Intrinsic value of Data I/O - DAIO

Previous Close

$11.52

  Intrinsic Value

$10.79

stock screener

  Rating & Target

hold

-6%

Previous close

$11.52

 
Intrinsic value

$10.79

 
Up/down potential

-6%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of DAIO 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Data I/O (DAIO) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.55
  42.90
  39.11
  35.70
  32.63
  29.87
  27.38
  25.14
  23.13
  21.31
  19.68
  18.21
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.79
Revenue, $m
  23
  33
  46
  62
  82
  107
  136
  170
  210
  254
  305
  360
  421
  487
  558
  634
  716
  802
  892
  988
  1,088
  1,192
  1,301
  1,415
  1,533
  1,656
  1,784
  1,917
  2,055
  2,199
  2,348
Variable operating expenses, $m
 
  31
  44
  59
  79
  102
  130
  163
  201
  244
  291
  345
  403
  466
  534
  607
  685
  767
  854
  945
  1,041
  1,141
  1,245
  1,354
  1,467
  1,585
  1,708
  1,835
  1,967
  2,104
  2,247
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
  22
  31
  44
  59
  79
  102
  130
  163
  201
  244
  291
  345
  403
  466
  534
  607
  685
  767
  854
  945
  1,041
  1,141
  1,245
  1,354
  1,467
  1,585
  1,708
  1,835
  1,967
  2,104
  2,247
Operating income, $m
  1
  1
  2
  3
  4
  5
  6
  7
  9
  11
  13
  15
  18
  21
  24
  27
  31
  34
  38
  42
  47
  51
  56
  61
  66
  71
  77
  82
  88
  95
  101
EBITDA, $m
  2
  1
  2
  3
  4
  5
  6
  7
  9
  11
  13
  15
  18
  21
  24
  27
  31
  34
  38
  42
  47
  51
  56
  61
  66
  71
  77
  82
  88
  95
  101
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  2
  2
  2
  3
  4
  4
  5
  6
  7
  7
  8
  9
  10
  11
  12
  14
  15
  16
  17
  19
  20
  22
  23
Earnings before tax, $m
  2
  1
  2
  2
  3
  4
  5
  6
  7
  9
  11
  12
  15
  17
  19
  22
  24
  27
  30
  33
  37
  40
  44
  47
  51
  55
  59
  64
  68
  73
  78
Tax expense, $m
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  4
  5
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
Net income, $m
  2
  1
  1
  2
  2
  3
  4
  4
  5
  7
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
  37
  40
  43
  46
  50
  53
  57

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  12
  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
  23
  16
  22
  30
  39
  51
  65
  81
  100
  122
  146
  172
  201
  233
  267
  303
  342
  383
  427
  472
  520
  570
  622
  677
  733
  792
  853
  917
  983
  1,052
  1,123
Adjusted assets (=assets-cash), $m
  11
  16
  22
  30
  39
  51
  65
  81
  100
  122
  146
  172
  201
  233
  267
  303
  342
  383
  427
  472
  520
  570
  622
  677
  733
  792
  853
  917
  983
  1,052
  1,123
Revenue / Adjusted assets
  2.091
  2.063
  2.091
  2.067
  2.103
  2.098
  2.092
  2.099
  2.100
  2.082
  2.089
  2.093
  2.095
  2.090
  2.090
  2.092
  2.094
  2.094
  2.089
  2.093
  2.092
  2.091
  2.092
  2.090
  2.091
  2.091
  2.091
  2.091
  2.091
  2.090
  2.091
Average production assets, $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
  0
Working capital, $m
  15
  4
  6
  8
  11
  14
  18
  22
  27
  33
  40
  47
  55
  63
  73
  82
  93
  104
  116
  128
  141
  155
  169
  184
  199
  215
  232
  249
  267
  286
  305
Total debt, $m
  0
  3
  7
  12
  18
  26
  34
  45
  57
  70
  86
  102
  121
  141
  163
  186
  211
  237
  264
  293
  324
  356
  389
  423
  459
  497
  536
  576
  618
  662
  707
Total liabilities, $m
  7
  10
  14
  19
  25
  33
  41
  52
  64
  77
  93
  109
  128
  148
  170
  193
  218
  244
  271
  300
  331
  363
  396
  430
  466
  504
  543
  583
  625
  669
  714
Total equity, $m
  16
  6
  8
  11
  14
  19
  24
  30
  37
  44
  53
  63
  73
  85
  97
  110
  125
  140
  155
  172
  189
  208
  227
  246
  267
  288
  311
  334
  358
  383
  409
Total liabilities and equity, $m
  23
  16
  22
  30
  39
  52
  65
  82
  101
  121
  146
  172
  201
  233
  267
  303
  343
  384
  426
  472
  520
  571
  623
  676
  733
  792
  854
  917
  983
  1,052
  1,123
Debt-to-equity ratio
  0.000
  0.520
  0.870
  1.100
  1.260
  1.370
  1.450
  1.510
  1.560
  1.590
  1.620
  1.640
  1.650
  1.660
  1.680
  1.680
  1.690
  1.700
  1.700
  1.710
  1.710
  1.710
  1.720
  1.720
  1.720
  1.720
  1.720
  1.730
  1.730
  1.730
  1.730
Adjusted equity ratio
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364
  0.364

