Intrinsic value of National Beverage - FIZZ

Previous Close

$89.61

  Intrinsic Value

$100.87

stock screener

  Rating & Target

hold

+13%

Previous close

$89.61

 
Intrinsic value

$100.87

 
Up/down potential

+13%

 
Rating

hold

We calculate the intrinsic value of FIZZ 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 4.2

 

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, %
  15.20
  14.18
  13.26
  12.44
  11.69
  11.02
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
Revenue, $m
  1,124
  1,283
  1,454
  1,634
  1,826
  2,027
  2,238
  2,459
  2,690
  2,931
  3,182
  3,442
  3,714
  3,996
  4,289
  4,593
  4,910
  5,239
  5,581
  5,937
  6,307
  6,693
  7,095
  7,514
  7,951
  8,406
  8,882
  9,379
  9,898
  10,440
Variable operating expenses, $m
  807
  921
  1,043
  1,173
  1,309
  1,454
  1,605
  1,763
  1,929
  2,101
  2,280
  2,466
  2,661
  2,863
  3,073
  3,291
  3,518
  3,753
  3,999
  4,254
  4,519
  4,795
  5,083
  5,383
  5,696
  6,023
  6,364
  6,720
  7,092
  7,480
Fixed operating expenses, $m
  74
  75
  77
  79
  80
  82
  84
  86
  88
  90
  91
  93
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  121
  124
  127
  130
  132
  135
  138
Total operating expenses, $m
  881
  996
  1,120
  1,252
  1,389
  1,536
  1,689
  1,849
  2,017
  2,191
  2,371
  2,559
  2,757
  2,961
  3,173
  3,393
  3,622
  3,860
  4,108
  4,365
  4,633
  4,911
  5,202
  5,504
  5,820
  6,150
  6,494
  6,852
  7,227
  7,618
Operating income, $m
  244
  287
  334
  383
  436
  491
  549
  610
  674
  740
  811
  882
  957
  1,035
  1,116
  1,200
  1,288
  1,379
  1,473
  1,572
  1,674
  1,781
  1,893
  2,009
  2,130
  2,257
  2,389
  2,527
  2,671
  2,822
EBITDA, $m
  259
  305
  353
  405
  460
  518
  579
  642
  709
  778
  850
  926
  1,004
  1,085
  1,170
  1,258
  1,349
  1,444
  1,543
  1,646
  1,753
  1,865
  1,981
  2,103
  2,229
  2,362
  2,500
  2,644
  2,795
  2,952
Interest expense (income), $m
  0
  0
  1
  2
  3
  5
  6
  7
  9
  10
  12
  14
  16
  17
  19
  21
  23
  26
  28
  30
  32
  35
  38
  40
  43
  46
  49
  52
  56
  59
  63
Earnings before tax, $m
  244
  286
  332
  380
  431
  485
  542
  601
  663
  728
  797
  867
  940
  1,016
  1,095
  1,177
  1,262
  1,351
  1,443
  1,539
  1,639
  1,744
  1,852
  1,966
  2,084
  2,207
  2,336
  2,471
  2,612
  2,759
Tax expense, $m
  66
  77
  90
  103
  116
  131
  146
  162
  179
  197
  215
  234
  254
  274
  296
  318
  341
  365
  390
  416
  443
  471
  500
  531
  563
  596
  631
  667
  705
  745
Net income, $m
  178
  209
  242
  277
  315
  354
  395
  439
  484
  531
  582
  633
  686
  742
  799
  859
  921
  986
  1,054
  1,124
  1,197
  1,273
  1,352
  1,435
  1,521
  1,611
  1,705
  1,804
  1,906
  2,014

