,836
  2,998
  3,168
  3,344
  3,529
  3,722
  3,924
  4,135
  4,356
  4,587
  4,829
  5,083
Variable operating expenses, $m
  533
  570
  609
  649
  691
  734
  780
  827
  876
  927
  824
  879
  937
  996
  1,058
  1,122
  1,189
  1,259
  1,332
  1,409
  1,488
  1,571
  1,658
  1,749
  1,843
  1,943
  2,046
  2,155
  2,269
  2,388
Fixed operating expenses, $m
  171
  174
  178
  182
  186
  190
  194
  199
  203
  208
  212
  217
  222
  226
  231
  237
  242
  247
  253
  258
  264
  270
  275
  282
  288
  294
  301
  307
  314
  321
Total operating expenses, $m
  704
  744
  787
  831
  877
  924
  974
  1,026
  1,079
  1,135
  1,036
  1,096
  1,159
  1,222
  1,289
  1,359
  1,431
  1,506
  1,585
  1,667
  1,752
  1,841
  1,933
  2,031
  2,131
  2,237
  2,347
  2,462
  2,583
  2,709
Operating income, $m
  101
  139
  179
  220
  264
  309
  356
  405
  455
  508
  718
  776
  835
  898
  962
  1,030
  1,101
  1,174
  1,251
  1,332
  1,416
  1,504
  1,596
  1,692
  1,793
  1,898
  2,009
  2,125
  2,246
  2,374
EBITDA, $m
  332
  378
  425
  475
  526
  580
  636
  695
  755
  818
  884
  952
  1,024
  1,098
  1,175
  1,256
  1,340
  1,427
  1,519
  1,615
  1,715
  1,819
  1,929
  2,043
  2,163
  2,289
  2,420
  2,558
  2,702
  2,854
Interest expense (income), $m
  0
  77
  87
  98
  109
  121
  133
  146
  159
  172
  187
  201
  217
  233
  249
  266
  284
  303
  322
  343
  364
  386
  409
  433
  458
  485
  512
  541
  571
  603
  636
Earnings before tax, $m
  25
  52
  81
  111
  143
  176
  210
  246
  283
  322
  517
  559
  603
  648
  696
  746
  798
  852
  908
  968
  1,030
  1,094
  1,162
  1,233
  1,308
  1,386
  1,468
  1,554
  1,644
  1,738
Tax expense, $m
  7
  14
  22
  30
  39
  47
  57
  66
  76
  87
  140
  151
  163
  175
  188
  201
  215
  230
  245
  261
  278
  295
  314
  333
  353
  374
  396
  420
  444
  469
Net income, $m
  18
  38
  59
  81
  104
  128
  153
  180
  207
  235
  377
  408
  440
  473
  508
  544
  582
  622
  663
  706
  752
  799
  848
  900
  955
  1,012
  1,072
  1,134
  1,200
  1,269

