Intrinsic value of Enova International, Inc. - ENVA

Previous Close

$21.29

  Intrinsic Value

$347.23

stock screener

  Rating & Target

str. buy

+999%

Previous close

$21.29

 
Intrinsic value

$347.23

 
Up/down potential

+999%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as ENVA.

We calculate the intrinsic value of ENVA 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 0.7

 

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, %
  28.30
  25.97
  23.87
  21.99
  20.29
  18.76
  17.38
  16.14
  15.03
  14.03
  13.12
  12.31
  11.58
  10.92
  10.33
  9.80
  9.32
  8.89
  8.50
  8.15
  7.83
  7.55
  7.29
  7.07
  6.86
  6.67
  6.51
  6.35
  6.22
  6.10
Revenue, $m
  1,429
  1,800
  2,230
  2,721
  3,273
  3,886
  4,562
  5,298
  6,095
  6,950
  7,862
  8,830
  9,852
  10,928
  12,057
  13,239
  14,472
  15,758
  17,097
  18,490
  19,938
  21,444
  23,008
  24,633
  26,323
  28,079
  29,906
  31,806
  33,785
  35,845
Variable operating expenses, $m
  1,164
  1,460
  1,802
  2,192
  2,631
  3,120
  3,657
  4,243
  4,877
  5,557
  6,256
  7,026
  7,840
  8,696
  9,595
  10,535
  11,516
  12,540
  13,605
  14,714
  15,866
  17,064
  18,309
  19,602
  20,947
  22,344
  23,798
  25,310
  26,885
  28,524
Fixed operating expenses, $m
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  31
  31
  32
  33
Total operating expenses, $m
  1,181
  1,478
  1,820
  2,211
  2,650
  3,139
  3,677
  4,263
  4,898
  5,578
  6,278
  7,048
  7,863
  8,719
  9,619
  10,559
  11,541
  12,565
  13,631
  14,740
  15,893
  17,091
  18,337
  19,631
  20,976
  22,374
  23,829
  25,341
  26,917
  28,557
Operating income, $m
  248
  323
  410
  510
  622
  747
  885
  1,035
  1,197
  1,371
  1,584
  1,781
  1,990
  2,209
  2,439
  2,680
  2,931
  3,193
  3,466
  3,750
  4,045
  4,352
  4,671
  5,002
  5,347
  5,705
  6,077
  6,465
  6,868
  7,288
EBITDA, $m
  286
  364
  455
  559
  675
  805
  948
  1,104
  1,272
  1,453
  1,646
  1,851
  2,067
  2,295
  2,534
  2,784
  3,045
  3,317
  3,601
  3,896
  4,202
  4,521
  4,852
  5,196
  5,554
  5,926
  6,313
  6,715
  7,134
  7,570
Interest expense (income), $m
  60
  82
  98
  127
  160
  198
  240
  288
  340
  397
  458
  524
  594
  669
  748
  831
  918
  1,009
  1,104
  1,203
  1,306
  1,413
  1,525
  1,641
  1,762
  1,887
  2,017
  2,152
  2,293
  2,440
  2,592
Earnings before tax, $m
  165
  225
  283
  350
  424
  507
  597
  695
  800
  913
  1,060
  1,187
  1,321
  1,461
  1,608
  1,762
  1,923
  2,090
  2,263
  2,444
  2,632
  2,827
  3,030
  3,241
  3,460
  3,688
  3,925
  4,172
  4,428
  4,696
Tax expense, $m
  45
  61
  77
  94
  115
  137
  161
  188
  216
  247
  286
  321
  357
  395
  434
  476
  519
  564
  611
  660
  711
  763
  818
  875
  934
  996
  1,060
  1,126
  1,196
  1,268
Net income, $m
  121
  164
  207
  255
  310
  370
  436
  507
  584
  667
  774
  867
  964
  1,067
  1,174
  1,286
  1,403
  1,525
  1,652
  1,784
  1,921
  2,064
  2,212
  2,366
  2,526
  2,692
  2,865
  3,045
  3,233
  3,428

