Intrinsic value of Clipper Realty - CLPR

Previous Close

$12.14

  Intrinsic Value

$535.55

stock screener

  Rating & Target

str. buy

+999%

Previous close

$12.14

 
Intrinsic value

$535.55

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CLPR 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 2017), $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 0.2

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
  5.36
  5.32
Revenue, $m
  116
  129
  143
  157
  172
  187
  203
  220
  238
  256
  275
  294
  315
  336
  358
  381
  405
  429
  455
  482
  510
  540
  570
  602
  636
  671
  707
  745
  785
  827
Variable operating expenses, $m
  77
  86
  94
  104
  114
  124
  134
  145
  157
  169
  180
  193
  206
  220
  235
  250
  265
  281
  298
  316
  334
  354
  374
  395
  417
  439
  463
  488
  514
  542
Fixed operating expenses, $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
Total operating expenses, $m
  82
  91
  99
  109
  120
  130
  140
  151
  163
  175
  186
  199
  213
  227
  242
  257
  272
  288
  306
  324
  342
  362
  382
  403
  426
  448
  472
  497
  523
  552
Operating income, $m
  34
  38
  43
  48
  53
  58
  63
  69
  75
  81
  88
  95
  102
  109
  116
  124
  132
  141
  149
  158
  168
  178
  188
  199
  210
  222
  235
  248
  261
  275
EBITDA, $m
  145
  162
  179
  198
  217
  237
  258
  279
  302
  325
  349
  375
  401
  428
  456
  486
  517
  549
  582
  617
  653
  691
  730
  771
  814
  859
  906
  955
  1,007
  1,061
Interest expense (income), $m
  34
  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
Earnings before tax, $m
  34
  38
  43
  48
  53
  58
  63
  69
  75
  81
  88
  95
  102
  109
  116
  124
  132
  141
  149
  158
  168
  178
  188
  199
  210
  222
  235
  248
  261
  275
Tax expense, $m
  9
  10
  12
  13
  14
  16
  17
  19
  20
  22
  24
  26
  27
  29
  31
  34
  36
  38
  40
  43
  45
  48
  51
  54
  57
  60
  63
  67
  71
  74
Net income, $m
  25
  28
  31
  35
  39
  42
  46
  50
  55
  59
  64
  69
  74
  80
  85
  91
  97
  103
  109
  116
  123
  130
  137
  145
  154
  162
  171
  181
  191
  201

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
  -20
  -22
  -24
  -26
  -29
  -32
  -34
  -37
  -40
  -43
  -46
  -50
  -53
  -57
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -102
  -107
  -113
  -119
  -126
  -132
  -139
Adjusted assets (=assets-cash), $m
  -20
  -22
  -24
  -26
  -29
  -32
  -34
  -37
  -40
  -43
  -46
  -50
  -53
  -57
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -102
  -107
  -113
  -119
  -126
  -132
  -139
Revenue / Adjusted assets
  -5.800
  -5.864
  -5.958
  -6.038
  -5.931
  -5.844
  -5.971
  -5.946
  -5.950
  -5.953
  -5.978
  -5.880
  -5.943
  -5.895
  -5.967
  -5.953
  -5.956
  -5.958
  -5.909
  -5.951
  -5.930
  -5.934
  -5.938
  -5.902
  -5.944
  -5.938
  -5.941
  -5.913
  -5.947
  -5.950
Average production assets, $m
  1,104
  1,227
  1,356
  1,491
  1,632
  1,780
  1,933
  2,092
  2,258
  2,431
  2,610
  2,796
  2,989
  3,191
  3,400
  3,617
  3,844
  4,080
  4,325
  4,581
  4,848
  5,127
  5,417
  5,721
  6,038
  6,369
  6,716
  7,078
  7,457
  7,854
Working capital, $m
  -969
  -1,077
  -1,190
  -1,309
  -1,433
  -1,562
  -1,696
  -1,836
  -1,982
  -2,133
  -2,290
  -2,454
  -2,623
  -2,800
  -2,984
  -3,174
  -3,373
  -3,580
  -3,796
  -4,020
  -4,255
  -4,499
  -4,754
  -5,020
  -5,299
  -5,589
  -5,893
  -6,211
  -6,544
  -6,892
Total debt, $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 liabilities, $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 equity, $m
  -20
  -22
  -24
  -26
  -29
  -32
  -34
  -37
  -40
  -43
  -46
  -50
  -53
  -57
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -102
  -107
  -113
  -119
  -126
  -132
  -139
Total liabilities and equity, $m
  -20
  -22
  -24
  -26
  -29
  -32
  -34
  -37
  -40
  -43
  -46
  -50
  -53
  -57
  -60
  -64
  -68
  -72
  -77
  -81
  -86
  -91
  -96
  -102
  -107
  -113
  -119
  -126
  -132
  -139
Debt-to-equity ratio
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
Adjusted equity ratio
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000
  1.000

