Intrinsic value of Health Insurance Innovations, Inc. - HIIQ

Previous Close

$29.34

  Intrinsic Value

$1,004

stock screener

  Rating & Target

str. buy

+999%

Previous close

$29.34

 
Intrinsic value

$1,004

 
Up/down potential

+999%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as HIIQ.

We calculate the intrinsic value of HIIQ 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 0.4

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  562
  868
  1,298
  1,883
  2,656
  3,652
  4,902
  6,436
  8,282
  10,461
  12,990
  15,882
  19,143
  22,776
  26,780
  31,152
  35,885
  40,970
  46,401
  52,168
  58,265
  64,685
  71,423
  78,475
  85,842
  93,524
  101,523
  109,846
  118,500
  127,495
Variable operating expenses, $m
  491
  758
  1,134
  1,645
  2,321
  3,191
  4,283
  5,623
  7,235
  9,139
  11,348
  13,874
  16,723
  19,896
  23,395
  27,214
  31,348
  35,791
  40,535
  45,573
  50,899
  56,507
  62,393
  68,554
  74,989
  81,700
  88,688
  95,959
  103,519
  111,377
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
  491
  758
  1,134
  1,645
  2,321
  3,191
  4,283
  5,623
  7,235
  9,139
  11,348
  13,874
  16,723
  19,896
  23,395
  27,214
  31,348
  35,791
  40,535
  45,573
  50,899
  56,507
  62,393
  68,554
  74,989
  81,700
  88,688
  95,959
  103,519
  111,377
Operating income, $m
  71
  109
  164
  238
  335
  461
  619
  813
  1,047
  1,322
  1,642
  2,008
  2,420
  2,879
  3,386
  3,938
  4,537
  5,180
  5,866
  6,595
  7,366
  8,178
  9,030
  9,921
  10,853
  11,824
  12,835
  13,887
  14,981
  16,119
EBITDA, $m
  75
  116
  174
  252
  356
  489
  657
  862
  1,110
  1,402
  1,741
  2,128
  2,565
  3,052
  3,588
  4,174
  4,808
  5,490
  6,217
  6,990
  7,807
  8,667
  9,570
  10,515
  11,502
  12,532
  13,604
  14,719
  15,878
  17,084
Interest expense (income), $m
  0
  1
  11
  27
  48
  77
  116
  166
  228
  305
  397
  506
  632
  776
  939
  1,121
  1,321
  1,539
  1,775
  2,029
  2,301
  2,589
  2,893
  3,214
  3,550
  3,903
  4,271
  4,654
  5,054
  5,469
  5,902
Earnings before tax, $m
  70
  98
  137
  189
  258
  345
  454
  585
  742
  925
  1,137
  1,376
  1,644
  1,940
  2,265
  2,618
  2,998
  3,404
  3,837
  4,295
  4,777
  5,285
  5,816
  6,371
  6,950
  7,553
  8,181
  8,834
  9,512
  10,217
Tax expense, $m
  19
  26
  37
  51
  70
  93
  122
  158
  200
  250
  307
  371
  444
  524
  612
  707
  809
  919
  1,036
  1,160
  1,290
  1,427
  1,570
  1,720
  1,876
  2,039
  2,209
  2,385
  2,568
  2,759
Net income, $m
  51
  71
  100
  138
  188
  252
  331
  427
  542
  675
  830
  1,004
  1,200
  1,416
  1,653
  1,911
  2,188
  2,485
  2,801
  3,135
  3,488
  3,858
  4,245
  4,651
  5,073
  5,514
  5,972
  6,449
  6,944
  7,458

