Intrinsic value of Acushnet Holdings Corp. - GOLF

Previous Close

$24.48

  Intrinsic Value

$24.51

stock screener

  Rating & Target

hold

0%

Previous close

$24.48

 
Intrinsic value

$24.51

 
Up/down potential

0%

 
Rating

hold

We calculate the intrinsic value of GOLF 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 1.8

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  1,667
  1,705
  1,749
  1,798
  1,853
  1,912
  1,977
  2,048
  2,124
  2,205
  2,293
  2,386
  2,485
  2,590
  2,702
  2,820
  2,946
  3,078
  3,218
  3,366
  3,522
  3,687
  3,860
  4,043
  4,235
  4,438
  4,651
  4,875
  5,112
  5,360
Variable operating expenses, $m
  1,487
  1,520
  1,557
  1,599
  1,645
  1,696
  1,751
  1,811
  1,876
  1,945
  1,951
  2,030
  2,114
  2,204
  2,299
  2,400
  2,506
  2,619
  2,738
  2,864
  2,997
  3,137
  3,284
  3,440
  3,604
  3,776
  3,958
  4,149
  4,349
  4,561
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
  1,487
  1,520
  1,557
  1,599
  1,645
  1,696
  1,751
  1,811
  1,876
  1,945
  1,951
  2,030
  2,114
  2,204
  2,299
  2,400
  2,506
  2,619
  2,738
  2,864
  2,997
  3,137
  3,284
  3,440
  3,604
  3,776
  3,958
  4,149
  4,349
  4,561
Operating income, $m
  180
  185
  192
  199
  207
  216
  226
  237
  248
  260
  342
  356
  370
  386
  403
  421
  439
  459
  480
  502
  525
  550
  576
  603
  631
  662
  693
  727
  762
  799
EBITDA, $m
  274
  281
  288
  296
  305
  315
  325
  337
  350
  363
  377
  393
  409
  426
  445
  464
  485
  507
  530
  554
  580
  607
  635
  665
  697
  730
  766
  802
  841
  882
Interest expense (income), $m
  64
  21
  22
  23
  24
  25
  26
  28
  30
  32
  34
  36
  38
  40
  43
  46
  49
  52
  55
  59
  62
  66
  70
  75
  79
  84
  89
  95
  100
  106
  112
Earnings before tax, $m
  159
  164
  169
  176
  182
  190
  198
  207
  216
  226
  306
  318
  330
  343
  357
  372
  387
  404
  421
  439
  459
  479
  501
  523
  547
  573
  599
  627
  656
  687
Tax expense, $m
  43
  44
  46
  47
  49
  51
  53
  56
  58
  61
  83
  86
  89
  93
  96
  100
  105
  109
  114
  119
  124
  129
  135
  141
  148
  155
  162
  169
  177
  185
Net income, $m
  116
  120
  124
  128
  133
  139
  145
  151
  158
  165
  223
  232
  241
  250
  261
  271
  283
  295
  307
  321
  335
  350
  366
  382
  400
  418
  437
  458
  479
  501

