Intrinsic value of Fox Factory Holding - FOXF

Previous Close

$71.00

  Intrinsic Value

$130.94

stock screener

  Rating & Target

str. buy

+84%

Previous close

$71.00

 
Intrinsic value

$130.94

 
Up/down potential

+84%

 
Rating

str. buy

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 2.7

 

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, %
  29.80
  27.32
  25.09
  23.08
  21.27
  19.64
  18.18
  16.86
  15.68
  14.61
  13.65
  12.78
  12.00
  11.30
  10.67
  10.11
  9.60
  9.14
  8.72
  8.35
  8.02
  7.71
  7.44
  7.20
  6.98
  6.78
  6.60
  6.44
  6.30
  6.17
Revenue, $m
  617
  786
  983
  1,210
  1,468
  1,756
  2,075
  2,425
  2,805
  3,215
  3,654
  4,121
  4,615
  5,137
  5,685
  6,260
  6,861
  7,487
  8,140
  8,820
  9,527
  10,262
  11,026
  11,819
  12,644
  13,501
  14,393
  15,320
  16,285
  17,289
Variable operating expenses, $m
  429
  542
  673
  824
  996
  1,188
  1,401
  1,634
  1,887
  2,160
  2,435
  2,746
  3,076
  3,424
  3,789
  4,172
  4,572
  4,990
  5,425
  5,878
  6,350
  6,839
  7,348
  7,877
  8,427
  8,998
  9,592
  10,210
  10,853
  11,523
Fixed operating expenses, $m
  80
  81
  83
  85
  87
  89
  91
  93
  95
  97
  99
  101
  104
  106
  108
  110
  113
  115
  118
  121
  123
  126
  129
  131
  134
  137
  140
  143
  147
  150
Total operating expenses, $m
  509
  623
  756
  909
  1,083
  1,277
  1,492
  1,727
  1,982
  2,257
  2,534
  2,847
  3,180
  3,530
  3,897
  4,282
  4,685
  5,105
  5,543
  5,999
  6,473
  6,965
  7,477
  8,008
  8,561
  9,135
  9,732
  10,353
  11,000
  11,673
Operating income, $m
  108
  163
  227
  301
  385
  479
  583
  698
  823
  957
  1,119
  1,273
  1,436
  1,608
  1,788
  1,977
  2,175
  2,382
  2,597
  2,821
  3,054
  3,297
  3,549
  3,811
  4,083
  4,366
  4,660
  4,966
  5,285
  5,617
EBITDA, $m
  134
  191
  257
  334
  422
  520
  628
  747
  877
  1,017
  1,167
  1,327
  1,496
  1,674
  1,862
  2,059
  2,264
  2,479
  2,703
  2,936
  3,178
  3,430
  3,692
  3,964
  4,247
  4,541
  4,847
  5,165
  5,496
  5,841
Interest expense (income), $m
  2
  5
  8
  12
  16
  21
  27
  33
  40
  48
  57
  66
  75
  85
  96
  108
  120
  132
  146
  159
  174
  189
  204
  220
  237
  255
  273
  291
  311
  331
  353
Earnings before tax, $m
  103
  154
  215
  284
  363
  452
  550
  658
  775
  901
  1,054
  1,198
  1,350
  1,511
  1,680
  1,858
  2,043
  2,236
  2,438
  2,647
  2,866
  3,093
  3,328
  3,573
  3,828
  4,093
  4,368
  4,655
  4,953
  5,264
Tax expense, $m
  28
  42
  58
  77
  98
  122
  148
  178
  209
  243
  285
  323
  365
  408
  454
  502
  552
  604
  658
  715
  774
  835
  899
  965
  1,034
  1,105
  1,179
  1,257
  1,337
  1,421
Net income, $m
  75
  113
  157
  207
  265
  330
  401
  480
  566
  658
  769
  874
  986
  1,103
  1,227
  1,356
  1,491
  1,632
  1,780
  1,933
  2,092
  2,258
  2,430
  2,609
  2,795
  2,988
  3,189
  3,398
  3,616
  3,843

