Intrinsic value of Camping World Holdings, Inc. - CWH

Previous Close

$12.27

  Intrinsic Value

$16.08

stock screener

  Rating & Target

buy

+31%

Previous close

$12.27

 
Intrinsic value

$16.08

 
Up/down potential

+31%

 
Rating

buy

We calculate the intrinsic value of CWH 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 1.1

 

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, %
  6.20
  6.08
  5.97
  5.87
  5.79
  5.71
  5.64
  5.57
  5.52
  5.46
  5.42
  5.38
  5.34
  5.31
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
  5.11
  5.10
  5.09
  5.08
  5.07
  5.06
  5.06
Revenue, $m
  4,551
  4,827
  5,116
  5,416
  5,730
  6,057
  6,398
  6,755
  7,127
  7,517
  7,924
  8,350
  8,796
  9,263
  9,751
  10,263
  10,799
  11,360
  11,949
  12,566
  13,212
  13,890
  14,601
  15,347
  16,129
  16,949
  17,810
  18,713
  19,660
  20,654
Variable operating expenses, $m
  4,066
  4,311
  4,566
  4,832
  5,109
  5,399
  5,701
  6,016
  6,346
  6,691
  7,013
  7,390
  7,784
  8,197
  8,630
  9,082
  9,557
  10,054
  10,574
  11,120
  11,693
  12,293
  12,922
  13,582
  14,274
  15,000
  15,761
  16,560
  17,399
  18,278
Fixed operating expenses, $m
  97
  99
  101
  104
  106
  108
  111
  113
  116
  118
  121
  123
  126
  129
  132
  135
  138
  141
  144
  147
  150
  153
  157
  160
  164
  167
  171
  175
  179
  182
Total operating expenses, $m
  4,163
  4,410
  4,667
  4,936
  5,215
  5,507
  5,812
  6,129
  6,462
  6,809
  7,134
  7,513
  7,910
  8,326
  8,762
  9,217
  9,695
  10,195
  10,718
  11,267
  11,843
  12,446
  13,079
  13,742
  14,438
  15,167
  15,932
  16,735
  17,578
  18,460
Operating income, $m
  388
  417
  448
  481
  514
  550
  587
  625
  666
  708
  791
  837
  886
  937
  990
  1,046
  1,105
  1,166
  1,231
  1,299
  1,370
  1,444
  1,523
  1,605
  1,692
  1,782
  1,878
  1,978
  2,083
  2,193
EBITDA, $m
  449
  481
  513
  547
  582
  619
  658
  698
  740
  785
  831
  880
  930
  984
  1,040
  1,098
  1,159
  1,224
  1,291
  1,362
  1,437
  1,515
  1,597
  1,683
  1,773
  1,868
  1,968
  2,073
  2,183
  2,298
Interest expense (income), $m
  62
  102
  99
  107
  115
  124
  133
  143
  153
  163
  174
  185
  197
  209
  222
  236
  250
  265
  281
  297
  314
  332
  351
  370
  391
  413
  435
  459
  484
  510
  538
Earnings before tax, $m
  286
  318
  341
  365
  390
  416
  444
  472
  503
  534
  606
  640
  676
  714
  754
  796
  840
  886
  934
  985
  1,038
  1,094
  1,153
  1,214
  1,279
  1,347
  1,418
  1,494
  1,572
  1,655
Tax expense, $m
  77
  86
  92
  99
  105
  112
  120
  128
  136
  144
  164
  173
  183
  193
  204
  215
  227
  239
  252
  266
  280
  295
  311
  328
  345
  364
  383
  403
  425
  447
Net income, $m
  208
  232
  249
  267
  285
  304
  324
  345
  367
  390
  442
  467
  494
  521
  550
  581
  613
  647
  682
  719
  758
  798
  841
  886
  934
  983
  1,035
  1,090
  1,148
  1,208

