Intrinsic value of Fox Factory Holding - FOXF

Previous Close

$39.10

  Intrinsic Value

$24.63

stock screener

  Rating & Target

sell

-37%

Previous close

$39.10

 
Intrinsic value

$24.63

 
Up/down potential

-37%

 
Rating

sell

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 2016), $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 1.5

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  9.81
  9.80
  9.32
  8.89
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
Revenue, $m
  403
  442
  484
  527
  571
  618
  666
  717
  769
  823
  880
  939
  1,000
  1,063
  1,129
  1,198
  1,270
  1,345
  1,423
  1,504
  1,589
  1,678
  1,771
  1,868
  1,969
  2,075
  2,186
  2,302
  2,423
  2,551
  2,684
Variable operating expenses, $m
 
  331
  361
  393
  426
  460
  495
  532
  571
  611
  652
  690
  734
  781
  830
  880
  933
  988
  1,045
  1,105
  1,167
  1,233
  1,301
  1,372
  1,446
  1,524
  1,606
  1,691
  1,780
  1,874
  1,972
Fixed operating expenses, $m
 
  58
  60
  61
  63
  64
  66
  68
  69
  71
  73
  75
  77
  79
  81
  83
  85
  87
  89
  91
  93
  96
  98
  101
  103
  106
  108
  111
  114
  117
  120
Total operating expenses, $m
  358
  389
  421
  454
  489
  524
  561
  600
  640
  682
  725
  765
  811
  860
  911
  963
  1,018
  1,075
  1,134
  1,196
  1,260
  1,329
  1,399
  1,473
  1,549
  1,630
  1,714
  1,802
  1,894
  1,991
  2,092
Operating income, $m
  46
  53
  63
  73
  83
  94
  105
  117
  129
  142
  155
  174
  189
  204
  219
  235
  252
  270
  289
  308
  328
  350
  372
  395
  419
  445
  472
  500
  529
  560
  593
EBITDA, $m
  55
  65
  75
  86
  97
  108
  120
  132
  145
  159
  172
  187
  202
  218
  235
  252
  270
  288
  308
  328
  350
  372
  396
  420
  446
  473
  501
  531
  562
  595
  629
Interest expense (income), $m
  2
  2
  3
  3
  4
  4
  5
  6
  6
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
  25
  26
  28
  30
Earnings before tax, $m
  43
  51
  60
  69
  79
  89
  100
  111
  123
  135
  147
  166
  180
  194
  209
  224
  240
  257
  275
  293
  312
  332
  353
  375
  399
  423
  448
  475
  503
  532
  563
Tax expense, $m
  7
  14
  16
  19
  21
  24
  27
  30
  33
  36
  40
  45
  49
  52
  56
  60
  65
  69
  74
  79
  84
  90
  95
  101
  108
  114
  121
  128
  136
  144
  152
Net income, $m
  36
  37
  44
  51
  58
  65
  73
  81
  90
  98
  107
  121
  131
  141
  152
  164
  175
  188
  200
  214
  228
  243
  258
  274
  291
  309
  327
  347
  367
  389
  411

