Intrinsic value of CPS Technologies - CPSH

Previous Close

$1.36

  Intrinsic Value

$49.92

stock screener

  Rating & Target

str. buy

+999%

Previous close

$1.36

 
Intrinsic value

$49.92

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CPSH 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 0.0

 

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, %
  40.40
  36.86
  33.67
  30.81
  28.23
  25.90
  23.81
  21.93
  20.24
  18.71
  17.34
  16.11
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
Revenue, $m
  20
  28
  37
  49
  63
  79
  98
  119
  144
  170
  200
  232
  267
  304
  344
  386
  431
  478
  528
  579
  633
  689
  748
  808
  872
  937
  1,006
  1,077
  1,151
  1,227
Variable operating expenses, $m
  4
  6
  7
  10
  13
  16
  20
  24
  29
  34
  40
  46
  53
  61
  69
  77
  86
  96
  106
  116
  127
  138
  150
  162
  174
  187
  201
  215
  230
  245
Fixed operating expenses, $m
  14
  15
  15
  15
  16
  16
  16
  17
  17
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
Total operating expenses, $m
  18
  21
  22
  25
  29
  32
  36
  41
  46
  51
  58
  64
  72
  80
  88
  97
  106
  117
  127
  138
  149
  161
  173
  186
  198
  212
  226
  241
  256
  272
Operating income, $m
  2
  8
  15
  24
  35
  47
  62
  79
  98
  119
  142
  168
  195
  224
  256
  289
  325
  362
  401
  442
  484
  529
  575
  623
  673
  725
  779
  836
  894
  955
EBITDA, $m
  3
  8
  16
  25
  36
  49
  64
  81
  101
  123
  147
  173
  201
  231
  263
  298
  334
  372
  412
  454
  498
  544
  591
  641
  692
  746
  801
  859
  919
  982
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
Earnings before tax, $m
  2
  8
  15
  24
  34
  47
  62
  78
  97
  118
  141
  166
  194
  223
  254
  287
  322
  359
  398
  439
  481
  525
  571
  619
  668
  720
  774
  830
  888
  948
Tax expense, $m
  1
  2
  4
  6
  9
  13
  17
  21
  26
  32
  38
  45
  52
  60
  69
  78
  87
  97
  107
  118
  130
  142
  154
  167
  180
  194
  209
  224
  240
  256
Net income, $m
  2
  6
  11
  17
  25
  34
  45
  57
  71
  86
  103
  121
  141
  163
  186
  210
  235
  262
  291
  320
  351
  383
  417
  452
  488
  526
  565
  606
  648
  692

