Intrinsic value of Fox Factory Holding - FOXF

Previous Close

$63.90

  Intrinsic Value

$61.52

stock screener

  Rating & Target

hold

-4%

Previous close

$63.90

 
Intrinsic value

$61.52

 
Up/down potential

-4%

 
Rating

hold

We calculate the intrinsic value of FOXF 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 2017), $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 2.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  18.00
  16.70
  15.53
  14.48
  13.53
  12.68
  11.91
  11.22
  10.60
  10.04
  9.53
  9.08
  8.67
  8.30
  7.97
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.76
  5.68
  5.61
Revenue, $m
  562
  655
  757
  867
  984
  1,109
  1,241
  1,380
  1,526
  1,680
  1,840
  2,007
  2,181
  2,362
  2,550
  2,746
  2,950
  3,161
  3,381
  3,609
  3,847
  4,094
  4,351
  4,618
  4,897
  5,188
  5,491
  5,807
  6,137
  6,481
Variable operating expenses, $m
  395
  458
  526
  600
  679
  763
  851
  945
  1,043
  1,146
  1,236
  1,348
  1,465
  1,586
  1,713
  1,844
  1,981
  2,123
  2,271
  2,424
  2,583
  2,749
  2,922
  3,102
  3,289
  3,484
  3,688
  3,900
  4,121
  4,353
Fixed operating expenses, $m
  79
  80
  82
  84
  86
  88
  90
  92
  94
  96
  98
  100
  102
  104
  107
  109
  111
  114
  116
  119
  122
  124
  127
  130
  133
  136
  139
  142
  145
  148
Total operating expenses, $m
  474
  538
  608
  684
  765
  851
  941
  1,037
  1,137
  1,242
  1,334
  1,448
  1,567
  1,690
  1,820
  1,953
  2,092
  2,237
  2,387
  2,543
  2,705
  2,873
  3,049
  3,232
  3,422
  3,620
  3,827
  4,042
  4,266
  4,501
Operating income, $m
  88
  117
  149
  183
  220
  259
  300
  344
  390
  438
  506
  559
  614
  671
  731
  793
  857
  924
  994
  1,066
  1,142
  1,220
  1,302
  1,387
  1,476
  1,568
  1,665
  1,765
  1,871
  1,980
EBITDA, $m
  128
  160
  196
  234
  276
  320
  366
  415
  467
  521
  578
  637
  699
  763
  830
  900
  972
  1,047
  1,125
  1,207
  1,291
  1,379
  1,471
  1,567
  1,666
  1,770
  1,878
  1,991
  2,109
  2,233
Interest expense (income), $m
  2
  5
  7
  9
  12
  14
  17
  19
  22
  25
  28
  32
  35
  39
  43
  47
  51
  55
  60
  64
  69
  74
  79
  85
  90
  96
  102
  109
  116
  122
  130
Earnings before tax, $m
  83
  110
  139
  171
  206
  242
  281
  322
  365
  410
  475
  524
  575
  628
  684
  742
  802
  864
  929
  997
  1,067
  1,141
  1,217
  1,296
  1,379
  1,466
  1,556
  1,650
  1,748
  1,851
Tax expense, $m
  22
  30
  38
  46
  56
  65
  76
  87
  98
  111
  128
  141
  155
  170
  185
  200
  217
  233
  251
  269
  288
  308
  329
  350
  372
  396
  420
  445
  472
  500
Net income, $m
  60
  80
  102
  125
  150
  177
  205
  235
  266
  299
  346
  382
  420
  459
  499
  542
  585
  631
  678
  728
  779
  833
  888
  946
  1,007
  1,070
  1,136
  1,204
  1,276
  1,351