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
  2,720
  2,885
  3,058
  3,237
  3,425
  3,620
  3,824
  4,038
  4,260
  4,493
  4,737
  4,991
  5,258
  5,537
  5,829
  6,134
  6,455
  6,790
  7,142
  7,511
  7,897
  8,303
  8,728
  9,173
  9,641
  10,131
  10,645
  11,185
  11,751
  12,346
Adjusted assets (=assets-cash), $m
  2,720
  2,885
  3,058
  3,237
  3,425
  3,620
  3,824
  4,038
  4,260
  4,493
  4,737
  4,991
  5,258
  5,537
  5,829
  6,134
  6,455
  6,790
  7,142
  7,511
  7,897
  8,303
  8,728
  9,173
  9,641
  10,131
  10,645
  11,185
  11,751
  12,346
Revenue / Adjusted assets
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
  1.673
Average production assets, $m
  319
  338
  358
  379
  401
  424
  448
  473
  499
  526
  555
  585
  616
  648
  683
  718
  756
  795
  836
  880
  925
  972
  1,022
  1,074
  1,129
  1,186
  1,247
  1,310
  1,376
  1,446
Working capital, $m
  1,315
  1,395
  1,478
  1,565
  1,656
  1,750
  1,849
  1,952
  2,060
  2,172
  2,290
  2,413
  2,542
  2,677
  2,818
  2,966
  3,121
  3,283
  3,453
  3,632
  3,818
  4,014
  4,220
  4,435
  4,661
  4,898
  5,147
  5,408
  5,682
  5,969
Total debt, $m
  1,835
  1,984
  2,139
  2,301
  2,469
  2,645
  2,829
  3,021
  3,221
  3,431
  3,650
  3,879
  4,119
  4,370
  4,633
  4,908
  5,196
  5,498
  5,815
  6,147
  6,495
  6,859
  7,242
  7,643
  8,064
  8,505
  8,968
  9,454
  9,963
  10,498
Total liabilities, $m
  2,448
  2,597
  2,752
  2,914
  3,082
  3,258
  3,442
  3,634
  3,834
  4,044
  4,263
  4,492
  4,732
  4,983
  5,246
  5,521
  5,809
  6,111
  6,428
  6,760
  7,108
  7,472
  7,855
  8,256
  8,677
  9,118
  9,581
  10,067
  10,576
  11,111
Total equity, $m
  272
  289
  306
  324
  342
  362
  382
  404
  426
  449
  474
  499
  526
  554
  583
  613
  645
  679
  714
  751
  790
  830
  873
  917
  964
  1,013
  1,065
  1,119
  1,175
  1,235
Total liabilities and equity, $m
  2,720
  2,886
  3,058
  3,238
  3,424
  3,620
  3,824
  4,038
  4,260
  4,493
  4,737
  4,991
  5,258
  5,537
  5,829
  6,134
  6,454
  6,790
  7,142
  7,511
  7,898
  8,302
  8,728
  9,173
  9,641
  10,131
  10,646
  11,186
  11,751
  12,346
Debt-to-equity ratio
  6.750
  6.870
  6.990
  7.110
  7.210
  7.310
  7.400
  7.480
  7.560
  7.640
  7.710
  7.770
  7.830
  7.890
  7.950
  8.000
  8.050
  8.100
  8.140
  8.180
  8.220
  8.260
  8.300
  8.330
  8.360
  8.390
  8.420
  8.450
  8.480
  8.500
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  208
  232
  249
  267
  285
  304
  324
  345
  367
  390
  442
  467
  494
  521
  550
  581
  613
  647
  682
  719
  758
  798
  841
  886
  934
  983
  1,035
  1,090
  1,148
  1,208
Depreciation, amort., depletion, $m
  62
  63
  65
  66
  68
  69
  71
  73
  75
  77
  40
  42
  45
  47
  49
  52
  55
  58
  61
  64
  67
  70
  74
  78
  82
  86
  90
  95
  100
  105
Funds from operations, $m
  270
  296
  314
  333
  353
  373
  395
  418
  442
  467
  482
  510
  538
  568
  600
  633
  668
  704
  742
  783
  825
  869
  915
  964
  1,015
  1,069
  1,126
  1,185
  1,248
  1,313
Change in working capital, $m
  77
  80
  83
  87
  91
  95
  99
  103
  108
  113
  118
  123
  129
  135
  141
  148
  155
  162
  170
  178
  187
  196
  205
  215
  226
  237
  249
  261
  274
  287
Cash from operations, $m
  193
  216
  230
  246
  262
  279
  296
  315
  334
  354
  365
  387
  409
  434
  459
  485
  513
  542
  572
  604
  638
  673
  710
  749
  789
  832
  877
  924
  974
  1,026
Maintenance CAPEX, $m
  -22
  -23
  -24
  -26
  -27
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -74
  -78
  -82
  -86
  -90
  -95
  -100
New CAPEX, $m
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -70
Cash from investing activities, $m
  -40
  -42
  -44
  -47
  -49
  -52
  -55
  -57
  -60
  -63
  -67
  -70
  -73
  -78
  -81
  -85
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -133
  -139
  -146
  -153
  -161
  -170
Free cash flow, $m
  153
  173
  186
  199
  213
  227
  242
  257
  274
  291
  298
  316
  336
  356
  378
  400
  423
  448
  474
  500
  529
  559
  590
  622
  657
  693
  731
  771
  813
  857
Issuance/(repayment) of debt, $m
  -57
  149
  155
  162
  169
  176
  184
  192
  200
  210
  219
  229
  240
  251
  263
  275
  288
  302
  317
  332
  348
  365
  382
  401
  421
  441
  463
  486
  510
  535
Issuance/(repurchase) of shares, $m
  7
  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  
  -50
  149
  155
  162
  169
  176
  184
  192
  200
  210
  219
  229
  240
  251
  263
  275
  288
  302
  317
  332
  348
  365
  382
  401
  421
  441
  463
  486
  510
  535
Total cash flow (excl. dividends), $m
  104
  322
  341
  361
  381
  403
  426
  449
  474
  500
  517
  546
  576
  607
  640
  675
  712
  750
  790
  832
  877
  923
  972
  1,024
  1,078
  1,134
  1,194
  1,256
  1,322
  1,391
Retained Cash Flow (-), $m
  -216
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -45
  -47
  -49
  -51
  -54
  -57
  -59
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
  -112
  305
  324
  343
  363
  383
  405
  428
  452
  477
  493
  520
  549
  579
  611
  645
  680
  716
  755
  795
  838
  883
  930
  979
  1,031
  1,085
  1,142
  1,203
  1,266
  1,332
Discount rate, %
  13.70
  14.39
  15.10
  15.86
  16.65
  17.49
  18.36
  19.28
  20.24
  21.25
  22.32
  23.43
  24.60
  25.83
  27.13
  28.48
  29.91
  31.40
  32.97
  34.62
  36.35
  38.17
  40.08
  42.08
  44.18
  46.39
  48.71
  51.15
  53.71
  56.39
PV of cash for distribution, $m
  -98
  233
  212
  190
  168
  146
  124
  104
  86
  69
  54
  42
  31
  23
  17
  12
  8
  5
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8
  98.8

