Intrinsic value of Forward Industries - FORD

Previous Close

$1.41

  Intrinsic Value

$0.24

stock screener

  Rating & Target

str. sell

-83%

Previous close

$1.41

 
Intrinsic value

$0.24

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of FORD 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
  40
  61
  92
  133
  187
  258
  346
  454
  584
  738
  917
  1,121
  1,351
  1,607
  1,889
  2,198
  2,532
  2,891
  3,274
  3,681
  4,111
  4,564
  5,039
  5,537
  6,057
  6,599
  7,163
  7,750
  8,361
  8,995
Variable operating expenses, $m
  38
  59
  88
  128
  180
  247
  332
  436
  561
  709
  880
  1,076
  1,297
  1,543
  1,814
  2,110
  2,431
  2,775
  3,143
  3,533
  3,946
  4,381
  4,838
  5,315
  5,814
  6,335
  6,876
  7,440
  8,026
  8,636
Fixed operating expenses, $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 operating expenses, $m
  38
  59
  88
  128
  180
  247
  332
  436
  561
  709
  880
  1,076
  1,297
  1,543
  1,814
  2,110
  2,431
  2,775
  3,143
  3,533
  3,946
  4,381
  4,838
  5,315
  5,814
  6,335
  6,876
  7,440
  8,026
  8,636
Operating income, $m
  2
  2
  4
  5
  7
  10
  14
  18
  23
  30
  37
  45
  54
  64
  76
  88
  101
  116
  131
  147
  164
  183
  202
  221
  242
  264
  287
  310
  334
  360
EBITDA, $m
  2
  2
  4
  5
  8
  10
  14
  18
  23
  30
  37
  45
  54
  65
  76
  88
  102
  116
  132
  148
  165
  183
  203
  223
  243
  265
  288
  312
  336
  362
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  2
  3
  4
  5
  7
  8
  10
  12
  14
  17
  20
  23
  26
  30
  33
  37
  41
  46
  50
  55
  60
  65
  70
  76
Earnings before tax, $m
  2
  2
  3
  5
  7
  9
  12
  15
  19
  24
  30
  37
  44
  52
  61
  71
  81
  93
  105
  118
  131
  145
  160
  176
  192
  209
  227
  245
  264
  284
Tax expense, $m
  0
  1
  1
  1
  2
  2
  3
  4
  5
  7
  8
  10
  12
  14
  17
  19
  22
  25
  28
  32
  35
  39
  43
  47
  52
  56
  61
  66
  71
  77
Net income, $m
  1
  2
  2
  3
  5
  6
  9
  11
  14
  18
  22
  27
  32
  38
  45
  52
  59
  68
  77
  86
  96
  106
  117
  128
  140
  153
  165
  179
  193
  207

