Intrinsic value of Gaia, Inc. - GAIA

Previous Close

$9.24

  Intrinsic Value

$0.45

stock screener

  Rating & Target

str. sell

-95%

Previous close

$9.24

 
Intrinsic value

$0.45

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of GAIA 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 0.2

 

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, %
  46.90
  42.71
  38.94
  35.55
  32.49
  29.74
  27.27
  25.04
  23.04
  21.23
  19.61
  18.15
  16.83
  15.65
  14.59
  13.63
  12.76
  11.99
  11.29
  10.66
  10.09
  9.58
  9.13
  8.71
  8.34
  8.01
  7.71
  7.44
  7.19
  6.97
Revenue, $m
  65
  92
  128
  174
  230
  299
  380
  475
  585
  709
  848
  1,002
  1,170
  1,353
  1,551
  1,762
  1,987
  2,225
  2,477
  2,740
  3,017
  3,306
  3,608
  3,922
  4,250
  4,590
  4,944
  5,311
  5,693
  6,090
Variable operating expenses, $m
  106
  150
  206
  278
  366
  474
  602
  751
  923
  1,118
  1,332
  1,573
  1,838
  2,126
  2,436
  2,768
  3,121
  3,495
  3,890
  4,304
  4,739
  5,193
  5,667
  6,161
  6,675
  7,209
  7,765
  8,342
  8,942
  9,566
Fixed operating expenses, $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  9
  10
Total operating expenses, $m
  111
  155
  211
  283
  372
  480
  608
  757
  929
  1,124
  1,338
  1,579
  1,845
  2,133
  2,443
  2,775
  3,128
  3,502
  3,898
  4,312
  4,747
  5,201
  5,675
  6,169
  6,684
  7,218
  7,774
  8,351
  8,951
  9,576
Operating income, $m
  -47
  -63
  -83
  -109
  -142
  -181
  -228
  -282
  -345
  -416
  -490
  -578
  -674
  -779
  -892
  -1,013
  -1,141
  -1,277
  -1,421
  -1,572
  -1,730
  -1,895
  -2,067
  -2,247
  -2,434
  -2,628
  -2,830
  -3,040
  -3,258
  -3,485
EBITDA, $m
  -33
  -45
  -60
  -80
  -104
  -133
  -168
  -209
  -256
  -309
  -368
  -434
  -506
  -585
  -669
  -760
  -856
  -958
  -1,065
  -1,178
  -1,296
  -1,420
  -1,549
  -1,683
  -1,823
  -1,969
  -2,120
  -2,277
  -2,440
  -2,610
Interest expense (income), $m
  0
  1
  1
  2
  3
  5
  7
  9
  11
  14
  18
  22
  26
  31
  36
  42
  48
  55
  62
  69
  77
  86
  94
  104
  113
  123
  133
  144
  155
  167
  179
Earnings before tax, $m
  -48
  -64
  -86
  -113
  -147
  -188
  -236
  -293
  -359
  -433
  -512
  -604
  -705
  -815
  -934
  -1,061
  -1,196
  -1,339
  -1,490
  -1,649
  -1,815
  -1,989
  -2,171
  -2,360
  -2,557
  -2,761
  -2,974
  -3,195
  -3,425
  -3,664
Tax expense, $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
Net income, $m
  -48
  -64
  -86
  -113
  -147
  -188
  -236
  -293
  -359
  -433
  -512
  -604
  -705
  -815
  -934
  -1,061
  -1,196
  -1,339
  -1,490
  -1,649
  -1,815
  -1,989
  -2,171
  -2,360
  -2,557
  -2,761
  -2,974
  -3,195
  -3,425
  -3,664

