Intrinsic value of Full House Resorts, Inc. - FLL

Previous Close

$2.02

  Intrinsic Value

$3.78

stock screener

  Rating & Target

str. buy

+87%

Previous close

$2.02

 
Intrinsic value

$3.78

 
Up/down potential

+87%

 
Rating

str. buy

We calculate the intrinsic value of FLL 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 0.1

 

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, %
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.24
  6.12
  6.01
  5.91
  5.82
  5.73
  5.66
  5.59
  5.54
  5.48
  5.43
  5.39
  5.35
  5.32
  5.28
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
  5.12
Revenue, $m
  176
  189
  203
  217
  231
  247
  262
  279
  296
  313
  332
  351
  371
  392
  414
  437
  461
  486
  513
  540
  569
  599
  630
  663
  698
  734
  772
  812
  853
  897
Variable operating expenses, $m
  143
  153
  163
  173
  184
  195
  207
  219
  232
  245
  247
  261
  276
  291
  308
  325
  343
  361
  381
  401
  422
  445
  468
  493
  518
  545
  573
  603
  634
  666
Fixed operating expenses, $m
  22
  23
  23
  24
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  30
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  40
  41
  42
Total operating expenses, $m
  165
  176
  186
  197
  209
  220
  233
  245
  259
  272
  275
  290
  305
  321
  338
  356
  375
  394
  414
  435
  457
  481
  504
  530
  556
  584
  613
  643
  675
  708
Operating income, $m
  11
  14
  17
  20
  23
  26
  30
  33
  37
  41
  57
  62
  66
  71
  76
  81
  87
  93
  99
  105
  112
  119
  126
  134
  142
  150
  159
  168
  178
  189
EBITDA, $m
  31
  34
  38
  42
  46
  50
  54
  58
  63
  68
  73
  78
  83
  89
  95
  101
  108
  115
  122
  130
  138
  146
  155
  164
  174
  184
  194
  206
  217
  230
Interest expense (income), $m
  8
  10
  11
  12
  13
  14
  15
  17
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  44
  46
  49
  51
  54
  57
  60
  63
Earnings before tax, $m
  0
  2
  4
  6
  8
  11
  13
  16
  18
  21
  36
  39
  42
  45
  48
  52
  56
  60
  64
  68
  73
  77
  82
  88
  93
  99
  105
  112
  118
  126
Tax expense, $m
  0
  1
  1
  2
  2
  3
  4
  4
  5
  6
  10
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
  25
  27
  28
  30
  32
  34
Net income, $m
  0
  2
  3
  5
  6
  8
  10
  11
  13
  15
  26
  28
  30
  33
  35
  38
  41
  43
  46
  50
  53
  56
  60
  64
  68
  72
  77
  81
  86
  92