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
  20
  31
  47
  68
  95
  131
  176
  231
  297
  375
  466
  570
  687
  817
  961
  1,118
  1,288
  1,470
  1,665
  1,872
  2,091
  2,321
  2,563
  2,816
  3,081
  3,356
  3,643
  3,942
  4,253
  4,575
Adjusted assets (=assets-cash), $m
  20
  31
  47
  68
  95
  131
  176
  231
  297
  375
  466
  570
  687
  817
  961
  1,118
  1,288
  1,470
  1,665
  1,872
  2,091
  2,321
  2,563
  2,816
  3,081
  3,356
  3,643
  3,942
  4,253
  4,575
Revenue / Adjusted assets
  2.000
  1.968
  1.957
  1.956
  1.968
  1.969
  1.966
  1.965
  1.966
  1.968
  1.968
  1.967
  1.967
  1.967
  1.966
  1.966
  1.966
  1.967
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
  1.966
Average production assets, $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
Working capital, $m
  7
  11
  16
  23
  32
  44
  59
  78
  101
  127
  158
  193
  232
  276
  325
  378
  435
  497
  563
  633
  707
  785
  867
  952
  1,042
  1,135
  1,232
  1,333
  1,438
  1,547
Total debt, $m
  2
  6
  11
  18
  27
  39
  54
  72
  94
  120
  151
  185
  224
  267
  315
  367
  423
  484
  549
  617
  690
  766
  847
  931
  1,019
  1,110
  1,205
  1,305
  1,408
  1,515
Total liabilities, $m
  7
  10
  15
  22
  32
  44
  58
  77
  99
  125
  155
  189
  228
  271
  319
  371
  428
  488
  553
  622
  694
  771
  851
  935
  1,023
  1,114
  1,210
  1,309
  1,412
  1,519
Total equity, $m
  13
  21
  31
  45
  64
  88
  118
  154
  199
  251
  311
  381
  459
  546
  642
  747
  860
  982
  1,112
  1,251
  1,397
  1,551
  1,712
  1,881
  2,058
  2,242
  2,434
  2,633
  2,841
  3,056
Total liabilities and equity, $m
  20
  31
  46
  67
  96
  132
  176
  231
  298
  376
  466
  570
  687
  817
  961
  1,118
  1,288
  1,470
  1,665
  1,873
  2,091
  2,322
  2,563
  2,816
  3,081
  3,356
  3,644
  3,942
  4,253
  4,575
Debt-to-equity ratio
  0.180
  0.290
  0.360
  0.400
  0.430
  0.450
  0.460
  0.470
  0.480
  0.480
  0.480
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1
  2
  2
  3
  5
  6
  9
  11
  14
  18
  22
  27
  32
  38
  45
  52
  59
  68
  77
  86
  96
  106
  117
  128
  140
  153
  165
  179
  193
  207
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
Funds from operations, $m
  1
  2
  2
  3
  5
  6
  9
  11
  14
  18
  22
  27
  32
  38
  45
  52
  60
  68
  77
  87
  97
  107
  118
  129
  141
  154
  167
  180
  194
  209
Change in working capital, $m
  3
  4
  5
  7
  9
  12
  15
  19
  22
  26
  31
  35
  40
  44
  49
  53
  57
  62
  66
  70
  74
  78
  82
  86
  89
  93
  97
  101
  105
  109
Cash from operations, $m
  -1
  -2
  -3
  -4
  -5
  -6
  -7
  -7
  -8
  -8
  -8
  -8
  -7
  -6
  -4
  -1
  3
  7
  11
  17
  23
  29
  36
  44
  52
  61
  70
  79
  89
  100
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
New CAPEX, $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
  -1
  -1
  -1
  -1
  -1
  -1
Cash from investing activities, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
Free cash flow, $m
  -1
  -2
  -3
  -4
  -5
  -6
  -7
  -8
  -8
  -9
  -9
  -8
  -8
  -6
  -4
  -2
  2
  6
  10
  16
  21
  28
  35
  42
  50
  59
  68
  77
  87
  98
Issuance/(repayment) of debt, $m
  2
  4
  5
  7
  9
  12
  15
  18
  22
  26
  30
  34
  39
  43
  48
  52
  56
  61
  65
  69
  73
  76
  80
  84
  88
  92
  95
  99
  103
  107
Issuance/(repurchase) of shares, $m
  4
  6
  8
  11
  14
  17
  21
  26
  30
  34
  39
  43
  46
  49
  51
  53
  54
  54
  54
  52
  50
  48
  45
  41
  36
  32
  26
  21
  15
  8
Cash from financing (excl. dividends), $m  
  6
  10
  13
  18
  23
  29
  36
  44
  52
  60
  69
  77
  85
  92
  99
  105
  110
  115
  119
  121
  123
  124
  125
  125
  124
  124
  121
  120
  118
  115
Total cash flow (excl. dividends), $m
  5
  7
  10
  14
  18
  24
  30
  36
  44
  52
  60
  69
  77
  86
  95
  104
  112
  121
  129
  137
  144
  152
  160
  167
  175
  182
  190
  197
  205
  213
Retained Cash Flow (-), $m
  -5
  -7
  -10
  -14
  -19
  -24
  -30
  -37
  -44
  -52
  -61
  -69
  -78
  -87
  -96
  -105
  -113
  -122
  -130
  -138
  -146
  -154
  -162
  -169
  -177
  -184
  -192
  -200
  -207
  -216
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
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
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
  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
Current shareholders' claim on cash, %
  77.0
  60.2
  48.1
  39.2
  32.6
  27.6
  23.7
  20.7
  18.3
  16.4
  14.9
  13.7
  12.6
  11.8
  11.1
  10.5
  10.0
  9.6
  9.3
  9.0
  8.8
  8.6
  8.4
  8.3
  8.2
  8.1
  8.0
  8.0
  8.0
  8.0

