Intrinsic value of Cedar Fair, L.P. - FUN

Previous Close

$53.81

  Intrinsic Value

$6.73

stock screener

  Rating & Target

str. sell

-88%

Previous close

$53.81

 
Intrinsic value

$6.73

 
Up/down potential

-88%

 
Rating

str. sell

We calculate the intrinsic value of FUN 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 3.0

 

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, %
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
Revenue, $m
  1,477
  1,611
  1,750
  1,895
  2,046
  2,202
  2,365
  2,534
  2,710
  2,893
  3,083
  3,281
  3,486
  3,700
  3,924
  4,156
  4,399
  4,652
  4,916
  5,191
  5,479
  5,780
  6,095
  6,424
  6,768
  7,128
  7,505
  7,900
  8,314
  8,747
Variable operating expenses, $m
  1,147
  1,249
  1,355
  1,466
  1,580
  1,700
  1,824
  1,953
  2,087
  2,226
  2,349
  2,500
  2,657
  2,820
  2,990
  3,167
  3,352
  3,545
  3,746
  3,956
  4,175
  4,405
  4,645
  4,895
  5,158
  5,432
  5,720
  6,021
  6,336
  6,666
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
  1,147
  1,249
  1,355
  1,466
  1,580
  1,700
  1,824
  1,953
  2,087
  2,226
  2,349
  2,500
  2,657
  2,820
  2,990
  3,167
  3,352
  3,545
  3,746
  3,956
  4,175
  4,405
  4,645
  4,895
  5,158
  5,432
  5,720
  6,021
  6,336
  6,666
Operating income, $m
  330
  362
  395
  429
  465
  503
  541
  582
  623
  667
  734
  781
  830
  880
  934
  989
  1,047
  1,107
  1,170
  1,235
  1,304
  1,375
  1,450
  1,528
  1,610
  1,696
  1,786
  1,880
  1,978
  2,081
EBITDA, $m
  515
  561
  610
  660
  713
  767
  824
  883
  944
  1,008
  1,074
  1,143
  1,215
  1,289
  1,367
  1,448
  1,533
  1,621
  1,713
  1,809
  1,909
  2,014
  2,124
  2,238
  2,358
  2,484
  2,615
  2,753
  2,897
  3,048
Interest expense (income), $m
  82
  90
  88
  98
  108
  119
  130
  141
  153
  165
  178
  192
  205
  220
  235
  251
  267
  284
  301
  320
  339
  359
  380
  402
  425
  449
  474
  501
  528
  557
  587
Earnings before tax, $m
  240
  273
  297
  321
  346
  373
  400
  428
  458
  489
  542
  575
  610
  646
  683
  722
  763
  805
  850
  896
  944
  995
  1,048
  1,103
  1,161
  1,222
  1,285
  1,352
  1,421
  1,494
Tax expense, $m
  65
  74
  80
  87
  94
  101
  108
  116
  124
  132
  146
  155
  165
  174
  184
  195
  206
  217
  229
  242
  255
  269
  283
  298
  313
  330
  347
  365
  384
  403
Net income, $m
  175
  200
  217
  234
  253
  272
  292
  313
  334
  357
  396
  420
  445
  471
  499
  527
  557
  588
  620
  654
  689
  726
  765
  805
  848
  892
  938
  987
  1,037
  1,091

