Intrinsic value of Masonite International Corporation - DOOR

Previous Close

$49.16

  Intrinsic Value

$46.32

stock screener

  Rating & Target

hold

-6%

Previous close

$49.16

 
Intrinsic value

$46.32

 
Up/down potential

-6%

 
Rating

hold

We calculate the intrinsic value of DOOR 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 1.2

 

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, %
  3.90
  4.01
  4.11
  4.20
  4.28
  4.35
  4.42
  4.47
  4.53
  4.57
  4.62
  4.65
  4.69
  4.72
  4.75
  4.77
  4.80
  4.82
  4.83
  4.85
  4.87
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.94
  4.94
  4.95
Revenue, $m
  2,255
  2,345
  2,441
  2,544
  2,653
  2,768
  2,890
  3,020
  3,156
  3,301
  3,453
  3,614
  3,783
  3,962
  4,150
  4,348
  4,557
  4,776
  5,007
  5,250
  5,505
  5,774
  6,057
  6,353
  6,666
  6,994
  7,338
  7,700
  8,081
  8,481
Variable operating expenses, $m
  2,075
  2,157
  2,244
  2,336
  2,434
  2,539
  2,649
  2,766
  2,889
  3,020
  3,118
  3,263
  3,416
  3,577
  3,747
  3,926
  4,114
  4,313
  4,521
  4,740
  4,971
  5,214
  5,469
  5,737
  6,019
  6,315
  6,626
  6,953
  7,297
  7,658
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
  2,075
  2,157
  2,244
  2,336
  2,434
  2,539
  2,649
  2,766
  2,889
  3,020
  3,118
  3,263
  3,416
  3,577
  3,747
  3,926
  4,114
  4,313
  4,521
  4,740
  4,971
  5,214
  5,469
  5,737
  6,019
  6,315
  6,626
  6,953
  7,297
  7,658
Operating income, $m
  180
  188
  198
  208
  218
  229
  241
  254
  267
  281
  335
  351
  367
  385
  403
  422
  442
  464
  486
  510
  534
  560
  588
  617
  647
  679
  712
  747
  784
  823
EBITDA, $m
  293
  305
  317
  331
  345
  360
  376
  392
  410
  429
  449
  470
  492
  515
  539
  565
  592
  621
  651
  682
  715
  750
  787
  826
  866
  909
  953
  1,001
  1,050
  1,102
Interest expense (income), $m
  27
  44
  46
  49
  52
  55
  58
  62
  65
  69
  73
  77
  82
  87
  92
  97
  102
  108
  115
  121
  128
  135
  143
  151
  159
  168
  177
  187
  197
  208
  219
Earnings before tax, $m
  136
  142
  149
  156
  163
  171
  180
  189
  198
  208
  258
  269
  281
  293
  306
  320
  334
  349
  365
  382
  399
  418
  437
  458
  479
  502
  526
  551
  577
  604
Tax expense, $m
  37
  38
  40
  42
  44
  46
  49
  51
  54
  56
  70
  73
  76
  79
  83
  86
  90
  94
  99
  103
  108
  113
  118
  124
  129
  135
  142
  149
  156
  163
Net income, $m
  99
  104
  109
  114
  119
  125
  131
  138
  145
  152
  188
  196
  205
  214
  223
  233
  244
  255
  266
  279
  292
  305
  319
  334
  350
  366
  384
  402
  421
  441