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
  15
  21
  28
  36
  46
  58
  72
  88
  105
  125
  147
  171
  196
  224
  253
  284
  317
  351
  388
  425
  465
  506
  549
  594
  640
  689
  739
  791
  845
  902
Adjusted assets (=assets-cash), $m
  15
  21
  28
  36
  46
  58
  72
  88
  105
  125
  147
  171
  196
  224
  253
  284
  317
  351
  388
  425
  465
  506
  549
  594
  640
  689
  739
  791
  845
  902
Revenue / Adjusted assets
  1.333
  1.333
  1.321
  1.361
  1.370
  1.362
  1.361
  1.352
  1.371
  1.360
  1.361
  1.357
  1.362
  1.357
  1.360
  1.359
  1.360
  1.362
  1.361
  1.362
  1.361
  1.362
  1.362
  1.360
  1.363
  1.360
  1.361
  1.362
  1.362
  1.360
Average production assets, $m
  2
  3
  4
  5
  7
  9
  11
  13
  16
  19
  22
  25
  29
  33
  38
  42
  47
  52
  57
  63
  69
  75
  81
  88
  95
  102
  110
  117
  125
  134
Working capital, $m
  5
  6
  9
  11
  14
  18
  23
  27
  33
  39
  46
  53
  61
  70
  79
  89
  99
  110
  121
  133
  146
  159
  172
  186
  200
  216
  231
  248
  265
  282
Total debt, $m
  1
  1
  3
  4
  5
  7
  9
  12
  15
  18
  21
  25
  29
  33
  37
  42
  47
  52
  58
  64
  70
  76
  83
  90
  97
  104
  112
  120
  128
  137
Total liabilities, $m
  2
  3
  4
  6
  7
  9
  11
  14
  16
  19
  23
  26
  30
  34
  39
  44
  49
  54
  60
  66
  72
  78
  85
  91
  99
  106
  114
  122
  130
  139
Total equity, $m
  13
  17
  23
  30
  39
  49
  61
  74
  89
  106
  124
  144
  166
  189
  214
  240
  268
  297
  328
  360
  393
  428
  465
  503
  542
  583
  625
  669
  715
  763
Total liabilities and equity, $m
  15
  20
  27
  36
  46
  58
  72
  88
  105
  125
  147
  170
  196
  223
  253
  284
  317
  351
  388
  426
  465
  506
  550
  594
  641
  689
  739
  791
  845
  902
Debt-to-equity ratio
  0.050
  0.080
  0.110
  0.130
  0.140
  0.150
  0.150
  0.160
  0.160
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
  0.180
Adjusted equity ratio
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2
  6
  11
  17
  25
  34
  45
  57
  71
  86
  103
  121
  141
  163
  186
  210
  235
  262
  291
  320
  351
  383
  417
  452
  488
  526
  565
  606
  648
  692
Depreciation, amort., depletion, $m
  0
  1
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  8
  8
  9
  10
  11
  13
  14
  15
  16
  18
  19
  20
  22
  23
  25
  27
Funds from operations, $m
  2
  6
  12
  18
  26
  36
  47
  60
  74
  90
  107
  127
  147
  169
  193
  218
  245
  273
  302
  333
  365
  398
  433
  469
  507
  546
  587
  629
  673
  719
Change in working capital, $m
  1
  2
  2
  3
  3
  4
  4
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
Cash from operations, $m
  1
  5
  10
  16
  23
  32
  43
  55
  68
  84
  101
  119
  139
  161
  184
  208
  234
  262
  291
  321
  352
  385
  420
  455
  492
  531
  571
  613
  656
  701
Maintenance CAPEX, $m
  0
  0
  -1
  -1
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -13
  -14
  -15
  -16
  -18
  -19
  -20
  -22
  -23
  -25
New CAPEX, $m
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
Cash from investing activities, $m
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -4
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -13
  -13
  -14
  -15
  -17
  -19
  -20
  -21
  -23
  -25
  -26
  -27
  -30
  -31
  -33
Free cash flow, $m
  0
  3
  8
  14
  21
  29
  39
  50
  63
  78
  94
  111
  130
  151
  173
  196
  221
  247
  275
  304
  334
  365
  398
  432
  468
  505
  543
  583
  625
  668
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
Issuance/(repurchase) of shares, $m
  2
  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  
  3
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
Total cash flow (excl. dividends), $m
  2
  4
  9
  15
  22
  31
  41
  53
  66
  81
  97
  115
  134
  155
  177
  201
  226
  253
  280
  310
  340
  372
  405
  439
  475
  512
  551
  591
  633
  676
Retained Cash Flow (-), $m
  -3
  -5
  -6
  -7
  -9
  -10
  -12
  -13
  -15
  -17
  -18
  -20
  -22
  -23
  -25
  -26
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -42
  -44
  -46
  -48
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
  -1
  -1
  3
  8
  14
  21
  29
  39
  51
  64
  79
  95
  113
  132
  153
  175
  198
  223
  250
  278
  307
  337
  368
  401
  436
  471
  508
  547
  587
  629
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
  -1
  -1
  3
  6
  11
  15
  20
  25
  29
  34
  37
  40
  43
  44
  45
  44
  43
  41
  38
  35
  32
  28
  24
  20
  17
  14
  11
  8
  6
  5
Current shareholders' claim on cash, %
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5
  90.5