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
  506
  590
  682
  780
  886
  998
  1,117
  1,242
  1,374
  1,512
  1,656
  1,806
  1,963
  2,126
  2,296
  2,472
  2,655
  2,845
  3,043
  3,249
  3,462
  3,685
  3,916
  4,157
  4,408
  4,670
  4,942
  5,227
  5,524
  5,834
Adjusted assets (=assets-cash), $m
  506
  590
  682
  780
  886
  998
  1,117
  1,242
  1,374
  1,512
  1,656
  1,806
  1,963
  2,126
  2,296
  2,472
  2,655
  2,845
  3,043
  3,249
  3,462
  3,685
  3,916
  4,157
  4,408
  4,670
  4,942
  5,227
  5,524
  5,834
Revenue / Adjusted assets
  1.111
  1.110
  1.110
  1.112
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
  1.111
Average production assets, $m
  218
  255
  295
  337
  383
  431
  483
  537
  594
  653
  716
  781
  848
  919
  992
  1,068
  1,147
  1,230
  1,315
  1,404
  1,496
  1,592
  1,692
  1,797
  1,905
  2,018
  2,136
  2,259
  2,387
  2,521
Working capital, $m
  52
  61
  70
  81
  92
  103
  115
  128
  142
  156
  171
  187
  203
  220
  237
  255
  274
  294
  314
  336
  358
  381
  405
  430
  455
  482
  511
  540
  571
  603
Total debt, $m
  134
  172
  213
  258
  306
  357
  410
  467
  526
  589
  654
  722
  793
  866
  943
  1,023
  1,105
  1,191
  1,281
  1,374
  1,470
  1,571
  1,675
  1,784
  1,898
  2,016
  2,139
  2,268
  2,402
  2,542
Total liabilities, $m
  229
  267
  308
  353
  400
  451
  505
  562
  621
  683
  749
  816
  887
  961
  1,038
  1,117
  1,200
  1,286
  1,375
  1,468
  1,565
  1,665
  1,770
  1,879
  1,992
  2,111
  2,234
  2,362
  2,497
  2,637
Total equity, $m
  277
  323
  374
  428
  485
  547
  612
  681
  753
  829
  907
  990
  1,076
  1,165
  1,258
  1,355
  1,455
  1,559
  1,668
  1,780
  1,897
  2,019
  2,146
  2,278
  2,416
  2,559
  2,708
  2,864
  3,027
  3,197
Total liabilities and equity, $m
  506
  590
  682
  781
  885
  998
  1,117
  1,243
  1,374
  1,512
  1,656
  1,806
  1,963
  2,126
  2,296
  2,472
  2,655
  2,845
  3,043
  3,248
  3,462
  3,684
  3,916
  4,157
  4,408
  4,670
  4,942
  5,226
  5,524
  5,834
Debt-to-equity ratio
  0.480
  0.530
  0.570
  0.600
  0.630
  0.650
  0.670
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
  0.750
  0.760
  0.760
  0.770
  0.770
  0.770
  0.780
  0.780
  0.780
  0.790
  0.790
  0.790
  0.790
  0.790
  0.800
Adjusted equity ratio
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548
  0.548

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  60
  80
  102
  125
  150
  177
  205
  235
  266
  299
  346
  382
  420
  459
  499
  542
  585
  631
  678
  728
  779
  833
  888
  946
  1,007
  1,070
  1,136
  1,204
  1,276
  1,351
Depreciation, amort., depletion, $m
  40
  43
  47
  52
  56
  61
  66
  71
  77
  83
  72
  78
  85
  92
  99
  107
  115
  123
  132
  140
  150
  159
  169
  180
  191
  202
  214
  226
  239
  252
Funds from operations, $m
  100
  123
  149
  177
  206
  238
  271
  306
  343
  382
  418
  460
  505
  551
  599
  648
  700
  754
  810
  868
  929
  992
  1,058
  1,126
  1,197
  1,272
  1,349
  1,430
  1,515
  1,603
Change in working capital, $m
  8
  9
  9
  10
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
Cash from operations, $m
  92
  115
  140
  166
  195
  226
  259
  293
  330
  368
  403
  445
  488
  534
  581
  630
  681
  734
  790
  847
  907
  969
  1,034
  1,101
  1,171
  1,245
  1,321
  1,401
  1,484
  1,571
Maintenance CAPEX, $m
  -19
  -22
  -25
  -29
  -34
  -38
  -43
  -48
  -54
  -59
  -65
  -72
  -78
  -85
  -92
  -99
  -107
  -115
  -123
  -132
  -140
  -150
  -159
  -169
  -180
  -191
  -202
  -214
  -226
  -239
New CAPEX, $m
  -33
  -36
  -40
  -43
  -46
  -49
  -51
  -54
  -57
  -60
  -62
  -65
  -68
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -113
  -118
  -123
  -128
  -134
Cash from investing activities, $m
  -52
  -58
  -65
  -72
  -80
  -87
  -94
  -102
  -111
  -119
  -127
  -137
  -146
  -155
  -165
  -175
  -186
  -197
  -208
  -221
  -232
  -246
  -259
  -273
  -288
  -304
  -320
  -337
  -354
  -373
Free cash flow, $m
  40
  56
  74
  94
  116
  139
  164
  191
  219
  249
  275
  308
  343
  379
  416
  455
  495
  537
  581
  627
  674
  723
  774
  828
  883
  941
  1,001
  1,064
  1,130
  1,198
Issuance/(repayment) of debt, $m
  35
  38
  41
  45
  48
  51
  54
  57
  60
  62
  65
  68
  71
  74
  77
  80
  83
  86
  89
  93
  97
  101
  105
  109
  113
  118
  123
  129
  134
  140
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  
  35
  38
  41
  45
  48
  51
  54
  57
  60
  62
  65
  68
  71
  74
  77
  80
  83
  86
  89
  93
  97
  101
  105
  109
  113
  118
  123
  129
  134
  140
Total cash flow (excl. dividends), $m
  75
  95
  116
  139
  164
  190
  218
  248
  279
  311
  341
  376
  413
  452
  493
  534
  578
  623
  671
  720
  771
  824
  879
  937
  997
  1,059
  1,125
  1,193
  1,264
  1,339
Retained Cash Flow (-), $m
  -42
  -46
  -50
  -54
  -58
  -62
  -65
  -69
  -72
  -76
  -79
  -82
  -86
  -89
  -93
  -97
  -100
  -104
  -108
  -113
  -117
  -122
  -127
  -132
  -138
  -143
  -149
  -156
  -163
  -170
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
  9
  10
  12
  14
  16
  18
  20
  22
  25
  27
  30
  33
  36
  39
  43
  46
  49
  53
  57
  61
  65
  69
  74
  78
  83
  88
  93
  99
  105
  110
Cash available for distribution, $m
  33
  48
  66
  85
  106
  128
  153
  179
  207
  236
  262
  294
  328
  363
  400
  438
  478
  519
  562
  607
  653
  702
  752
  805
  859
  916
  975
  1,037
  1,101
  1,169
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
  32
  44
  57
  70
  82
  93
  103
  112
  119
  124
  124
  125
  125
  122
  117
  111
  104
  96
  87
  77
  68
  58
  49
  41
  33
  27
  21
  16
  12
  9
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

