Intrinsic value of Care.com - CRCM

Previous Close

$20.82

  Intrinsic Value

$20.54

stock screener

  Rating & Target

hold

-1%

Previous close

$20.82

 
Intrinsic value

$20.54

 
Up/down potential

-1%

 
Rating

hold

We calculate the intrinsic value of CRCM 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 0.7

 

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, %
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  191
  208
  226
  245
  264
  284
  305
  327
  350
  373
  398
  423
  450
  478
  506
  536
  568
  600
  634
  670
  707
  746
  787
  829
  873
  920
  969
  1,020
  1,073
  1,129
Variable operating expenses, $m
  124
  135
  146
  158
  170
  182
  195
  209
  223
  238
  247
  262
  279
  296
  314
  332
  352
  372
  393
  415
  438
  462
  487
  514
  541
  570
  600
  632
  665
  700
Fixed operating expenses, $m
  56
  57
  59
  60
  61
  63
  64
  65
  67
  68
  70
  71
  73
  75
  76
  78
  80
  81
  83
  85
  87
  89
  91
  93
  95
  97
  99
  101
  103
  106
Total operating expenses, $m
  180
  192
  205
  218
  231
  245
  259
  274
  290
  306
  317
  333
  352
  371
  390
  410
  432
  453
  476
  500
  525
  551
  578
  607
  636
  667
  699
  733
  768
  806
Operating income, $m
  10
  15
  21
  27
  33
  39
  46
  53
  60
  67
  81
  90
  98
  107
  116
  126
  136
  147
  158
  170
  182
  195
  208
  223
  237
  253
  269
  287
  305
  324
EBITDA, $m
  18
  23
  29
  35
  41
  47
  54
  61
  69
  76
  84
  93
  101
  110
  120
  130
  140
  151
  162
  174
  187
  200
  214
  228
  243
  259
  276
  294
  312
  331
Interest expense (income), $m
  0
  0
  0
  1
  2
  2
  3
  3
  4
  5
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  19
  21
  22
  23
  25
  26
Earnings before tax, $m
  10
  15
  20
  25
  31
  37
  43
  49
  55
  62
  76
  83
  91
  99
  107
  116
  126
  135
  146
  156
  167
  179
  192
  204
  218
  232
  247
  263
  280
  297
Tax expense, $m
  3
  4
  5
  7
  8
  10
  12
  13
  15
  17
  20
  22
  25
  27
  29
  31
  34
  37
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  76
  80
Net income, $m
  7
  11
  15
  18
  23
  27
  31
  36
  40
  45
  55
  61
  66
  72
  78
  85
  92
  99
  106
  114
  122
  131
  140
  149
  159
  170
  181
  192
  204
  217

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
  132
  144
  156
  169
  182
  196
  211
  226
  242
  258
  275
  293
  311
  330
  350
  371
  392
  415
  438
  463
  489
  516
  544
  573
  604
  636
  669
  705
  741
  780
Adjusted assets (=assets-cash), $m
  132
  144
  156
  169
  182
  196
  211
  226
  242
  258
  275
  293
  311
  330
  350
  371
  392
  415
  438
  463
  489
  516
  544
  573
  604
  636
  669
  705
  741
  780
Revenue / Adjusted assets
  1.447
  1.444
  1.449
  1.450
  1.451
  1.449
  1.445
  1.447
  1.446
  1.446
  1.447
  1.444
  1.447
  1.448
  1.446
  1.445
  1.449
  1.446
  1.447
  1.447
  1.446
  1.446
  1.447
  1.447
  1.445
  1.447
  1.448
  1.447
  1.448
  1.447
Average production assets, $m
  38
  41
  45
  49
  53
  57
  61
  65
  70
  74
  79
  84
  90
  95
  101
  107
  113
  119
  126
  133
  141
  148
  157
  165
  174
  183
  193
  203
  214
  225
Working capital, $m
  -24
  -26
  -29
  -31
  -34
  -36
  -39
  -42
  -44
  -47
  -51
  -54
  -57
  -61
  -64
  -68
  -72
  -76
  -81
  -85
  -90
  -95
  -100
  -105
  -111
  -117
  -123
  -129
  -136
  -143
Total debt, $m
  9
  18
  28
  38
  49
  60
  72
  83
  96
  109
  122
  136
  150
  165
  181
  198
  215
  232
  251
  270
  291
  312
  334
  357
  381
  407
  433
  461
  490
  521
Total liabilities, $m
  104
  113
  123
  133
  144
  155
  166
  178
  191
  204
  217
  231
  245
  260
  276
  292
  310
  327
  346
  365
  386
  407
  429
  452
  476
  502
  528
  556
  585
  616
Total equity, $m
  28
  30
  33
  36
  38
  41
  45
  48
  51
  54
  58
  62
  66
  70
  74
  78
  83
  88
  93
  98
  103
  109
  115
  121
  127
  134
  141
  149
  156
  165
Total liabilities and equity, $m
  132
  143
  156
  169
  182
  196
  211
  226
  242
  258
  275
  293
  311
  330
  350
  370
  393
  415
  439
  463
  489
  516
  544
  573
  603
  636
  669
  705
  741
  781
Debt-to-equity ratio
  0.320
  0.610
  0.860
  1.080
  1.270
  1.450
  1.610
  1.750
  1.880
  2.000
  2.100
  2.200
  2.290
  2.380
  2.450
  2.530
  2.590
  2.660
  2.710
  2.770
  2.820
  2.870
  2.910
  2.950
  2.990
  3.030
  3.070
  3.100
  3.130
  3.160
Adjusted equity ratio
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211
  0.211