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
  692
  1,069
  1,598
  2,319
  3,271
  4,497
  6,037
  7,927
  10,200
  12,883
  15,998
  19,559
  23,575
  28,049
  32,981
  38,365
  44,193
  50,456
  57,144
  64,247
  71,755
  79,661
  87,959
  96,645
  105,717
  115,177
  125,029
  135,279
  145,936
  157,014
Adjusted assets (=assets-cash), $m
  692
  1,069
  1,598
  2,319
  3,271
  4,497
  6,037
  7,927
  10,200
  12,883
  15,998
  19,559
  23,575
  28,049
  32,981
  38,365
  44,193
  50,456
  57,144
  64,247
  71,755
  79,661
  87,959
  96,645
  105,717
  115,177
  125,029
  135,279
  145,936
  157,014
Revenue / Adjusted assets
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
  0.812
Average production assets, $m
  45
  70
  105
  153
  215
  296
  397
  521
  671
  847
  1,052
  1,286
  1,551
  1,845
  2,169
  2,523
  2,907
  3,319
  3,758
  4,226
  4,719
  5,239
  5,785
  6,357
  6,953
  7,575
  8,223
  8,898
  9,599
  10,327
Working capital, $m
  55
  85
  127
  185
  260
  358
  480
  631
  812
  1,025
  1,273
  1,556
  1,876
  2,232
  2,624
  3,053
  3,517
  4,015
  4,547
  5,113
  5,710
  6,339
  6,999
  7,691
  8,413
  9,165
  9,949
  10,765
  11,613
  12,495
Total debt, $m
  210
  493
  890
  1,432
  2,147
  3,068
  4,224
  5,643
  7,350
  9,365
  11,705
  14,379
  17,395
  20,755
  24,459
  28,502
  32,879
  37,583
  42,606
  47,940
  53,579
  59,516
  65,748
  72,270
  79,084
  86,188
  93,587
  101,285
  109,289
  117,608
Total liabilities, $m
  519
  802
  1,200
  1,741
  2,457
  3,377
  4,534
  5,953
  7,660
  9,675
  12,014
  14,688
  17,705
  21,065
  24,769
  28,812
  33,189
  37,892
  42,915
  48,249
  53,888
  59,826
  66,057
  72,580
  79,393
  86,498
  93,896
  101,594
  109,598
  117,917
Total equity, $m
  172
  266
  398
  577
  815
  1,120
  1,503
  1,974
  2,540
  3,208
  3,983
  4,870
  5,870
  6,984
  8,212
  9,553
  11,004
  12,564
  14,229
  15,997
  17,867
  19,836
  21,902
  24,065
  26,323
  28,679
  31,132
  33,684
  36,338
  39,096
Total liabilities and equity, $m
  691
  1,068
  1,598
  2,318
  3,272
  4,497
  6,037
  7,927
  10,200
  12,883
  15,997
  19,558
  23,575
  28,049
  32,981
  38,365
  44,193
  50,456
  57,144
  64,246
  71,755
  79,662
  87,959
  96,645
  105,716
  115,177
  125,028
  135,278
  145,936
  157,013
Debt-to-equity ratio
  1.220
  1.850
  2.240
  2.480
  2.640
  2.740
  2.810
  2.860
  2.890
  2.920
  2.940
  2.950
  2.960
  2.970
  2.980
  2.980
  2.990
  2.990
  2.990
  3.000
  3.000
  3.000
  3.000
  3.000
  3.000
  3.010
  3.010
  3.010
  3.010
  3.010
Adjusted equity ratio
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  51
  71
  100
  138
  188
  252
  331
  427
  542
  675
  830
  1,004
  1,200
  1,416
  1,653
  1,911
  2,188
  2,485
  2,801
  3,135
  3,488
  3,858
  4,245
  4,651
  5,073
  5,514
  5,972
  6,449
  6,944
  7,458
Depreciation, amort., depletion, $m
  5
  7
  10
  15
  21
  28
  38
  49
  63
  80
  98
  120
  145
  172
  203
  236
  272
  310
  351
  395
  441
  490
  541
  594
  650
  708
  769
  832
  897
  965
Funds from operations, $m
  56
  79
  110
  153
  209
  280
  369
  476
  605
  755
  928
  1,125
  1,345
  1,589
  1,856
  2,147
  2,460
  2,795
  3,152
  3,530
  3,929
  4,347
  4,786
  5,245
