Intrinsic value of CUI Global, Inc. - CUI

Previous Close

$0.78

  Intrinsic Value

$0.41

stock screener

  Rating & Target

sell

-48%

Previous close

$0.78

 
Intrinsic value

$0.41

 
Up/down potential

-48%

 
Rating

sell

We calculate the intrinsic value of CUI 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, %
  13.50
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.96
  7.67
  7.40
  7.16
  6.94
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
Revenue, $m
  94
  106
  119
  132
  146
  161
  176
  192
  208
  226
  244
  262
  282
  302
  323
  345
  367
  391
  416
  441
  468
  496
  524
  555
  586
  619
  653
  689
  727
  766
Variable operating expenses, $m
  101
  113
  127
  141
  156
  171
  187
  204
  222
  240
  258
  278
  298
  320
  342
  365
  389
  414
  440
  467
  495
  525
  555
  587
  621
  655
  692
  730
  769
  811
Fixed operating expenses, $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 operating expenses, $m
  101
  113
  127
  141
  156
  171
  187
  204
  222
  240
  258
  278
  298
  320
  342
  365
  389
  414
  440
  467
  495
  525
  555
  587
  621
  655
  692
  730
  769
  811
Operating income, $m
  -7
  -7
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -26
  -27
  -29
  -31
  -33
  -34
  -36
  -38
  -40
  -43
  -45
EBITDA, $m
  -4
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -29
Interest expense (income), $m
  0
  0
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
Earnings before tax, $m
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
Tax expense, $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
Net income, $m
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59

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
  100
  112
  126
  140
  155
  170
  186
  203
  221
  239
  258
  278
  299
  320
  342
  365
  389
  414
  440
  467
  496
  525
  556
  587
  621
  656
  692
  730
  770
  811
Adjusted assets (=assets-cash), $m
  100
  112
  126
  140
  155
  170
  186
  203
  221
  239
  258
  278
  299
  320
  342
  365
  389
  414
  440
  467
  496
  525
  556
  587
  621
  656
  692
  730
  770
  811
Revenue / Adjusted assets
  0.940
  0.946
  0.944
  0.943
  0.942
  0.947
  0.946
  0.946
  0.941
  0.946
  0.946
  0.942
  0.943
  0.944
  0.944
  0.945
  0.943
  0.944
  0.945
  0.944
  0.944
  0.945
  0.942
  0.945
  0.944
  0.944
  0.944
  0.944
  0.944
  0.945
Average production assets, $m
  32
  36
  41
  45
  50
  55
  60
  66
  72
  77
  84
  90
  97
  104
  111
  118
  126
  134
  143
  151
  160
  170
  180
  190
  201
  212
  224
  236
  249
  263
Working capital, $m
  11
  13
  14
  16
  17
  19
  21
  23
  25
  27
  29
  31
  33
  36
  38
  41
  43
  46
  49
  52
  55
  58
  62
  65
  69
  73
  77
  81
  86
  90
Total debt, $m
  13
  17
  22
  27
  32
  37
  43
  49
  55
  61
  68
  74
  82
  89
  97
  105
  113
  122
  131
  140
  150
  160
  170
  182
  193
  205
  218
  231
  245
  259
Total liabilities, $m
  35
  39
  44
  48
  54
  59
  64
  70
  76
  83
  89
  96
  103
  111
  118
  126
  135
  143
  152
  162
  171
  182
  192
  203
  215
  227
  239
  253
  266
  281
Total equity, $m
  65
  74
  82
  91
  101
  111
  122
  133
  144
  156
  169
  182
  195
  209
  224
  239
  255
  271
  288
  306
  324
  343
  363
  384
  406
  429
  453
  477
  503
  531
Total liabilities and equity, $m
  100
  113
  126
  139
  155
  170
  186
  203
  220
  239
  258
  278
  298
  320
  342
  365
  390
  414
  440
  468
  495
  525
  555
  587
  621
  656
  692
  730
  769
  812
Debt-to-equity ratio
  0.200
  0.230
  0.260
  0.290
  0.310
  0.330
  0.350
  0.370
  0.380
  0.390
  0.400
  0.410
  0.420
  0.430
  0.430
  0.440
  0.440
  0.450
  0.450
  0.460
  0.460
  0.470
  0.470
  0.470
  0.480
  0.480
  0.480
  0.480
  0.490
  0.490
Adjusted equity ratio
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654
  0.654