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
  1,848
  1,922
  2,001
  2,085
  2,174
  2,269
  2,369
  2,475
  2,587
  2,706
  2,830
  2,962
  3,101
  3,247
  3,402
  3,564
  3,735
  3,915
  4,104
  4,303
  4,513
  4,733
  4,964
  5,208
  5,464
  5,732
  6,015
  6,312
  6,624
  6,952
Adjusted assets (=assets-cash), $m
  1,848
  1,922
  2,001
  2,085
  2,174
  2,269
  2,369
  2,475
  2,587
  2,706
  2,830
  2,962
  3,101
  3,247
  3,402
  3,564
  3,735
  3,915
  4,104
  4,303
  4,513
  4,733
  4,964
  5,208
  5,464
  5,732
  6,015
  6,312
  6,624
  6,952
Revenue / Adjusted assets
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
  1.220
Average production assets, $m
  800
  832
  867
  903
  942
  983
  1,026
  1,072
  1,121
  1,172
  1,226
  1,283
  1,343
  1,406
  1,473
  1,544
  1,618
  1,696
  1,777
  1,864
  1,954
  2,050
  2,150
  2,255
  2,366
  2,483
  2,605
  2,734
  2,869
  3,011
Working capital, $m
  338
  352
  366
  382
  398
  415
  434
  453
  473
  495
  518
  542
  567
  594
  623
  652
  683
  716
  751
  787
  826
  866
  908
  953
  1,000
  1,049
  1,101
  1,155
  1,212
  1,272
Total debt, $m
  843
  891
  943
  998
  1,057
  1,119
  1,185
  1,255
  1,328
  1,406
  1,488
  1,575
  1,666
  1,762
  1,863
  1,970
  2,082
  2,200
  2,325
  2,456
  2,593
  2,738
  2,890
  3,050
  3,218
  3,395
  3,580
  3,775
  3,980
  4,196
Total liabilities, $m
  1,214
  1,263
  1,315
  1,370
  1,429
  1,491
  1,557
  1,626
  1,700
  1,778
  1,860
  1,946
  2,037
  2,134
  2,235
  2,342
  2,454
  2,572
  2,696
  2,827
  2,965
  3,109
  3,262
  3,421
  3,590
  3,766
  3,952
  4,147
  4,352
  4,567
Total equity, $m
  634
  659
  686
  715
  746
  778
  813
  849
  887
  928
  971
  1,016
  1,064
  1,114
  1,167
  1,222
  1,281
  1,343
  1,408
  1,476
  1,548
  1,623
  1,703
  1,786
  1,874
  1,966
  2,063
  2,165
  2,272
  2,384
Total liabilities and equity, $m
  1,848
  1,922
  2,001
  2,085
  2,175
  2,269
  2,370
  2,475
  2,587
  2,706
  2,831
  2,962
  3,101
  3,248
  3,402
  3,564
  3,735
  3,915
  4,104
  4,303
  4,513
  4,732
  4,965
  5,207
  5,464
  5,732
  6,015
  6,312
  6,624
  6,951
Debt-to-equity ratio
  1.330
  1.350
  1.370
  1.400
  1.420
  1.440
  1.460
  1.480
  1.500
  1.510
  1.530
  1.550
  1.570
  1.580
  1.600
  1.610
  1.630
  1.640
  1.650
  1.660
  1.680
  1.690
  1.700
  1.710
  1.720
  1.730
  1.740
  1.740
  1.750
  1.760
Adjusted equity ratio
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  99
  104
  109
  114
  119
  125
  131
  138
  145
  152
  188
  196
  205
  214
  223
  233
  244
  255
  266
  279
  292
  305
  319
  334
  350
  366
  384
  402
  421
  441
Depreciation, amort., depletion, $m
  113
  116
  119
  123
  126
  130
  134
  138
  143
  148
  114
  119
  124
  130
  136
  143
  150
  157
  165
  173
  181
  190
  199
  209
  219
  230
  241
  253
  266
  279
Funds from operations, $m
  212
  220
  228
  237
  246
  255
  265
  276
  288
  300
  302
  315
  329
  344
  360
  376
  394
  412
  431
  451
  472
  495
  518
  543
  569
  596
  625
  655
  687
  720
Change in working capital, $m
  13
  14
  14
  15
  16
  17
  18
  19
  21
  22
  23
  24
  25
  27
  28
  30
  31
  33
  35
  36
  38
  40
  42
  45
  47
  49
  52
  54
  57
  60
Cash from operations, $m
  200
  206
  214
  221
  229
  238
  247
  257
  267
  278
  279
  291
  304
  317
  332
  346
  362
  379
  396
  415
  434
  455
  476
  498
  522
  547
  573
  601
  630
  660
Maintenance CAPEX, $m
  -71
  -74
  -77
  -80
  -84
  -87
  -91
  -95
  -99
  -104
  -108
  -114
  -119
  -124
  -130
  -136
  -143
  -150
  -157
  -165
  -173
  -181
  -190
  -199
  -209
  -219
  -230
  -241
  -253
  -266
New CAPEX, $m
  -29
  -32
  -34
  -36
  -39
  -41
  -43
  -46
  -49
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -78
  -82
  -86
  -91
  -95
  -100
  -105
  -111
  -116
  -122
  -129
  -135
  -142
Cash from investing activities, $m
  -100
  -106
  -111
  -116
  -123
  -128
  -134
  -141
  -148
  -155
  -162
  -171
  -179
  -187
  -197
  -206
  -217
  -228
  -239
  -251
  -264
  -276
  -290
  -304
  -320
  -335
  -352
  -370
  -388
  -408
Free cash flow, $m
  99
  100
  102
  105
  107
  110
  113
  116
  119
  123
  116
  120
  125
  130
  134
  140
  145
  151
  157
  164
  171
  178
  186
  194
  202
  211
  221
  231
  241
  252
Issuance/(repayment) of debt, $m
  46
  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
  215
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  
  46
  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
  215
Total cash flow (excl. dividends), $m
  145
  149
  154
  160
  166
  172
  179
  186
  193
  201
  198
  207
  216
  226
  236
  246
  258
  269
  282
  295
  308
  323
  338
  354
  371
  388
  407
  426
  446
  468
Retained Cash Flow (-), $m
  -23
  -25
  -27
  -29
  -31
  -32
  -34
  -36
  -38
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -76
  -79
  -83
  -88
  -92
  -97
  -102
  -107
  -112
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
  122
  124
  127
  131
  135
  140
  144
  149
  155
  160
  156
  162
  168
  175
  183
  191
  199
  208
  217
  226
  237
  247
  259
  270
  283
  296
  310
  324
  339
  355
Discount rate, %
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
  114
  108
  103
  97
  91
  85
  79
  73
  66
  60
  50
  44
  38
  33
  28
  24
  20
  16
  13
  10
  8
  6
  4
  3
  2
  1
  1
  1
  0
  0
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

