Intrinsic value of The Hain Celestial Group, Inc. - HAIN

Previous Close

$19.62

  Intrinsic Value

$13.01

stock screener

  Rating & Target

sell

-34%

Previous close

$19.62

 
Intrinsic value

$13.01

 
Up/down potential

-34%

 
Rating

sell

We calculate the intrinsic value of HAIN 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 2.0

 

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, %
  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
  2,507
  2,565
  2,631
  2,705
  2,787
  2,877
  2,975
  3,081
  3,195
  3,318
  3,449
  3,589
  3,738
  3,896
  4,064
  4,242
  4,431
  4,630
  4,841
  5,063
  5,298
  5,546
  5,806
  6,081
  6,371
  6,676
  6,997
  7,334
  7,689
  8,063
Variable operating expenses, $m
  2,386
  2,438
  2,496
  2,562
  2,635
  2,715
  2,803
  2,897
  2,999
  3,108
  3,071
  3,196
  3,329
  3,470
  3,619
  3,778
  3,946
  4,123
  4,311
  4,509
  4,718
  4,939
  5,171
  5,416
  5,674
  5,945
  6,231
  6,531
  6,848
  7,180
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
  2,386
  2,438
  2,496
  2,562
  2,635
  2,715
  2,803
  2,897
  2,999
  3,108
  3,071
  3,196
  3,329
  3,470
  3,619
  3,778
  3,946
  4,123
  4,311
  4,509
  4,718
  4,939
  5,171
  5,416
  5,674
  5,945
  6,231
  6,531
  6,848
  7,180
Operating income, $m
  121
  127
  134
  143
  152
  161
  172
  184
  196
  210
  377
  393
  409
  426
  445
  464
  485
  507
  530
  554
  580
  607
  636
  666
  697
  731
  766
  803
  842
  882
EBITDA, $m
  311
  318
  326
  335
  345
  357
  369
  382
  396
  411
  427
  445
  463
  483
  504
  526
  549
  574
  600
  628
  657
  687
  720
  754
  790
  827
  867
  909
  953
  999
Interest expense (income), $m
  19
  39
  40
  41
  43
  45
  47
  50
  52
  55
  58
  62
  65
  69
  73
  77
  81
  86
  91
  96
  102
  108
  114
  121
  128
  135
  143
  151
  159
  168
  178
Earnings before tax, $m
  82
  87
  93
  99
  106
  114
  122
  131
  141
  151
  316
  328
  340
  354
  368
  383
  399
  416
  433
  452
  472
  493
  515
  538
  562
  588
  615
  643
  673
  705
Tax expense, $m
  22
  24
  25
  27
  29
  31
  33
  35
  38
  41
  85
  88
  92
  96
  99
  103
  108
  112
  117
  122
  127
  133
  139
  145
  152
  159
  166
  174
  182
  190
Net income, $m
  60
  64
  68
  72
  78
  83
  89
  96
  103
  110
  231
  239
  248
  258
  269
  280
  291
  303
  316
  330
  344
  360
  376
  393
  410
  429
  449
  470
  491
  514