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
  556
  708
  885
  1,089
  1,321
  1,580
  1,868
  2,183
  2,525
  2,894
  3,289
  3,709
  4,154
  4,624
  5,117
  5,634
  6,175
  6,739
  7,327
  7,939
  8,575
  9,237
  9,924
  10,638
  11,381
  12,152
  12,955
  13,789
  14,658
  15,562
Adjusted assets (=assets-cash), $m
  556
  708
  885
  1,089
  1,321
  1,580
  1,868
  2,183
  2,525
  2,894
  3,289
  3,709
  4,154
  4,624
  5,117
  5,634
  6,175
  6,739
  7,327
  7,939
  8,575
  9,237
  9,924
  10,638
  11,381
  12,152
  12,955
  13,789
  14,658
  15,562
Revenue / Adjusted assets
  1.110
  1.110
  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
  1.111
  1.111
Average production assets, $m
  144
  184
  230
  283
  343
  411
  486
  567
  656
  752
  855
  964
  1,080
  1,202
  1,330
  1,465
  1,605
  1,752
  1,905
  2,064
  2,229
  2,401
  2,580
  2,766
  2,959
  3,159
  3,368
  3,585
  3,811
  4,046
Working capital, $m
  111
  141
  177
  218
  264
  316
  374
  436
  505
  579
  658
  742
  831
  925
  1,023
  1,127
  1,235
  1,348
  1,465
  1,588
  1,715
  1,847
  1,985
  2,127
  2,276
  2,430
  2,591
  2,758
  2,931
  3,112
Total debt, $m
  156
  225
  305
  398
  502
  620
  749
  892
  1,046
  1,213
  1,392
  1,582
  1,783
  1,995
  2,218
  2,452
  2,696
  2,951
  3,217
  3,494
  3,781
  4,080
  4,391
  4,714
  5,049
  5,398
  5,761
  6,138
  6,531
  6,939
Total liabilities, $m
  251
  320
  400
  492
  597
  714
  844
  987
  1,141
  1,308
  1,486
  1,676
  1,878
  2,090
  2,313
  2,547
  2,791
  3,046
  3,312
  3,588
  3,876
  4,175
  4,486
  4,809
  5,144
  5,493
  5,856
  6,233
  6,625
  7,034
Total equity, $m
  305
  388
  485
  597
  724
  866
  1,024
  1,196
  1,384
  1,586
  1,802
  2,033
  2,276
  2,534
  2,804
  3,088
  3,384
  3,693
  4,015
  4,351
  4,699
  5,062
  5,438
  5,830
  6,237
  6,660
  7,099
  7,557
  8,032
  8,528
Total liabilities and equity, $m
  556
  708
  885
  1,089
  1,321
  1,580
  1,868
  2,183
  2,525
  2,894
  3,288
  3,709
  4,154
  4,624
  5,117
  5,635
  6,175
  6,739
  7,327
  7,939
  8,575
  9,237
  9,924
  10,639
  11,381
  12,153
  12,955
  13,790
  14,657
  15,562
Debt-to-equity ratio
  0.510
  0.580
  0.630
  0.670
  0.690
  0.720
  0.730
  0.750
  0.760
  0.770
  0.770
  0.780
  0.780
  0.790
  0.790
  0.790
  0.800
  0.800
  0.800
  0.800
  0.800
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
  0.810
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
  75
  113
  157
  207
  265
  330
  401
  480
  566
  658
  769
  874
  986
  1,103
  1,227
  1,356
  1,491
  1,632
  1,780
  1,933
  2,092
  2,258
  2,430
  2,609
  2,795
  2,988
  3,189
  3,398
  3,616
  3,843
Depreciation, amort., depletion, $m
  26
  28
  31
  34
  37
  41
  45
  49
  54
  60
  47
  54
  60
  67
  74
  81
  89
  97
  106
  115
  124
  133
  143
  154
  164
  176
  187
  199
  212
  225
Funds from operations, $m
  101
  141
  187
  241
  302
  370
  446
  529
  620
  717
  817
  928
  1,046
  1,170
  1,301
  1,437
  1,580
  1,730
  1,885
  2,047
  2,216
  2,391
  2,573
  2,762
  2,959
  3,163
  3,376
  3,597
  3,828
  4,067
Change in working capital, $m
  26
  30
  35
  41
  46
  52
  57
  63
  68
  74
  79
  84
  89
  94
  99
  103
  108
  113
  118
  122
  127
  132
  137
  143
  148
  154
  160
  167
  174
  181
Cash from operations, $m
  76
  110
  152
  200
  256
  319
  389
  466
  551
  644
  738
  844
  957
  1,076