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7
  11
  15
  18
  23
  27
  31
  36
  40
  45
  55
  61
  66
  72
  78
  85
  92
  99
  106
  114
  122
  131
  140
  149
  159
  170
  181
  192
  204
  217
Depreciation, amort., depletion, $m
  7
  8
  8
  8
  8
  8
  8
  8
  9
  9
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
Funds from operations, $m
  15
  19
  22
  26
  30
  35
  39
  44
  49
  54
  58
  64
  69
  75
  82
  89
  96
  103
  111
  119
  127
  136
  145
  155
  165
  176
  187
  199
  212
  225
Change in working capital, $m
  -2
  -2
  -2
  -2
  -2
  -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 operations, $m
  17
  21
  25
  29
  33
  37
  42
  47
  52
  57
  61
  67
  73
  79
  86
  92
  100
  107
  115
  123
  132
  141
  150
  160
  171
  182
  193
  206
  218
  232
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
New CAPEX, $m
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
Cash from investing activities, $m
  -4
  -4
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -13
  -15
  -15
  -16
  -17
  -18
  -18
Free cash flow, $m
  12
  16
  20
  23
  27
  32
  36
  40
  45
  50
  54
  59
  65
  70
  77
  83
  90
  97
  104
  112
  120
  128
  137
  147
  156
  167
  177
  189
  201
  213
Issuance/(repayment) of debt, $m
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  30
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  
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  30
Total cash flow (excl. dividends), $m
  22
  25
  29
  34
  38
  43
  47
  52
  58
  63
  67
  73
  79
  85
  92
  99
  107
  114
  123
  131
  140
  149
  159
  170
  181
  192
  204
  217
  230
  244
Retained Cash Flow (-), $m
  -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
  -7
  -8
  -8
Prev. year cash balance distribution, $m
  64
  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
  83
  23
  27
  31
  35
  40
  44
  49
  54
  59
  63
  69
  75
  81
  88
  95
  102
  110
  118
  126
  135
  144
  153
  163
  174
  185
  197
  209
  222
  236
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
  80
  21
  23
  25
  27
  29
  30
  31
  31
  31
  30
  29
  29
  27
  26
  24
  22
  20
  18
  16
  14
  12
  10
  8
  7
  5
  4
  3
  2
  2
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

Care.com, Inc. is an online marketplace for finding and managing family care. As of December 31, 2016, the Company had 22.8 million members, including 12.9 million families and 9.9 million caregivers, spanning 19 countries. Its consumer matching solutions allow families to search for, qualify, vet, connect with and select caregivers. It also provides caregivers with solutions to create personal profiles, describe their skills and experience, and otherwise differentiate and market themselves in a fragmented marketplace. In addition to consumer matching solutions, the Company offers its members products and services to facilitate their interaction with caregivers. It serves employers by providing access to certain of its products and services to employer-sponsored families. In addition, it serves care-related businesses, such as day care centers, nanny agencies and home care agencies, willing to market their services to its care-seeking families and recruit its caregiver members.