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
  2,059
  2,261
  2,471
  2,690
  2,918
  3,155
  3,401
  3,658
  3,924
  4,201
  4,488
  4,787
  5,099
  5,422
  5,759
  6,110
  6,475
  6,856
  7,254
  7,668
  8,101
  8,553
  9,025
  9,519
  10,035
  10,575
  11,140
  11,731
  12,351
  12,999
Adjusted assets (=assets-cash), $m
  2,059
  2,261
  2,471
  2,690
  2,918
  3,155
  3,401
  3,658
  3,924
  4,201
  4,488
  4,787
  5,099
  5,422
  5,759
  6,110
  6,475
  6,856
  7,254
  7,668
  8,101
  8,553
  9,025
  9,519
  10,035
  10,575
  11,140
  11,731
  12,351
  12,999
Revenue / Adjusted assets
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
  0.391
Average production assets, $m
  928
  1,018
  1,113
  1,211
  1,314
  1,421
  1,532
  1,648
  1,767
  1,892
  2,022
  2,156
  2,297
  2,442
  2,594
  2,752
  2,917
  3,088
  3,267
  3,454
  3,649
  3,853
  4,065
  4,288
  4,520
  4,763
  5,018
  5,284
  5,563
  5,855
Working capital, $m
  -136
  -149
  -163
  -178
  -193
  -208
  -225
  -242
  -259
  -278
  -297
  -316
  -337
  -358
  -381
  -404
  -428
  -453
  -479
  -507
  -535
  -565
  -596
  -629
  -663
  -699
  -736
  -775
  -816
  -859
Total debt, $m
  1,383
  1,553
  1,731
  1,916
  2,109
  2,310
  2,518
  2,735
  2,961
  3,195
  3,438
  3,691
  3,954
  4,228
  4,513
  4,810
  5,119
  5,441
  5,777
  6,128
  6,494
  6,877
  7,276
  7,694
  8,131
  8,587
  9,065
  9,566
  10,089
  10,638
Total liabilities, $m
  1,742
  1,912
  2,090
  2,275
  2,468
  2,669
  2,878
  3,094
  3,320
  3,554
  3,797
  4,050
  4,313
  4,587
  4,872
  5,169
  5,478
  5,800
  6,137
  6,487
  6,853
  7,236
  7,635
  8,053
  8,490
  8,947
  9,425
  9,925
  10,449
  10,997
Total equity, $m
  317
  348
  380
  414
  449
  486
  524
  563
  604
  647
  691
  737
  785
  835
  887
  941
  997
  1,056
  1,117
  1,181
  1,248
  1,317
  1,390
  1,466
  1,545
  1,629
  1,716
  1,807
  1,902
  2,002
Total liabilities and equity, $m
  2,059
  2,260
  2,470
  2,689
  2,917
  3,155
  3,402
  3,657
  3,924
  4,201
  4,488
  4,787
  5,098
  5,422
  5,759
  6,110
  6,475
  6,856
  7,254
  7,668
  8,101
  8,553
  9,025
  9,519
  10,035
  10,576
  11,141
  11,732
  12,351
  12,999
Debt-to-equity ratio
  4.360
  4.460
  4.550
  4.630
  4.690
  4.750
  4.810
  4.860
  4.900
  4.940
  4.970
  5.010
  5.040
  5.060
  5.090
  5.110
  5.130
  5.150
  5.170
  5.190
  5.210
  5.220
  5.240
  5.250
  5.260
  5.270
  5.280
  5.290
  5.300
  5.310
Adjusted equity ratio
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  18
  38
  59
  81
  104
  128
  153
  180
  207
  235
  377
  408
  440
  473
  508
  544
  582
  622
  663
  706
  752
  799
  848
  900
  955
  1,012
  1,072
  1,134
  1,200
  1,269
Depreciation, amort., depletion, $m
  231
  238
  246
  254
  263
  271
  280
  290
  300
  310
  166
  177
  188
  200
  213
  226
  239
  253
  268
  283
  299
  316
  333
  351
  371
  390
  411
  433
  456
  480
Funds from operations, $m
  249
  276
  305
  336
  367
  400
  434
  469
  506
  545
  543
  585
  628
  674
  721
  770
  821
  875
  931
  989
  1,051
  1,115
  1,182
  1,252
  1,325
  1,402
  1,483
  1,567
  1,656
  1,749
Change in working capital, $m
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
Cash from operations, $m
  262
  290
  319
  350
  382
  415
  450
  486
  524
  563
  562
  605
  649
  695
  743
  793
  845
  900
  957
  1,017
  1,079
  1,145
  1,213
  1,284
  1,359
  1,438
  1,520
  1,606
  1,697
  1,792
Maintenance CAPEX, $m
  -69
  -76
  -83
  -91
  -99
  -108
  -116
  -126
  -135
  -145
  -155
  -166
  -177
  -188
  -200
  -213
  -226
  -239
  -253
  -268
  -283
  -299
  -316
  -333
  -351
  -371
  -390
  -411
  -433
  -456
New CAPEX, $m
  -87
  -91
  -95
  -99
  -103
  -107
  -111
  -115
  -120
  -125
  -130
  -135
  -140
  -146
  -152
  -158
  -165
  -172
  -179
  -187
  -195
  -204
  -213
  -222
  -233
  -243
  -254
