Intrinsic value of FRP Holdings, Inc. - FRPH

Previous Close

$46.32

  Intrinsic Value

$11.37

stock screener

  Rating & Target

str. sell

-75%

Previous close

$46.32

 
Intrinsic value

$11.37

 
Up/down potential

-75%

 
Rating

str. sell

We calculate the intrinsic value of FRPH 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 0.5

 

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, %
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
  6.09
  5.98
  5.89
  5.80
  5.72
  5.65
  5.58
  5.52
  5.47
  5.42
Revenue, $m
  49
  55
  62
  69
  77
  85
  93
  102
  111
  120
  130
  140
  151
  162
  173
  185
  198
  211
  224
  238
  252
  267
  283
  300
  317
  335
  353
  373
  393
  415
Variable operating expenses, $m
  24
  24
  24
  25
  25
  25
  25
  25
  26
  26
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
Fixed operating expenses, $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 operating expenses, $m
  24
  24
  24
  25
  25
  25
  25
  25
  26
  26
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
Operating income, $m
  25
  31
  38
  45
  52
  60
  68
  77
  85
  95
  127
  137
  148
  158
  169
  181
  193
  206
  219
  232
  247
  261
  277
  293
  309
  327
  345
  364
  384
  405
EBITDA, $m
  65
  73
  82
  91
  101
  112
  123
  134
  146
  159
  171
  185
  199
  213
  228
  244
  260
  277
  295
  313
  332
  352
  373
  394
  417
  441
  465
  491
  518
  546
Interest expense (income), $m
  0
  6
  7
  9
  11
  13
  15
  17
  19
  21
  24
  26
  29
  32
  34
  37
  40
  43
  47
  50
  54
  57
  61
  65
  69
  74
  78
  83
  88
  93
  98
Earnings before tax, $m
  19
  24
  29
  34
  39
  45
  51
  58
  64
  71
  101
  108
  116
  124
  132
  141
  150
  159
  169
  179
  189
  200
  212
  224
  236
  249
  262
  277
  291
  307
Tax expense, $m
  5
  6
  8
  9
  11
  12
  14
  16
  17
  19
  27
  29
  31
  33
  36
  38
  40
  43
  46
  48
  51
  54
  57
  60
  64
  67
  71
  75
  79
  83
Net income, $m
  14
  17
  21
  25
  29
  33
  37
  42
  47
  52
  74
  79
  85
  90
  97
  103
  109
  116
  123
  131
  138
  146
  154
  163
  172
  182
  192
  202
  213
  224

