Intrinsic value of Control4 Corporation - CTRL

Previous Close

$23.80

  Intrinsic Value

$12.40

stock screener

  Rating & Target

sell

-48%

Previous close

$23.80

 
Intrinsic value

$12.40

 
Up/down potential

-48%

 
Rating

sell

We calculate the intrinsic value of CTRL 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 0.6

 

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, %
  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
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.07
Revenue, $m
  289
  308
  326
  346
  367
  388
  410
  433
  458
  483
  510
  537
  566
  597
  628
  662
  696
  733
  771
  811
  853
  897
  943
  991
  1,042
  1,095
  1,151
  1,209
  1,271
  1,335
Variable operating expenses, $m
  215
  228
  242
  257
  272
  288
  304
  321
  339
  358
  377
  397
  419
  441
  465
  489
  515
  542
  570
  600
  631
  663
  697
  733
  770
  810
  851
  894
  939
  987
Fixed operating expenses, $m
  52
  53
  54
  56
  57
  58
  59
  61
  62
  63
  65
  66
  68
  69
  71
  72
  74
  75
  77
  79
  81
  82
  84
  86
  88
  90
  92
  94
  96
  98
Total operating expenses, $m
  267
  281
  296
  313
  329
  346
  363
  382
  401
  421
  442
  463
  487
  510
  536
  561
  589
  617
  647
  679
  712
  745
  781
  819
  858
  900
  943
  988
  1,035
  1,085
Operating income, $m
  22
  26
  30
  34
  38
  42
  47
  51
  56
  62
  68
  74
  80
  86
  93
  100
  108
  116
  124
  133
  142
  151
  162
  172
  184
  196
  208
  221
  235
  250
EBITDA, $m
  29
  33
  37
  41
  46
  51
  56
  61
  66
  72
  78
  85
  91
  98
  106
  113
  122
  130
  139
  149
  159
  169
  181
  192
  205
  218
  231
  246
  261
  277
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
Earnings before tax, $m
  22
  26
  29
  33
  37
  41
  45
  50
  55
  60
  66
  72
  78
  84
  90
  97
  104
  112
  120
  128
  137
  146
  156
  166
  177
  189
  201
  213
  227
  241
Tax expense, $m
  6
  7
  8
  9
  10
  11
  12
  14
  15
  16
  18
  19
  21
  23
  24
  26
  28
  30
  32
  35
  37
  39
  42
  45
  48
  51
  54
  58
  61
  65
Net income, $m
  16
  19
  21
  24
  27
  30
  33
  37
  40
  44
  48
  52
  57
  61
  66
  71
  76
  82
  87
  93
  100
  107
  114
  121
  129
  138
  146
  156
  166
  176

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
  213
  226
  240
  254
  269
  285
  302
  319
  337
  355
  375
  395
  416
  439
  462
  486
  512
  539
  567
  596
  627
  659
  693
  729
  766
  805
  846
  889
  934
  982
Adjusted assets (=assets-cash), $m
  213
  226
  240
  254
  269
  285
  302
  319
  337
  355
  375
  395
  416
  439
  462
  486
  512
  539
  567
  596
  627
  659
  693
  729
  766
  805
  846
  889
  934
  982
Revenue / Adjusted assets
  1.357
  1.363
  1.358
  1.362
  1.364
  1.361
  1.358
  1.357
  1.359
  1.361
  1.360
  1.359
  1.361
  1.360
  1.359
  1.362
  1.359
  1.360
  1.360
  1.361
  1.360
  1.361
  1.361
  1.359
  1.360
  1.360
  1.361
  1.360
  1.361
  1.359
Average production assets, $m
  33
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  75
  79
  84
  88
  92
  97
  102
  107
  113
  119
  125
  131
  138
  145
  152
Working capital, $m
  44
  46
  49
  52
  55
  59
  62
  65
  69
  73
  77
  81
  86
  90
  95
  100
  105
  111
  116
  122
  129
  135
  142
  150
  157
  165
  174
  183
  192
  202
Total debt, $m
  3
  6
  9
  13
  16
  20
  23
  27
  32
  36
  40
  45
  50
  55
  61
  66
  72
  78
  85
  92
  99
  106
  114
  122
  131
  140
  149
  159
  170
  181
Total liabilities, $m
  49
  52
  55
  59
  62
  66
  70
  74
  78
  82
  87
  91
  96
  101
  107
  112
  118
  124
  131
  138
  145
  152
  160
  168
  177
  186
  195
  205
  216
  227
Total equity, $m
  164
  174
  185
  196
  207
  219
  232
  245
  259
  273
  288
  304
  320
  337
  355
  374
  394
  414
  436
  459
  482
  507
  533
  561
  589
  619
  651
  684
  718
  755
Total liabilities and equity, $m
  213
  226
  240
  255
  269
  285
  302
  319
  337
  355
  375
  395
  416
  438
  462
  486
  512
  538
  567
  597
  627
  659
  693
  729
  766
  805
  846
  889
  934
  982
Debt-to-equity ratio
  0.020
  0.030
  0.050
  0.060
  0.080
  0.090
  0.100
  0.110
  0.120
  0.130
  0.140
  0.150
  0.160
  0.160
  0.170
  0.180
  0.180
  0.190
  0.190
  0.200
  0.200
  0.210
  0.210
  0.220
  0.220
  0.230
  0.230
  0.230
  0.240
  0.240
Adjusted equity ratio
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769
  0.769