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
  3,006
  3,075
  3,154
  3,243
  3,341
  3,449
  3,567
  3,694
  3,831
  3,978
  4,135
  4,303
  4,482
  4,672
  4,873
  5,087
  5,313
  5,552
  5,804
  6,071
  6,353
  6,649
  6,962
  7,292
  7,639
  8,004
  8,389
  8,794
  9,220
  9,668
Adjusted assets (=assets-cash), $m
  3,006
  3,075
  3,154
  3,243
  3,341
  3,449
  3,567
  3,694
  3,831
  3,978
  4,135
  4,303
  4,482
  4,672
  4,873
  5,087
  5,313
  5,552
  5,804
  6,071
  6,353
  6,649
  6,962
  7,292
  7,639
  8,004
  8,389
  8,794
  9,220
  9,668
Revenue / Adjusted assets
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
  0.834
Average production assets, $m
  1,091
  1,116
  1,144
  1,177
  1,212
  1,251
  1,294
  1,340
  1,390
  1,443
  1,500
  1,561
  1,626
  1,695
  1,768
  1,845
  1,927
  2,014
  2,106
  2,203
  2,305
  2,412
  2,526
  2,645
  2,771
  2,904
  3,043
  3,190
  3,345
  3,507
Working capital, $m
  559
  572
  587
  603
  621
  642
  663
  687
  712
  740
  769
  800
  834
  869
  906
  946
  988
  1,033
  1,080
  1,129
  1,181
  1,237
  1,295
  1,356
  1,421
  1,489
  1,560
  1,636
  1,715
  1,798
Total debt, $m
  740
  768
  801
  837
  878
  922
  970
  1,023
  1,079
  1,139
  1,204
  1,273
  1,346
  1,425
  1,507
  1,595
  1,688
  1,786
  1,890
  2,000
  2,115
  2,237
  2,366
  2,501
  2,644
  2,794
  2,952
  3,119
  3,294
  3,478
Total liabilities, $m
  1,236
  1,264
  1,296
  1,333
  1,373
  1,418
  1,466
  1,518
  1,575
  1,635
  1,700
  1,769
  1,842
  1,920
  2,003
  2,091
  2,184
  2,282
  2,386
  2,495
  2,611
  2,733
  2,861
  2,997
  3,140
  3,290
  3,448
  3,614
  3,789
  3,973
Total equity, $m
  1,771
  1,811
  1,858
  1,910
  1,968
  2,032
  2,101
  2,176
  2,256
  2,343
  2,436
  2,535
  2,640
  2,752
  2,870
  2,996
  3,129
  3,270
  3,419
  3,576
  3,742
  3,916
  4,101
  4,295
  4,499
  4,715
  4,941
  5,180
  5,430
  5,694
Total liabilities and equity, $m
  3,007
  3,075
  3,154
  3,243
  3,341
  3,450
  3,567
  3,694
  3,831
  3,978
  4,136
  4,304
  4,482
  4,672
  4,873
  5,087
  5,313
  5,552
  5,805
  6,071
  6,353
  6,649
  6,962
  7,292
  7,639
  8,005
  8,389
  8,794
  9,219
  9,667
Debt-to-equity ratio
  0.420
  0.420
  0.430
  0.440
  0.450
  0.450
  0.460
  0.470
  0.480
  0.490
  0.490
  0.500
  0.510
  0.520
  0.530
  0.530
  0.540
  0.550
  0.550
  0.560
  0.570
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
  0.610
  0.610
Adjusted equity ratio
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589
  0.589

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  60
  64
  68
  72
  78
  83
  89
  96
  103
  110
  231
  239
  248
  258
  269
  280
  291
  303
  316
  330
  344
  360
  376
  393
  410
  429
  449
  470
  491
  514
Depreciation, amort., depletion, $m
  190
  191
  192
  193
  194
  195
  197
  198
  200
  202
  50
  52
  54
  56
  59
  62
  64
  67
  70
  73
  77
  80
  84
  88
  92
  97
  101
  106
  111
  117
Funds from operations, $m
  250
  254
  259
  265
  271
  278
  286
  294
  303
  312
  281
  291
  303
  315
  328
  341
  355
  371
  387
  403
  421
  440
  460
  481
  503
  526
  550
  576
  603
  631
Change in working capital, $m
  11
  13
  15
  17
  18
  20
  22
  24
  25
  27
  29
  31
  33
  35
  37
  40
  42
  44
  47
  50
  52
  55
  58
  61
  65
  68
  72
  75
  79
  83
Cash from operations, $m
  239
  242
  245
  249
  253
  258
  264
  270
  277
  285
  251
  260
  269
  279
  290
  301
  313
  326
  340
  354
  369
  385
  402
  420
  438
  458
  479
  501
  524
  548
Maintenance CAPEX, $m
  -36
  -36
  -37
  -38
  -39
  -40
  -42
  -43
  -45
  -46
  -48
  -50
  -52
  -54
  -56
  -59
  -62
  -64
  -67
  -70
  -73
  -77
  -80
  -84
  -88
  -92
  -97
  -101
  -106
  -111
New CAPEX, $m
  -21
  -25
  -29
  -32
  -36
  -39
  -43
  -46
  -50
  -53
  -57
  -61
  -65
  -69
  -73
  -77
  -82
  -87
  -92
  -97
  -102
  -108
  -113
  -120
  -126
  -133
  -140
  -147
  -155
  -163
Cash from investing activities, $m
  -57
  -61
  -66
  -70
  -75
  -79
  -85
  -89
  -95
  -99
  -105
  -111
  -117
  -123
  -129
  -136
  -144
  -151
  -159
  -167
  -175
  -185
  -193
  -204
  -214
  -225
  -237
  -248
  -261
  -274
Free cash flow, $m
  182
  180
  179
  178
  178
  179
  180
  181
  183
  185
  146
  149
  153
  156
  160
  165
  170
  175
  181
  187
  193
  200
  208
  216
  224
  233
  242
  252
  263
  274
Issuance/(repayment) of debt, $m
  26
  28
  32
  36
  40
  44
  48
  52
  56
  60
  65
  69
  73
  78
  83
  88
  93
  98
  104
  110
  116
  122
  129
  135
  143
  150
  158
  166
  175
  184
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  
  26
  28
  32
  36
  40
  44
  48
  52
  56
  60
  65
  69
  73
  78
  83
  88
  93
  98
  104
  110
  116
  122
  129
  135
  143
  150
  158
  166
  175
  184
Total cash flow (excl. dividends), $m
  208
  209
  211
  215
  219
  223
  228
  233
  239
  246
  211
  218
  226
  234
  243
  253
  263
  273
  285
  297
  309
  322
  336
  351
  367
  383
  401
  419
  438
  458
Retained Cash Flow (-), $m
  -34
  -41
  -47
  -52
  -58
  -64
  -69
  -75
  -81
  -87
  -93
  -99
  -105
  -112
  -119
  -126
  -133
  -141
  -149
  -157
  -166
  -175
  -184
  -194
  -204
  -215
  -227
  -238
  -251
  -264
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
  175
  168
  165
  163
  161
  160
  159
  158
  158
  159
  118
  119
  121
  122
  125
  127
  130
  133
  136
  139
  143
  148
  152
  157
  162
  168
  174
  180
  187
  194
Discount rate, %
  6.00
  6.30
  6.62
  6.95
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.78
  11.31
  11.88
  12.47
  13.10
  13.75
  14.44
  15.16
  15.92
  16.72
  17.55
  18.43
  19.35
  20.32
  21.33
  22.40
  23.52
  24.70
PV of cash for distribution, $m
  165
  148
  136
  124
  113
  103
  92
  83
  74
  65
  42
  37
  32
  27
  23
  19
  16
  13
  10
  8
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
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

