Intrinsic value of FlexShopper, Inc. - FPAY

Previous Close

$1.11

  Intrinsic Value

$0.56

stock screener

  Rating & Target

sell

-50%

Previous close

$1.11

 
Intrinsic value

$0.56

 
Up/down potential

-50%

 
Rating

sell

We calculate the intrinsic value of FPAY 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, %
  50.50
  45.95
  41.86
  38.17
  34.85
  31.87
  29.18
  26.76
  24.59
  22.63
  20.86
  19.28
  17.85
  16.57
  15.41
  14.37
  13.43
  12.59
  11.83
  11.15
  10.53
  9.98
  9.48
  9.03
  8.63
  8.27
  7.94
  7.65
  7.38
  7.14
Revenue, $m
  128
  187
  265
  366
  493
  651
  841
  1,066
  1,328
  1,628
  1,968
  2,347
  2,766
  3,224
  3,721
  4,256
  4,827
  5,435
  6,078
  6,755
  7,467
  8,212
  8,990
  9,802
  10,648
  11,529
  12,444
  13,395
  14,384
  15,411
Variable operating expenses, $m
  119
  173
  245
  339
  457
  603
  778
  986
  1,229
  1,507
  1,821
  2,172
  2,560
  2,984
  3,444
  3,938
  4,467
  5,030
  5,625
  6,252
  6,910
  7,600
  8,320
  9,072
  9,855
  10,669
  11,516
  12,397
  13,312
  14,263
Fixed operating expenses, $m
  11
  11
  12
  12
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
  16
  16
  16
  17
  17
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
Total operating expenses, $m
  130
  184
  257
  351
  469
  616
  791
  999
  1,242
  1,521
  1,835
  2,186
  2,575
  2,999
  3,459
  3,954
  4,483
  5,046
  5,642
  6,269
  6,927
  7,618
  8,338
  9,091
  9,874
  10,688
  11,536
  12,417
  13,333
  14,284
Operating income, $m
  -2
  2
  8
  15
  24
  36
  50
  66
  85
  107
  133
  161
  192
  225
  262
  302
  344
  389
  436
  486
  539
  594
  652
  712
  775
  840
  908
  978
  1,051
  1,127
EBITDA, $m
  -1
  4
  10
  18
  28
  41
  56
  74
  95
  120
  147
  178
  212
  249
  290
  333
  380
  429
  481
  536
  594
  655
  718
  785
  853
  925
  1,000
  1,077
  1,158
  1,242
Interest expense (income), $m
  1
  5
  9
  13
  20
  28
  38
  51
  66
  84
  105
  129
  156
  187
  220
  257
  297
  340
  386
  434
  486
  540
  597
  657
  720
  785
  853
  923
  997
  1,073
  1,152
Earnings before tax, $m
  -7
  -6
  -6
  -5
  -3
  -2
  -1
  0
  1
  3
  4
  4
  5
  5
  5
  5
  4
  3
  2
  1
  -1
  -3
  -5
  -8
  -10
  -13
  -16
  -19
  -22
  -25
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -7
  -6
  -6
  -5
  -3
  -2
  -1
  0
  1
  2
  3
  3
  4
  4
  4
  3
  3
  2
  1
  0
  -1
  -3
  -5
  -8
  -10
  -13
  -16
  -19
  -22
  -25

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
  73
  107
  152
  209
  282
  372
  481
  610
  760
  931
  1,126
  1,343
  1,582
  1,845
  2,129
  2,435
  2,762
  3,109
  3,477
  3,865
  4,272
  4,698
  5,143
  5,608
  6,092
  6,595
  7,119
  7,663
  8,229
  8,817
Adjusted assets (=assets-cash), $m
  73
  107
  152
  209
  282
  372
  481
  610
  760
  931
  1,126
  1,343
  1,582
  1,845
  2,129
  2,435
  2,762
  3,109
  3,477
  3,865
  4,272
  4,698
  5,143
  5,608
  6,092
  6,595
  7,119
  7,663
  8,229
  8,817
Revenue / Adjusted assets
  1.753
  1.748
  1.743
  1.751
  1.748
  1.750
  1.748
  1.748
  1.747
  1.749
  1.748
  1.748
  1.748
  1.747
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
  1.748
Average production assets, $m
  5
  7
  10
  14
  18
  24
  31
  39
  49
  60
  73
  87
  102
  119
  138
  157
  179
  201
  225
  250
  276
  304
  333
  363
  394
  427
  460
  496
  532
  570
Working capital, $m
  44
  64
  90
  125
  168
  222
  287
  363
  453
  555
  671
  800
  943
  1,099
  1,269
  1,451
  1,646
  1,853
  2,073
  2,304
  2,546
  2,800
  3,066
  3,343
  3,631
  3,931
  4,243
  4,568
  4,905
  5,255
Total debt, $m
  50
  78
  115
  163
  223
  297
  387
  493
  617
  758
  919
  1,098
  1,295
  1,512
  1,746
  1,998
  2,268
  2,555
  2,858
  3,178
  3,514
  3,866
  4,233
  4,616
  5,016
  5,431
  5,863
  6,312
  6,779
  7,264
Total liabilities, $m
  60
  88
  125
  173
  233
  307
  397
  503
  627
  768
  929
  1,108
  1,305
  1,522
  1,756
  2,009
  2,278
  2,565
  2,869
  3,188
  3,524
  3,876
  4,243
  4,626
  5,026
  5,441
  5,873
  6,322
  6,789
  7,274
Total equity, $m
  13
  19
  27
  37
  49
  65
  84
  107
  133
  163
  197
  235
  277
  323
  373
  426
  483
  544
  608
  676
  748
  822
  900
  981
  1,066
  1,154
  1,246
  1,341
  1,440
  1,543
Total liabilities and equity, $m
  73
  107
  152
  210
  282
  372
  481
  610
  760
  931
  1,126
  1,343
  1,582
  1,845
  2,129
  2,435
  2,761
  3,109
  3,477
  3,864
  4,272
  4,698
  5,143
  5,607
  6,092
  6,595
  7,119
  7,663
  8,229
  8,817
Debt-to-equity ratio
  3.930
  4.180
  4.340
  4.440
  4.510
  4.560
  4.590
  4.620
  4.640
  4.650
  4.660
  4.670
  4.680
  4.680
  4.690
  4.690
  4.690
  4.700
  4.700
  4.700
  4.700
  4.700
  4.700
  4.700
  4.700
  4.710
  4.710
  4.710
  4.710
  4.710
Adjusted equity ratio
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175
  0.175