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  25
  28
  31
  35
  39
  42
  46
  50
  55
  59
  64
  69
  74
  80
  85
  91
  97
  103
  109
  116
  123
  130
  137
  145
  154
  162
  171
  181
  191
  201
Depreciation, amort., depletion, $m
  111
  124
  137
  150
  164
  179
  194
  210
  227
  244
  261
  280
  299
  319
  340
  362
  384
  408
  433
  458
  485
  513
  542
  572
  604
  637
  672
  708
  746
  785
Funds from operations, $m
  136
  152
  168
  185
  203
  221
  240
  261
  281
  303
  325
  349
  373
  399
  425
  452
  481
  511
  542
  574
  607
  643
  679
  717
  757
  799
  843
  889
  936
  986
Change in working capital, $m
  -102
  -108
  -113
  -119
  -124
  -129
  -135
  -140
  -146
  -151
  -157
  -163
  -170
  -177
  -184
  -191
  -199
  -207
  -216
  -225
  -234
  -244
  -255
  -266
  -278
  -291
  -304
  -318
  -333
  -348
Cash from operations, $m
  239
  259
  281
  303
  326
  350
  375
  401
  427
  454
  483
  512
  543
  575
  609
  643
  680
  718
  757
  798
  842
  887
  934
  984
  1,036
  1,090
  1,147
  1,207
  1,269
  1,335
Maintenance CAPEX, $m
  -99
  -110
  -123
  -136
  -149
  -163
  -178
  -193
  -209
  -226
  -243
  -261
  -280
  -299
  -319
  -340
  -362
  -384
  -408
  -433
  -458
  -485
  -513
  -542
  -572
  -604
  -637
  -672
  -708
  -746
New CAPEX, $m
  -117
  -123
  -129
  -135
  -141
  -147
  -153
  -160
  -166
  -172
  -179
  -186
  -193
  -201
  -209
  -218
  -226
  -236
  -246
  -256
  -267
  -278
  -291
  -304
  -317
  -331
  -346
  -362
  -379
  -397
Cash from investing activities, $m
  -216
  -233
  -252
  -271
  -290
  -310
  -331
  -353
  -375
  -398
  -422
  -447
  -473
  -500
  -528
  -558
  -588
  -620
  -654
  -689
  -725
  -763
  -804
  -846
  -889
  -935
  -983
  -1,034
  -1,087
  -1,143
Free cash flow, $m
  23
  26
  29
  33
  36
  40
  44
  48
  52
  56
  60
  65
  70
  75
  80
  86
  91
  97
  104
  110
  117
  124
  131
  139
  147
  155
  164
  173
  182
  192
Issuance/(repayment) of debt, $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
Issuance/(repurchase) of shares, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
Cash from financing (excl. dividends), $m  
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
Total cash flow (excl. dividends), $m
  20
  24
  27
  30
  34
  37
  41
  45
  49
  53
  57
  62
  67
  71
  77
  82
  87
  93
  99
  105
  112
  119
  126
  133
  141
  149
  157
  166
  175
  185
Retained Cash Flow (-), $m
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
Prev. year cash balance distribution, $m
  18
  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
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
Cash available for distribution, $m
  40
  26
  29
  33
  36
  40
  44
  48
  52
  56
  60
  65
  70
  75
  80
  86
  91
  97
  104
  110
  117
  124
  131
  139
  147
  155
  164
  173
  182
  192
Discount rate, %
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
  0.00
PV of cash for distribution, $m
  40
  26
  29
  33
  36
  40
  44
  48
  52
  56
  60
  65
  70
  75
  80
  86
  91
  97
  104
  110
  117
  124
  131
  139
  147
  155
  164
  173
  182
  192
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

