Intrinsic value of I.D. Systems - IDSY

Previous Close

$6.12

  Intrinsic Value

$196.05

stock screener

  Rating & Target

str. buy

+999%

Previous close

$6.12

 
Intrinsic value

$196.05

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of IDSY 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 0.1

 

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
  66
  101
  151
  220
  310
  426
  572
  751
  966
  1,221
  1,516
  1,853
  2,234
  2,658
  3,125
  3,635
  4,187
  4,781
  5,415
  6,088
  6,799
  7,548
  8,334
  9,157
  10,017
  10,913
  11,847
  12,818
  13,828
  14,877
Variable operating expenses, $m
  28
  43
  63
  91
  128
  175
  235
  308
  395
  499
  618
  756
  911
  1,084
  1,275
  1,483
  1,708
  1,950
  2,209
  2,483
  2,773
  3,079
  3,400
  3,735
  4,086
  4,452
  4,832
  5,229
  5,640
  6,069
Fixed operating expenses, $m
  29
  29
  30
  31
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  41
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  53
  54
Total operating expenses, $m
  57
  72
  93
  122
  159
  207
  268
  341
  429
  534
  654
  792
  948
  1,122
  1,314
  1,523
  1,749
  1,991
  2,251
  2,526
  2,817
  3,124
  3,446
  3,782
  4,134
  4,501
  4,882
  5,280
  5,693
  6,123
Operating income, $m
  9
  29
  58
  98
  151
  219
  305
  410
  537
  687
  862
  1,061
  1,285
  1,536
  1,811
  2,113
  2,439
  2,789
  3,164
  3,561
  3,981
  4,424
  4,888
  5,375
  5,883
  6,412
  6,964
  7,538
  8,135
  8,755
EBITDA, $m
  11
  32
  62
  103
  158
  228
  316
  425
  555
  709
  889
  1,094
  1,325
  1,583
  1,867
  2,177
  2,513
  2,874
  3,259
  3,668
  4,101
  4,557
  5,035
  5,536
  6,059
  6,605
  7,173
  7,764
  8,379
  9,017
Interest expense (income), $m
  0
  0
  4
  9
  17
  28
  42
  60
  83
  111
  145
  184
  230
  283
  342
  409
  482
  561
  648
  740
  839
  944
  1,055
  1,172
  1,295
  1,424
  1,558
  1,698
  1,844
  1,996
  2,153
Earnings before tax, $m
  9
  26
  49
  81
  123
  177
  245
  327
  426
  542
  678
  831
  1,002
  1,193
  1,403
  1,631
  1,877
  2,142
  2,423
  2,722
  3,037
  3,368
  3,716
  4,079
  4,459
  4,854
  5,266
  5,694
  6,139
  6,602
Tax expense, $m
  2
  7
  13
  22
  33
  48
  66
  88
  115
  146
  183
  224
  271
  322
  379
  440
  507
  578
  654
  735
  820
  909
  1,003
  1,101
  1,204
  1,311
  1,422
  1,537
  1,658
  1,782
Net income, $m
  7
  19
  36
  59
  90
  129
  179
  239
  311
  396
  495
  606
  732
  871
  1,024
  1,191
  1,371
  1,563
  1,769
  1,987
  2,217
  2,459
  2,713
  2,978
  3,255
  3,544
  3,844
  4,157
  4,482
  4,819

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
  97
  150
  225
  326
  461
  633
  850
  1,116
  1,436
  1,814
  2,252
  2,754
  3,319
  3,949
  4,643
  5,401
  6,222
  7,104
  8,045
  9,045
  10,102
  11,216
  12,384
  13,607
  14,884
  16,216
  17,603
  19,046
  20,546
  22,106
Adjusted assets (=assets-cash), $m
  97
  150
  225
  326
  461
  633
  850
  1,116
  1,436
  1,814
  2,252
  2,754
  3,319
  3,949
  4,643
  5,401
  6,222
  7,104
  8,045
  9,045
  10,102
  11,216
  12,384
  13,607
  14,884
  16,216
  17,603
  19,046
  20,546
  22,106
Revenue / Adjusted assets
  0.680
  0.673
  0.671
  0.675
  0.672
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
  0.673
Average production assets, $m
  11
  17
  25
  36
  51
  70
  94
  123
  158
  200
  249
  304
  366
  436
  512
  596
  687
  784
  888
  998
  1,115
  1,238
  1,367
  1,502
  1,643
  1,790
  1,943
  2,102
  2,268
  2,440
Working capital, $m
  6
  9
  13
  19
  26
  36
  49
  64
  82
  104
  129
  158
  190
  226
  266
  309
  356
  406
  460
  517
  578
  642
  708
  778
  851
  928
  1,007
  1,090
  1,175
  1,265
Total debt, $m
  17
  41
  75
  122
  183
  263
  362
  484
  631
  805
  1,006
  1,236
  1,495
  1,785
  2,103
  2,451
  2,828
  3,233
  3,665
  4,124
  4,609
  5,120
  5,656
  6,217
  6,804
  7,415
  8,052
  8,714
  9,403
  10,119
Total liabilities, $m
  45
  69
  103
  150
  211
  291
  390
  512
  659
  833
  1,034
  1,264
  1,523
  1,813
  2,131
  2,479
  2,856
  3,261
  3,693
  4,152
  4,637
  5,148
  5,684
  6,245
  6,832
  7,443
  8,080
  8,742
  9,431
  10,147
Total equity, $m
  53
  81
  122
  177
  249
  343
  460
  604
  777
  981
  1,218
  1,490
  1,796
  2,136
  2,512
  2,922
  3,366
  3,843
  4,353
  4,894
  5,465
  6,068
  6,700
  7,361
  8,052
  8,773
  9,523
  10,304
  11,116
  11,959
Total liabilities and equity, $m
  98
  150
  225
  327
  460
  634
  850
  1,116
  1,436
  1,814
  2,252
  2,754
  3,319
  3,949
  4,643
  5,401
  6,222
  7,104
  8,046
  9,046
  10,102
  11,216
  12,384
  13,606
  14,884
  16,216
  17,603
  19,046
  20,547
  22,106
Debt-to-equity ratio
  0.320
  0.500
  0.620
  0.690
  0.740
  0.770
  0.790
  0.800
  0.810
  0.820
  0.830
  0.830
  0.830
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
  0.850
Adjusted equity ratio
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541
  0.541

