Intrinsic value of FlexShopper - FPAY

Previous Close

$0.72

  Intrinsic Value

$0.29

stock screener

  Rating & Target

str. sell

-60%

Previous close

$0.72

 
Intrinsic value

$0.29

 
Up/down potential

-60%

 
Rating

str. 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, %
  14.30
  13.37
  12.53
  11.78
  11.10
  10.49
  9.94
  9.45
  9.00
  8.60
  8.24
  7.92
  7.63
  7.36
  7.13
  6.91
  6.72
  6.55
  6.40
  6.26
  6.13
  6.02
  5.92
  5.82
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
Revenue, $m
  77
  87
  98
  109
  121
  134
  147
  161
  176
  191
  207
  223
  240
  258
  276
  295
  315
  336
  357
  380
  403
  427
  453
  479
  507
  535
  565
  597
  629
  663
Variable operating expenses, $m
  61
  69
  77
  86
  96
  106
  117
  128
  139
  151
  164
  177
  190
  204
  219
  234
  249
  266
  283
  300
  319
  338
  358
  379
  401
  423
  447
  472
  498
  525
Fixed operating expenses, $m
  21
  22
  22
  23
  23
  24
  24
  25
  26
  26
  27
  27
  28
  28
  29
  30
  30
  31
  32
  32
  33
  34
  35
  35
  36
  37
  38
  39
  39
  40
Total operating expenses, $m
  82
  91
  99
  109
  119
  130
  141
  153
  165
  177
  191
  204
  218
  232
  248
  264
  279
  297
  315
  332
  352
  372
  393
  414
  437
  460
  485
  511
  537
  565
Operating income, $m
  -5
  -4
  -2
  0
  2
  4
  6
  9
  11
  14
  17
  19
  22
  25
  29
  32
  35
  39
  43
  47
  51
  55
  60
  65
  70
  75
  80
  86
  92
  98
EBITDA, $m
  -5
  -3
  -1
  1
  3
  5
  8
  10
  13
  15
  18
  21
  24
  28
  31
  34
  38
  42
  46
  50
  54
  59
  64
  69
  74
  79
  85
  91
  97
  104
Interest expense (income), $m
  1
  3
  3
  4
  5
  5
  6
  7
  8
  9
  10
  11
  11
  13
  14
  15
  16
  17
  18
  19
  21
  22
  24
  25
  27
  28
  30
  32
  34
  36
  38
Earnings before tax, $m
  -8
  -7
  -6
  -5
  -3
  -2
  -1
  1
  3
  4
  6
  8
  10
  12
  14
  16
  19
  21
  23
  26
  29
  32
  35
  38
  41
  45
  48
  52
  56
  61
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
Net income, $m
  -8
  -7
  -6
  -5
  -3
  -2
  -1
  1
  2
  3
  4
  6
  7
  9
  10
  12
  14
  15
  17
  19
  21
  23
  25
  28
  30
  33
  35
  38
  41
  44

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
  39
  44
  50
  55
  62
  68
  75
  82
  89
  97
  105
  113
  122
  131
  140
  150
  160
  171
  181
  193
  205
  217
  230
  243
  257
  272
  287
  303
  319
  337
Adjusted assets (=assets-cash), $m
  39
  44
  50
  55
  62
  68
  75
  82
  89
  97
  105
  113
  122
  131
  140
  150
  160
  171
  181
  193
  205
  217
  230
  243
  257
  272
  287
  303
  319
  337
Revenue / Adjusted assets
  1.974
  1.977
  1.960
  1.982
  1.952
  1.971
  1.960
  1.963
  1.978
  1.969
  1.971
  1.973
  1.967
  1.969
  1.971
  1.967
  1.969
  1.965
  1.972
  1.969
  1.966
  1.968
  1.970
  1.971
  1.973
  1.967
  1.969
  1.970
  1.972
  1.967
Average production assets, $m
  3
  4
  4
  4
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  26
  27
Working capital, $m
  20
  22
  25
  28
  31
  34
  38
  41
  45
  49
  53
  57
  61
  66
  70
  75
  80
  86
  91
  97
  103
  109
  115
  122
  129
  136
  144
  152
  160
  169
Total debt, $m
  23
  27
  32
  36
  41
  47
  52
  58
  64
  70
  77
  83
  90
  98
  105
  113
  121
  130
  139
  148
  158
  168
  178
  189
  200
  212
  225
  238
  251
  265
Total liabilities, $m
  32
  36
  40
  45
  50
  55
  61
  67
  73
  79
  85
  92
  99
  107
  114
  122
  130
  139
  148
  157
  167
  177
  187
  198
  209
  221
  234
  246
  260
  274
Total equity, $m
  7
  8
  9
  10
  11
  13
  14
  15
  17
  18
  20
  21
  23
  24
  26
  28
  30
  32
  34
  36
  38
  40
  43
  45
  48
  51
  53
  56
  59
  63
Total liabilities and equity, $m
  39
  44
  49
  55
  61
  68
  75
  82
  90
  97
  105
  113
  122
  131
  140
  150
  160
  171
  182
  193
  205
  217
  230
  243
  257
  272
  287
  302
  319
  337
Debt-to-equity ratio
  3.150
  3.290
  3.410
  3.510
  3.600
  3.670
  3.740
  3.790
  3.840
  3.880
  3.920
  3.950
  3.980
  4.010
  4.040
  4.060
  4.080
  4.100
  4.110
  4.130
  4.140
  4.160
  4.170
  4.180
  4.190
  4.200
  4.210
  4.220
  4.230
  4.230
Adjusted equity ratio
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186
  0.186

