Intrinsic value of National Beverage Corp. - FIZZ

Previous Close

$43.91

  Intrinsic Value

$46.14

stock screener

  Rating & Target

hold

+5%

Previous close

$43.91

 
Intrinsic value

$46.14

 
Up/down potential

+5%

 
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 2.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  996
  1,018
  1,045
  1,074
  1,107
  1,142
  1,181
  1,223
  1,269
  1,317
  1,369
  1,425
  1,484
  1,547
  1,614
  1,685
  1,759
  1,839
  1,922
  2,011
  2,104
  2,202
  2,306
  2,415
  2,530
  2,651
  2,778
  2,912
  3,053
  3,202
Variable operating expenses, $m
  715
  731
  750
  771
  794
  820
  848
  878
  910
  945
  981
  1,021
  1,063
  1,108
  1,156
  1,207
  1,261
  1,317
  1,377
  1,440
  1,507
  1,578
  1,652
  1,730
  1,812
  1,899
  1,990
  2,086
  2,188
  2,294
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
  789
  806
  827
  850
  874
  902
  932
  964
  998
  1,035
  1,072
  1,114
  1,159
  1,206
  1,256
  1,309
  1,365
  1,424
  1,486
  1,551
  1,621
  1,694
  1,771
  1,851
  1,936
  2,026
  2,120
  2,218
  2,323
  2,432
Operating income, $m
  207
  212
  218
  224
  232
  240
  250
  260
  271
  283
  297
  311
  325
  341
  358
  376
  395
  415
  436
  459
  483
  508
  535
  563
  593
  625
  658
  693
  730
  769
EBITDA, $m
  221
  226
  232
  239
  247
  256
  266
  276
  288
  300
  314
  328
  344
  360
  378
  397
  417
  438
  460
  484
  509
  536
  564
  593
  625
  658
  693
  730
  769
  809
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  4
  5
  6
  6
  7
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
Earnings before tax, $m
  207
  212
  218
  224
  231
  239
  248
  258
  269
  280
  294
  308
  322
  337
  354
  371
  390
  409
  430
  452
  475
  500
  526
  554
  583
  614
  646
  681
  717
  755
Tax expense, $m
  56
  57
  59
  60
  62
  65
  67
  70
  73
  76
  79
  83
  87
  91
  96
  100
  105
  110
  116
  122
  128
  135
  142
  150
  157
  166
  175
  184
  194
  204
Net income, $m
  151
  155
  159
  164
  169
  175
  181
  188
  196
  205
  215
  225
  235
  246
  258
  271
  284
  299
  314
  330
  347
  365
  384
  404
  426
  448
  472
  497
  523
  551