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
  1,725
  1,765
  1,810
  1,861
  1,918
  1,980
  2,047
  2,120
  2,199
  2,283
  2,373
  2,470
  2,572
  2,681
  2,797
  2,919
  3,049
  3,186
  3,331
  3,484
  3,646
  3,816
  3,996
  4,185
  4,384
  4,594
  4,815
  5,047
  5,292
  5,549
Adjusted assets (=assets-cash), $m
  1,725
  1,765
  1,810
  1,861
  1,918
  1,980
  2,047
  2,120
  2,199
  2,283
  2,373
  2,470
  2,572
  2,681
  2,797
  2,919
  3,049
  3,186
  3,331
  3,484
  3,646
  3,816
  3,996
  4,185
  4,384
  4,594
  4,815
  5,047
  5,292
  5,549
Revenue / Adjusted assets
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
  0.966
Average production assets, $m
  583
  597
  612
  629
  648
  669
  692
  717
  743
  772
  802
  835
  870
  907
  946
  987
  1,031
  1,077
  1,126
  1,178
  1,233
  1,290
  1,351
  1,415
  1,482
  1,553
  1,628
  1,706
  1,789
  1,876
Working capital, $m
  382
  390
  400
  412
  424
  438
  453
  469
  486
  505
  525
  546
  569
  593
  619
  646
  675
  705
  737
  771
  807
  844
  884
  926
  970
  1,016
  1,065
  1,116
  1,171
  1,227
Total debt, $m
  399
  418
  439
  463
  490
  519
  551
  585
  622
  662
  705
  750
  798
  850
  904
  962
  1,023
  1,088
  1,156
  1,228
  1,304
  1,384
  1,469
  1,558
  1,652
  1,751
  1,855
  1,964
  2,079
  2,200
Total liabilities, $m
  813
  831
  853
  877
  903
  932
  964
  999
  1,036
  1,075
  1,118
  1,163
  1,212
  1,263
  1,317
  1,375
  1,436
  1,501
  1,569
  1,641
  1,717
  1,797
  1,882
  1,971
  2,065
  2,164
  2,268
  2,377
  2,492
  2,613
Total equity, $m
  913
  934
  958
  985
  1,014
  1,047
  1,083
  1,122
  1,163
  1,208
  1,255
  1,306
  1,361
  1,418
  1,480
  1,544
  1,613
  1,686
  1,762
  1,843
  1,929
  2,019
  2,114
  2,214
  2,319
  2,430
  2,547
  2,670
  2,799
  2,935
Total liabilities and equity, $m
  1,726
  1,765
  1,811
  1,862
  1,917
  1,979
  2,047
  2,121
  2,199
  2,283
  2,373
  2,469
  2,573
  2,681
  2,797
  2,919
  3,049
  3,187
  3,331
  3,484
  3,646
  3,816
  3,996
  4,185
  4,384
  4,594
  4,815
  5,047
  5,291
  5,548
Debt-to-equity ratio
  0.440
  0.450
  0.460
  0.470
  0.480
  0.500
  0.510
  0.520
  0.540
  0.550
  0.560
  0.570
  0.590
  0.600
  0.610
  0.620
  0.630
  0.650
  0.660
  0.670
  0.680
  0.690
  0.690
  0.700
  0.710
  0.720
  0.730
  0.740
  0.740
  0.750
Adjusted equity ratio
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529
  0.529

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  116
  120
  124
  128
  133
  139
  145
  151
  158
  165
  223
  232
  241
  250
  261
  271
  283
  295
  307
  321
  335
  350
  366
  382
  400
  418
  437
  458
  479
  501
Depreciation, amort., depletion, $m
  95
  95
  96
  97
  97
  98
  99
  101
  102
  103
  36
  37
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
  60
  63
  66
  69
  72
  76
  79
  83
Funds from operations, $m
  211
  215
  220
  225
  231
  237
  244
  251
  260
  268
  259
  269
  279
  291
  302
  315
  328
  342
  357
  373
  389
  407
  425
  445
  465
  487
  509
  533
  558
  584
Change in working capital, $m
  7
  9
  10
  11
  12
  14
  15
  16
  17
  19
  20
  21
  23
  24
  26
  27
  29
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  51
  54
  57
Cash from operations, $m
  203
  206
  209
  214
  218
  223
  229
  235
  242
  250
  239
  248
  257
  266
  277
  288
  300
  312
  325
  339
  354
  369
  386
  403
  421
  440
  460
  482
  504
  528
Maintenance CAPEX, $m
  -25
  -26
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -34
  -36
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -76
  -79
New CAPEX, $m
  -12
  -13
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
Cash from investing activities, $m
  -37
  -39
  -41
  -44
  -47
  -50
  -53
  -56
  -59
  -62
  -65
  -69
  -72
  -75
  -79
  -83
  -88
  -92
  -97
  -102
  -107
  -113
  -118
  -124
  -130
  -137
  -144
  -151
  -159
  -166
Free cash flow, $m
  166
  167
  168
  169
  171
  174
  177
  180
  184
  188
  174
  179
  185
  191
  198
  205
  212
  220
  228
  237
  247
  257
  268
  279
  291
  304
  317
  331
  346
  362
Issuance/(repayment) of debt, $m
  16
  19
  21
  24
  27
  29
  32
  34
  37
  40
  43
  45
  48
  51
  54
  58
  61
  65
  68
  72
  76
  80
  85
  89
  94
  99
  104
  109
  115
  121
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  16
  19
  21
  24
  27
  29
  32
  34
  37
  40
  43
  45
  48
  51
  54
  58
  61
  65
  68
  72
  76
  80
  85
  89
  94
  99
  104
  109
  115
  121
Total cash flow (excl. dividends), $m
  182
  186
  189
  193
  198
  203
  208
  214
  221
  228
  217
  225
  233
  242
  252
  262
  273
  285
  297
  310
  323
  337
  352
  368
  385
  403
  421
  441
  461
  483
Retained Cash Flow (-), $m
  -18
  -21
  -24
  -27
  -30
  -33
  -36
  -39
  -42
  -45
  -48
  -51
  -54
  -58
  -61
  -65
  -69
  -73
  -77
  -81
  -85
  -90
  -95
  -100
  -105
  -111
  -117
  -123
  -129
  -136
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
  164
  165
  165
  166
  168
  170
  173
  176
  179
  183
  169
  174
  179
  185
  191
  197
  205
  212
  220
  229
  238
  247
  257
  268
  280
  292
  304
  318
  332
  347
Discount rate, %
  4.60
  4.83
  5.07
  5.33
  5.59
  5.87
  6.16
  6.47
  6.80
  7.14
  7.49
  7.87
  8.26
  8.67
  9.11
  9.56
  10.04
  10.54
  11.07
  11.62
  12.21
  12.82
  13.46
  14.13
  14.84
  15.58
  16.36
  17.17
  18.03
  18.93
PV of cash for distribution, $m
  157
  150
  142
  135
  128
  121
  114
  106
  99
  92
  76
  70
  64
  58
  52
  46
  40
  35
  30
  25
  21
  17
  14
  11
  9
  7
  5
  4
  3
  2
Current shareholders' claim on cash, %
  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
  100.0