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
  132
  189
  263
  356
  472
  612
  779
  974
  1,198
  1,452
  1,737
  2,053
  2,398
  2,773
  3,178
  3,611
  4,072
  4,560
  5,075
  5,616
  6,183
  6,775
  7,394
  8,038
  8,708
  9,406
  10,131
  10,884
  11,667
  12,480
Adjusted assets (=assets-cash), $m
  132
  189
  263
  356
  472
  612
  779
  974
  1,198
  1,452
  1,737
  2,053
  2,398
  2,773
  3,178
  3,611
  4,072
  4,560
  5,075
  5,616
  6,183
  6,775
  7,394
  8,038
  8,708
  9,406
  10,131
  10,884
  11,667
  12,480
Revenue / Adjusted assets
  0.492
  0.487
  0.487
  0.489
  0.487
  0.489
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
  0.488
Average production assets, $m
  71
  102
  142
  192
  255
  330
  420
  526
  647
  784
  938
  1,108
  1,294
  1,497
  1,715
  1,949
  2,198
  2,461
  2,739
  3,031
  3,337
  3,657
  3,990
  4,338
  4,700
  5,077
  5,468
  5,874
  6,297
  6,736
Working capital, $m
  -12
  -18
  -25
  -34
  -44
  -58
  -73
  -92
  -113
  -137
  -164
  -193
  -226
  -261
  -299
  -340
  -384
  -429
  -478
  -529
  -582
  -638
  -696
  -757
  -820
  -886
  -954
  -1,025
  -1,099
  -1,175
Total debt, $m
  25
  41
  62
  88
  121
  161
  209
  264
  328
  401
  482
  572
  670
  777
  893
  1,016
  1,147
  1,286
  1,433
  1,587
  1,749
  1,918
  2,094
  2,278
  2,469
  2,667
  2,874
  3,089
  3,312
  3,544
Total liabilities, $m
  38
  54
  75
  101
  134
  174
  222
  278
  341
  414
  495
  585
  683
  790
  906
  1,029
  1,160
  1,300
  1,446
  1,600
  1,762
  1,931
  2,107
  2,291
  2,482
  2,681
  2,887
  3,102
  3,325
  3,557
Total equity, $m
  95
  135
  188
  255
  337
  438
  557
  696
  857
  1,039
  1,242
  1,468
  1,715
  1,983
  2,272
  2,582
  2,911
  3,260
  3,628
  4,015
  4,421
  4,844
  5,286
  5,747
  6,226
  6,725
  7,243
  7,782
  8,342
  8,923
Total liabilities and equity, $m
  133
  189
  263
  356
  471
  612
  779
  974
  1,198
  1,453
  1,737
  2,053
  2,398
  2,773
  3,178
  3,611
  4,071
  4,560
  5,074
  5,615
  6,183
  6,775
  7,393
  8,038
  8,708
  9,406
  10,130
  10,884
  11,667
  12,480
Debt-to-equity ratio
  0.260
  0.300
  0.330
  0.350
  0.360
  0.370
  0.370
  0.380
  0.380
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
  0.400
Adjusted equity ratio
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715
  0.715

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -48
  -64
  -86
  -113
  -147
  -188
  -236
  -293
  -359
  -433
  -512
  -604
  -705
  -815
  -934
  -1,061
  -1,196
  -1,339
  -1,490
  -1,649
  -1,815
  -1,989
  -2,171
  -2,360
  -2,557
  -2,761
  -2,974
  -3,195
  -3,425
  -3,664
Depreciation, amort., depletion, $m
  14
  18
  23
  30
  38
  48
  59
  73
  89
  107
  122
  144
  168
  194
  223
  253
  285
  320
  356
  394
  433
  475
  518
  563
  610
  659
  710
  763
  818
  875
Funds from operations, $m
  -33
  -46
  -62
  -83
  -109
  -140
  -177
  -220
  -270
  -327
  -390
  -460
  -537
  -621
  -711
  -808
  -911
  -1,020
  -1,134
  -1,255
  -1,382
  -1,514
  -1,652
  -1,796
  -1,946
  -2,102
  -2,264
  -2,432
  -2,607
  -2,789
Change in working capital, $m
  -4
  -5
  -7
  -9
  -11
  -13
  -16
  -18
  -21
  -24
  -27
  -30
  -33
  -35
  -38
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -58
  -61
  -63
  -66
  -68
  -71
  -74
  -77
Cash from operations, $m
  -29
  -41
  -55
  -74
  -98
  -127
  -161
  -202
  -249
  -303
  -363
  -431
  -505
  -586
  -673
  -767
  -867
  -974
  -1,086
  -1,204
  -1,329
  -1,458
  -1,594
  -1,736
  -1,883
  -2,036
  -2,196
  -2,361
  -2,534
  -2,712
Maintenance CAPEX, $m
  -6
  -9
  -13
  -18
  -25
  -33
  -43
  -55
  -68
  -84
  -102
  -122
  -144
  -168
  -194
  -223
  -253
  -285
  -320
  -356
  -394
  -433
  -475
  -518
  -563
  -610
  -659
  -710
  -763
  -818
New CAPEX, $m
  -23
  -31
  -40
  -50
  -62
  -76
  -90
  -105
  -121
  -137
  -154
  -170
  -186
  -203
  -218
  -234
  -249
  -263
  -278
  -292
  -306
  -320
  -334
  -348
  -362
  -376
  -391
  -407
  -423
  -439
Cash from investing activities, $m
  -29
  -40
  -53
  -68
  -87
  -109
  -133
  -160
  -189
  -221
  -256
  -292
  -330
  -371
  -412
  -457
  -502
  -548
  -598
  -648
  -700
  -753
  -809
  -866
  -925
  -986
  -1,050
  -1,117
  -1,186
  -1,257
Free cash flow, $m
  -59
  -80
  -108
  -143
  -185
  -235
  -294
  -362
  -438
  -524
  -619
  -722
  -835
  -956
  -1,086
  -1,223
  -1,369
  -1,522
  -1,683
  -1,852
  -2,028
  -2,212
  -2,403
  -2,602
  -2,808
  -3,023
  -3,246
  -3,478
  -3,719
  -3,969
Issuance/(repayment) of debt, $m
  12
  16
  21
  27
  33
  40
  48
  56
  64
  73
  81
  90
  98
  107
  115
  123
  131
  139
  147
  154
  162
  169
  176
  184
  191
  199
  207
  215
  223
  232
Issuance/(repurchase) of shares, $m
  78
  105
  138
  180
  229
  288
  356
  433
  519
  615
  715
  830
  952
  1,084
  1,223
  1,370
  1,526
  1,688
  1,858
  2,036
  2,221
  2,413
  2,613
  2,820
  3,036
  3,260
  3,492
  3,734
  3,985
  4,246
Cash from financing (excl. dividends), $m  
  90
  121
  159
  207
  262
  328
  404
  489
  583
  688
  796
  920
  1,050
  1,191
  1,338
  1,493
  1,657
  1,827
  2,005
  2,190
  2,383
  2,582
  2,789
  3,004
  3,227
  3,459
  3,699
  3,949
  4,208
  4,478
Total cash flow (excl. dividends), $m
  31
  40
  51
  63
  77
  93
  109
  127
  145
  164
  178
  197
  216
  234
  253
  270
  288
  305
  322
  338
  354
  370
  386
  402
  419
  436
  453
  471
  489
  508
Retained Cash Flow (-), $m
  -78
  -105
  -138
  -180
  -229
  -288
  -356
  -433
  -519
  -615
  -715
  -830
  -952
  -1,084
  -1,223
  -1,370
  -1,526
  -1,688
  -1,858
  -2,036
  -2,221
  -2,413
  -2,613
  -2,820
  -3,036
  -3,260
  -3,492
  -3,734
  -3,985
  -4,246
Prev. year cash balance distribution, $m
  17
  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
  -30
  -64
  -87
  -116
  -152
  -195
  -246
  -306
  -374
  -451
  -538
  -633
  -737
  -849
  -970
  -1,100
  -1,238
  -1,383
  -1,537
  -1,698
  -1,867
  -2,043
  -2,227
  -2,418
  -2,617
  -2,824
  -3,040
  -3,263
  -3,496
  -3,737
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
  -28
  -59
  -76
  -96
  -118
  -142
  -167
  -191
  -215
  -237
  -255
  -270
  -280
  -285
  -285
  -280
  -269
  -255
  -237
  -216
  -193
  -169
  -146
  -123
  -102
  -82
  -65
  -50
  -38
  -28
Current shareholders' claim on cash, %
  62.8
  40.7
  27.0
  18.4
  12.7
  9.0
  6.4
  4.6
  3.4
  2.5
  1.9
  1.4
  1.1
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0