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -8
  -7
  -6
  -5
  -3
  -2
  -1
  1
  2
  3
  4
  6
  7
  9
  10
  12
  14
  15
  17
  19
  21
  23
  25
  28
  30
  33
  35
  38
  41
  44
Depreciation, amort., depletion, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
Funds from operations, $m
  -8
  -6
  -5
  -4
  -2
  -1
  1
  2
  3
  5
  6
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
  37
  40
  43
  46
  50
Change in working capital, $m
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
Cash from operations, $m
  -10
  -9
  -8
  -7
  -6
  -4
  -3
  -2
  0
  1
  2
  3
  5
  6
  8
  9
  11
  13
  15
  16
  18
  21
  23
  25
  27
  30
  32
  35
  38
  41
Maintenance CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
New CAPEX, $m
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from investing activities, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
Free cash flow, $m
  -11
  -10
  -9
  -8
  -7
  -6
  -4
  -3
  -2
  -1
  0
  1
  2
  4
  5
  6
  8
  9
  11
  13
  14
  16
  18
  20
  22
  24
  27
  29
  32
  34
Issuance/(repayment) of debt, $m
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
Issuance/(repurchase) of shares, $m
  9
  8
  7
  6
  5
  3
  2
  1
  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  
  13
  12
  11
  11
  10
  8
  8
  7
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
Total cash flow (excl. dividends), $m
  2
  2
  2
  3
  3
  3
  3
  3
  4
  5
  6
  8
  9
  11
  13
  14
  16
  18
  20
  22
  24
  26
  29
  31
  34
  36
  39
  42
  45
  49
Retained Cash Flow (-), $m
  -9
  -8
  -7
  -6
  -5
  -3
  -2
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
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
  -7
  -6
  -5
  -3
  -2
  0
  1
  2
  2
  4
  5
  6
  8
  9
  11
  12
  14
  16
  18
  20
  22
  24
  26
  29
  31
  34
  36
  39
  42
  45
Discount rate, %
  10.00
  10.50
  11.03
  11.58
  12.16
  12.76
  13.40
  14.07
  14.77
  15.51
  16.29
  17.10
  17.96
  18.86
  19.80
  20.79
  21.83
  22.92
  24.07
  25.27
  26.53
  27.86
  29.25
  30.72
  32.25
  33.86
  35.56
  37.33
  39.20
  41.16
PV of cash for distribution, $m
  -6
  -5
  -3
  -2
  -1
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  32.5
  12.5
  5.6
  2.9
  1.8
  1.3
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0
  1.0

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 (FPAY)

Valuation Ratios
P/E Ratio -0.3
Price to Sales 0.1
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -0.2
Price to Free Cash Flow -0.2
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 $67.046364 million for the last fiscal year's total revenue generated by FlexShopper. The default revenue input number comes from 0001 income statement of FlexShopper. 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 14.3% 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%, whose default value for FPAY is calculated based on our internal credit rating of FlexShopper, 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.
    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 79.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $21 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 15% for FlexShopper.

Corporate tax rate of 27% is the nominal tax rate for FlexShopper. 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 4.1%.

Life of production assets of 0.1 years is the average useful life of capital assets used in FlexShopper 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 25.5%. 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 - $6.323912 million for FlexShopper - 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 5.47 million for FlexShopper 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 at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
FPAY FlexShopper 0.720 0.29  str.sell
MIND Mitcham Indust 3.89 1.14  str.sell
EXTN Exterran 23.38 23.37  hold

COMPANY NEWS

▶ FlexShopper Provides Third Quarter 2018 Business Update   [Oct-03-18 08:30AM  GlobeNewswire]
▶ FlexShopper, Inc. Announces Closing of Public Offering   [Sep-28-18 02:10PM  GlobeNewswire]
▶ FlexShopper, Inc.¬†Awarded Patent for LTO System   [Sep-24-18 08:30AM  GlobeNewswire]
▶ FlexShopper Leans into Zimmerman as National AOR   [Apr-11-17 11:15AM  PR Newswire]
▶ FlexShopper, Inc. Raises $20 Million of Equity   [Jun-13-16 08:51AM  PR Newswire]

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