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
  196
  210
  225
  240
  257
  273
  291
  309
  328
  348
  368
  389
  412
  435
  459
  485
  511
  539
  568
  599
  631
  664
  699
  735
  774
  814
  856
  900
  946
  995
Adjusted assets (=assets-cash), $m
  196
  210
  225
  240
  257
  273
  291
  309
  328
  348
  368
  389
  412
  435
  459
  485
  511
  539
  568
  599
  631
  664
  699
  735
  774
  814
  856
  900
  946
  995
Revenue / Adjusted assets
  0.898
  0.900
  0.902
  0.904
  0.899
  0.905
  0.900
  0.903
  0.902
  0.899
  0.902
  0.902
  0.900
  0.901
  0.902
  0.901
  0.902
  0.902
  0.903
  0.902
  0.902
  0.902
  0.901
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
  0.902
Average production assets, $m
  144
  155
  166
  177
  189
  202
  215
  228
  242
  256
  272
  287
  304
  321
  339
  358
  377
  398
  419
  442
  465
  490
  516
  543
  571
  600
  631
  664
  698
  734
Working capital, $m
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
  -75
Total debt, $m
  109
  119
  129
  139
  150
  161
  173
  185
  198
  211
  225
  239
  254
  270
  286
  303
  321
  340
  359
  380
  401
  423
  447
  471
  497
  524
  552
  582
  613
  645
Total liabilities, $m
  131
  141
  151
  161
  172
  183
  195
  207
  220
  233
  247
  261
  276
  292
  308
  325
  343
  362
  381
  402
  423
  445
  469
  493
  519
  546
  574
  604
  635
  667
Total equity, $m
  64
  69
  74
  79
  84
  90
  96
  102
  108
  114
  121
  128
  135
  143
  151
  160
  168
  177
  187
  197
  207
  218
  230
  242
  255
  268
  282
  296
  311
  327
Total liabilities and equity, $m
  195
  210
  225
  240
  256
  273
  291
  309
  328
  347
  368
  389
  411
  435
  459
  485
  511
  539
  568
  599
  630
  663
  699
  735
  774
  814
  856
  900
  946
  994
Debt-to-equity ratio
  1.700
  1.720
  1.740
  1.760
  1.780
  1.790
  1.810
  1.820
  1.840
  1.850
  1.860
  1.870
  1.880
  1.890
  1.890
  1.900
  1.910
  1.920
  1.920
  1.930
  1.930
  1.940
  1.940
  1.950
  1.950
  1.960
  1.960
  1.970
  1.970
  1.970
Adjusted equity ratio
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329
  0.329

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  2
  3
  5
  6
  8
  10
  11
  13
  15
  26
  28
  30
  33
  35
  38
  41
  43
  46
  50
  53
  56
  60
  64
  68
  72
  77
  81
  86
  92
Depreciation, amort., depletion, $m
  20
  21
  21
  22
  23
  23
  24
  25
  26
  27
  15
  16
  17
  18
  19
  20
  21
  22
  23
  25
  26
  27
  29
  30
  32
  34
  35
  37
  39
  41
Funds from operations, $m
  21
  23
  25
  27
  29
  31
  34
  36
  39
  42
  41
  44
  47
  51
  54
  58
  62
  66
  70
  74
  79
  84
  89
  94
  100
  106
  112
  119
  125
  133
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
Cash from operations, $m
  22
  24
  26
  28
  30
  33
  35
  38
  40
  43
  43
  46
  49
  53
  56
  60
  64
  68
  72
  77
  81
  86
  92
  97
  103
  109
  115
  122
  129
  136
Maintenance CAPEX, $m
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -29
  -30
  -32
  -34
  -35
  -37
  -39
New CAPEX, $m
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
Cash from investing activities, $m
  -17
  -19
  -20
  -20
  -22
  -23
  -24
  -25
  -27
  -29
  -29
  -31
  -32
  -34
  -36
  -38
  -40
  -42
  -43
  -45
  -48
  -51
  -53
  -56
  -58
  -62
  -65
  -68
  -71
  -75
Free cash flow, $m
  4
  5
  6
  7
  8
  10
  11
  12
  14
  15
  13
  15
  17
  18
  20
  22
  24
  26
  28
  31
  33
  36
  38
  41
  44
  47
  51
  54
  58
  62
Issuance/(repayment) of debt, $m
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  25
  26
  27
  28
  30
  31
  33
Issuance/(repurchase) of shares, $m
  4
  3
  2
  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  
  13
  13
  12
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
  22
  23
  25
  26
  27
  28
  30
  31
  33
Total cash flow (excl. dividends), $m
  18
  18
  18
  18
  19
  21
  23
  24
  26
  28
  27
  29
  32
  34
  37
  39
  42
  45
  48
  51
  55
  58
  62
  66
  70
  74
  79
  84
  89
  94
Retained Cash Flow (-), $m
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -15
  -16
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
  13
  13
  13
  13
  14
  15
  17
  18
  20
  22
  20
  22
  24
  26
  29
  31
  33
  36
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  74
  78
Discount rate, %
  8.30
  8.72
  9.15
  9.61
  10.09
  10.59
  11.12
  11.68
  12.26
  12.88
  13.52
  14.20
  14.91
  15.65
  16.43
  17.26
  18.12
  19.02
  19.97
  20.97
  22.02
  23.12
  24.28
  25.49
  26.77
  28.11
  29.51
  30.99
  32.54
  34.16
PV of cash for distribution, $m
  12
  11
  10
  9
  9
  8
  8
  8
  7
  7
  5
  5
  4
  3
  3
  2
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  92.7
  88.1
  85.7
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1
  85.1