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  7
  19
  36
  59
  90
  129
  179
  239
  311
  396
  495
  606
  732
  871
  1,024
  1,191
  1,371
  1,563
  1,769
  1,987
  2,217
  2,459
  2,713
  2,978
  3,255
  3,544
  3,844
  4,157
  4,482
  4,819
Depreciation, amort., depletion, $m
  2
  3
  4
  5
  7
  9
  11
  15
  18
  23
  27
  33
  39
  47
  55
  64
  74
  84
  95
  107
  120
  133
  147
  161
  177
  192
  209
  226
  244
  262
Funds from operations, $m
  9
  22
  40
  64
  97
  138
  190
  253
  329
  419
  521
  639
  771
  918
  1,079
  1,255
  1,444
  1,648
  1,864
  2,094
  2,337
  2,592
  2,860
  3,139
  3,432
  3,736
  4,053
  4,383
  4,725
  5,082
Change in working capital, $m
  2
  3
  4
  6
  8
  10
  12
  15
  18
  22
  25
  29
  32
  36
  40
  43
  47
  50
  54
  57
  60
  64
  67
  70
  73
  76
  79
  83
  86
  89
Cash from operations, $m
  7
  19
  36
  58
  89
  128
  178
  238
  311
  397
  496
  610
  739
  882
  1,039
  1,211
  1,397
  1,597
  1,811
  2,037
  2,276
  2,528
  2,793
  3,070
  3,359
  3,660
  3,974
  4,300
  4,640
  4,992
Maintenance CAPEX, $m
  -1
  -1
  -2
  -3
  -4
  -5
  -8
  -10
  -13
  -17
  -22
  -27
  -33
  -39
  -47
  -55
  -64
  -74
  -84
  -95
  -107
  -120
  -133
  -147
  -161
  -177
  -192
  -209
  -226
  -244
New CAPEX, $m
  -4
  -6
  -8
  -11
  -15
  -19
  -24
  -29
  -35
  -42
  -48
  -55
  -62
  -70
  -77
  -84
  -91
  -97
  -104
  -110
  -117
  -123
  -129
  -135
  -141
  -147
  -153
  -159
  -166
  -172
Cash from investing activities, $m
  -5
  -7
  -10
  -14
  -19
  -24
  -32
  -39
  -48
  -59
  -70
  -82
  -95
  -109
  -124
  -139
  -155
  -171
  -188
  -205
  -224
  -243
  -262
  -282
  -302
  -324
  -345
  -368
  -392
  -416
Free cash flow, $m
  2
  12
  25
  45
  70
  104
  146
  199
  262
  338
  426
  528
  644
  773
  916
  1,073
  1,243
  1,426
  1,622
  1,831
  2,052
  2,286
  2,531
  2,788
  3,056
  3,336
  3,628
  3,932
  4,248
  4,576
Issuance/(repayment) of debt, $m
  17
  24
  34
  47
  62
  79
  99
  122
  147
  173
  201
  230
  260
  289
  319
  348
  377
  405
  432
  459
  485
  511
  536
  561
  586
  611
  637
  662
  689
  716
Issuance/(repurchase) of shares, $m
  13
  10
  5
  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  
  30
  34
  39
  47
  62
  79
  99
  122
  147
  173
  201
  230
  260
  289
  319
  348
  377
  405
  432
  459
  485
  511
  536
  561
  586
  611
  637
  662
  689
  716
Total cash flow (excl. dividends), $m
  32
  46
  64
  91
  132
  183
  246
  321
  409
  512
  628
  758
  903
  1,062
  1,235
  1,421
  1,619
  1,831
  2,055
  2,290
  2,538
  2,797
  3,067
  3,349
  3,642
  3,948
  4,265
  4,594
  4,937
  5,292
Retained Cash Flow (-), $m
  -20
  -29
  -40
  -55
  -73
  -93
  -117
  -144
  -173
  -204
  -237
  -271
  -306
  -341
  -376
  -410
  -444
  -477
  -509
  -541
  -572
  -602
  -632
  -662
  -691
  -721
  -750
  -781
  -812
  -844
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
  12
  17
  24
  36
  59
  90
  128
  177
  236
  307
  390
  487
  597
  721
  859
  1,010
  1,175
  1,354
  1,545
  1,749
  1,966
  2,194
  2,435
  2,687
  2,951
  3,227
  3,514
  3,814
  4,125
  4,449
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
  12
  16
  21
  30
  46
  65
  87
  111
  136
  161
  185
  208
  227
  242
  252
  257
  256
  249
  238
  222
  203
  182
  160
  137
  115
  94
  75
  59
  45
  33
Current shareholders' claim on cash, %
  89.2
  84.3
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9
  82.9

