Intrinsic value of Fox Factory Holding Corp. - FOXF

Previous Close

$72.84

  Intrinsic Value

$57.93

stock screener

  Rating & Target

sell

-20%

Previous close

$72.84

 
Intrinsic value

$57.93

 
Up/down potential

-20%

 
Rating

sell

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 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 2.8

 

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, %
  29.50
  27.05
  24.85
  22.86
  21.07
  19.47
  18.02
  16.72
  15.55
  14.49
  13.54
  12.69
  11.92
  11.23
  10.60
  10.04
  9.54
  9.09
  8.68
  8.31
  7.98
  7.68
  7.41
  7.17
  6.95
  6.76
  6.58
  6.42
  6.28
  6.15
Revenue, $m
  802
  1,018
  1,271
  1,562
  1,891
  2,260
  2,667
  3,113
  3,596
  4,118
  4,675
  5,268
  5,896
  6,558
  7,254
  7,983
  8,744
  9,539
  10,366
  11,228
  12,124
  13,055
  14,022
  15,028
  16,073
  17,159
  18,289
  19,464
  20,687
  21,960
Variable operating expenses, $m
  652
  827
  1,031
  1,265
  1,530
  1,827
  2,155
  2,514
  2,903
  3,323
  3,766
  4,244
  4,750
  5,283
  5,843
  6,430
  7,043
  7,683
  8,350
  9,044
  9,765
  10,516
  11,295
  12,105
  12,947
  13,822
  14,732
  15,678
  16,663
  17,689
Fixed operating expenses, $m
  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
  43
  44
  45
  46
Total operating expenses, $m
  677
  852
  1,057
  1,291
  1,557
  1,854
  2,183
  2,543
  2,932
  3,353
  3,796
  4,275
  4,782
  5,316
  5,876
  6,464
  7,078
  7,719
  8,386
  9,081
  9,803
  10,555
  11,335
  12,145
  12,988
  13,864
  14,775
  15,722
  16,708
  17,735
Operating income, $m
  125
  167
  215
  271
  335
  406
  484
  570
  664
  765
  879
  994
  1,115
  1,243
  1,378
  1,519
  1,666
  1,820
  1,980
  2,147
  2,320
  2,500
  2,688
  2,882
  3,085
  3,295
  3,514
  3,742
  3,978
  4,225
EBITDA, $m
  143
  188
  240
  301
  369
  445
  530
  623
  723
  831
  947
  1,071
  1,202
  1,339
  1,484
  1,636
  1,794
  1,960
  2,132
  2,312
  2,498
  2,692
  2,894
  3,103
  3,321
  3,547
  3,783
  4,027
  4,282
  4,547
Interest expense (income), $m
  2
  3
  6
  9
  13
  17
  21
  27
  32
  39
  46
  53
  61
  70
  79
  88
  98
  109
  119
  131
  143
  155
  168
  181
  195
  209
  224
  240
  256
  273
  290
Earnings before tax, $m
  122
  161
  206
  259
  318
  384
  458
  538
  625
  719
  826
  932
  1,045
  1,164
  1,289
  1,421
  1,557
  1,700
  1,849
  2,004
  2,165
  2,333
  2,507
  2,688
  2,876
  3,071
  3,274
  3,486
  3,706
  3,935
Tax expense, $m
  33
  43
  56
  70
  86
  104
  124
  145
  169
  194
  223
  252
  282
  314
  348
  384
  421
  459
  499
  541
  585
  630
  677
  726
  776
  829
  884
  941
  1,001
  1,062
Net income, $m
  89
  117
  151
  189
  232
  280
  334
  393
  456
  525
  603
  681
  763
  850
  941
  1,037
  1,137
  1,241
  1,350
  1,463
  1,581
  1,703
  1,830
  1,962
  2,099
  2,242
  2,390
  2,545
  2,705
  2,872