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -29
  -31
  -33
  -35
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
Depreciation, amort., depletion, $m
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  15
  15
  16
Funds from operations, $m
  -4
  -5
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -36
  -38
  -40
  -43
Change in working capital, $m
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
Cash from operations, $m
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -11
  -13
  -14
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -45
  -47
Maintenance CAPEX, $m
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -15
  -15
New CAPEX, $m
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
Cash from investing activities, $m
  -6
  -6
  -6
  -8
  -8
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -13
  -13
  -13
  -14
  -15
  -16
  -16
  -18
  -18
  -20
  -21
  -21
  -23
  -23
  -25
  -26
  -28
  -28
Free cash flow, $m
  -11
  -12
  -13
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -35
  -38
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -76
Issuance/(repayment) of debt, $m
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
Issuance/(repurchase) of shares, $m
  15
  16
  18
  19
  21
  22
  24
  26
  28
  29
  30
  32
  34
  36
  39
  41
  43
  46
  48
  51
  54
  57
  60
  63
  67
  70
  74
  78
  82
  86
Cash from financing (excl. dividends), $m  
  19
  20
  23
  24
  26
  27
  30
  32
  34
  35
  37
  39
  41
  43
  47
  49
  51
  55
  57
  60
  64
  67
  71
  74
  79
  82
  87
  91
  96
  100
Total cash flow (excl. dividends), $m
  8
  8
  9
  9
  10
  10
  11
  11
  11
  12
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  24
Retained Cash Flow (-), $m
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -28
  -29
  -30
  -32
  -34
  -36
  -39
  -41
  -43
  -46
  -48
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -82
  -86
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
  -7
  -8
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -62
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
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -9
  -9
  -9
  -9
  -9
  -8
  -8
  -8
  -7
  -6
  -6
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
  -1
  0
Current shareholders' claim on cash, %
  73.0
  53.8
  40.0
  29.9
  22.6
  17.1
  13.1
  10.0
  7.7
  6.0
  4.7
  3.7
  2.9
  2.3
  1.8
  1.4
  1.1
  0.9
  0.7
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1

CUI Global, Inc. is a platform company. The Company's segments include Power and Electromechanical, Energy and Other. The Power and Electromechanical segment includes its subsidiaries, CUI, Inc. (CUI), CUI Japan and CUI-Canada, Inc., which provide electromechanical components, including power supplies, transformers, converters, connectors and industrial controls for original equipment manufacturers (OEMs). Its Power and Electro-Mechanical segment aggregates its product offerings into over two categories: components, including connectors, speakers, buzzers, test and measurement devices, and control solutions, including encoders and sensors, and power solutions. Its Energy segment includes its subsidiaries, Orbital Gas Systems Limited (Orbital) and the Orbital Gas Systems, North America, Inc., which consist of gas related test and measurement systems, including the GasPT, a natural gas inferential metering device. The Other segment includes corporate activity.

FINANCIAL RATIOS  of  CUI Global, Inc. (CUI)

Valuation Ratios
P/E Ratio -2.3
Price to Sales 0.2
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -16.4
Price to Free Cash Flow -5.5
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -60%
Cap. Spend. - 3 Yr. Gr. Rate -7.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 18.4%
Total Debt to Equity 18.4%
Interest Coverage 0
Management Effectiveness
Return On Assets -8.2%
Ret/ On Assets - 3 Yr. Avg. -5.7%
Return On Total Capital -11%
Ret/ On T. Cap. - 3 Yr. Avg. -7.8%
Return On Equity -12.8%
Return On Equity - 3 Yr. Avg. -8.9%
Asset Turnover 1
Profitability Ratios
Gross Margin 37.2%
Gross Margin - 3 Yr. Avg. 37.5%
EBITDA Margin -4.7%
EBITDA Margin - 3 Yr. Avg. -1.8%
Operating Margin -8.1%
Oper. Margin - 3 Yr. Avg. -6.4%
Pre-Tax Margin -8.1%
Pre-Tax Margin - 3 Yr. Avg. -6.8%
Net Profit Margin -8.1%
Net Profit Margin - 3 Yr. Avg. -6.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 8.3%
Payout Ratio 0%

CUI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CUI stock intrinsic value calculation we used $83 million for the last fiscal year's total revenue generated by CUI Global, Inc.. The default revenue input number comes from 0001 income statement of CUI Global, Inc.. 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 CUI stock valuation model: a) initial revenue growth rate of 13.5% 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 CUI is calculated based on our internal credit rating of CUI Global, Inc., 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 CUI Global, Inc..
    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 CUI stock the variable cost ratio is equal to 107.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CUI 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 5.7% for CUI Global, Inc..

Corporate tax rate of 27% is the nominal tax rate for CUI Global, Inc.. 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 CUI 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 CUI are equal to 34.3%.

Life of production assets of 16.1 years is the average useful life of capital assets used in CUI Global, Inc. 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 CUI is equal to 11.8%. 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 - $57.486 million for CUI Global, Inc. - 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 28.552 million for CUI Global, Inc. 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 CUI Global, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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