FINANCIAL RATIOS  of  Care.com (CRCM)

Valuation Ratios
P/E Ratio 86.2
Price to Sales 3.7
Price to Book 5.2
Price to Tangible Book
Price to Cash Flow 40.2
Price to Free Cash Flow 40.2
Growth Rates
Sales Growth Rate 16.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
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 4.7%
Ret/ On Assets - 3 Yr. Avg. -24.4%
Return On Total Capital 6.9%
Ret/ On T. Cap. - 3 Yr. Avg. -35.4%
Return On Equity 6.9%
Return On Equity - 3 Yr. Avg. -35.4%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 80.2%
Gross Margin - 3 Yr. Avg. 80%
EBITDA Margin 3.1%
EBITDA Margin - 3 Yr. Avg. -11.8%
Operating Margin 1.2%
Oper. Margin - 3 Yr. Avg. -13.4%
Pre-Tax Margin 0.6%
Pre-Tax Margin - 3 Yr. Avg. -15.3%
Net Profit Margin 4.3%
Net Profit Margin - 3 Yr. Avg. -31%
Effective Tax Rate 200%
Eff/ Tax Rate - 3 Yr. Avg. 64.7%
Payout Ratio 0%

CRCM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CRCM stock intrinsic value calculation we used $174.09 million for the last fiscal year's total revenue generated by Care.com. The default revenue input number comes from 0001 income statement of Care.com. 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 CRCM stock valuation model: a) initial revenue growth rate of 9.5% 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 CRCM is calculated based on our internal credit rating of Care.com, 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 Care.com.
    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 CRCM stock the variable cost ratio is equal to 65.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $55 million in the base year in the intrinsic value calculation for CRCM 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 Care.com.

Corporate tax rate of 27% is the nominal tax rate for Care.com. 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 CRCM 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 CRCM are equal to 19.9%.

Life of production assets of 28.9 years is the average useful life of capital assets used in Care.com 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 CRCM is equal to -12.7%. 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 - $89.461 million for Care.com - 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 31.264 million for Care.com 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 Care.com at the current share price and the inputted number of shares is $0.7 billion.

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COMPANY NEWS

▶ One Thing To Consider Before Buying Carecom Inc (NYSE:CRCM)   [Sep-06-18 01:08PM  Simply Wall St.]
▶ [$$] Care.com Acquires Three Companies   [Jul-30-18 07:25PM  The Wall Street Journal]
▶ Care.com, Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ Care.com to Participate At Upcoming Investor Conferences   [May-09-18 08:00AM  Business Wire]
▶ Care.com: 1Q Earnings Snapshot   [May-08-18 06:26AM  Associated Press]
▶ Care.com, Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ Care.com to Participate At 30th Annual ROTH Conference   [Mar-05-18 04:15PM  Business Wire]
▶ Care.com beats Street 4Q forecasts   [06:27AM  Associated Press]
▶ Care.com, Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ Should You Care About Care.Com?   [Dec-11-17 05:53PM  GuruFocus.com]
▶ ETFs with exposure to Care.com, Inc. : November 8, 2017   [Nov-08-17 05:48PM  Capital Cube]
▶ Care.com tops Street 3Q forecasts   [06:16AM  Associated Press]
▶ Care.com, Inc. to Host Earnings Call   [06:00AM  ACCESSWIRE]
▶ ETFs with exposure to Care.com, Inc. : August 29, 2017   [Aug-29-17 06:45PM  Capital Cube]
▶ Care.com beats Street 2Q forecasts   [Aug-10-17 09:18PM  Associated Press]
▶ Care.com, Inc. Value Analysis (NYSE:CRCM) : July 5, 2017   [Jul-05-17 01:25PM  Capital Cube]
▶ Care.com Joins New Job Search Feature on Google   [Jun-21-17 10:23AM  Business Wire]
▶ ETFs with exposure to Care.com, Inc. : May 22, 2017   [May-22-17 01:29PM  Capital Cube]
▶ ETFs with exposure to Care.com, Inc. : May 8, 2017   [May-08-17 04:21PM  Capital Cube]
▶ Why Care.com Stock Is Rallying Today   [May-03-17 02:33PM  Motley Fool]
▶ Care.com beats Street 1Q forecasts   [06:12AM  Associated Press]
▶ Care.com to Participate at Upcoming Investor Conferences   [May-01-17 04:01PM  Business Wire]
▶ ETFs with exposure to Care.com, Inc. : April 26, 2017   [Apr-26-17 03:12PM  Capital Cube]
▶ Care.com Releases 2017 Babysitter Survey Results   [Apr-17-17 08:02AM  Business Wire]
▶ Top Ranked Momentum Stocks to Buy for April 5th   [Apr-05-17 09:17AM  Zacks]

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