  -266
  -279
  -292
Cash from investing activities, $m
  -156
  -167
  -178
  -190
  -202
  -215
  -227
  -241
  -255
  -270
  -285
  -301
  -317
  -334
  -352
  -371
  -391
  -411
  -432
  -455
  -478
  -503
  -529
  -555
  -584
  -614
  -644
  -677
  -712
  -748
Free cash flow, $m
  106
  123
  141
  160
  180
  201
  223
  245
  269
  294
  277
  304
  332
  361
  391
  422
  455
  489
  525
  562
  601
  642
  684
  729
  775
  824
  875
  929
  985
  1,044
Issuance/(repayment) of debt, $m
  164
  170
  178
  185
  193
  201
  209
  217
  225
  234
  243
  253
  263
  274
  285
  297
  309
  322
  336
  351
  366
  382
  400
  418
  437
  457
  478
  500
  524
  549
Issuance/(repurchase) of shares, $m
  11
  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  
  175
  170
  178
  185
  193
  201
  209
  217
  225
  234
  243
  253
  263
  274
  285
  297
  309
  322
  336
  351
  366
  382
  400
  418
  437
  457
  478
  500
  524
  549
Total cash flow (excl. dividends), $m
  281
  293
  319
  345
  373
  402
  431
  462
  494
  528
  521
  557
  595
  635
  676
  719
  764
  812
  861
  913
  967
  1,024
  1,084
  1,146
  1,212
  1,281
  1,353
  1,429
  1,509
  1,592
Retained Cash Flow (-), $m
  -29
  -31
  -32
  -34
  -35
  -37
  -38
  -39
  -41
  -43
  -44
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -61
  -64
  -67
  -70
  -73
  -76
  -79
  -83
  -87
  -91
  -95
  -100
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
  252
  262
  287
  312
  338
  365
  393
  423
  453
  485
  477
  511
  547
  585
  624
  665
  708
  753
  800
  849
  901
  955
  1,011
  1,070
  1,133
  1,198
  1,266
  1,338
  1,413
  1,492
Discount rate, %
  10.90
  11.45
  12.02
  12.62
  13.25
  13.91
  14.61
  15.34
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.66
  23.79
  24.98
  26.23
  27.54
  28.92
  30.37
  31.89
  33.48
  35.15
  36.91
  38.76
  40.69
  42.73
  44.87
PV of cash for distribution, $m
  227
  211
  204
  194
  181
  167
  151
  135
  118
  102
  79
  66
  54
  43
  33
  25
  19
  14
  10
  7
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9

FINANCIAL RATIOS  of  Cision Ltd. (CISN)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

CISN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CISN stock intrinsic value calculation we used $730 million for the last fiscal year's total revenue generated by Cision Ltd.. The default revenue input number comes from 0001 income statement of Cision Ltd.. 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 CISN stock valuation model: a) initial revenue growth rate of 10.3% 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 10.9%, whose default value for CISN is calculated based on our internal credit rating of Cision Ltd., 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 Cision Ltd..
    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 CISN stock the variable cost ratio is equal to 68.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $167 million in the base year in the intrinsic value calculation for CISN 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 6.3% for Cision Ltd..

Corporate tax rate of 27% is the nominal tax rate for Cision Ltd.. 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 CISN 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 CISN are equal to 115.2%.

Life of production assets of 12.2 years is the average useful life of capital assets used in Cision Ltd. 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 CISN is equal to -16.9%. 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 - $288.317 million for Cision Ltd. - 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 148.202 million for Cision Ltd. 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 Cision Ltd. at the current share price and the inputted number of shares is $0.9 billion.

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