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2
  1
  1
  2
  2
  3
  4
  4
  5
  7
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
  37
  40
  43
  46
  50
  53
  57
Depreciation, amort., depletion, $m
  1
  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
Funds from operations, $m
  2
  1
  1
  2
  2
  3
  4
  4
  5
  7
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
  37
  40
  43
  46
  50
  53
  57
Change in working capital, $m
  -1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  7
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  19
Cash from operations, $m
  3
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  3
  4
  5
  6
  7
  9
  10
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  35
  37
Maintenance CAPEX, $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
  0
New CAPEX, $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
  0
Cash from investing activities, $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
  0
Free cash flow, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  3
  4
  5
  6
  7
  9
  10
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  35
  37
Issuance/(repayment) of debt, $m
  0
  3
  4
  5
  6
  7
  9
  10
  12
  14
  15
  17
  18
  20
  22
  23
  25
  26
  28
  29
  30
  32
  33
  35
  36
  37
  39
  40
  42
  44
  45
Issuance/(repurchase) of shares, $m
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  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  
  0
  4
  5
  6
  7
  8
  10
  11
  13
  15
  16
  18
  18
  20
  22
  23
  25
  26
  28
  29
  30
  32
  33
  35
  36
  37
  39
  40
  42
  44
  45
Total cash flow (excl. dividends), $m
  0
  3
  4
  6
  7
  9
  10
  12
  14
  16
  17
  19
  21
  24
  26
  29
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  66
  70
  74
  78
  83
Retained Cash Flow (-), $m
  -1
  -2
  -2
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
Prev. year cash balance distribution, $m
 
  12
  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
 
  14
  2
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
  37
  40
  43
  47
  50
  53
  57
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
 
  13
  2
  2
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  4
  4
  4
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
Current shareholders' claim on cash, %
  100
  97.3
  94.9
  92.9
  91.2
  89.8
  88.6
  87.7
  87.0
  86.6
  86.3
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1
  86.1

Data I/O Corporation provides programming and associated intellectual property management solutions. The Company's solutions are used in the manufacturing of flash, microcontrollers and flash-memory-based intelligent devices. It designs, manufactures and sells programming systems used by designers and manufacturers of electronic products. Its solutions, including associated intellectual property management, secure content management and process control capabilities, enable it to address the requirements of the electronic device market. It provides services related to hardware support, system installation and repair, and device programming. Its programming solutions include a range of products, systems, modules and accessories, grouped into over two categories, such as automated programming systems and manual programming systems. Its products include PSV Handlers, RoadRunner and RoadRunner3 Series Handlers, LumenX Programmer, FlashPAK III programmer and Sprint/Unifamily programmers.

