Intrinsic value of Dynatronics - DYNT

Previous Close

$2.90

  Intrinsic Value

$0.16

stock screener

  Rating & Target

str. sell

-94%

Previous close

$2.90

 
Intrinsic value

$0.16

 
Up/down potential

-94%

 
Rating

str. sell

We calculate the intrinsic value of DYNT 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  57
  88
  132
  192
  271
  372
  499
  656
  844
  1,066
  1,323
  1,618
  1,950
  2,320
  2,728
  3,174
  3,656
  4,174
  4,727
  5,315
  5,936
  6,590
  7,276
  7,995
  8,745
  9,528
  10,343
  11,191
  12,072
  12,989
Variable operating expenses, $m
  54
  82
  123
  178
  251
  345
  462
  607
  781
  986
  1,223
  1,495
  1,802
  2,145
  2,522
  2,933
  3,379
  3,858
  4,369
  4,912
  5,486
  6,091
  6,725
  7,389
  8,083
  8,806
  9,559
  10,343
  11,158
  12,005
Fixed operating expenses, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
Total operating expenses, $m
  57
  85
  126
  181
  254
  348
  465
  611
  785
  990
  1,227
  1,499
  1,806
  2,149
  2,526
  2,937
  3,383
  3,862
  4,374
  4,917
  5,491
  6,096
  6,730
  7,394
  8,088
  8,811
  9,564
  10,349
  11,164
  12,011
Operating income, $m
  1
  3
  6
  11
  16
  24
  34
  45
  60
  76
  96
  119
  144
  172
  202
  236
  273
  312
  353
  398
  445
  494
  546
  600
  657
  716
  778
  842
  909
  978
EBITDA, $m
  2
  4
  8
  13
  20
  29
  39
  53
  69
  88
  110
  135
  163
  195
  230
  268
  309
  354
  401
  452
  505
  561
  620
  681
  746
  813
  882
  955
  1,031
  1,109
Interest expense (income), $m
  0
  0
  1
  1
  2
  4
  5
  7
  10
  13
  17
  22
  27
  33
  40
  47
  56
  65
  75
  86
  97
  109
  122
  135
  150
  164
  180
  196
  213
  230
  248
Earnings before tax, $m
  0
  2
  5
  8
  13
  19
  26
  36
  46
  59
  75
  92
  111
  132
  155
  180
  208
  237
  268
  301
  336
  372
  411
  451
  493
  536
  582
  629
  678
  730
Tax expense, $m
  0
  1
  1
  2
  3
  5
  7
  10
  13
  16
  20
  25
  30
  36
  42
  49
  56
  64
  72
  81
  91
  101
  111
  122
  133
  145
  157
  170
  183
  197
Net income, $m
  0
  2
  3
  6
  9
  14
  19
  26
  34
  43
  55
  67
  81
  96
  113
  132
  152
  173
  196
  220
  245
  272
  300
  329
  360
  392
  425
  459
  495
  533

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
  41
  64
  96
  139
  196
  269
  362
  475
  611
  772
  958
  1,172
  1,412
  1,680
  1,976
  2,298
  2,647
  3,022
  3,423
  3,848
  4,298
  4,772
  5,269
  5,789
  6,333
  6,899
  7,489
  8,103
  8,742
  9,405
Adjusted assets (=assets-cash), $m
  41
  64
  96
  139
  196
  269
  362
  475
  611
  772
  958
  1,172
  1,412
  1,680
  1,976
  2,298
  2,647
  3,022
  3,423
  3,848
  4,298
  4,772
  5,269
  5,789
  6,333
  6,899
  7,489
  8,103
  8,742
  9,405
Revenue / Adjusted assets
  1.390
  1.375
  1.375
  1.381
  1.383
  1.383
  1.378
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
  1.381
Average production assets, $m
  11
  16
  25
  36
  50
  69
  93
  122
  157
  198
  246
  301
  363
  432
  507
  590
  680
  776
  879
  989
  1,104
  1,226
  1,353
  1,487
  1,627
  1,772
  1,924
  2,081
  2,245
  2,416
Working capital, $m
  13
  20
  30
  43
  61
  84
  112
  148
  190
  240
  298
  364
  439
  522
  614
  714
  823
  939
  1,064
  1,196
  1,336
  1,483
  1,637
  1,799
  1,968
  2,144
  2,327
  2,518
  2,716
  2,922
Total debt, $m
  14
  26
  43
  66
  96
  134
  183
  243
  314
  399
  497
  610
  737
  878
  1,033
  1,203
  1,387
  1,585
  1,796
  2,020
  2,257
  2,507
  2,769
  3,043
  3,330
  3,628
  3,939
  4,263
  4,599
  4,949
Total liabilities, $m
  22
  34
  50
  73
  103
  142
  191
  250
  322
  407
  505
  617
  744
  885
  1,041
  1,211
  1,395
  1,593
  1,804
  2,028
  2,265
  2,515
  2,777
  3,051
  3,337
  3,636
  3,947
  4,270
  4,607
  4,957
Total equity, $m
  20
  30
  45
  66
  93
  127
  171
  225
  289
  365
  453
  554
  668
  795
  934
  1,087
  1,252
  1,430
  1,619
  1,820
  2,033
  2,257
  2,492
  2,738
  2,995
  3,263
  3,542
  3,833
  4,135
  4,449
Total liabilities and equity, $m
  42
  64
  95
  139
  196
  269
  362
  475
  611
  772
  958
  1,171
  1,412
  1,680
  1,975
  2,298
  2,647
  3,023
  3,423
  3,848
  4,298
  4,772
  5,269
  5,789
  6,332
  6,899
  7,489
  8,103
  8,742
  9,406
Debt-to-equity ratio
  0.720
  0.860
  0.940
  1.000
  1.030
  1.050
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.100
  1.100
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
  1.110
Adjusted equity ratio
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473
  0.473