Clipper Realty, Inc. is a real estate investment trust, which acquires, owns, manages, operates and repositions multi-family residential and commercial properties in the New York metropolitan area, with a portfolio in Manhattan and Brooklyn. The Company's segments include Commercial and Residential. As of June 30, 2016, it owned two residential/retail rental properties at 50 Murray Street and 53 Park Place in the Tribeca neighborhood of Manhattan, referred to as the Tribeca House properties. As of June 30, 2016, it also owned a residential property complex in the East Flatbush neighborhood of Brooklyn consisting of 59 buildings, referred to as the Flatbush Gardens properties or complex. As of June 30, 2016, it owned two primarily commercial properties in Downtown Brooklyn (one of which included 36 residential apartment units), referred to as the 141 Livingston Street property and the 250 Livingston Street property, and also owned the Aspen property.

FINANCIAL RATIOS  of  Clipper Realty (CLPR)

Valuation Ratios
P/E Ratio -34.7
Price to Sales 1.5
Price to Book 3.6
Price to Tangible Book
Price to Cash Flow 15.4
Price to Free Cash Flow -1.2
Growth Rates
Sales Growth Rate 9.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 1244.4%
Cap. Spend. - 3 Yr. Gr. Rate 109.5%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 1984.2%
Total Debt to Equity 1984.2%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.4%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital -0.5%
Ret/ On T. Cap. - 3 Yr. Avg. 0.1%
Return On Equity -9.8%
Return On Equity - 3 Yr. Avg. 1.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 73.1%
Gross Margin - 3 Yr. Avg. 67.7%
EBITDA Margin 41.9%
EBITDA Margin - 3 Yr. Avg. 40.3%
Operating Margin 28%
Oper. Margin - 3 Yr. Avg. 31.1%
Pre-Tax Margin -12.9%
Pre-Tax Margin - 3 Yr. Avg. -4%
Net Profit Margin -4.3%
Net Profit Margin - 3 Yr. Avg. 0.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio -250%

CLPR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLPR stock intrinsic value calculation we used $104 million for the last fiscal year's total revenue generated by Clipper Realty. The default revenue input number comes from 2017 income statement of Clipper Realty. 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 CLPR stock valuation model: a) initial revenue growth rate of 11.8% 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 0%, whose default value for CLPR is calculated based on our internal credit rating of Clipper Realty, 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 Clipper Realty.
    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 CLPR stock the variable cost ratio is equal to 66.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5 million in the base year in the intrinsic value calculation for CLPR 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 Clipper Realty.

Corporate tax rate of 27% is the nominal tax rate for Clipper Realty. 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 CLPR stock is equal to 3%.

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 CLPR are equal to 949.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Clipper Realty 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 CLPR is equal to -833.6%. 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 - $0 million for Clipper Realty - 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 18 million for Clipper Realty 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 Clipper Realty at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
CLPR Clipper Realty 12.14 535.55  str.buy
MAA Mid-America Ap 103.09 1,195.37  str.buy
ESS Essex Property 243.34 16.95  str.sell

COMPANY NEWS

▶ Clipper Realty, Inc. to Host Earnings Call   [Aug-09-18 08:00AM  ACCESSWIRE]
▶ Clipper Realty Inc. Announces Second Quarter 2018 Results   [Aug-08-18 04:05PM  Business Wire]
▶ Clipper Realty Inc (NYSE:CLPR): Are Analysts Optimistic?   [May-14-18 11:07AM  Simply Wall St.]
▶ Clipper Realty Inc. Announces First Quarter 2018 Results   [May-10-18 04:00PM  Business Wire]
▶ Clipper Realty Inc. Announces Second Quarter 2017 Results   [Jul-27-17 04:05PM  Business Wire]
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