Forward Industries, Inc. designs and distributes carry and protective solutions, primarily for hand held electronic devices, including soft-sided carrying cases, bags, clips, hand straps, protective plates and other accessories. The Company operates in the design and distribution of carry and protective solutions, primarily for hand held electronic devices segment. Its original equipment manufacturer (OEM) products include carrying cases and other accessories for blood glucose monitoring kits and various other portable electronic and non-electronic products. Its carrying cases are designed to enable the devices to be stowed in a pocket, handbag, briefcase, or backpack, clipped to a belt or shoulder strap, or strapped to an arm. Its products include Diabetic products and Other products. The Company, through its subsidiaries, Forward US and Forward Switzerland, distributes and sells its products across the world.

FINANCIAL RATIOS  of  Forward Industries (FORD)

Valuation Ratios
P/E Ratio 12.6
Price to Sales 0.5
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -7.4%
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 NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 8%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 4.4%
Return On Equity 11.8%
Return On Equity - 3 Yr. Avg. 4.4%
Asset Turnover 2
Profitability Ratios
Gross Margin 16%
Gross Margin - 3 Yr. Avg. 18.2%
EBITDA Margin 4%
EBITDA Margin - 3 Yr. Avg. 0.3%
Operating Margin 4%
Oper. Margin - 3 Yr. Avg. -0.9%
Pre-Tax Margin 4%
Pre-Tax Margin - 3 Yr. Avg. 0.3%
Net Profit Margin 4%
Net Profit Margin - 3 Yr. Avg. 1.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

FORD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FORD stock intrinsic value calculation we used $24.764613 million for the last fiscal year's total revenue generated by Forward Industries. The default revenue input number comes from 0001 income statement of Forward Industries. 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 FORD 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 4.3%, whose default value for FORD is calculated based on our internal credit rating of Forward Industries, 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 Forward Industries.
    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 FORD stock the variable cost ratio is equal to 96%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FORD 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 Forward Industries.

Corporate tax rate of 27% is the nominal tax rate for Forward Industries. 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 FORD 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 FORD are equal to 0.1%.

Life of production assets of 1.4 years is the average useful life of capital assets used in Forward Industries 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 FORD is equal to 17.2%. 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 - $8.930422 million for Forward Industries - 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 9.517 million for Forward Industries 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 Forward Industries at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
VRA Vera Bradley 12.30 5.48  str.sell
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COMPANY NEWS

▶ Forward Reports Fiscal 2018 Third Quarter Results   [Aug-14-18 05:27PM  GlobeNewswire]
▶ Forward Reports Fiscal 2018 Second Quarter Results   [May-21-18 09:00AM  GlobeNewswire]
▶ Forward Reports Fiscal 2018 First Quarter Results   [Feb-14-18 04:15PM  GlobeNewswire]
▶ Forward Industries Acquires Intelligent Product Solutions   [Jan-18-18 05:55PM  GlobeNewswire]
▶ Forward Reports Fiscal 2017 and Fourth Quarter Results   [Dec-14-17 04:01PM  GlobeNewswire]
▶ Forward Industries Inc (FORD): Financial Strength Analysis   [Dec-11-17 05:48AM  Simply Wall St.]
▶ Ford set to reach deal with Alibaba to sell cars online   [Dec-06-17 01:04PM  Yahoo Finance Video]
▶ Does Forward Industries Incs (FORD) PE Ratio Warrant A Buy?   [Oct-16-17 09:45PM  Simply Wall St.]
▶ Forward Reports Fiscal 2017 Third Quarter Results   [Aug-14-17 04:01PM  GlobeNewswire]
▶ Why Google Became Alphabet   [May-26-17 08:37AM  Investopedia]
▶ Forward Reports Fiscal 2017 Second Quarter Results   [May-12-17 04:01PM  GlobeNewswire]
▶ Ford is making a hybrid F-150 truck   [Apr-10-17 12:27PM  Quartz]
▶ Outlook Cloudy For Europe On Eve Of Paris Car Show   [Sep-22-16 08:33AM  at Forbes]
▶ May Auto Sales Dip Throws A Scare Into 2016 Forecasts   [Jun-01-16 05:51PM  at Forbes]

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