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  16
  19
  21
  24
  27
  30
  33
  37
  40
  44
  48
  52
  57
  61
  66
  71
  76
  82
  87
  93
  100
  107
  114
  121
  129
  138
  146
  156
  166
  176
Depreciation, amort., depletion, $m
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
Funds from operations, $m
  23
  26
  29
  32
  35
  39
  42
  46
  50
  54
  58
  63
  68
  73
  78
  84
  90
  96
  103
  110
  117
  125
  133
  141
  150
  160
  170
  180
  191
  203
Change in working capital, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
Cash from operations, $m
  20
  23
  26
  29
  32
  36
  39
  43
  46
  50
  54
  59
  64
  68
  74
  79
  85
  91
  97
  104
  111
  118
  126
  134
  143
  152
  161
  171
  182
  193
Maintenance CAPEX, $m
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
New CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
Cash from investing activities, $m
  -7
  -8
  -8
  -9
  -9
  -9
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -30
  -31
  -32
Free cash flow, $m
  13
  15
  18
  20
  23
  26
  29
  32
  35
  38
  42
  46
  49
  54
  58
  63
  67
  73
  78
  84
  90
  96
  103
  110
  117
  125
  133
  141
  151
  160
Issuance/(repayment) of debt, $m
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
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  
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
Total cash flow (excl. dividends), $m
  16
  18
  21
  24
  26
  29
  33
  36
  39
  43
  46
  50
  54
  59
  63
  68
  73
  79
  84
  90
  97
  103
  110
  118
  126
  134
  142
  151
  161
  171
Retained Cash Flow (-), $m
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -35
  -36
Prev. year cash balance distribution, $m
  53
  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
  59
  8
  10
  13
  15
  17
  20
  23
  25
  28
  31
  35
  38
  42
  45
  49
  54
  58
  63
  68
  73
  79
  84
  90
  97
  104
  111
  118
  126
  135
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
  56
  7
  9
  10
  12
  13
  13
  14
  15
  15
  15
  15
  14
  14
  13
  13
  12
  11
  10
  9
  8
  7
  6
  5
  4
  3
  2
  2
  1
  1
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

Control4 Corporation (Control4) is a provider of smart home and business solutions. The Company's smart home and small business solutions provide consumers with the ability to integrate audio, video, lighting, temperature, security, communications, network management and other functionalities into a unified automation solution, customized to match their lifestyles and business needs. Its Control4 solution integrates various third-party devices and systems into a unified solution for mainstream consumers. Through its unified software platform, consumers can interact with their entire automated home without learning multiple interfaces or various remote controls. Its Control4 product line is the Control4 Home Operating System (C4 OS), and the associated application software and software development kits (SDKs). Its products with embedded software and services include controllers, interface devices, lighting products, comfort products, security products and communication products.

FINANCIAL RATIOS  of  Control4 Corporation (CTRL)

Valuation Ratios
P/E Ratio 43.4
Price to Sales 2.7
Price to Book 4.1
Price to Tangible Book
Price to Cash Flow 31.4
Price to Free Cash Flow 37.7
Growth Rates
Sales Growth Rate 28.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25%
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 8.5%
Ret/ On Assets - 3 Yr. Avg. 4.4%
Return On Total Capital 10.3%
Ret/ On T. Cap. - 3 Yr. Avg. 5.3%
Return On Equity 10.3%
Return On Equity - 3 Yr. Avg. 5.3%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 49.8%
Gross Margin - 3 Yr. Avg. 50.4%
EBITDA Margin 5.7%
EBITDA Margin - 3 Yr. Avg. 5.2%
Operating Margin 2.4%
Oper. Margin - 3 Yr. Avg. 2.6%
Pre-Tax Margin 1.9%
Pre-Tax Margin - 3 Yr. Avg. 2.4%
Net Profit Margin 6.2%
Net Profit Margin - 3 Yr. Avg. 3.5%
Effective Tax Rate -225%
Eff/ Tax Rate - 3 Yr. Avg. -104.6%
Payout Ratio 0%

CTRL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CTRL stock intrinsic value calculation we used $272 million for the last fiscal year's total revenue generated by Control4 Corporation. The default revenue input number comes from 0001 income statement of Control4 Corporation. 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 CTRL stock valuation model: a) initial revenue growth rate of 6.4% 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 CTRL is calculated based on our internal credit rating of Control4 Corporation, 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 Control4 Corporation.
    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 CTRL stock the variable cost ratio is equal to 74.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $51 million in the base year in the intrinsic value calculation for CTRL 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 Control4 Corporation.

Corporate tax rate of 27% is the nominal tax rate for Control4 Corporation. 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 CTRL 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 CTRL are equal to 11.4%.

Life of production assets of 5.7 years is the average useful life of capital assets used in Control4 Corporation 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 CTRL is equal to 15.1%. 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 - $206.347 million for Control4 Corporation - 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 26.521 million for Control4 Corporation 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 Control4 Corporation at the current share price and the inputted number of shares is $0.6 billion.

RELATED COMPANIES Price Int.Val. Rating
AAPL Apple Inc. 203.30 166.34  hold
NSSC NAPCO Security 26.09 26.08  buy
CSCO Cisco Systems, 57.95 50.72  hold
CMCSA Comcast Corpor 44.64 141.78  str.buy
NTGR NETGEAR, Inc. 26.21 9.53  str.sell
HON Honeywell Inte 177.14 132.66  hold
GOOGL Alphabet Inc. 1,145.34 985.65  hold
LRAD LRAD Corporati 3.79 0.23  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.