FINANCIAL RATIOS  of  Data I/O (DAIO)

Valuation Ratios
P/E Ratio 46.2
Price to Sales 4
Price to Book 5.8
Price to Tangible Book
Price to Cash Flow 30.8
Price to Free Cash Flow 92.4
Growth Rates
Sales Growth Rate 4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
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 9.3%
Ret/ On Assets - 3 Yr. Avg. 6.6%
Return On Total Capital 12.9%
Ret/ On T. Cap. - 3 Yr. Avg. 9.1%
Return On Equity 12.9%
Return On Equity - 3 Yr. Avg. 9.1%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 56.5%
Gross Margin - 3 Yr. Avg. 55.2%
EBITDA Margin 13%
EBITDA Margin - 3 Yr. Avg. 10.4%
Operating Margin 4.3%
Oper. Margin - 3 Yr. Avg. 4.5%
Pre-Tax Margin 8.7%
Pre-Tax Margin - 3 Yr. Avg. 5.9%
Net Profit Margin 8.7%
Net Profit Margin - 3 Yr. Avg. 5.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

DAIO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DAIO stock intrinsic value calculation we used $23 million for the last fiscal year's total revenue generated by Data I/O. The default revenue input number comes from 2016 income statement of Data I/O. 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 DAIO stock valuation model: a) initial revenue growth rate of 42.9% 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 DAIO is calculated based on our internal credit rating of Data I/O, 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 Data I/O.
    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 DAIO stock the variable cost ratio is equal to 95.7%.

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 DAIO 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 3.5% for Data I/O.

Corporate tax rate of 27% is the nominal tax rate for Data I/O. 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 DAIO 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 DAIO are equal to 0%.

Life of production assets of 0 years is the average useful life of capital assets used in Data I/O 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 DAIO is equal to 13%. 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 - $16 million for Data I/O - 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 8.542 million for Data I/O 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 Data I/O at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Data I/O Earns ISO 9001:2015 Certifications   [Feb-01-18 09:00AM  Marketwired]
▶ ETFs with exposure to Data I/O Corp. : January 1, 2018   [Jan-01-18 11:32AM  Capital Cube]
▶ ETFs with exposure to Data I/O Corp. : December 8, 2017   [Dec-08-17 12:38PM  Capital Cube]
▶ ETFs with exposure to Data I/O Corp. : November 27, 2017   [Nov-27-17 01:04PM  Capital Cube]
▶ ETFs with exposure to Data I/O Corp. : November 8, 2017   [Nov-08-17 05:54PM  Capital Cube]
▶ Data I/O Reports Third Quarter 2017 Results   [Oct-26-17 04:05PM  Marketwired]
▶ DATA I/O CORP to Host Earnings Call   [12:35PM  ACCESSWIRE]
▶ ETFs with exposure to Data I/O Corp. : October 23, 2017   [Oct-23-17 10:32AM  Capital Cube]
▶ Data I/O Corporation Announces Upcoming Investor Events   [Oct-12-17 01:08PM  Marketwired]
▶ ETFs with exposure to Data I/O Corp. : October 3, 2017   [Oct-03-17 11:09AM  Capital Cube]
▶ Data I/O Reports Second Quarter 2017 Results   [Jul-27-17 04:05PM  Marketwired]
▶ ETFs with exposure to Data I/O Corp. : July 5, 2017   [Jul-05-17 12:38PM  Capital Cube]
▶ ETFs with exposure to Data I/O Corp. : May 31, 2017   [May-31-17 12:28PM  Capital Cube]
▶ ETFs with exposure to Data I/O Corp. : May 18, 2017   [May-18-17 01:39PM  Capital Cube]
▶ Data I/O Reports First Quarter 2017 Results   [May-04-17 04:05PM  Marketwired]
▶ ETFs with exposure to Data I/O Corp. : April 5, 2017   [Apr-05-17 04:37PM  Capital Cube]
▶ Data I/O Corporation Announces Upcoming Investor Events   [Feb-07-17 09:00AM  Marketwired]
▶ Data I/O Reports Third Quarter 2016 Results   [Oct-27-16 04:05PM  Marketwired]
▶ Data I/O Reports Second Quarter 2016 Results   [Jul-28-16 04:05PM  Marketwired]
▶ Data I/O Reports First Quarter 2016 Results   [Apr-28-16 04:05PM  Marketwired]
▶ Data I/O Reports Fourth Quarter 2015 Results   [Feb-25-16 04:05PM  Marketwired]
Financial statements of DAIO
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