Camping World Holdings, Inc. is a provider of a portfolio of services, protection plans, products and resources for recreational vehicle (RV) enthusiasts. The Company operates through two segments: Consumer Services and Plans, and Retail. Within the Consumer Services and Plans segment, the Company derives revenue from the sale of the offerings, including emergency roadside assistance; property and casualty insurance programs; travel assist programs; extended vehicle service contracts; co branded credit cards; vehicle financing and refinancing; club memberships, and publications and directories. Within the Retail segment, it derives revenue from the sale of the products, including new vehicles; used vehicles; parts and service, including RV accessories and supplies, and finance and insurance. The Company provides its offerings through its two brands: Good Sam and Camping World. Its Camping World brand operates a network of RV centric retail locations in the United States.

FINANCIAL RATIOS  of  Camping World Holdings, Inc. (CWH)

Valuation Ratios
P/E Ratio 5.2
Price to Sales 0.3
Price to Book 13.2
Price to Tangible Book
Price to Cash Flow 4.4
Price to Free Cash Flow 5.4
Growth Rates
Sales Growth Rate 7.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2.4%
Cap. Spend. - 3 Yr. Gr. Rate 4.6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 828%
Total Debt to Equity 1672%
Interest Coverage 4
Management Effectiveness
Return On Assets 17.4%
Ret/ On Assets - 3 Yr. Avg. 22.3%
Return On Total Capital 16.3%
Ret/ On T. Cap. - 3 Yr. Avg. 22.1%
Return On Equity -174.5%
Return On Equity - 3 Yr. Avg. -115.5%
Asset Turnover 2.4
Profitability Ratios
Gross Margin 28.3%
Gross Margin - 3 Yr. Avg. 28%
EBITDA Margin 8.4%
EBITDA Margin - 3 Yr. Avg. 8.1%
Operating Margin 7.9%
Oper. Margin - 3 Yr. Avg. 7.4%
Pre-Tax Margin 5.9%
Pre-Tax Margin - 3 Yr. Avg. 5.4%
Net Profit Margin 5.4%
Net Profit Margin - 3 Yr. Avg. 5.2%
Effective Tax Rate 2.9%
Eff/ Tax Rate - 3 Yr. Avg. 1.7%
Payout Ratio 1%

CWH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CWH stock intrinsic value calculation we used $4285 million for the last fiscal year's total revenue generated by Camping World Holdings, Inc.. The default revenue input number comes from 0001 income statement of Camping World Holdings, 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 CWH stock valuation model: a) initial revenue growth rate of 6.2% 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 13.7%, whose default value for CWH is calculated based on our internal credit rating of Camping World Holdings, 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 Camping World Holdings, 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 CWH stock the variable cost ratio is equal to 89.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $95 million in the base year in the intrinsic value calculation for CWH 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 Camping World Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for Camping World Holdings, 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 CWH 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 CWH are equal to 7%.

Life of production assets of 13.8 years is the average useful life of capital assets used in Camping World Holdings, 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 CWH is equal to 28.9%. 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 - $56.505 million for Camping World Holdings, 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 88.148 million for Camping World Holdings, 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 Camping World Holdings, Inc. at the current share price and the inputted number of shares is $1.1 billion.

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