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  35
  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
  336
  330
  361
  393
  427
  462
  498
  535
  574
  615
  657
  701
  747
  794
  843
  895
  949
  1,004
  1,063
  1,123
  1,187
  1,253
  1,322
  1,395
  1,470
  1,550
  1,632
  1,719
  1,810
  1,905
  2,004
Adjusted assets (=assets-cash), $m
  301
  330
  361
  393
  427
  462
  498
  535
  574
  615
  657
  701
  747
  794
  843
  895
  949
  1,004
  1,063
  1,123
  1,187
  1,253
  1,322
  1,395
  1,470
  1,550
  1,632
  1,719
  1,810
  1,905
  2,004
Revenue / Adjusted assets
  1.339
  1.339
  1.341
  1.341
  1.337
  1.338
  1.337
  1.340
  1.340
  1.338
  1.339
  1.340
  1.339
  1.339
  1.339
  1.339
  1.338
  1.340
  1.339
  1.339
  1.339
  1.339
  1.340
  1.339
  1.339
  1.339
  1.339
  1.339
  1.339
  1.339
  1.339
Average production assets, $m
  89
  98
  107
  116
  126
  137
  147
  158
  170
  182
  194
  207
  221
  235
  250
  265
  281
  297
  314
  332
  351
  371
  391
  413
  435
  459
  483
  509
  536
  564
  593
Working capital, $m
  96
  71
  78
  85
  92
  100
  107
  115
  124
  133
  142
  151
  161
  171
  182
  193
  204
  217
  229
  242
  256
  270
  285
  301
  317
  334
  352
  371
  390
  411
  432
Total debt, $m
  67
  77
  92
  108
  124
  141
  159
  177
  196
  216
  237
  258
  280
  304
  328
  353
  379
  406
  435
  464
  495
  528
  561
  597
  634
  672
  713
  755
  799
  846
  894
Total liabilities, $m
  151
  161
  176
  192
  208
  225
  243
  261
  280
  300
  321
  342
  364
  388
  412
  437
  463
  490
  519
  548
  579
  612
  645
  681
  718
  756
  797
  839
  883
  930
  978
Total equity, $m
  185
  169
  185
  201
  219
  236
  255
  274
  294
  315
  336
  359
  382
  407
  432
  458
  486
  514
  544
  575
  608
  642
  677
  714
  753
  793
  836
  880
  927
  975
  1,026
Total liabilities and equity, $m
  336
  330
  361
  393
  427
  461
  498
  535
  574
  615
  657
  701
  746
  795
  844
  895
  949
  1,004
  1,063
  1,123
  1,187
  1,254
  1,322
  1,395
  1,471
  1,549
  1,633
  1,719
  1,810
  1,905
  2,004
Debt-to-equity ratio
  0.362
  0.460
  0.500
  0.540
  0.570
  0.600
  0.620
  0.650
  0.670
  0.690
  0.700
  0.720
  0.730
  0.750
  0.760
  0.770
  0.780
  0.790
  0.800
  0.810
  0.810
  0.820
  0.830
  0.840
  0.840
  0.850
  0.850
  0.860
  0.860
  0.870
  0.870
Adjusted equity ratio
  0.498
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512
  0.512

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  36
  37
  44
  51
  58
  65
  73
  81
  90
  98
  107
  121
  131
  141
  152
  164
  175
  188
  200
  214
  228
  243
  258
  274
  291
  309
  327
  347
  367
  389
  411
Depreciation, amort., depletion, $m
  9
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  13
  14
  14
  15
  16
  17
  18
  19
  20
  22
  23
  24
  25
  27
  28
  30
  31
  33
  35
  36
Funds from operations, $m
  30
  49
  56
  64
  71
  79
  88
  97
  106
  115
  125
  134
  145
  156
  168
  180
  192
  206
  220
  234
  249
  265
  282
  299
  318
  337
  357
  378
  400
  423
  447
Change in working capital, $m
  -9
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  20
  21
Cash from operations, $m
  39
  43
  50
  57
  64
  72
  80
  89
  97
  107
  116
  124
  135
  146
  157
  169
  181
  194
  207
  221
  236
  251
  267
  284
  301
  320
  339
  359
  380
  403
  426
Maintenance CAPEX, $m
  0
  -5
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -22
  -23
  -24
  -25
  -27
  -28
  -30
  -31
  -33
  -35
New CAPEX, $m
  -12
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -25
  -26
  -27
  -28
  -29
Cash from investing activities, $m
  -12
  -14
  -15
  -17
  -17
  -18
  -19
  -20
  -22
  -22
  -23
  -25
  -26
  -28
  -29
  -30
  -32
  -34
  -35
  -37
  -39
  -42
  -43
  -45
  -47
  -50
  -53
  -56
  -58
  -61
  -64
Free cash flow, $m
  27
  28
  34
  41
  47
  54
  61
  68
  76
  84
  92
  100
  109
  118
  128
  138
  149
  160
  172
  184
  197
  210
  224
  238
  254
  270
  286
  304
  322
  342
  362
Issuance/(repayment) of debt, $m
  18
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
  37
  39
  40
  42
  44
  46
  49
Issuance/(repurchase) of shares, $m
  -8
  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  
  2
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
  37
  39
  40
  42
  44
  46
  49
Total cash flow (excl. dividends), $m
  28
  43
  49
  56
  63
  71
  79
  87
  95
  104
  113
  121
  131
  141
  152
  163
  175
  187
  200
  213
  228
  242
  258
  274
  291
  308
  327
  346
  367
  388
  411
Retained Cash Flow (-), $m
  -33
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -44
  -46
  -49
  -51
Prev. year cash balance distribution, $m
 