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
  381
  390
  400
  411
  424
  437
  452
  468
  486
  504
  524
  546
  568
  592
  618
  645
  674
  704
  736
  770
  805
  843
  883
  924
  968
  1,015
  1,064
  1,115
  1,169
  1,226
Adjusted assets (=assets-cash), $m
  381
  390
  400
  411
  424
  437
  452
  468
  486
  504
  524
  546
  568
  592
  618
  645
  674
  704
  736
  770
  805
  843
  883
  924
  968
  1,015
  1,064
  1,115
  1,169
  1,226
Revenue / Adjusted assets
  2.614
  2.610
  2.613
  2.613
  2.611
  2.613
  2.613
  2.613
  2.611
  2.613
  2.613
  2.610
  2.613
  2.613
  2.612
  2.612
  2.610
  2.612
  2.611
  2.612
  2.614
  2.612
  2.612
  2.614
  2.614
  2.612
  2.611
  2.612
  2.612
  2.612
Average production assets, $m
  85
  87
  89
  91
  94
  97
  100
  104
  108
  112
  116
  121
  126
  131
  137
  143
  150
  156
  163
  171
  179
  187
  196
  205
  215
  225
  236
  248
  260
  272
Working capital, $m
  60
  61
  63
  64
  66
  69
  71
  73
  76
  79
  82
  85
  89
  93
  97
  101
  106
  110
  115
  121
  126
  132
  138
  145
  152
  159
  167
  175
  183
  192
Total debt, $m
  3
  6
  9
  13
  17
  22
  27
  32
  38
  45
  51
  59
  66
  75
  83
  93
  102
  113
  124
  135
  147
  160
  174
  188
  203
  219
  235
  253
  271
  291
Total liabilities, $m
  130
  133
  136
  140
  144
  149
  154
  160
  166
  172
  179
  186
  194
  202
  211
  220
  230
  240
  251
  262
  275
  287
  301
  315
  330
  346
  363
  380
  399
  418
Total equity, $m
  251
  257
  264
  271
  279
  288
  298
  309
  320
  332
  345
  360
  374
  390
  407
  425
  444
  464
  485
  507
  531
  556
  582
  609
  638
  669
  701
  735
  770
  808
Total liabilities and equity, $m
  381
  390
  400
  411
  423
  437
  452
  469
  486
  504
  524
  546
  568
  592
  618
  645
  674
  704
  736
  769
  806
  843
  883
  924
  968
  1,015
  1,064
  1,115
  1,169
  1,226
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.050
  0.060
  0.080
  0.090
  0.100
  0.120
  0.130
  0.150
  0.160
  0.180
  0.190
  0.200
  0.220
  0.230
  0.240
  0.250
  0.270
  0.280
  0.290
  0.300
  0.310
  0.320
  0.330
  0.340
  0.340
  0.350
  0.360
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
  151
  155
  159
  164
  169
  175
  181
  188
  196
  205
  215
  225
  235
  246
  258
  271
  284
  299
  314
  330
  347
  365
  384
  404
  426
  448
  472
  497
  523
  551
Depreciation, amort., depletion, $m
  14
  14
  15
  15
  15
  16
  16
  17
  17
  18
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
  36
  38
  40
Funds from operations, $m
  165
  169
  173
  178
  184
  191
  198
  205
  214
  223
  232
  242
  254
  266
  278
  292
  306
  322
  338
  355
  373
  393
  413
  435
  457
  481
  507
  533
  561
  591
Change in working capital, $m
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
Cash from operations, $m
  164
  168
  172
  177
  182
  188
  195
  203
  211
  220
  229
  239
  250
  262
  274
  288
  302
  317
  333
  350
  368
  387
  407
  428
  450
  474
  499
  525
  553
  582
Maintenance CAPEX, $m
  -12
  -12
  -13
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
New CAPEX, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
Cash from investing activities, $m
  -14
  -14
  -15
  -15
  -16
  -17
  -17
  -19
  -19
  -20
  -20
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -33
  -34
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -51
Free cash flow, $m
  150
  153
  157
  161
  166
  172
  178
  184
  192
  200
  208
  217
  227
  238
  249
  262
  275
  288
  303
  318
  335
  352
  370
  390
  410
  432
  455
  479
  505
  531
Issuance/(repayment) of debt, $m
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  18
  19
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  
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  18
  19
Total cash flow (excl. dividends), $m
  153
  156
  160
  165
  170
  176
  183
  190
  198
  206
  215
  225
  235
  246
  258
  271
  284
  299
  314
  330
  347
  365
  384
  404
  425
  448
  472
  497
  523
  551
Retained Cash Flow (-), $m
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -31
  -32
  -34
  -36
  -37
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
  233
  150
  154
  158
  162
  167
  173
  179
  186
  194
  202
  211
  220
  230
  241
  253
  265
  279
  293
  308
  323
  340
  358
  377
  396
  417
  439
  463
  487
  513
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
  223
  138
  134
  130
  126
  121
  117
  112
  107
  102
  96
  90
  84
  77
  71
  64
  58
  51
  45
  39
  33
  28
  23
  19
  15
  12
  9
  7
  5
  4
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 Corp. (FIZZ)

Valuation Ratios
P/E Ratio 19.1
Price to Sales 2.5
Price to Book 8.3
Price to Tangible Book
Price to Cash Flow 17.9
Price to Free Cash Flow 20.5
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 $976 million for the last fiscal year's total revenue generated by National Beverage Corp.. The default revenue input number comes from 0001 income statement of National Beverage Corp.. 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 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 Corp., 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 Corp..
    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 Corp..

Corporate tax rate of 27% is the nominal tax rate for National Beverage Corp.. 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 Corp. 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 Corp. - 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 46.587 million for National Beverage Corp. 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 Corp. at the current share price and the inputted number of shares is $2.0 billion.

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