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
  2,218
  2,419
  2,628
  2,845
  3,072
  3,307
  3,551
  3,805
  4,069
  4,344
  4,629
  4,926
  5,235
  5,556
  5,891
  6,240
  6,605
  6,984
  7,381
  7,795
  8,227
  8,679
  9,151
  9,645
  10,162
  10,703
  11,269
  11,862
  12,483
  13,134
Adjusted assets (=assets-cash), $m
  2,218
  2,419
  2,628
  2,845
  3,072
  3,307
  3,551
  3,805
  4,069
  4,344
  4,629
  4,926
  5,235
  5,556
  5,891
  6,240
  6,605
  6,984
  7,381
  7,795
  8,227
  8,679
  9,151
  9,645
  10,162
  10,703
  11,269
  11,862
  12,483
  13,134
Revenue / Adjusted assets
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
  0.666
Average production assets, $m
  2,889
  3,151
  3,423
  3,707
  4,001
  4,308
  4,626
  4,957
  5,301
  5,658
  6,030
  6,417
  6,819
  7,238
  7,675
  8,129
  8,604
  9,098
  9,615
  10,154
  10,717
  11,306
  11,921
  12,565
  13,238
  13,943
  14,681
  15,453
  16,262
  17,110
Working capital, $m
  -148
  -161
  -175
  -190
  -205
  -220
  -237
  -253
  -271
  -289
  -308
  -328
  -349
  -370
  -392
  -416
  -440
  -465
  -492
  -519
  -548
  -578
  -609
  -642
  -677
  -713
  -751
  -790
  -831
  -875
Total debt, $m
  1,635
  1,816
  2,004
  2,200
  2,403
  2,615
  2,835
  3,064
  3,301
  3,548
  3,805
  4,072
  4,350
  4,640
  4,941
  5,255
  5,583
  5,925
  6,282
  6,654
  7,043
  7,450
  7,875
  8,320
  8,785
  9,272
  9,781
  10,315
  10,874
  11,460
Total liabilities, $m
  1,996
  2,177
  2,365
  2,561
  2,764
  2,976
  3,196
  3,425
  3,662
  3,909
  4,166
  4,433
  4,711
  5,001
  5,302
  5,616
  5,944
  6,286
  6,643
  7,015
  7,404
  7,811
  8,236
  8,681
  9,146
  9,633
  10,142
  10,676
  11,235
  11,821
Total equity, $m
  222
  242
  263
  285
  307
  331
  355
  381
  407
  434
  463
  493
  523
  556
  589
  624
  660
  698
  738
  779
  823
  868
  915
  965
  1,016
  1,070
  1,127
  1,186
  1,248
  1,313
Total liabilities and equity, $m
  2,218
  2,419
  2,628
  2,846
  3,071
  3,307
  3,551
  3,806
  4,069
  4,343
  4,629
  4,926
  5,234
  5,557
  5,891
  6,240
  6,604
  6,984
  7,381
  7,794
  8,227
  8,679
  9,151
  9,646
  10,162
  10,703
  11,269
  11,862
  12,483
  13,134
Debt-to-equity ratio
  7.370
  7.510
  7.630
  7.730
  7.820
  7.910
  7.980
  8.050
  8.110
  8.170
  8.220
  8.270
  8.310
  8.350
  8.390
  8.420
  8.450
  8.480
  8.510
  8.540
  8.560
  8.580
  8.610
  8.630
  8.640
  8.660
  8.680
  8.700
  8.710
  8.730
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  175
  200
  217
  234
  253
  272
  292
  313
  334
  357
  396
  420
  445
  471
  499
  527
  557
  588
  620
  654
  689
  726
  765
  805
  848
  892
  938
  987
  1,037
  1,091
Depreciation, amort., depletion, $m
  185
  200
  215
  231
  248
  265
  283
  302
  321
  341
  341
  363
  385
  409
  434
  459
  486
  514
  543
  574
  605
  639
  674
  710
  748
  788
  829
  873
  919
  967
Funds from operations, $m
  360
  399
  432
  465
  500
  537
  575
  614
  655
  698
  736
  782
  830
  880
  932
  986
  1,043
  1,102
  1,163
  1,228
  1,295
  1,365
  1,438
  1,515
  1,596
  1,680
  1,768
  1,860
  1,956
  2,057
Change in working capital, $m
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -31
  -33
  -34
  -36
  -38
  -39
  -41
  -43
Cash from operations, $m
  373
  413
  446
  480
  516
  553
  591
  631
  673
  716
  755
  802
  851
  902
  955
  1,010
  1,067
  1,127
  1,190
  1,255
  1,324
  1,395
  1,470
  1,548
  1,630
  1,716
  1,805
  1,899
  1,998
  2,101
Maintenance CAPEX, $m
  -149
  -163
  -178
  -193
  -209
  -226
  -243
  -261
  -280
  -299
  -320
  -341
  -363
  -385
  -409
  -434
  -459
  -486
  -514
  -543
  -574
  -605
  -639
  -674
  -710
  -748
  -788
  -829
  -873
  -919
New CAPEX, $m
  -250
  -261
  -272
  -283
  -295
  -306
  -318
  -331
  -344
  -357
  -372
  -387
  -402
  -419
  -436
  -455
  -474
  -495
  -516
  -539
  -563
  -589
  -615
  -644
  -673
  -705
  -738
  -772
  -809
  -848
Cash from investing activities, $m
  -399
  -424
  -450
  -476
  -504
  -532
  -561
  -592
  -624
  -656
  -692
  -728
  -765
  -804
  -845
  -889
  -933
  -981
  -1,030
  -1,082
  -1,137
  -1,194
  -1,254
  -1,318
  -1,383
  -1,453
  -1,526
  -1,601
  -1,682
  -1,767
Free cash flow, $m
  -26
  -12
  -5
  3
  11
  20
  29
  39
  49
  59
  64
  75
  86
  97
  109
  121
  134
  146
  159
  173
  187
  201
  216
  231
  247
  263
  280
  297
  315
  334
Issuance/(repayment) of debt, $m
  -28
  181
  188
  196
  204
  212
  220
  229
  238
  247
  257
  267
  278
  289
  302
  314
  328
  342
  357
  373
  389
  407
  425
  445
  465
  487
  510
  534
  559
  586
Issuance/(repurchase) of shares, $m
  46
  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  
  18
  181
  188
  196
  204
  212
  220
  229
  238
  247
  257
  267
  278
  289
  302
  314
  328
  342
  357
  373
  389
  407
  425
  445
  465
  487
  510
  534
  559
  586
Total cash flow (excl. dividends), $m
  -8
  168
  183
  199
  215
  232
  249
  268
  286
  306
  321
  342
  364
  387
  411
  435
  461
  488
  516
  545
  576
  608
  641
  676
  712
  750
  790
  831
  874
  920
Retained Cash Flow (-), $m
  -222
  -20
  -21
  -22
  -23
  -24
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -59
  -62
  -65
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
  -222
  148
  162
  177
  192
  208
  225
  242
  260
  279
  292
  312
  333
  355
  377
  401
  425
  450
  477
  504
  533
  563
  594
  626
  660
  696
  733
  772
  812
  855
Discount rate, %
  11.90
  12.50
  13.12
  13.78
  14.46
  15.19
  15.95
  16.74
  17.58
  18.46
  19.38
  20.35
  21.37
  22.44
  23.56
  24.74
  25.98
  27.28
  28.64
  30.07
  31.57
  33.15
  34.81
  36.55
  38.38
  40.30
  42.31
  44.43
  46.65
  48.98
PV of cash for distribution, $m
  -198
  117
  112
  106
  98
  89
  80
  70
  61
  51
  42
  34
  27
  21
  16
  12
  8
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Cedar Fair, L.P. is an operator of regional amusement parks. The Company operates within a segment of amusement/water parks with accompanying resort facilities. As of December 31, 2016, the Company owned approximately 11 amusement parks, two separately gated outdoor water parks, one indoor water park and five hotels. The amusement parks include Cedar Point, located on Lake Erie between Cleveland and Toledo in Sandusky, Ohio; Knott's Berry Farm, near Los Angeles, California; Canada's Wonderland, near Toronto, Canada; Kings Island, near Cincinnati, Ohio; Carowinds, in Charlotte, North Carolina; Dorney Park & Wildwater Kingdom (Dorney Park), in Allentown, Pennsylvania; Kings Dominion, near Richmond, Virginia; California's Great America, in Santa Clara, California; Valleyfair, near Minneapolis/St. Paul, Minnesota; Worlds of Fun, in Kansas City, Missouri, and Michigan's Adventure, in Muskegon, Michigan. It manages and operates Gilroy Gardens Family Theme Park in Gilroy, California.