Full House Resorts, Inc. owns, operates, develops, manages, and/or invests in casinos and related hospitality and entertainment facilities. The Company's casino/resort segments include the Silver Slipper Casino & Hotel in Hancock County, Mississippi; the Rising Star Casino Resort in Rising Sun, Indiana, and the Northern Nevada segment, which consists of the Grand Lodge Casino in Incline Village, Nevada and Stockman's Casino in Fallon, Nevada. The Company's Development/Management segment includes costs associated with casino-related development and management projects. The Company has a leased property, Grand Lodge Casino. The Rising Star Casino Resort is located on the banks of the Ohio River in Rising Sun, Indiana. The Silver Slipper Casino & Hotel is situated on the far west end of the Mississippi Gulf Coast in Bay St. Louis, Mississippi. The Grand Lodge Casino is located within Hyatt Regency in Incline Village, Nevada on the north shore of Lake Tahoe.

FINANCIAL RATIOS  of  Full House Resorts, Inc. (FLL)

Valuation Ratios
P/E Ratio -9.2
Price to Sales 0.3
Price to Book 0.8
Price to Tangible Book
Price to Cash Flow 5.8
Price to Free Cash Flow 11.5
Growth Rates
Sales Growth Rate 16.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -63.6%
Cap. Spend. - 3 Yr. Gr. Rate -7.8%
Financial Strength
Quick Ratio 14
Current Ratio 0.1
LT Debt to Equity 178.6%
Total Debt to Equity 182.1%
Interest Coverage 1
Management Effectiveness
Return On Assets 3.1%
Ret/ On Assets - 3 Yr. Avg. -2.3%
Return On Total Capital -3.5%
Ret/ On T. Cap. - 3 Yr. Avg. -6.6%
Return On Equity -8.8%
Return On Equity - 3 Yr. Avg. -13.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 45.2%
Gross Margin - 3 Yr. Avg. 44.9%
EBITDA Margin 8.2%
EBITDA Margin - 3 Yr. Avg. 3.5%
Operating Margin 4.1%
Oper. Margin - 3 Yr. Avg. -1.7%
Pre-Tax Margin -2.7%
Pre-Tax Margin - 3 Yr. Avg. -7.5%
Net Profit Margin -3.4%
Net Profit Margin - 3 Yr. Avg. -7.2%
Effective Tax Rate -25%
Eff/ Tax Rate - 3 Yr. Avg. 9.8%
Payout Ratio 0%

FLL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FLL stock intrinsic value calculation we used $164 million for the last fiscal year's total revenue generated by Full House Resorts, Inc.. The default revenue input number comes from 0001 income statement of Full House Resorts, 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 FLL stock valuation model: a) initial revenue growth rate of 7.6% 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 8.3%, whose default value for FLL is calculated based on our internal credit rating of Full House Resorts, 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 Full House Resorts, 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 FLL stock the variable cost ratio is equal to 81.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $22 million in the base year in the intrinsic value calculation for FLL 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 10.3% for Full House Resorts, Inc..

Corporate tax rate of 27% is the nominal tax rate for Full House Resorts, 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 FLL 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 FLL are equal to 81.8%.

Life of production assets of 17.9 years is the average useful life of capital assets used in Full House Resorts, 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 FLL is equal to -8.4%. 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 - $59.745 million for Full House Resorts, 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 26.934 million for Full House Resorts, 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 Full House Resorts, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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