CPS Technologies Corporation (CPS) provides material solutions to the transportation, automotive, energy, computing/Internet, telecommunications, aerospace, defense, and oil and gas end markets. Its primary material solution is metal matrix composites (MMCs), which are a class of materials consisting of a combination of metal and ceramic. It designs, manufactures and sells custom MMC components, which manages the performance and reliability of systems in the end markets. It provides lids and heat spreaders used with integrated circuits in Internet switches and routers. It provides baseplates and housings used in modules built with wide band gap semiconductors, such as silicon carbide (SiC) and gallium nitride (GaN). The Company also assembles housings and packages for hybrid circuits. These housings and packages may include MMC components. Its products are manufactured by processes, including the Quickset Injection Molding Process and the QuickCast Pressure Infiltration Process.

FINANCIAL RATIOS  of  CPS Technologies (CPSH)

Valuation Ratios
P/E Ratio 0
Price to Sales 1.2
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 18
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -31.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
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. 2.8%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 3.5%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 3.5%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 13.3%
Gross Margin - 3 Yr. Avg. 19.3%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 5.9%
Operating Margin -13.3%
Oper. Margin - 3 Yr. Avg. -1.5%
Pre-Tax Margin -6.7%
Pre-Tax Margin - 3 Yr. Avg. 0.7%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 1.4%
Effective Tax Rate 100%
Eff/ Tax Rate - 3 Yr. Avg. 66.7%
Payout Ratio 0%

CPSH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CPSH stock intrinsic value calculation we used $14.577183 million for the last fiscal year's total revenue generated by CPS Technologies. The default revenue input number comes from 0001 income statement of CPS Technologies. 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 CPSH stock valuation model: a) initial revenue growth rate of 40.4% 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 CPSH is calculated based on our internal credit rating of CPS Technologies, 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 CPS Technologies.
    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 CPSH stock the variable cost ratio is equal to 20%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $14 million in the base year in the intrinsic value calculation for CPSH 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 CPS Technologies.

Corporate tax rate of 27% is the nominal tax rate for CPS Technologies. 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 CPSH 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 CPSH are equal to 10.9%.

Life of production assets of 2.9 years is the average useful life of capital assets used in CPS Technologies 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 CPSH is equal to 23%. 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 - $9.320834 million for CPS Technologies - 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 13.203 million for CPS Technologies 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 CPS Technologies at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
MTRN Materion 54.73 4.87  str.sell
KLIC Kulicke&Soffa 20.07 38.61  str.buy
XCRA Xcerra 14.27 21.96  str.buy
ESIO Electro Scient 29.05 774.92  str.buy
CCF Chase 110.56 370.43  str.buy

COMPANY NEWS

▶ CPS Technologies Corporation Conference Call Notification   [Oct-23-18 02:00PM  GlobeNewswire]
▶ CPS Technologies Corporation to Exhibit at EURONAVAL 2018   [Oct-11-18 11:37AM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Jul-24-18 10:52AM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Apr-24-18 04:35PM  GlobeNewswire]
▶ CPS Technologies Corporation Announces 2017 Results   [Mar-01-18 04:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Feb-22-18 05:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Appoints Sales Representative   [Nov-14-17 10:14AM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Oct-19-17 11:34AM  GlobeNewswire]
▶ CPS Technologies Corporation Appoints Sales Representative   [Sep-26-17 02:34PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Jul-25-17 03:26PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [May-01-17 03:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Announces 2016 Results   [Mar-02-17 04:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Feb-23-17 12:10PM  GlobeNewswire]
▶ CPS Technologies Corporation Expands Executive Team   [Nov-08-16 02:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Oct-25-16 03:07PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Jul-27-16 01:22PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Apr-27-16 09:35AM  GlobeNewswire]
▶ CPS Technologies Corporation Announces 2015 Results   [Feb-24-16 04:00PM  GlobeNewswire]
▶ CPS Technologies Corporation Conference Call Notification   [Feb-17-16 05:00PM  GlobeNewswire]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.