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
  1,275
  1,606
  1,990
  2,427
  2,919
  3,467
  4,070
  4,727
  5,437
  6,200
  7,013
  7,877
  8,789
  9,749
  10,756
  11,810
  12,910
  14,057
  15,252
  16,494
  17,786
  19,129
  20,524
  21,974
  23,482
  25,048
  26,678
  28,373
  30,138
  31,976
Adjusted assets (=assets-cash), $m
  1,275
  1,606
  1,990
  2,427
  2,919
  3,467
  4,070
  4,727
  5,437
  6,200
  7,013
  7,877
  8,789
  9,749
  10,756
  11,810
  12,910
  14,057
  15,252
  16,494
  17,786
  19,129
  20,524
  21,974
  23,482
  25,048
  26,678
  28,373
  30,138
  31,976
Revenue / Adjusted assets
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
  1.121
Average production assets, $m
  237
  299
  370
  452
  543
  645
  757
  880
  1,012
  1,154
  1,305
  1,466
  1,635
  1,814
  2,002
  2,198
  2,402
  2,616
  2,838
  3,069
  3,310
  3,560
  3,819
  4,089
  4,370
  4,661
  4,964
  5,280
  5,608
  5,950
Working capital, $m
  -29
  -36
  -45
  -54
  -65
  -78
  -91
  -106
  -122
  -139
  -157
  -177
  -197
  -219
  -241
  -265
  -289
  -315
  -342
  -370
  -399
  -429
  -460
  -493
  -526
  -562
  -598
  -636
  -676
  -717
Total debt, $m
  1,025
  1,323
  1,668
  2,062
  2,505
  2,998
  3,540
  4,131
  4,771
  5,457
  6,189
  6,967
  7,787
  8,651
  9,558
  10,506
  11,497
  12,529
  13,604
  14,722
  15,885
  17,094
  18,349
  19,655
  21,011
  22,421
  23,888
  25,413
  27,002
  28,656
Total liabilities, $m
  1,147
  1,445
  1,791
  2,184
  2,627
  3,120
  3,663
  4,254
  4,893
  5,580
  6,312
  7,089
  7,910
  8,774
  9,680
  10,629
  11,619
  12,651
  13,727
  14,845
  16,008
  17,216
  18,472
  19,777
  21,133
  22,544
  24,010
  25,536
  27,124
  28,778
Total equity, $m
  127
  161
  199
  243
  292
  347
  407
  473
  544
  620
  701
  788
  879
  975
  1,076
  1,181
  1,291
  1,406
  1,525
  1,649
  1,779
  1,913
  2,052
  2,197
  2,348
  2,505
  2,668
  2,837
  3,014
  3,198
Total liabilities and equity, $m
  1,274
  1,606
  1,990
  2,427
  2,919
  3,467
  4,070
  4,727
  5,437
  6,200
  7,013
  7,877
  8,789
  9,749
  10,756
  11,810
  12,910
  14,057
  15,252
  16,494
  17,787
  19,129
  20,524
  21,974
  23,481
  25,049
  26,678
  28,373
  30,138
  31,976
Debt-to-equity ratio
  8.040
  8.240
  8.380
  8.500
  8.580
  8.650
  8.700
  8.740
  8.770
  8.800
  8.830
  8.840
  8.860
  8.870
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.940
  8.950
  8.950
  8.950
  8.960
  8.960
  8.960
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
  121
  164
  207
  255
  310
  370
  436
  507
  584
  667
  774
  867
  964
  1,067
  1,174
  1,286
  1,403
  1,525
  1,652
  1,784
  1,921
  2,064
  2,212
  2,366
  2,526
  2,692
  2,865
  3,045
  3,233
  3,428
Depreciation, amort., depletion, $m
  38
  41
  45
  48
  53
  58
  63
  69
  75
  82
  62
  69
  78
  86
  95
  104
  114
  124
  135
  145
  157
  169
  181
  194
  207
  221
  235
  250
  266
  282
Funds from operations, $m
  159
  205
  251
  304
  363
  428
  499
  576
  659
  748
  836
  936
  1,042
  1,153
  1,269
  1,391
  1,517
  1,649
  1,787
  1,930
  2,078
  2,233
  2,393
  2,560
  2,733
  2,913
  3,100
  3,295
  3,499
  3,710
Change in working capital, $m
  -6
  -7
  -9
  -10
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
  -40
  -41
Cash from operations, $m
  165
  213
  260
  314
  374
  440
  512
  591
  675
  765
  854
  955
  1,062
  1,174
  1,292
  1,414
  1,542
  1,675
  1,814
  1,958
  2,107
  2,263
  2,424
  2,592
  2,767
  2,948
  3,137
  3,333
  3,538
  3,751
Maintenance CAPEX, $m
  -9
  -11
  -14
  -18
  -21
  -26
  -31
  -36
  -42
  -48
  -55
  -62
  -69
  -78
  -86
  -95
  -104
  -114
  -124
  -135
  -145
  -157
  -169
  -181
  -194
  -207
  -221
  -235
  -250
  -266
New CAPEX, $m
  -53
  -62
  -71
  -81
  -92
  -102
  -112
  -122
  -132
  -142
  -151
  -161
  -170
  -179
  -187
  -196
  -205
  -213
  -222
  -231
  -240
  -250
  -260
  -270
  -280
  -292
  -303
  -315
  -328
  -342
Cash from investing activities, $m
  -62
  -73
  -85
  -99
  -113
  -128
  -143
  -158
  -174
  -190
  -206
  -223
  -239
  -257
  -273
  -291
  -309
  -327
  -346
  -366
  -385
  -407
  -429
  -451
  -474
  -499
  -524
  -550
  -578
  -608
Free cash flow, $m
  104
  140
  174
  215
  261
  312
  370
  433
  501
  576
  648
  733
  823
  918
  1,018
  1,123
  1,233
  1,348
  1,467
  1,592
  1,721
  1,856
  1,996
  2,141
  2,292
  2,450
  2,613
  2,783
  2,959
  3,144
Issuance/(repayment) of debt, $m
  167
  298
  345
  394
  443
  493
  542
  591
  639
  686
  732
  777
  821
  864
  906
  948
  990
  1,032
  1,075
  1,118
  1,163
  1,208
  1,256
  1,305
  1,356
  1,410
  1,467
  1,526
  1,588
  1,654
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  
  167
  298
  345
  394
  443
  493
  542
  591
  639
  686
  732
  777
  821
  864
  906
  948
  990
  1,032
  1,075
  1,118
  1,163
  1,208
  1,256
  1,305
  1,356
  1,410
  1,467
  1,526
  1,588
  1,654
Total cash flow (excl. dividends), $m
  270
  438
  520
  608
  704
  805
  912
  1,024
  1,141
  1,262
  1,380
  1,510
  1,644
  1,782
  1,925
  2,072
  2,223
  2,380
  2,542
  2,710
  2,884
  3,064
  3,252
  3,446
  3,649
  3,860
  4,079
  4,309
  4,548
  4,797
Retained Cash Flow (-), $m
  -114
  -33
  -38
  -44
  -49
  -55
  -60
  -66
  -71
  -76
  -81
  -86
  -91
  -96
  -101
  -105
  -110
  -115
  -119
  -124
  -129
  -134
  -140
  -145
  -151
  -157
  -163
  -170
  -176
  -184
Prev. year cash balance distribution, $m
  335
  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
  491
  405
  481
  565
  655
  750
  852
  958
  1,070
  1,186
  1,299
  1,424
  1,553
  1,686
  1,824
  1,966
  2,113
  2,265
  2,423
  2,586
  2,755
  2,930
  3,112
  3,301
  3,498
  3,703
  3,916
  4,139
  4,371
  4,614
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
  471
  370
  419
  465
  507
  545
  575
  599
  614
  622
  617
  608
  590
  566
  535
  500
  460
  417
  373
  329
  285
  243
  204
  168
  136
  108
  84
  64
  48
  35
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