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  2
  3
  6
  9
  14
  19
  26
  34
  43
  55
  67
  81
  96
  113
  132
  152
  173
  196
  220
  245
  272
  300
  329
  360
  392
  425
  459
  495
  533
Depreciation, amort., depletion, $m
  1
  2
  2
  3
  3
  4
  6
  7
  9
  11
  13
  16
  20
  23
  28
  32
  37
  42
  48
  54
  60
  67
  74
  81
  88
  96
  105
  113
  122
  131
Funds from operations, $m
  1
  3
  5
  9
  13
  18
  25
  33
  43
  55
  68
  83
  101
  120
  141
  164
  188
  215
  243
  273
  305
  338
  373
  410
  448
  488
  529
  572
  617
  664
Change in working capital, $m
  5
  7
  10
  13
  18
  23
  29
  35
  42
  50
  58
  66
  75
  83
  92
  100
  108
  117
  124
  132
  140
  147
  154
  162
  169
  176
  183
  191
  198
  206
Cash from operations, $m
  -3
  -4
  -4
  -5
  -5
  -5
  -4
  -2
  1
  5
  10
  17
  26
  36
  49
  63
  80
  98
  119
  141
  165
  191
  219
  248
  279
  312
  346
  382
  419
  458
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -13
  -16
  -20
  -23
  -28
  -32
  -37
  -42
  -48
  -54
  -60
  -67
  -74
  -81
  -88
  -96
  -105
  -113
  -122
New CAPEX, $m
  -4
  -6
  -8
  -11
  -15
  -19
  -24
  -29
  -35
  -41
  -48
  -55
  -62
  -69
  -76
  -83
  -90
  -96
  -103
  -109
  -116
  -122
  -128
  -134
  -140
  -146
  -152
  -158
  -164
  -170
Cash from investing activities, $m
  -4
  -7
  -9
  -12
  -17
  -22
  -28
  -34
  -42
  -50
  -59
  -68
  -78
  -89
  -99
  -111
  -122
  -133
  -145
  -157
  -170
  -182
  -195
  -208
  -221
  -234
  -248
  -263
  -277
  -292
Free cash flow, $m
  -8
  -10
  -13
  -17
  -21
  -26
  -31
  -36
  -41
  -45
  -49
  -51
  -52
  -52
  -50
  -47
  -42
  -35
  -26
  -16
  -4
  10
  25
  41
  59
  78
  98
  119
  142
  165
Issuance/(repayment) of debt, $m
  8
  12
  17
  23
  30
  39
  49
  60
  72
  85
  98
  112
  127
  141
  156
  170
  184
  198
  211
  224
  237
  250
  262
  274
  286
  299
  311
  324
  336
  350
Issuance/(repurchase) of shares, $m
  7
  9
  12
  14
  18
  21
  24
  28
  30
  33
  34
  34
  33
  31
  27
  21
  14
  5
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  15
  21
  29
  37
  48
  60
  73
  88
  102
  118
  132
  146
  160
  172
  183
  191
  198
  203
  211
  224
  237
  250
  262
  274
  286
  299
  311
  324
  336
  350
Total cash flow (excl. dividends), $m
  7
  11
  15
  20
  26
  33
  42
  51
  61
  72
  83
  95
  107
  120
  132
  144
  156
  167
  185
  208
  233
  259
  287
  315
  345
  377
  409
  443
  478
  515
Retained Cash Flow (-), $m
  -7
  -11
  -15
  -20
  -27
  -35
  -44
  -54
  -64
  -76
  -88
  -101
  -114
  -127
  -140
  -153
  -165
  -177
  -189
  -201
  -213
  -224
  -235
  -246
  -257
  -268
  -279
  -290
  -302
  -314
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
  0
  0
  0
  0
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -9
  -10
  -5
  7
  20
  35
  51
  69
  88
  109
  130
  153
  176
  201
Discount rate, %
  7.80
  8.19
  8.60
  9.03
  9.48
  9.95
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.41
  27.73
  29.12
  30.58
  32.11
PV of cash for distribution, $m
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  76.8
  61.6
  51.3
  44.0
  38.6
  34.5
  31.3
  28.9
  26.9
  25.4
  24.3
  23.3
  22.6
  22.1
  21.7
  21.5
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3
  21.3