The Hain Celestial Group, Inc. is an organic and natural products company. The Company and its subsidiaries manufacture, market, distribute and sell organic and natural products under brand names which are sold as better-for-you products. The Company's segments include United States, United Kingdom, Hain Pure Protein and Rest of World. Its Rest of World segment includes Canada and Europe. The Company's brand names include Almond Dream, Arrowhead Mills, Bearitos, BluePrint, Celestial Seasonings, Cully & Sully, Danival, DeBoles, Earth's Best, Ella's Kitchen, Empire, Europe's Best, Farmhouse Fare, Frank Cooper's, FreeBird, Gale's, Garden of Eatin', GG UniqueFiber, Hain Pure Foods, Hartley's, Health Valley, Imagine, Johnson's Juice Co., Joya, Kosher Valley, Lima, The Greek Gods, Tilda, Walnut Acres, WestSoy, Yves Veggie Cuisine and Yorkshire Provender. Its personal care products are marketed under the Alba Botanica, Avalon Organics, Earth's Best, JASON, Live Clean and Queen Helene brands.

FINANCIAL RATIOS  of  The Hain Celestial Group, Inc. (HAIN)

Valuation Ratios
P/E Ratio 30.4
Price to Sales 0.7
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow 9.4
Price to Free Cash Flow 13.2
Growth Rates
Sales Growth Rate -1.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -18.2%
Cap. Spend. - 3 Yr. Gr. Rate 8.4%
Financial Strength
Quick Ratio 15
Current Ratio 0
LT Debt to Equity 43.2%
Total Debt to Equity 43.8%
Interest Coverage 6
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital 2.7%
Ret/ On T. Cap. - 3 Yr. Avg. 3.7%
Return On Equity 4%
Return On Equity - 3 Yr. Avg. 5.5%
Asset Turnover 1
Profitability Ratios
Gross Margin 19%
Gross Margin - 3 Yr. Avg. 20.6%
EBITDA Margin 6.2%
EBITDA Margin - 3 Yr. Avg. 8.2%
Operating Margin 3.9%
Oper. Margin - 3 Yr. Avg. 6.3%
Pre-Tax Margin 3.1%
Pre-Tax Margin - 3 Yr. Avg. 5.1%
Net Profit Margin 2.3%
Net Profit Margin - 3 Yr. Avg. 3.4%
Effective Tax Rate 24.7%
Eff/ Tax Rate - 3 Yr. Avg. 36%
Payout Ratio 0%

HAIN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HAIN stock intrinsic value calculation we used $2458 million for the last fiscal year's total revenue generated by The Hain Celestial Group, Inc.. The default revenue input number comes from 0001 income statement of The Hain Celestial Group, 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 HAIN 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 6%, whose default value for HAIN is calculated based on our internal credit rating of The Hain Celestial Group, 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 The Hain Celestial Group, 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 HAIN stock the variable cost ratio is equal to 95.3%.

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 HAIN 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 The Hain Celestial Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for The Hain Celestial Group, 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 HAIN 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 HAIN are equal to 43.5%.

Life of production assets of 30.2 years is the average useful life of capital assets used in The Hain Celestial Group, 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 HAIN is equal to 22.3%. 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 - $1737.049 million for The Hain Celestial Group, 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 104.213 million for The Hain Celestial Group, 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 The Hain Celestial Group, Inc. at the current share price and the inputted number of shares is $2.0 billion.

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