Fox Factory Holding Corp. is engaged in the manufacturing, sale and service of ride dynamics products. The Company's products fall into two categories: bikes, and powered vehicles, including side-by-sides, on-road vehicles with off-road capabilities, off-road vehicles and trucks, all-terrain vehicles (ATVs), snowmobiles, specialty vehicles and applications, and motorcycles. The Company's brands include FOX, FOX RACING SHOX and RACE FACE. The Company's products include 34 Factory Series FLOAT FIT4, which provides external adjustability with its fourth-generation FOX Isolated Technology and closed-cartridge damper, and includes a self-adjusting negative chamber air spring; X2 technology, utilized in its Factory Series FLOAT and DH rear shocks; PODIUM Internal Bypass, and X2 technology utilized in its 2.5 PODIUM shocks for side-by-sides that feature high and low speed rebound adjustment, high and low speed compression adjustment, and a dual-rate spring for the rear shocks.

FINANCIAL RATIOS  of  Fox Factory Holding (FOXF)

Valuation Ratios
P/E Ratio 65.5
Price to Sales 5.8
Price to Book 12.7
Price to Tangible Book
Price to Cash Flow 60.4
Price to Free Cash Flow 87.3
Growth Rates
Sales Growth Rate 9.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 9.1%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 34.1%
Total Debt to Equity 36.2%
Interest Coverage 23
Management Effectiveness
Return On Assets 12.3%
Ret/ On Assets - 3 Yr. Avg. 11.9%
Return On Total Capital 15.9%
Ret/ On T. Cap. - 3 Yr. Avg. 16.4%
Return On Equity 21.4%
Return On Equity - 3 Yr. Avg. 21.5%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 31.3%
Gross Margin - 3 Yr. Avg. 30.8%
EBITDA Margin 13.4%
EBITDA Margin - 3 Yr. Avg. 13.7%
Operating Margin 11.2%
Oper. Margin - 3 Yr. Avg. 10.8%
Pre-Tax Margin 10.7%
Pre-Tax Margin - 3 Yr. Avg. 10.3%
Net Profit Margin 8.9%
Net Profit Margin - 3 Yr. Avg. 8.3%
Effective Tax Rate 16.3%
Eff/ Tax Rate - 3 Yr. Avg. 20.1%
Payout Ratio 0%

FOXF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FOXF stock intrinsic value calculation we used $476 million for the last fiscal year's total revenue generated by Fox Factory Holding. The default revenue input number comes from 2017 income statement of Fox Factory Holding. 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 FOXF stock valuation model: a) initial revenue growth rate of 18% 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 FOXF is calculated based on our internal credit rating of Fox Factory Holding, 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 Fox Factory Holding.
    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 FOXF stock the variable cost ratio is equal to 70.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $77 million in the base year in the intrinsic value calculation for FOXF 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 Fox Factory Holding.

Corporate tax rate of 27% is the nominal tax rate for Fox Factory Holding. 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 FOXF stock is equal to 1.8%.

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 FOXF are equal to 38.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Fox Factory Holding 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 FOXF is equal to 9.3%. 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 - $235 million for Fox Factory Holding - 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 37 million for Fox Factory Holding 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 Fox Factory Holding at the current share price and the inputted number of shares is $2.4 billion.

RELATED COMPANIES Price Int.Val. Rating
TEN Tenneco 43.26 160.33  str.buy
PII Polaris Indust 108.25 152.08  buy
SUP Superior Indus 22.65 57.92  str.buy
JOUT Johnson Outdoo 102.99 172.84  str.buy

COMPANY NEWS

▶ Fox Factory Holding: 2Q Earnings Snapshot   [07:26PM  Associated Press]
▶ Tesla (TSLA) Raises Prices in China as Trade Spat Escalates   [Jul-10-18 02:30PM  InvestorPlace]
▶ Why Fox Factory Holding Corp (NASDAQ:FOXF) Could Be A Buy   [Jun-21-18 07:55AM  Simply Wall St.]
▶ Fox Factory Holding: 1Q Earnings Snapshot   [May-02-18 06:31PM  Associated Press]
▶ U.S. Auto Sales Rev Up in March: 5 Solid Picks   [Apr-04-18 09:23AM  Zacks]
▶ Fox Factory Holding tops Street 4Q forecasts   [05:04AM  Associated Press]
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.