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
  430
  491
  557
  626
  699
  776
  857
  941
  1,030
  1,122
  1,218
  1,318
  1,422
  1,530
  1,642
  1,758
  1,880
  2,006
  2,137
  2,273
  2,415
  2,562
  2,716
  2,877
  3,044
  3,218
  3,400
  3,591
  3,789
  3,997
Adjusted assets (=assets-cash), $m
  430
  491
  557
  626
  699
  776
  857
  941
  1,030
  1,122
  1,218
  1,318
  1,422
  1,530
  1,642
  1,758
  1,880
  2,006
  2,137
  2,273
  2,415
  2,562
  2,716
  2,877
  3,044
  3,218
  3,400
  3,591
  3,789
  3,997
Revenue / Adjusted assets
  2.614
  2.613
  2.610
  2.610
  2.612
  2.612
  2.611
  2.613
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.613
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
  2.612
Average production assets, $m
  96
  109
  124
  139
  155
  172
  190
  209
  229
  249
  270
  293
  316
  340
  365
  390
  417
  445
  474
  505
  536
  569
  603
  639
  676
  715
  755
  797
  841
  887
Working capital, $m
  67
  77
  87
  98
  110
  122
  134
  148
  161
  176
  191
  207
  223
  240
  257
  276
  295
  314
  335
  356
  378
  402
  426
  451
  477
  504
  533
  563
  594
  626
Total debt, $m
  19
  40
  62
  86
  111
  137
  165
  194
  224
  255
  288
  322
  357
  394
  433
  472
  514
  557
  601
  648
  696
  746
  799
  854
  911
  970
  1,032
  1,097
  1,165
  1,236
Total liabilities, $m
  147
  168
  190
  213
  238
  265
  292
  321
  351
  383
  415
  449
  485
  522
  560
  600
  641
  684
  729
  775
  823
  874
  926
  981
  1,038
  1,097
  1,160
  1,224
  1,292
  1,363
Total equity, $m
  284
  324
  367
  412
  461
  511
  565
  620
  679
  739
  803
  869
  937
  1,008
  1,082
  1,159
  1,239
  1,322
  1,408
  1,498
  1,591
  1,689
  1,790
  1,896
  2,006
  2,121
  2,241
  2,366
  2,497
  2,634
Total liabilities and equity, $m
  431
  492
  557
  625
  699
  776
  857
  941
  1,030
  1,122
  1,218
  1,318
  1,422
  1,530
  1,642
  1,759
  1,880
  2,006
  2,137
  2,273
  2,414
  2,563
  2,716
  2,877
  3,044
  3,218
  3,401
  3,590
  3,789
  3,997
Debt-to-equity ratio
  0.070
  0.120
  0.170
  0.210
  0.240
  0.270
  0.290
  0.310
  0.330
  0.350
  0.360
  0.370
  0.380
  0.390
  0.400
  0.410
  0.410
  0.420
  0.430
  0.430
  0.440
  0.440
  0.450
  0.450
  0.450
  0.460
  0.460
  0.460
  0.470
  0.470
Adjusted equity ratio
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659
  0.659

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  178
  209
  242
  277
  315
  354
  395
  439
  484
  531
  582
  633
  686
  742
  799
  859
  921
  986
  1,054
  1,124
  1,197
  1,273
  1,352
  1,435
  1,521
  1,611
  1,705
  1,804
  1,906
  2,014
Depreciation, amort., depletion, $m
  16
  18
  20
  22
  24
  27
  29
  32
  35
  38
  40
  43
  46
  50
  54
  57
  61
  65
  70
  74
  79
  84
  89
  94
  99
  105
  111
  117
  124
  131
Funds from operations, $m
  193
  226
  262
  299
  339
  381
  425
  471
  519
  569
  621
  676
  733
  792
  853
  917
  983
  1,052
  1,123
  1,198
  1,276
  1,357
  1,441
  1,529
  1,621
  1,716
  1,816
  1,921
  2,030
  2,144
Change in working capital, $m
  9
  10
  10
  11
  11
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
Cash from operations, $m
  184
  217
  252
  288
  328
  369
  412
  458
  505
  555
  606
  660
  716
  775
  835
  898
  964
  1,032
  1,103
  1,177
  1,253
  1,333
  1,417
  1,504
  1,594
  1,689
  1,788
  1,891
  1,999
  2,112
Maintenance CAPEX, $m
  -12
  -14
  -16
  -18
  -20
  -23
  -25
  -28
  -31
  -34
  -37
  -40
  -43
  -46
  -50
  -54
  -57
  -61
  -65
  -70
  -74
  -79
  -84
  -89
  -94
  -99
  -105
  -111
  -117
  -124
New CAPEX, $m
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -40
  -42
  -44
  -46
Cash from investing activities, $m
  -25
  -28
  -30
  -33
  -36
  -40
  -43
  -47
  -51
  -54
  -58
  -62
  -66
  -70
  -75
  -80
  -84
  -89
  -94
  -100
  -105
  -112
  -118
  -125
  -131
  -138
  -145
  -153
  -161
  -170
Free cash flow, $m
  160
  189
  221
  255
  291
  329
  369
  411
  455
  501
  548
  598
  650
  704
  760
  819
  879
  943
  1,008
  1,077
  1,148
  1,222
  1,299
  1,379
  1,463
  1,551
  1,642
  1,738
  1,838
  1,942
Issuance/(repayment) of debt, $m
  19
  21
  22
  24
  25
  26
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  46
  48
  50
  52
  55
  57
  59
  62
  65
  68
  71
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  
  19
  21
  22
  24
  25
  26
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  46
  48
  50
  52
  55
  57
  59
  62
  65
  68
  71
Total cash flow (excl. dividends), $m
  179
  210
  243
  279
  316
  355
  397
  440
  485
  532
  581
  632
  686
  741
  799
  859
  921
  986
  1,053
  1,123
  1,196
  1,272
  1,351
  1,434
  1,520
  1,610
  1,705
  1,803
  1,905
  2,013
Retained Cash Flow (-), $m
  -37
  -40
  -43
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -63
  -66
  -68
  -71
  -74
  -77
  -80
  -83
  -86
  -90
  -93
  -97
  -101
  -106
  -110
  -115
  -120
  -125
  -131
  -137
Prev. year cash balance distribution, $m
  85
  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
  227
  170
  200
  233
  268
  304
  343
  384
  427
  472
  518
  567
  617
  670
  725
  782
  841
  903
  967
  1,033
  1,103
  1,175
  1,250
  1,328
  1,410
  1,495
  1,584
  1,677
  1,774
  1,876
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
  217
  155
  174
  192
  207
  221
  232
  240
  245
  247
  246
  242
  235
  225
  213
  199
  183
  166
  149
  131
  114
  97
  82
  68
  55
  44
  34
  26
  19
  14
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