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -7
  -6
  -6
  -5
  -3
  -2
  -1
  0
  1
  2
  3
  3
  4
  4
  4
  3
  3
  2
  1
  0
  -1
  -3
  -5
  -8
  -10
  -13
  -16
  -19
  -22
  -25
Depreciation, amort., depletion, $m
  1
  2
  2
  3
  4
  5
  7
  8
  10
  12
  15
  17
  20
  24
  28
  31
  36
  40
  45
  50
  55
  61
  67
  73
  79
  85
  92
  99
  106
  114
Funds from operations, $m
  -6
  -5
  -3
  -2
  1
  3
  6
  8
  11
  14
  17
  21
  24
  28
  31
  35
  39
  43
  46
  50
  54
  58
  61
  65
  69
  73
  76
  81
  85
  89
Change in working capital, $m
  15
  20
  27
  34
  43
  54
  65
  77
  89
  102
  116
  129
  143
  156
  169
  182
  195
  207
  219
  231
  243
  254
  265
  277
  288
  300
  312
  324
  337
  350
Cash from operations, $m
  -21
  -25
  -30
  -36
  -43
  -51
  -59
  -68
  -78
  -88
  -99
  -109
  -119
  -129
  -138
  -147
  -156
  -165
  -173
  -181
  -189
  -196
  -204
  -212
  -220
  -228
  -236
  -244
  -252
  -261
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -15
  -17
  -20
  -24
  -28
  -31
  -36
  -40
  -45
  -50
  -55
  -61
  -67
  -73
  -79
  -85
  -92
  -99
  -106
New CAPEX, $m
  -2
  -2
  -3
  -4
  -5
  -6
  -7
  -8
  -10
  -11
  -13
  -14
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -25
  -26
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
Cash from investing activities, $m
  -3
  -3
  -4
  -6
  -8
  -10
  -12
  -14
  -18
  -21
  -25
  -29
  -33
  -37
  -42
  -48
  -52
  -58
  -64
  -70
  -76
  -83
  -90
  -97
  -104
  -112
  -119
  -127
  -136
  -144
Free cash flow, $m
  -23
  -28
  -34
  -42
  -50
  -60
  -71
  -83
  -96
  -109
  -123
  -137
  -152
  -166
  -180
  -195
  -209
  -223
  -237
  -251
  -265
  -279
  -294
  -309
  -324
  -339
  -355
  -371
  -388
  -406
Issuance/(repayment) of debt, $m
  20
  28
  37
  48
  60
  74
  90
  106
  124
  142
  160
  179
  198
  216
  234
  252
  270
  287
  303
  320
  336
  352
  367
  383
  399
  415
  432
  449
  467
  485
Issuance/(repurchase) of shares, $m
  11
  12
  13
  15
  16
  18
  20
  22
  25
  28
  31
  35
  38
  42
  46
  50
  54
  59
  63
  67
  72
  78
  83
  89
  95
  101
  107
  114
  121
  128
Cash from financing (excl. dividends), $m  
  31
  40
  50
  63
  76
  92
  110
  128
  149
  170
  191
  214
  236
  258
  280
  302
  324
  346
  366
  387
  408
  430
  450
  472
  494
  516
  539
  563
  588
  613
Total cash flow (excl. dividends), $m
  9
  12
  16
  21
  26
  32
  39
  46
  53
  61
  68
  76
  84
  92
  100
  108
  115
  122
  130
  136
  143
  150
  157
  164
  170
  177
  184
  192
  199
  207
Retained Cash Flow (-), $m
  -11
  -12
  -13
  -15
  -16
  -18
  -20
  -23
  -26
  -30
  -34
  -38
  -42
  -46
  -50
  -54
  -57
  -61
  -64
  -68
  -72
  -78
  -83
  -89
  -95
  -101
  -107
  -114
  -121
  -128
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
  -2
  0
  3
  6
  10
  14
  19
  23
  27
  31
  34
  38
  42
  46
  50
  54
  58
  62
  65
  69
  71
  72
  74
  75
  76
  76
  77
  78
  79
  79
Discount rate, %
  10.80
  11.34
  11.91
  12.50
  13.13
  13.78
  14.47
  15.20
  15.96
  16.75
  17.59
  18.47
  19.40
  20.37
  21.38
  22.45
  23.58
  24.75
  25.99
  27.29
  28.66
  30.09
  31.59
  33.17
  34.83
  36.57
  38.40
  40.32
  42.34
  44.45
PV of cash for distribution, $m
  -2
  0
  2
  4
  5
  6
  7
  7
  7
  7
  6
  5
  4
  3
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  63.0
  44.4
  33.9
  27.3
  22.9
  19.8
  17.4
  15.6
  14.2
  13.0
  12.0
  11.1
  10.4
  9.7
  9.2
  8.7
  8.2
  7.8
  7.4
  7.1
  6.8
  6.5
  6.2
  5.9
  5.7
  5.5
  5.3
  5.1
  4.9
  4.7