FINANCIAL RATIOS  of  Cedar Fair, L.P. (FUN)

Valuation Ratios
P/E Ratio 17
Price to Sales 2.3
Price to Book 49.6
Price to Tangible Book
Price to Cash Flow 8.5
Price to Free Cash Flow 15.4
Growth Rates
Sales Growth Rate 4.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -8.5%
Cap. Spend. - 3 Yr. Gr. Rate 6.1%
Financial Strength
Quick Ratio 41
Current Ratio 0
LT Debt to Equity 2514.8%
Total Debt to Equity 2519.7%
Interest Coverage 4
Management Effectiveness
Return On Assets 12%
Ret/ On Assets - 3 Yr. Avg. 10.3%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity 301.7%
Return On Equity - 3 Yr. Avg. 178.9%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 91.7%
Gross Margin - 3 Yr. Avg. 91.6%
EBITDA Margin 35.9%
EBITDA Margin - 3 Yr. Avg. 31.1%
Operating Margin 24.6%
Oper. Margin - 3 Yr. Avg. 23.3%
Pre-Tax Margin 19.3%
Pre-Tax Margin - 3 Yr. Avg. 13.3%
Net Profit Margin 13.8%
Net Profit Margin - 3 Yr. Avg. 10.6%
Effective Tax Rate 28.5%
Eff/ Tax Rate - 3 Yr. Avg. 17.9%
Payout Ratio 105.1%

FUN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FUN stock intrinsic value calculation we used $1349 million for the last fiscal year's total revenue generated by Cedar Fair, L.P.. The default revenue input number comes from 0001 income statement of Cedar Fair, L.P.. 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 FUN stock valuation model: a) initial revenue growth rate of 9.5% 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 11.9%, whose default value for FUN is calculated based on our internal credit rating of Cedar Fair, L.P., 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 Cedar Fair, L.P..
    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 FUN stock the variable cost ratio is equal to 77.8%.

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 FUN 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 Cedar Fair, L.P..

Corporate tax rate of 27% is the nominal tax rate for Cedar Fair, L.P.. 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 FUN 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 FUN are equal to 195.6%.

Life of production assets of 17.7 years is the average useful life of capital assets used in Cedar Fair, L.P. 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 FUN is equal to -10%. 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 - $0 million for Cedar Fair, L.P. - 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 56.600 million for Cedar Fair, L.P. 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 Cedar Fair, L.P. at the current share price and the inputted number of shares is $3.0 billion.

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