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
  628
  798
  996
  1,224
  1,482
  1,771
  2,090
  2,439
  2,819
  3,227
  3,664
  4,129
  4,621
  5,140
  5,685
  6,256
  6,853
  7,475
  8,124
  8,799
  9,501
  10,231
  10,989
  11,777
  12,596
  13,448
  14,333
  15,254
  16,212
  17,210
Adjusted assets (=assets-cash), $m
  628
  798
  996
  1,224
  1,482
  1,771
  2,090
  2,439
  2,819
  3,227
  3,664
  4,129
  4,621
  5,140
  5,685
  6,256
  6,853
  7,475
  8,124
  8,799
  9,501
  10,231
  10,989
  11,777
  12,596
  13,448
  14,333
  15,254
  16,212
  17,210
Revenue / Adjusted assets
  1.277
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
  1.276
Average production assets, $m
  184
  233
  291
  358
  433
  517
  611
  713
  824
  943
  1,071
  1,206
  1,350
  1,502
  1,661
  1,828
  2,002
  2,184
  2,374
  2,571
  2,776
  2,990
  3,211
  3,441
  3,681
  3,930
  4,188
  4,457
  4,737
  5,029
Working capital, $m
  147
  187
  234
  287
  348
  416
  491
  573
  662
  758
  860
  969
  1,085
  1,207
  1,335
  1,469
  1,609
  1,755
  1,907
  2,066
  2,231
  2,402
  2,580
  2,765
  2,957
  3,157
  3,365
  3,581
  3,806
  4,041
Total debt, $m
  108
  165
  232
  309
  396
  494
  602
  720
  848
  986
  1,134
  1,291
  1,457
  1,633
  1,817
  2,010
  2,212
  2,422
  2,641
  2,869
  3,107
  3,353
  3,610
  3,876
  4,153
  4,441
  4,740
  5,051
  5,375
  5,712
Total liabilities, $m
  212
  270
  337
  414
  501
  599
  706
  824
  953
  1,091
  1,238
  1,396
  1,562
  1,737
  1,922
  2,115
  2,316
  2,527
  2,746
  2,974
  3,211
  3,458
  3,714
  3,981
  4,258
  4,545
  4,845
  5,156
  5,480
  5,817
Total equity, $m
  416
  528
  660
  810
  981
  1,172
  1,384
  1,615
  1,866
  2,136
  2,426
  2,733
  3,059
  3,403
  3,763
  4,141
  4,537
  4,949
  5,378
  5,825
  6,290
  6,773
  7,275
  7,797
  8,339
  8,902
  9,489
  10,098
  10,732
  11,393
Total liabilities and equity, $m
  628
  798
  997
  1,224
  1,482
  1,771
  2,090
  2,439
  2,819
  3,227
  3,664
  4,129
  4,621
  5,140
  5,685
  6,256
  6,853
  7,476
  8,124
  8,799
  9,501
  10,231
  10,989
  11,778
  12,597
  13,447
  14,334
  15,254
  16,212
  17,210
Debt-to-equity ratio
  0.260
  0.310
  0.350
  0.380
  0.400
  0.420
  0.430
  0.450
  0.450
  0.460
  0.470
  0.470
  0.480
  0.480
  0.480
  0.490
  0.490
  0.490
  0.490
  0.490
  0.490
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
  0.500
Adjusted equity ratio
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  89
  117
  151
  189
  232
  280
  334
  393
  456
  525
  603
  681
  763
  850
  941
  1,037
  1,137
  1,241
  1,350
  1,463
  1,581
  1,703
  1,830
  1,962
  2,099
  2,242
  2,390
  2,545
  2,705
  2,872
Depreciation, amort., depletion, $m
  18
  21
  25
  29
  34
  40
  46
  52
  59
  67
  69
  77
  87
  96
  106
  117
  128
  140
  152
  165
  178
  192
  206
  221
  236
  252
  268
  286
  304
  322
Funds from operations, $m
  107
  139
  176
  218
  266
  320
  380
  445
  516
  592
  671
  758
  850
  946
  1,048
  1,154
  1,265
  1,381
  1,502
  1,628
  1,759
  1,894
  2,036
  2,183
  2,335
  2,494
  2,659
  2,830
  3,009
  3,195
Change in working capital, $m
  34
  40
  47
  53
  61
  68
  75
  82
  89
  96
  103
  109
  116
  122
  128
  134
  140
  146
  152
  158
  165
  171
  178
  185
  192
  200
  208
  216
  225
  234
Cash from operations, $m
  73
  99
  129
  165
  206
  252
  305
  363
  426
  496
  569
  649
  734
  824
  920
  1,020
  1,125
  1,235
  1,350
  1,469
  1,594
  1,723
  1,858
  1,997
  2,143
  2,294
  2,451
  2,614
  2,784
  2,961
Maintenance CAPEX, $m
  -9
  -12
  -15
  -19
  -23
  -28
  -33
  -39
  -46
  -53
  -60
  -69
  -77
  -87
  -96
  -106
  -117
  -128
  -140
  -152
  -165
  -178
  -192
  -206
  -221
  -236
  -252
  -268
  -286
  -304
New CAPEX, $m
  -42
  -50
  -58
  -67
  -75
  -84
  -93
  -102
  -111