  5,723
  6,222
  6,741
  7,280
  7,841
  8,424
Change in working capital, $m
  21
  30
  42
  57
  76
  98
  122
  150
  181
  214
  248
  283
  320
  356
  392
  428
  464
  498
  532
  565
  597
  629
  660
  691
  722
  753
  784
  816
  848
  881
Cash from operations, $m
  35
  49
  68
  96
  133
  183
  246
  326
  424
  541
  680
  841
  1,025
  1,233
  1,464
  1,718
  1,996
  2,297
  2,620
  2,965
  3,331
  3,718
  4,126
  4,554
  5,001
  5,469
  5,957
  6,464
  6,993
  7,542
Maintenance CAPEX, $m
  -3
  -4
  -7
  -10
  -14
  -20
  -28
  -37
  -49
  -63
  -79
  -98
  -120
  -145
  -172
  -203
  -236
  -272
  -310
  -351
  -395
  -441
  -490
  -541
  -594
  -650
  -708
  -769
  -832
  -897
New CAPEX, $m
  -17
  -25
  -35
  -47
  -63
  -81
  -101
  -124
  -149
  -176
  -205
  -234
  -264
  -294
  -324
  -354
  -383
  -412
  -440
  -467
  -494
  -520
  -546
  -571
  -597
  -622
  -648
  -674
  -701
  -729
Cash from investing activities, $m
  -20
  -29
  -42
  -57
  -77
  -101
  -129
  -161
  -198
  -239
  -284
  -332
  -384
  -439
  -496
  -557
  -619
  -684
  -750
  -818
  -889
  -961
  -1,036
  -1,112
  -1,191
  -1,272
  -1,356
  -1,443
  -1,533
  -1,626
Free cash flow, $m
  15
  19
  27
  38
  56
  82
  117
  165
  226
  302
  396
  509
  641
  793
  967
  1,161
  1,377
  1,613
  1,870
  2,146
  2,442
  2,757
  3,090
  3,442
  3,811
  4,197
  4,601
  5,022
  5,460
  5,916
Issuance/(repayment) of debt, $m
  195
  283
  398
  541
  715
  921
  1,156
  1,419
  1,707
  2,015
  2,339
  2,674
  3,016
  3,360
  3,704
  4,043
  4,377
  4,704
  5,023
  5,334
  5,639
  5,937
  6,232
  6,523
  6,813
  7,104
  7,399
  7,698
  8,004
  8,319
Issuance/(repurchase) of shares, $m
  14
  22
  32
  41
  49
  53
  52
  43
  24
  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  
  209
  305
  430
  582
  764
  974
  1,208
  1,462
  1,731
  2,015
  2,339
  2,674
  3,016
  3,360
  3,704
  4,043
  4,377
  4,704
  5,023
  5,334
  5,639
  5,937
  6,232
  6,523
  6,813
  7,104
  7,399
  7,698
  8,004
  8,319
Total cash flow (excl. dividends), $m
  223
  325
  456
  621
  821
  1,056
  1,326
  1,627
  1,957
  2,317
  2,735
  3,183
  3,657
  4,154
  4,671
  5,205
  5,754
  6,317
  6,893
  7,481
  8,081
  8,695
  9,322
  9,965
  10,624
  11,301
  11,999
  12,720
  13,464
  14,236
Retained Cash Flow (-), $m
  -64
  -94
  -132
  -179
  -237
  -305
  -383
  -471
  -566
  -668
  -776
  -887
  -1,000
  -1,114
  -1,228
  -1,341
  -1,451
  -1,560
  -1,665
  -1,769
  -1,870
  -1,969
  -2,066
  -2,163
  -2,259
  -2,356
  -2,453
  -2,552
  -2,654
  -2,758
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
  159
  231
  324
  441
  583
  751
  942
  1,157
  1,391
  1,649
  1,960
  2,296
  2,657
  3,040
  3,443
  3,864
  4,303
  4,757
  5,227
  5,712
  6,212
  6,726
  7,256
  7,802
  8,365
  8,946
  9,546
  10,167
  10,810
  11,477
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
  153
  212
  282
  363
  452
  545
  637
  723
  799
  865
  931
  980
  1,010
  1,020
  1,011
  982
  936
  876
  805
  726
  642
  558
  476
  397
  325
  261
  205
  157
  118
  86
Current shareholders' claim on cash, %
  97.0
  94.0
  91.3
  89.0
  87.2
  85.8
  84.9
  84.3
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0
  84.0