FlexShopper, Inc. is a holding company. The Company, through FlexShopper, LLC (FlexShopper), is engaged in the business of providing certain types of durable goods to consumers on a lease-to-own basis and providing lease-to-own (LTO) terms to consumers of third-party retailers and e-tailers. FlexShopper and its online LTO products provide consumers the ability to acquire durable goods, including electronics, computers and furniture on a payment, lease basis. Concurrently, FlexShopper's model provides e-tailers and retailers an opportunity to upturn their sales by utilizing FlexShopper's online channels to connect with consumers that want to acquire products on an LTO basis. FlexShopper processes LTO transactions using its LTO Engine. The LTO Engine is FlexShopper's technology that automates the process of consumers receiving spending limits and entering into leases for durable goods within a few minutes. FlexShopper owns two subsidiaries: FlexShopper 1, LLC and FlexShopper 2, LLC.

FINANCIAL RATIOS  of  FlexShopper, Inc. (FPAY)

Valuation Ratios
P/E Ratio -0.5
Price to Sales 0.1
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow -0.3
Price to Free Cash Flow -0.3
Growth Rates
Sales Growth Rate 128.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 100%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 4.8
LT Debt to Equity 66.7%
Total Debt to Equity 66.7%
Interest Coverage -11
Management Effectiveness
Return On Assets -47.8%
Ret/ On Assets - 3 Yr. Avg. -56.8%
Return On Total Capital -60%
Ret/ On T. Cap. - 3 Yr. Avg. -73.9%
Return On Equity -114.3%
Return On Equity - 3 Yr. Avg. -117.7%
Asset Turnover 2.1
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 45.9%
EBITDA Margin 27.1%
EBITDA Margin - 3 Yr. Avg. -9.4%
Operating Margin -20.8%
Oper. Margin - 3 Yr. Avg. -53%
Pre-Tax Margin -25%
Pre-Tax Margin - 3 Yr. Avg. -56%
Net Profit Margin -25%
Net Profit Margin - 3 Yr. Avg. -49.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 6.7%
Payout Ratio 0%

FPAY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FPAY stock intrinsic value calculation we used $85 million for the last fiscal year's total revenue generated by FlexShopper, Inc.. The default revenue input number comes from 0001 income statement of FlexShopper, Inc.. 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 FPAY stock valuation model: a) initial revenue growth rate of 50.5% 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 10.8%, whose default value for FPAY is calculated based on our internal credit rating of FlexShopper, Inc., 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 FlexShopper, Inc..
    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 FPAY stock the variable cost ratio is equal to 92.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $11 million in the base year in the intrinsic value calculation for FPAY 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 17% for FlexShopper, Inc..

Corporate tax rate of 27% is the nominal tax rate for FlexShopper, Inc.. 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 FPAY 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 FPAY are equal to 3.7%.

Life of production assets of 0.1 years is the average useful life of capital assets used in FlexShopper, Inc. 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 FPAY is equal to 34.1%. 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 - $8.492676 million for FlexShopper, Inc. - 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 17.574 million for FlexShopper, Inc. 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 FlexShopper, Inc. at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
FPAY FlexShopper, I 1.11 1.05  buy
MIND Mitcham Indust 3.80 1.14  str.sell
EXTN Exterran Corpo 13.48 12.21  sell

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