  1,202
  1,334
  1,472
  1,617
  1,768
  1,925
  2,089
  2,259
  2,436
  2,619
  2,810
  3,009
  3,216
  3,430
  3,654
  3,887
Maintenance CAPEX, $m
  -6
  -8
  -10
  -13
  -16
  -19
  -23
  -27
  -32
  -36
  -42
  -47
  -54
  -60
  -67
  -74
  -81
  -89
  -97
  -106
  -115
  -124
  -133
  -143
  -154
  -164
  -176
  -187
  -199
  -212
New CAPEX, $m
  -33
  -39
  -46
  -53
  -60
  -67
  -75
  -82
  -89
  -96
  -103
  -109
  -116
  -122
  -128
  -134
  -141
  -147
  -153
  -159
  -165
  -172
  -179
  -186
  -193
  -201
  -209
  -217
  -226
  -235
Cash from investing activities, $m
  -39
  -47
  -56
  -66
  -76
  -86
  -98
  -109
  -121
  -132
  -145
  -156
  -170
  -182
  -195
  -208
  -222
  -236
  -250
  -265
  -280
  -296
  -312
  -329
  -347
  -365
  -385
  -404
  -425
  -447
Free cash flow, $m
  36
  63
  95
  134
  180
  232
  291
  358
  431
  511
  593
  687
  787
  894
  1,007
  1,126
  1,250
  1,381
  1,518
  1,660
  1,808
  1,963
  2,123
  2,290
  2,464
  2,644
  2,832
  3,026
  3,229
  3,440
Issuance/(repayment) of debt, $m
  58
  69
  80
  92
  105
  117
  130
  142
  155
  167
  178
  190
  201
  212
  223
  234
  244
  255
  266
  277
  288
  299
  311
  323
  336
  349
  363
  377
  393
  409
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  
  58
  69
  80
  92
  105
  117
  130
  142
  155
  167
  178
  190
  201
  212
  223
  234
  244
  255
  266
  277
  288
  299
  311
  323
  336
  349
  363
  377
  393
  409
Total cash flow (excl. dividends), $m
  94
  132
  176
  227
  284
  349
  421
  500
  586
  678
  772
  877
  989
  1,106
  1,230
  1,359
  1,495
  1,636
  1,783
  1,937
  2,096
  2,262
  2,434
  2,613
  2,799
  2,993
  3,194
  3,404
  3,622
  3,849
Retained Cash Flow (-), $m
  -70
  -83
  -97
  -112
  -127
  -142
  -157
  -173
  -187
  -202
  -216
  -230
  -244
  -257
  -270
  -283
  -296
  -309
  -322
  -335
  -349
  -362
  -377
  -391
  -407
  -423
  -440
  -457
  -476
  -495
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
  24
  48
  78
  115
  158
  207
  264
  327
  398
  476
  556
  647
  745
  849
  959
  1,076
  1,199
  1,327
  1,461
  1,601
  1,747
  1,899
  2,057
  2,222
  2,393
  2,570
  2,755
  2,946
  3,146
  3,353
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
  23
  44
  68
  94
  122
  150
  178
  205
  229
  249
  264
  276
  283
  285
  282
  273
  261
  244
  225
  203
  181
  158
  135
  113
  93
  75
  59
  46
  34
  25
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 72.8
Price to Sales 6.5
Price to Book 14.2
Price to Tangible Book
Price to Cash Flow 67.2
Price to Free Cash Flow 97
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 $475.633 million for the last fiscal year's total revenue generated by Fox Factory Holding. The default revenue input number comes from 0001 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 29.8% 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 70.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $78 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 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 23.4%.

Life of production assets of 18 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 18%. 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 - $234.835 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 37.673 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 $2.7 billion.

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