I.D. Systems, Inc. (I.D. Systems) develops, markets and sells wireless machine-to-machine solutions for managing and securing enterprise assets, which include industrial vehicles, such as forklifts and airport ground support equipment, rental vehicles, and transportation assets, such as dry van trailers, refrigerated trailers, railcars and containers. Its systems utilize radio frequency identification (RFID), wireless fidelity (Wi-Fi), satellite or cellular communications, and sensor technology and software to control, track, monitor and analyze assets. It provides data reporting and analysis software tool platform, I.D. Systems Analytics PowerFleet IQ (for fleets of forklifts and other industrial trucks) and VeriWise IQ (for fleets of containers, trailers and other transportation assets). Its solutions include industrial and rental fleet asset management, industrial fleet asset management, transportation asset management and rental fleet asset management solutions.

FINANCIAL RATIOS  of  I.D. Systems (IDSY)

Valuation Ratios
P/E Ratio -14
Price to Sales 2.3
Price to Book 5.3
Price to Tangible Book
Price to Cash Flow -42.1
Price to Free Cash Flow -28.1
Growth Rates
Sales Growth Rate -11.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 2
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 18.8%
Interest Coverage 0
Management Effectiveness
Return On Assets -13.6%
Ret/ On Assets - 3 Yr. Avg. -18.9%
Return On Total Capital -30%
Ret/ On T. Cap. - 3 Yr. Avg. -36.4%
Return On Equity -32.4%
Return On Equity - 3 Yr. Avg. -37.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 48.6%
Gross Margin - 3 Yr. Avg. 44.2%
EBITDA Margin -13.5%
EBITDA Margin - 3 Yr. Avg. -18.9%
Operating Margin -16.2%
Oper. Margin - 3 Yr. Avg. -22%
Pre-Tax Margin -16.2%
Pre-Tax Margin - 3 Yr. Avg. -22%
Net Profit Margin -16.2%
Net Profit Margin - 3 Yr. Avg. -22%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

IDSY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IDSY stock intrinsic value calculation we used $40.958 million for the last fiscal year's total revenue generated by I.D. Systems. The default revenue input number comes from 0001 income statement of I.D. Systems. 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 IDSY 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 IDSY is calculated based on our internal credit rating of I.D. Systems, 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 I.D. Systems.
    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 IDSY stock the variable cost ratio is equal to 43.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $28 million in the base year in the intrinsic value calculation for IDSY 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 22.9% for I.D. Systems.

Corporate tax rate of 27% is the nominal tax rate for I.D. Systems. 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 IDSY 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 IDSY are equal to 16.4%.

Life of production assets of 9.3 years is the average useful life of capital assets used in I.D. Systems 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 IDSY is equal to 8.5%. 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 - $32.971 million for I.D. Systems - 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 17.754 million for I.D. Systems 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 I.D. Systems at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ I.D. Systems (IDSY) Q3 Earnings Meet Estimates   [Nov-08-18 05:50PM  Zacks]
▶ I.D. Systems: 3Q Earnings Snapshot   [04:45PM  Associated Press]
▶ I.D. Systems: 2Q Earnings Snapshot   [04:27PM  Associated Press]
▶ I.D. Systems Sets May 2018 Financial Conference Schedule   [May-18-18 08:00AM  GlobeNewswire]
▶ I.D. Systems: 1Q Earnings Snapshot   [May-02-18 05:23PM  Associated Press]
▶ I.D. Systems reports 4Q loss   [Mar-01-18 07:59PM  Associated Press]
▶ I.D. Systems reports 3Q loss   [Nov-09-17 04:41PM  Associated Press]
▶ I.D. Systems reports 2Q loss   [Aug-03-17 11:32PM  Associated Press]
▶ ETFs with exposure to I.D. Systems, Inc. : June 9, 2017   [Jun-09-17 01:38PM  Capital Cube]
▶ I.D. Systems reports 1Q loss   [May-04-17 05:24PM  Associated Press]
▶ ETFs with exposure to I.D. Systems, Inc. : April 7, 2017   [Apr-07-17 04:51PM  Capital Cube]
▶ I.D. Systems reports 4Q loss   [04:14PM  Associated Press]

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