  -119
  -128
  -136
  -144
  -152
  -159
  -167
  -174
  -182
  -190
  -197
  -205
  -213
  -222
  -230
  -239
  -249
  -259
  -269
  -280
  -292
Cash from investing activities, $m
  -51
  -62
  -73
  -86
  -98
  -112
  -126
  -141
  -157
  -172
  -188
  -205
  -221
  -239
  -255
  -273
  -291
  -310
  -330
  -349
  -370
  -391
  -414
  -436
  -460
  -485
  -511
  -537
  -566
  -596
Free cash flow, $m
  23
  37
  56
  80
  107
  140
  178
  222
  270
  324
  381
  444
  513
  586
  664
  747
  834
  925
  1,020
  1,120
  1,224
  1,332
  1,444
  1,561
  1,683
  1,809
  1,940
  2,077
  2,218
  2,365
Issuance/(repayment) of debt, $m
  48
  57
  67
  77
  87
  98
  108
  118
  128
  138
  148
  157
  166
  175
  184
  193
  202
  210
  219
  228
  237
  247
  256
  266
  277
  288
  299
  311
  324
  337
Issuance/(repurchase) of shares, $m
  6
  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  
  54
  57
  67
  77
  87
  98
  108
  118
  128
  138
  148
  157
  166
  175
  184
  193
  202
  210
  219
  228
  237
  247
  256
  266
  277
  288
  299
  311
  324
  337
Total cash flow (excl. dividends), $m
  77
  95
  123
  157
  195
  238
  286
  340
  398
  462
  528
  601
  679
  762
  849
  940
  1,035
  1,135
  1,239
  1,348
  1,461
  1,579
  1,701
  1,828
  1,960
  2,097
  2,239
  2,388
  2,542
  2,703
Retained Cash Flow (-), $m
  -95
  -112
  -131
  -151
  -171
  -191
  -211
  -231
  -251
  -270
  -289
  -308
  -326
  -343
  -361
  -378
  -395
  -412
  -429
  -447
  -465
  -483
  -502
  -522
  -542
  -564
  -586
  -610
  -634
  -660
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
  -18
  -18
  -8
  6
  24
  47
  75
  108
  147
  191
  239
  294
  353
  418
  488
  562
  640
  723
  810
  901
  996
  1,095
  1,199
  1,306
  1,418
  1,533
  1,653
  1,778
  1,908
  2,042
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
  -17
  -16
  -7
  5
  18
  34
  51
  68
  84
  100
  113
  125
  134
  140
  143
  143
  139
  133
  125
  115
  103
  91
  79
  67
  55
  45
  35
  28
  21
  15
Current shareholders' claim on cash, %
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8
  99.8

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 Corp. (FOXF)

Valuation Ratios
P/E Ratio 74.6
Price to Sales 6.7
Price to Book 14.5
Price to Tangible Book
Price to Cash Flow 68.9
Price to Free Cash Flow 99.5
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 $619 million for the last fiscal year's total revenue generated by Fox Factory Holding Corp.. The default revenue input number comes from 0001 income statement of Fox Factory Holding 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 FOXF stock valuation model: a) initial revenue growth rate of 29.5% 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 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 Fox Factory Holding 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 FOXF stock the variable cost ratio is equal to 81.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $24 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 Corp..

Corporate tax rate of 27% is the nominal tax rate for Fox Factory Holding 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 FOXF 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 FOXF are equal to 22.9%.

Life of production assets of 15.6 years is the average useful life of capital assets used in Fox Factory Holding 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 FOXF is equal to 18.4%. 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 - $321.205 million for Fox Factory Holding 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 37.942 million for Fox Factory Holding 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 Fox Factory Holding Corp. at the current share price and the inputted number of shares is $2.8 billion.

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