Dynatronics Corporation is a manufacturer and distributor of physical medicine products. The Company's products include a line of medical equipment for physical medicine applications, including therapy devices, medical supplies and soft goods, treatment tables and rehabilitation equipment. Its products are used by physical therapists, chiropractors, sports medicine practitioners, podiatrists, physicians and other physical medicine professionals. Its physical medicine products include therapeutic modalities, such as Dynatron Solaris, including electrotherapy and thermal therapy, and 25 Series, including electrotherapy and ultrasound; manufactured capital products, including traction systems and wood furniture; manufactured supplies, including cold packs, straps, wedges, bolsters and mats; distributed capital products, including hydrotherapy, weight training equipment and pilates, and distributed supplies, including clinical accessories, sports med and taping products, lotions and gels.

FINANCIAL RATIOS  of  Dynatronics (DYNT)

Valuation Ratios
P/E Ratio -6.7
Price to Sales 0.4
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow -6.7
Price to Free Cash Flow -6.7
Growth Rates
Sales Growth Rate 20%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 33.3%
Total Debt to Equity 50%
Interest Coverage 0
Management Effectiveness
Return On Assets -9.8%
Ret/ On Assets - 3 Yr. Avg. -11.2%
Return On Total Capital -14.3%
Ret/ On T. Cap. - 3 Yr. Avg. -16.1%
Return On Equity -22.2%
Return On Equity - 3 Yr. Avg. -27.9%
Asset Turnover 1.8
Profitability Ratios
Gross Margin 33.3%
Gross Margin - 3 Yr. Avg. 32.6%
EBITDA Margin -5.6%
EBITDA Margin - 3 Yr. Avg. -4.1%
Operating Margin -2.8%
Oper. Margin - 3 Yr. Avg. -4.3%
Pre-Tax Margin -5.6%
Pre-Tax Margin - 3 Yr. Avg. -5.2%
Net Profit Margin -5.6%
Net Profit Margin - 3 Yr. Avg. -6.4%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -33.3%
Payout Ratio 0%

DYNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DYNT stock intrinsic value calculation we used $35.75833 million for the last fiscal year's total revenue generated by Dynatronics. The default revenue input number comes from 0001 income statement of Dynatronics. 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 DYNT stock valuation model: a) initial revenue growth rate of 60% 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 7.8%, whose default value for DYNT is calculated based on our internal credit rating of Dynatronics, 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 Dynatronics.
    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 DYNT stock the variable cost ratio is equal to 94.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3 million in the base year in the intrinsic value calculation for DYNT 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 Dynatronics.

Corporate tax rate of 27% is the nominal tax rate for Dynatronics. 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 DYNT 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 DYNT are equal to 18.6%.

Life of production assets of 18.4 years is the average useful life of capital assets used in Dynatronics 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 DYNT is equal to 22.5%. 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 - $12.32439 million for Dynatronics - 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 8.089 million for Dynatronics 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 Dynatronics at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Dynatronics to Attend Private Practice Section Show   [Oct-31-18 09:00AM  ACCESSWIRE]
▶ Dynatronics to Attend NATA Show   [Jun-20-18 04:15PM  ACCESSWIRE]
▶ Dynatronics Corporation Announces Leadership Transition   [Feb-21-18 08:00AM  PR Newswire]
▶ Dynatronics Announces Exhibit at Arab Health   [Jan-29-18 09:00AM  PR Newswire]
▶ Dynatronics Holds Annual Meeting of Shareholders   [Nov-29-17 06:00PM  PR Newswire]
▶ Is Dynatronics Corporation (DYNT) A Financially Sound Company?   [Oct-24-17 03:08PM  Simply Wall St.]
▶ Dynatronics Completes Acquisition of Bird & Cronin, Inc.   [Oct-02-17 02:19PM  PR Newswire]
▶ New Strong Sell Stocks for September 28th   [Sep-28-17 09:27AM  Zacks]
▶ Is It Too Late To Buy Dynatronics Corporation (DYNT)?   [Sep-22-17 03:11PM  Simply Wall St.]
▶ Dynatronics and Hausmann to Attend NATA Trade Show   [Jun-26-17 09:00AM  PR Newswire]
▶ Dynatronics Announces Fiscal 2017 Third Quarter Results   [May-15-17 04:05PM  PR Newswire]
▶ Dynatronics Completes Acquisition of Hausmann Industries   [Apr-04-17 09:05AM  PR Newswire]
▶ Dynatronics Announces Transition in Executive Management   [May-23-16 04:05PM  PR Newswire]

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