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
  476
  538
  604
  674
  748
  825
  906
  990
  1,078
  1,169
  1,264
  1,363
  1,466
  1,573
  1,684
  1,799
  1,919
  2,044
  2,174
  2,309
  2,450
  2,597
  2,749
  2,909
  3,075
  3,249
  3,430
  3,620
  3,818
  4,025
Adjusted assets (=assets-cash), $m
  476
  538
  604
  674
  748
  825
  906
  990
  1,078
  1,169
  1,264
  1,363
  1,466
  1,573
  1,684
  1,799
  1,919
  2,044
  2,174
  2,309
  2,450
  2,597
  2,749
  2,909
  3,075
  3,249
  3,430
  3,620
  3,818
  4,025
Revenue / Adjusted assets
  0.103
  0.102
  0.103
  0.102
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
  0.103
Average production assets, $m
  275
  311
  349
  389
  432
  476
  523
  572
  622
  675
  730
  787
  847
  908
  972
  1,039
  1,108
  1,180
  1,255
  1,333
  1,415
  1,499
  1,588
  1,680
  1,776
  1,876
  1,981
  2,090
  2,204
  2,324
Working capital, $m
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  15
Total debt, $m
  114
  140
  168
  197
  228
  260
  294
  329
  365
  404
  443
  485
  528
  572
  619
  667
  717
  769
  824
  880
  939
  1,000
  1,064
  1,131
  1,200
  1,273
  1,349
  1,428
  1,511
  1,597
Total liabilities, $m
  199
  225
  253
  282
  313
  345
  379
  414
  451
  489
  529
  570
  613
  658
  704
  752
  802
  854
  909
  965
  1,024
  1,085
  1,149
  1,216
  1,285
  1,358
  1,434
  1,513
  1,596
  1,682
Total equity, $m
  277
  313
  352
  392
  435
  480
  527
  576
  627
  681
  736
  793
  853
  915
  980
  1,047
  1,117
  1,190
  1,265
  1,344
  1,426
  1,511
  1,600
  1,693
  1,790
  1,891
  1,996
  2,107
  2,222
  2,342
Total liabilities and equity, $m
  476
  538
  605
  674
  748
  825
  906
  990
  1,078
  1,170
  1,265
  1,363
  1,466
  1,573
  1,684
  1,799
  1,919
  2,044
  2,174
  2,309
  2,450
  2,596
  2,749
  2,909
  3,075
  3,249
  3,430
  3,620
  3,818
  4,024
Debt-to-equity ratio
  0.410
  0.450
  0.480
  0.500
  0.520
  0.540
  0.560
  0.570
  0.580
  0.590
  0.600
  0.610
  0.620
  0.630
  0.630
  0.640
  0.640
  0.650
  0.650
  0.650
  0.660
  0.660
  0.670
  0.670
  0.670
  0.670
  0.680
  0.680
  0.680
  0.680
Adjusted equity ratio
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582
  0.582

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  14
  17
  21
  25
  29
  33
  37
  42
  47
  52
  74
  79
  85
  90
  97
  103
  109
  116
  123
  131
  138
  146
  154
  163
  172
  182
  192
  202
  213
  224
Depreciation, amort., depletion, $m
  40
  42
  44
  47
  49
  52
  55
  58
  61
  64
  44
  48
  51
  55
  59
  63
  67
  72
  76
  81
  86
  91
  96
  102
  108
  114
  120
  127
  134
  141
Funds from operations, $m
  54
  59
  65
  71
  78
  85
  92
  100
  107
  116
  118
  127
  136
  146
  155
  166
  177
  188
  199
  211
  224
  237
  251
  265
  280
  295
  312
  329
  346
  365
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  53
  59
  65
  71
  78
  85
  92
  99
  107
  115
  118
  126
  136
  145
  155
  165
  176
  187
  199
  211
  223
  236
  250
  264
  279
  295
  311
  328
  345
  364
Maintenance CAPEX, $m
  -15
  -17
  -19
  -21
  -24
  -26
  -29
  -32
  -35
  -38
  -41
  -44
  -48
  -51
  -55
  -59
  -63
  -67
  -72
  -76
  -81
  -86
  -91
  -96
  -102
  -108
  -114
  -120
  -127
  -134
New CAPEX, $m
  -34
  -36
  -38
  -40
  -42
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -81
  -85
  -88
  -92
  -96
  -100
  -105
  -109
  -114
  -120
Cash from investing activities, $m
  -49
  -53
  -57
  -61
  -66
  -71
  -76
  -81
  -86
  -91
  -96
  -101
  -107
  -113
  -119
  -126
  -132
  -139
  -147
  -154
  -162
  -171
  -179
  -188
  -198
  -208
  -219
  -229
  -241
  -254
Free cash flow, $m
  5
  6
  8
  10
  12
  14
  16
  19
  22
  25
  22
  25
  29
  32
  36
  40
  44
  48
  52
  57
  61
  66
  71
  76
  81
  87
  92
  98
  104
  111
Issuance/(repayment) of debt, $m
  24
  26
  28
  29
  31
  32
  34
  35
  37
  38
  40
  41
  43
  45
  46
  48
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  79
  83
  87
Issuance/(repurchase) of shares, $m
  20
  19
  18
  16
  14
  12
  10
  7
  4
  1
  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  
  44
  45
  46
  45
  45
  44
  44
  42
  41
  39
  40
  41
  43
  45
  46
  48
  50
  52
  54
  56
  59
  61
  64
  67
  70
  73
  76
  79
  83
  87
Total cash flow (excl. dividends), $m
  48
  51
  53
  55
  56
  58
  60
  61
  63
  65
  62
  66
  72
  77
  82
  88
  94
  100
  107
  113
  120
  127
  135
  143
  151
  159
  168
  178
  187
  197
Retained Cash Flow (-), $m
  -33
  -36
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -93
  -97
  -101
  -106
  -110
  -115
  -121
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
  15
  15
  15
  14
  14
  13
  13
  12
  12
  11
  6
  9
  12
  15
  18
  21
  24
  27
  31
  35
  38
  42
  46
  50
  54
  58
  63
  67
  72
  77
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  14
  13
  12
  11
  10
  9
  7
  7
  6
  5
  2
  3
  3
  3
  3
  3
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  95.9
  92.6
  89.9
  87.8
  86.2
  85.0
  84.1
  83.5
  83.2
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
  83.1
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FRP Holdings, Inc. is a holding company engaged in various real estate businesses. The Company conducts its business through its subsidiaries, FRP Maryland, Inc., FRP Development Corp. and Florida Rock Properties, Inc. The segments of the Company include leasing and management of warehouse and office building owned by the Company (the Asset Management Segment), leasing and management of mining royalty land owned by the Company (the Mining Royalty Lands Segment) and real property acquisition, entitlement, development and construction primarily for warehouse and office buildings (the Land Development and Construction Segment). The Company's Asset Management Segment owns leases and manages warehouse and office buildings. Its Mining Royalty Lands Segment owns several properties comprising approximately 15,000 acres under lease for mining rents or royalties. Its Land Development and Construction Segment owns and monitors the parcels of land that are in various stages of development.