Enova International, Inc. is a technology and analytics company. The Company provides online financial services. As of December 31, 2016, the Company offered or arranged loans to consumers in 33 states in the United States and in the United Kingdom and Brazil. As of December 31, 2016, it also offered financing to small businesses in all 50 states and Washington D.C. in the United States. The Company provides online financial services to non-prime credit consumers and small businesses in the United States, United Kingdom, and Brazil. Its customers include small businesses, which have bank accounts but use alternative financial services because of their limited access to more traditional credit from banks, credit card companies and other lenders. The Company's financing products include short-term loans, line of credit accounts, installment loans and receivables purchase agreements (RPAs).

FINANCIAL RATIOS  of  Enova International, Inc. (ENVA)

Valuation Ratios
P/E Ratio 20.2
Price to Sales 1
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 1.8
Price to Free Cash Flow 1.9
Growth Rates
Sales Growth Rate 14.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -56.3%
Cap. Spend. - 3 Yr. Gr. Rate -1.4%
Financial Strength
Quick Ratio 13
Current Ratio 0.4
LT Debt to Equity 268.6%
Total Debt to Equity 269.8%
Interest Coverage 2
Management Effectiveness
Return On Assets 7.9%
Ret/ On Assets - 3 Yr. Avg. 11.6%
Return On Total Capital 4.3%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 15.6%
Return On Equity - 3 Yr. Avg. 36.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 56%
Gross Margin - 3 Yr. Avg. 63.3%
EBITDA Margin 17.8%
EBITDA Margin - 3 Yr. Avg. 22.1%
Operating Margin 16.4%
Oper. Margin - 3 Yr. Avg. 20.7%
Pre-Tax Margin 7.6%
Pre-Tax Margin - 3 Yr. Avg. 13.5%
Net Profit Margin 4.7%
Net Profit Margin - 3 Yr. Avg. 8.4%
Effective Tax Rate 38.6%
Eff/ Tax Rate - 3 Yr. Avg. 37.8%
Payout Ratio 0%

ENVA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENVA stock intrinsic value calculation we used $1114 million for the last fiscal year's total revenue generated by Enova International, Inc.. The default revenue input number comes from 0001 income statement of Enova International, 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 ENVA stock valuation model: a) initial revenue growth rate of 28.3% 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 ENVA is calculated based on our internal credit rating of Enova International, 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 Enova International, 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 ENVA stock the variable cost ratio is equal to 82%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17 million in the base year in the intrinsic value calculation for ENVA 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 9.6% for Enova International, Inc..

Corporate tax rate of 27% is the nominal tax rate for Enova International, 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 ENVA 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 ENVA are equal to 16.6%.

Life of production assets of 21.1 years is the average useful life of capital assets used in Enova International, 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 ENVA is equal to -2%. 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 - $347.768 million for Enova International, 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 33.491 million for Enova International, 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 Enova International, Inc. at the current share price and the inputted number of shares is $0.7 billion.

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