Acushnet Holdings Corp. is engaged in the design, development, manufacture and distribution of golf products. The Company is engaged in various product categories, such as golf clubs, wedges, putters, golf gloves, golf gear and golf wear. The Company operates in four segments: Titleist Golf Balls, Titleist Golf Clubs, Titleist Golf Gear and FootJoy Golf Wear. The company's Titleist golf ball segment is engaged in designing and manufacturing a golf ball. It sells Titleist Pro V1. The Company also designs, manufactures and sells other golf balls under the Titleist brand, such as NXT Tour, Velocity and DT TruSoft, as well as under the Pinnacle brand. The Company designs, assembles and sells golf clubs (drivers, fairways, hybrids and irons) under the Titleist brand, wedges under the Vokey Design brand, and putters under the Scotty Cameron brand. Titleist golf clubs, Vokey Design wedges and Scotty Cameron putters are used by the players.

FINANCIAL RATIOS  of  Acushnet Holdings Corp. (GOLF)

Valuation Ratios
P/E Ratio 40.3
Price to Sales 1.2
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow 17.3
Price to Free Cash Flow 21.1
Growth Rates
Sales Growth Rate 4.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -17.4%
Cap. Spend. - 3 Yr. Gr. Rate -16.2%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 47.4%
Total Debt to Equity 55.7%
Interest Coverage 2
Management Effectiveness
Return On Assets 4.6%
Ret/ On Assets - 3 Yr. Avg. 3.8%
Return On Total Capital 3.9%
Ret/ On T. Cap. - 3 Yr. Avg. 2.5%
Return On Equity 8.8%
Return On Equity - 3 Yr. Avg. 7.9%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 50.8%
Gross Margin - 3 Yr. Avg. 50.6%
EBITDA Margin 12.3%
EBITDA Margin - 3 Yr. Avg. 10%
Operating Margin 9.1%
Oper. Margin - 3 Yr. Avg. 7.9%
Pre-Tax Margin 5.7%
Pre-Tax Margin - 3 Yr. Avg. 3.5%
Net Profit Margin 2.9%
Net Profit Margin - 3 Yr. Avg. 1.4%
Effective Tax Rate 43.8%
Eff/ Tax Rate - 3 Yr. Avg. 57.3%
Payout Ratio 0%

GOLF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GOLF stock intrinsic value calculation we used $1634 million for the last fiscal year's total revenue generated by Acushnet Holdings Corp.. The default revenue input number comes from 0001 income statement of Acushnet Holdings Corp.. 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 GOLF stock valuation model: a) initial revenue growth rate of 2% 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 4.6%, whose default value for GOLF is calculated based on our internal credit rating of Acushnet Holdings Corp., 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 Acushnet Holdings Corp..
    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 GOLF stock the variable cost ratio is equal to 89.3%.

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 GOLF 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 Acushnet Holdings Corp..

Corporate tax rate of 27% is the nominal tax rate for Acushnet Holdings Corp.. 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 GOLF 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 GOLF are equal to 35%.

Life of production assets of 22.6 years is the average useful life of capital assets used in Acushnet Holdings Corp. 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 GOLF is equal to 22.9%. 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 - $894.872 million for Acushnet Holdings Corp. - 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 74.947 million for Acushnet Holdings Corp. 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 Acushnet Holdings Corp. at the current share price and the inputted number of shares is $1.8 billion.

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