Health Insurance Innovations, Inc. is a developer, distributor and cloud-based administrator of individual and family health insurance plans (IFPs) and supplemental products, which include short-term medical (STM) insurance plans, and guaranteed-issue and underwritten hospital indemnity plans. The Company also develops, distributes and administers supplemental products, which include a range of additional insurance and non-insurance products, such as pharmacy benefit cards, dental plans, vision plans, cancer/critical illness plans, deductible and gap protection plans, and life insurance policies that are purchased as supplements to IFP. The Company's STM plans are provided up to six months, 11 months, or 364 days of health insurance coverage with a range of deductible and copay levels. Individual major medical (IMM) plans cover prescription drugs, pre-existing conditions and preventive care, while STM plans provide optional coverage for prescription drugs.

FINANCIAL RATIOS  of  Health Insurance Innovations, Inc. (HIIQ)

Valuation Ratios
P/E Ratio 87.3
Price to Sales 2.4
Price to Book 9.1
Price to Tangible Book
Price to Cash Flow 24.3
Price to Free Cash Flow 29.1
Growth Rates
Sales Growth Rate 76.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 4.5%
Ret/ On Assets - 3 Yr. Avg. 1.9%
Return On Total Capital 10.4%
Ret/ On T. Cap. - 3 Yr. Avg. 4.2%
Return On Equity 11.4%
Return On Equity - 3 Yr. Avg. 4.6%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 5.9%
EBITDA Margin - 3 Yr. Avg. 4.1%
Operating Margin 10.3%
Oper. Margin - 3 Yr. Avg. 3.9%
Pre-Tax Margin 4.3%
Pre-Tax Margin - 3 Yr. Avg. 1.8%
Net Profit Margin 2.7%
Net Profit Margin - 3 Yr. Avg. 1.2%
Effective Tax Rate -62.5%
Eff/ Tax Rate - 3 Yr. Avg. 12.5%
Payout Ratio 0%

HIIQ stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HIIQ stock intrinsic value calculation we used $351 million for the last fiscal year's total revenue generated by Health Insurance Innovations, Inc.. The default revenue input number comes from 0001 income statement of Health Insurance Innovations, 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 HIIQ stock valuation model: a) initial revenue growth rate of 60% 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 HIIQ is calculated based on our internal credit rating of Health Insurance Innovations, 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 Health Insurance Innovations, 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 HIIQ stock the variable cost ratio is equal to 87.5%.

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 HIIQ 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 Health Insurance Innovations, Inc..

Corporate tax rate of 27% is the nominal tax rate for Health Insurance Innovations, 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 HIIQ 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 HIIQ are equal to 8.1%.

Life of production assets of 10.7 years is the average useful life of capital assets used in Health Insurance Innovations, 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 HIIQ is equal to 9.8%. 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 - $107.83 million for Health Insurance Innovations, 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 14.929 million for Health Insurance Innovations, 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 Health Insurance Innovations, Inc. at the current share price and the inputted number of shares is $0.4 billion.

RELATED COMPANIES Price Int.Val. Rating
EHTH eHealth, Inc. 62.61 392.44  str.buy
BRO Brown & Brown, 28.88 43.91  buy
AJG Arthur J. Gall 78.88 154.47  str.buy

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.