National Beverage Corp. is a holding company. The Company develops, produces, markets and sells a diverse portfolio of flavored beverage products primarily in North America. The Company's brands consist of beverages geared to the active and health-conscious consumer (Power+ Brands), including sparkling waters, energy drinks and juices, and carbonated soft drinks in a range of flavors, including regular, sugar-free and reduced calorie options. In addition, the Company produces soft drinks for certain retailers, such as allied brands. The Company's portfolio of Power+ Brands includes LaCroix, LaCroix Curate, LaCroix NiCola and Shasta sparkling water products; Rip It energy drinks and shots, and Everfresh, Everfresh Premier Varietals and Mr. Pure juice and juice-based products. The Company's carbonated soft drinks include Shasta and Faygo, iconic brands. The Company had, as of April 30, 2016, 12 production facilities located near metropolitan markets across the continental United States.

FINANCIAL RATIOS  of  National Beverage (FIZZ)

Valuation Ratios
P/E Ratio 39
Price to Sales 5
Price to Book 17
Price to Tangible Book
Price to Cash Flow 36.6
Price to Free Cash Flow 41.7
Growth Rates
Sales Growth Rate 17.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.7%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
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 32.4%
Ret/ On Assets - 3 Yr. Avg. 25.1%
Return On Total Capital 47.3%
Ret/ On T. Cap. - 3 Yr. Avg. 38.1%
Return On Equity 47.3%
Return On Equity - 3 Yr. Avg. 40.1%
Asset Turnover 2.5
Profitability Ratios
Gross Margin 39.4%
Gross Margin - 3 Yr. Avg. 35.8%
EBITDA Margin 21.3%
EBITDA Margin - 3 Yr. Avg. 16.5%
Operating Margin 19.7%
Oper. Margin - 3 Yr. Avg. 14.8%
Pre-Tax Margin 19.7%
Pre-Tax Margin - 3 Yr. Avg. 14.8%
Net Profit Margin 12.9%
Net Profit Margin - 3 Yr. Avg. 9.7%
Effective Tax Rate 34.4%
Eff/ Tax Rate - 3 Yr. Avg. 34.5%
Payout Ratio 65.4%

FIZZ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FIZZ stock intrinsic value calculation we used $975.734 million for the last fiscal year's total revenue generated by National Beverage. The default revenue input number comes from 0001 income statement of National Beverage. 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 FIZZ stock valuation model: a) initial revenue growth rate of 15.2% 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 4.3%, whose default value for FIZZ is calculated based on our internal credit rating of National Beverage, 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 National Beverage.
    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 FIZZ stock the variable cost ratio is equal to 71.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $72 million in the base year in the intrinsic value calculation for FIZZ 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 National Beverage.

Corporate tax rate of 27% is the nominal tax rate for National Beverage. 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 FIZZ 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 FIZZ are equal to 8.5%.

Life of production assets of 6.8 years is the average useful life of capital assets used in National Beverage 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 FIZZ is equal to 6%. 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 - $331.44 million for National Beverage - 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 46.618 million for National Beverage 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 National Beverage at the current share price and the inputted number of shares is $4.2 billion.

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COMPANY NEWS

▶ Why National Beverage Corp. Shares Fell 20.7% in October   [Nov-12-18 04:49PM  Motley Fool]
▶ New LaCroix Themes Flavor Miami Scene   [Nov-05-18 10:06AM  Business Wire]
▶ Opinion: La Croix is the latest victim of a junk science lawsuit   [Oct-18-18 03:08PM  American City Business Journals]
▶ LaCroixs Essences Confirmed As Natural   [12:49PM  Business Wire]
▶ LaCroix Fans Outcry Loudly   [Oct-12-18 12:08PM  Business Wire]
▶ LaCroix's parent company faces class action lawsuit   [Oct-08-18 12:12PM  American City Business Journals]
▶ National Beverage Affirms LaCroix is Natural   [Oct-05-18 07:29PM  Business Wire]
▶ National Beverage Refutes Allegations   [Oct-01-18 07:25PM  Business Wire]
▶ 2 Monster Stocks in the Making   [Sep-22-18 07:16AM  Motley Fool]
▶ National Beverage Hints at Future Growth Initiatives   [Sep-15-18 07:17PM  Motley Fool]
▶ National Beverage: Fiscal 1Q Earnings Snapshot   [10:05AM  Associated Press]
▶ 21 Beverage Stocks to Buy for the Contrarian-Minded   [Aug-27-18 11:52AM  InvestorPlace]
▶ These Stocks Turned $1,000 Into $21,000 -- or More!   [Aug-22-18 08:03PM  Motley Fool]

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