Gaia, Inc., formerly Gaiam, Inc., is engaged in providing global digital video subscription service. The Company is a global digital video streaming service and online community delivering curated media to its subscribers in over 120 countries. It provides its members access to approximately 7,000 video titles. Its video content is available to its subscribers through online digital streaming on virtually any Internet-connected device on a commercial-free basis. In addition to streaming, the Company's subscribers can download its video content to their devices, so they can view its content without being actively connected to the Internet. Through the Gaia service, the Company's subscribers have access to a library of inspiring films, personal growth-related content, documentaries, interviews, yoga classes and fitness. The Company has also created a fitness and yoga-focused version of its video service. The Company also operates a digital versatile disc (DVD) subscription club.

FINANCIAL RATIOS  of  Gaia, Inc. (GAIA)

Valuation Ratios
P/E Ratio 1.6
Price to Sales 8.2
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow -9.3
Price to Free Cash Flow -6.4
Growth Rates
Sales Growth Rate 30.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.7%
Cap. Spend. - 3 Yr. Gr. Rate 18.5%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 73.7%
Ret/ On Assets - 3 Yr. Avg. 19.7%
Return On Total Capital 95.6%
Ret/ On T. Cap. - 3 Yr. Avg. 24.7%
Return On Equity 95.6%
Return On Equity - 3 Yr. Avg. 24.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 82.4%
Gross Margin - 3 Yr. Avg. 82.9%
EBITDA Margin -76.5%
EBITDA Margin - 3 Yr. Avg. -62.1%
Operating Margin -100%
Oper. Margin - 3 Yr. Avg. -86.7%
Pre-Tax Margin -100%
Pre-Tax Margin - 3 Yr. Avg. -86.7%
Net Profit Margin 511.8%
Net Profit Margin - 3 Yr. Avg. 115.1%
Effective Tax Rate 35.3%
Eff/ Tax Rate - 3 Yr. Avg. 11.8%
Payout Ratio 0%

GAIA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GAIA stock intrinsic value calculation we used $44 million for the last fiscal year's total revenue generated by Gaia, Inc.. The default revenue input number comes from 0001 income statement of Gaia, 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 GAIA stock valuation model: a) initial revenue growth rate of 46.9% 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 GAIA is calculated based on our internal credit rating of Gaia, 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 Gaia, 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 GAIA stock the variable cost ratio is equal to 168.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $5 million in the base year in the intrinsic value calculation for GAIA 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 Gaia, Inc..

Corporate tax rate of 27% is the nominal tax rate for Gaia, 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 GAIA 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 GAIA are equal to 110.6%.

Life of production assets of 7.7 years is the average useful life of capital assets used in Gaia, 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 GAIA is equal to -19.3%. 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 - $81.465 million for Gaia, 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 17.900 million for Gaia, 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 Gaia, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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