FINANCIAL RATIOS  of  FRP Holdings, Inc. (FRPH)

Valuation Ratios
P/E Ratio 229.5
Price to Sales 45.9
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 76.5
Price to Free Cash Flow 459
Growth Rates
Sales Growth Rate -73%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -82.1%
Cap. Spend. - 3 Yr. Gr. Rate -23.4%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 18.1%
Total Debt to Equity 20.6%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.8%
Ret/ On Assets - 3 Yr. Avg. 3%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 3.1%
Return On Equity 1%
Return On Equity - 3 Yr. Avg. 3.8%
Asset Turnover 0
Profitability Ratios
Gross Margin 60%
Gross Margin - 3 Yr. Avg. 59.8%
EBITDA Margin 50%
EBITDA Margin - 3 Yr. Avg. 62.7%
Operating Margin 40%
Oper. Margin - 3 Yr. Avg. 40.1%
Pre-Tax Margin 30%
Pre-Tax Margin - 3 Yr. Avg. 37.5%
Net Profit Margin 20%
Net Profit Margin - 3 Yr. Avg. 25.1%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 37.8%
Payout Ratio 0%

FRPH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FRPH stock intrinsic value calculation we used $43 million for the last fiscal year's total revenue generated by FRP Holdings, Inc.. The default revenue input number comes from 0001 income statement of FRP Holdings, 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 FRPH stock valuation model: a) initial revenue growth rate of 14% 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 5.8%, whose default value for FRPH is calculated based on our internal credit rating of FRP Holdings, 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 FRP Holdings, 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 FRPH stock the variable cost ratio is equal to 55.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for FRPH 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 6.5% for FRP Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for FRP Holdings, 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 FRPH 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 FRPH are equal to 560.6%.

Life of production assets of 16.5 years is the average useful life of capital assets used in FRP Holdings, 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 FRPH is equal to 3.7%. 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 - $243.53 million for FRP Holdings, 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 9.969 million for FRP Holdings, 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 FRP Holdings, Inc. at the current share price and the inputted number of shares is $0.5 billion.

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