Masonite International Corporation is a designer and manufacturer of interior and exterior doors for residential construction, residential repair, renovation and remodeling, and the non-residential building construction markets. The Company's segments are organized and managed principally by end market: North American Residential, Europe and Architectural. The North American Residential segment is the aggregation of the Wholesale and Retail segments. The Europe segment is the aggregation of the United Kingdom and Central Eastern Europe segments. Its product lines include residential doors, architectural doors and components. Its residential doors are molded panel, flush, stile and rail, routed medium-density fiberboard, steel or fiberglass. Its architectural doors are products designed, constructed and tested. It offers a line of architectural interior doors ranging from molded panel doors to designed flush wood doors with inlay designs. _tck('aft');

FINANCIAL RATIOS  of  Masonite International Corporation (DOOR)

Valuation Ratios
P/E Ratio 14.8
Price to Sales 0.7
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 8.4
Price to Free Cash Flow 15.9
Growth Rates
Sales Growth Rate 5.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 60.8%
Cap. Spend. - 3 Yr. Gr. Rate 12.3%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 72.8%
Total Debt to Equity 72.8%
Interest Coverage 6
Management Effectiveness
Return On Assets 8.2%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital 8.9%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 15.4%
Return On Equity - 3 Yr. Avg. 1.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 20.8%
Gross Margin - 3 Yr. Avg. 18%
EBITDA Margin 12%
EBITDA Margin - 3 Yr. Avg. 7.3%
Operating Margin 7.8%
Oper. Margin - 3 Yr. Avg. 2.9%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 1.1%
Net Profit Margin 5%
Net Profit Margin - 3 Yr. Avg. 0.2%
Effective Tax Rate 17.3%
Eff/ Tax Rate - 3 Yr. Avg. -15.5%
Payout Ratio 0%

DOOR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DOOR stock intrinsic value calculation we used $2170 million for the last fiscal year's total revenue generated by Masonite International Corporation. The default revenue input number comes from 0001 income statement of Masonite International 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 DOOR stock valuation model: a) initial revenue growth rate of 3.9% 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 6.7%, whose default value for DOOR is calculated based on our internal credit rating of Masonite International 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 Masonite International 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 DOOR stock the variable cost ratio is equal to 92.1%.

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 DOOR 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 5.5% for Masonite International Corporation.

Corporate tax rate of 27% is the nominal tax rate for Masonite International 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 DOOR 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 DOOR are equal to 35.5%.

Life of production assets of 10.8 years is the average useful life of capital assets used in Masonite International 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 DOOR is equal to 15%. 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 - $610.44 million for Masonite International 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 25.420 million for Masonite International 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 Masonite International Corporation at the current share price and the inputted number of shares is $1.2 billion.

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