  31
  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
 
  58
  34
  40
  46
  53
  60
  67
  75
  83
  91
  99
  108
  117
  127
  137
  148
  159
  170
  182
  195
  208
  222
  237
  252
  268
  284
  302
  320
  339
  360
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
 
  56
  31
  35
  38
  41
  44
  46
  47
  48
  48
  47
  46
  44
  43
  40
  37
  35
  31
  28
  25
  22
  18
  16
  13
  10
  8
  6
  5
  4
  3
Current shareholders' claim on cash, %
  100
  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 40.1
Price to Sales 3.6
Price to Book 7.8
Price to Tangible Book
Price to Cash Flow 37
Price to Free Cash Flow 53.4
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 $403 million for the last fiscal year's total revenue generated by Fox Factory Holding. The default revenue input number comes from 2016 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 9.8% 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 74.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $57 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 3.5% 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 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 22.1%.

Life of production assets of 16.3 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 16.1%. 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 - $185 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 37.33 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 $1.5 billion.

RELATED COMPANIES Price Int.Val. Rating
TEN Tenneco 57.51 97.74  str.buy
PII Polaris Indust 129.65 243.21  str.buy
DE Deere 151.95 155.05  buy
SUP Superior Indus 15.75 4.00  str.sell
JOUT Johnson Outdoo 60.73 17.70  str.sell

COMPANY NEWS

▶ Fox Factory Holding tops Street 3Q forecasts   [Nov-01-17 06:57PM  Associated Press]
▶ Auto Industry Stock Outlook - Sept. 2017   [Aug-31-17 02:27PM  Zacks]
▶ Stock Indexes Up, As Market Shows A Different Face   [Aug-04-17 12:06PM  Investor's Business Daily]
▶ Fox Factory Holding tops Street 2Q forecasts   [03:15AM  Associated Press]
▶ New Strong Buy Stocks for July 17th   [Jul-17-17 09:15AM  Zacks]
▶ Winning Mutual Fund Focuses On Leading Stocks Like Autohome, MarketAxess   [Jul-07-17 02:43PM  Investor's Business Daily]
▶ Top Fund Managers Are Buying This Breakout 'Shock' Stock   [Jun-30-17 04:19PM  Investor's Business Daily]
▶ Leisure Industry Leader Racks Up New Breakout   [Jun-27-17 12:04PM  Investor's Business Daily]
▶ Stocks Climb Off Lows; Nvidia Sees Unusually Heavy Volume Again   [Jun-26-17 01:26PM  Investor's Business Daily]
▶ Auto Industry Stock Outlook - May 2017   [May-08-17 03:52PM  Zacks]
▶ Fox Factory Sees Its Composite Rating Rise To 98   [11:28AM  Investor's Business Daily]
▶ Fox Factory Holding beats Street 1Q forecasts   [May-03-17 07:51PM  Associated Press]
Financial statements of FOXF
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

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

Copyright © X-FIN.com 2005-2017. All rigths reserved.