Intrinsic value of Internap Corporation - INAP

Previous Close

$2.44

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$2.44

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of INAP 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, %
  20.40
  18.86
  17.47
  16.23
  15.10
  14.09
  13.18
  12.37
  11.63
  10.97
  10.37
  9.83
  9.35
  8.91
  8.52
  8.17
  7.85
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.36
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
Revenue, $m
  338
  402
  472
  549
  632
  721
  816
  917
  1,024
  1,136
  1,254
  1,377
  1,506
  1,640
  1,780
  1,925
  2,076
  2,234
  2,397
  2,567
  2,743
  2,926
  3,117
  3,315
  3,522
  3,737
  3,961
  4,194
  4,438
  4,692
Variable operating expenses, $m
  435
  508
  589
  677
  772
  875
  984
  1,100
  1,223
  1,352
  1,441
  1,583
  1,731
  1,885
  2,046
  2,213
  2,387
  2,568
  2,756
  2,951
  3,153
  3,364
  3,583
  3,812
  4,049
  4,296
  4,554
  4,822
  5,102
  5,394
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
  435
  508
  589
  677
  772
  875
  984
  1,100
  1,223
  1,352
  1,441
  1,583
  1,731
  1,885
  2,046
  2,213
  2,387
  2,568
  2,756
  2,951
  3,153
  3,364
  3,583
  3,812
  4,049
  4,296
  4,554
  4,822
  5,102
  5,394
Operating income, $m
  -97
  -106
  -117
  -128
  -140
  -154
  -168
  -183
  -199
  -216
  -188
  -206
  -225
  -245
  -266
  -288
  -311
  -334
  -359
  -384
  -410
  -438
  -466
  -496
  -527
  -559
  -593
  -628
  -664
  -702
EBITDA, $m
  32
  38
  45
  52
  60
  68
  77
  87
  97
  108
  119
  131
  143
  156
  169
  183
  197
  212
  228
  244
  260
  278
  296
  315
  334
  355
  376
  398
  421
  445
Interest expense (income), $m
  30
  59
  64
  78
  92
  109
  126
  145
  165
  186
  208
  232
  257
  283
  310
  338
  368
  398
  430
  463
  497
  533
  570
  609
  649
  691
  734
  779
  827
  876
  927
Earnings before tax, $m
  -156
  -170
  -194
  -220
  -249
  -280
  -313
  -348
  -385
  -424
  -420
  -463
  -508
  -555
  -604
  -656
  -709
  -764
  -822
  -881
  -944
  -1,008
  -1,075
  -1,145
  -1,218
  -1,293
  -1,372
  -1,454
  -1,540
  -1,629
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
  -156
  -170
  -194
  -220
  -249
  -280
  -313
  -348
  -385
  -424
  -420
  -463
  -508
  -555
  -604
  -656
  -709
  -764
  -822
  -881
  -944
  -1,008
  -1,075
  -1,145
  -1,218
  -1,293
  -1,372
  -1,454
  -1,540
  -1,629

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
  706
  840
  986
  1,146
  1,319
  1,505
  1,704
  1,914
  2,137
  2,371
  2,617
  2,875
  3,144
  3,424
  3,716
  4,019
  4,335
  4,663
  5,004
  5,358
  5,726
  6,109
  6,507
  6,921
  7,352
  7,801
  8,269
  8,757
  9,265
  9,795
Adjusted assets (=assets-cash), $m
  706
  840
  986
  1,146
  1,319
  1,505
  1,704
  1,914
  2,137
  2,371
  2,617
  2,875
  3,144
  3,424
  3,716
  4,019
  4,335
  4,663
  5,004
  5,358
  5,726
  6,109
  6,507
  6,921
  7,352
  7,801
  8,269
  8,757
  9,265
  9,795
Revenue / Adjusted assets
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
  0.479
Average production assets, $m
  505
  600
  705
  819
  943
  1,076
  1,218
  1,368
  1,527
  1,695
  1,871
  2,054
  2,247
  2,447
  2,655
  2,872
  3,098
  3,332
  3,576
  3,829
  4,092
  4,366
  4,651
  4,947
  5,255
  5,575
  5,910
  6,258
  6,621
  7,001
Working capital, $m
  -25
  -29
  -34
  -40
  -46
  -53
  -60
  -67
  -75
  -83
  -92
  -101
  -110
  -120
  -130
  -141
  -152
  -163
  -175
  -187
  -200
  -214
  -228
  -242
  -257
  -273
  -289
  -306
  -324
  -343
Total debt, $m
  573
  693
  825
  969
  1,125
  1,292
  1,471
  1,661
  1,861
  2,072
  2,293
  2,525
  2,767
  3,019
  3,282
  3,555
  3,839
  4,134
  4,441
  4,760
  5,091
  5,436
  5,794
  6,167
  6,555
  6,959
  7,380
  7,818
  8,276
  8,753
Total liabilities, $m
  636
  756
  888
  1,032
  1,187
  1,355
  1,533
  1,723
  1,923
  2,134
  2,356
  2,587
  2,829
  3,081
  3,344
  3,617
  3,901
  4,197
  4,503
  4,822
  5,154
  5,498
  5,857
  6,229
  6,617
  7,021
  7,442
  7,881
  8,339
  8,816
Total equity, $m
  71
  84
  99
  115
  132
  151
  170
  191
  214
  237
  262
  287
  314
  342
  372
  402
  433
  466
  500
  536
  573
  611
  651
  692
  735
  780
  827
  876
  927
  980
Total liabilities and equity, $m
  707
  840
  987
  1,147
  1,319
  1,506
  1,703
  1,914
  2,137
  2,371
  2,618
  2,874
  3,143
  3,423
  3,716
  4,019
  4,334
  4,663
  5,003
  5,358
  5,727
  6,109
  6,508
  6,921
  7,352
  7,801
  8,269
  8,757
  9,266
  9,796
Debt-to-equity ratio
  8.120
  8.260
  8.370
  8.460
  8.530
  8.590
  8.630
  8.670
  8.710
  8.740
  8.760
  8.780
  8.800
  8.820
  8.830
  8.840
  8.860
  8.870
  8.880
  8.880
  8.890
  8.900
  8.900
  8.910
  8.920
  8.920
  8.920
  8.930
  8.930
  8.940
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -156
  -170
  -194
  -220
  -249
  -280
  -313
  -348
  -385
  -424
  -420
  -463
  -508
  -555
  -604
  -656
  -709
  -764
  -822
  -881
  -944
  -1,008
  -1,075
  -1,145
  -1,218
  -1,293
  -1,372
  -1,454
  -1,540
  -1,629
Depreciation, amort., depletion, $m
  129
  144
  161
  180
  200
  222
  246
  270
  296
  324
  307
  337
  368
  401
  435
  471
  508
  546
  586
  628
  671
  716
  762
  811
  861
  914
  969
  1,026
  1,085
  1,148
Funds from operations, $m
  -27
  -26
  -33
  -40
  -49
  -58
  -67
  -78
  -89
  -101
  -113
  -126
  -140
  -154
  -169
  -185
  -201
  -218
  -235
  -254
  -273
  -292
  -313
  -334
  -356
  -379
  -403
  -428
  -454
  -481
Change in working capital, $m
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
Cash from operations, $m
  -23
  -21
  -28
  -35
  -42
  -51
  -60
  -70
  -81
  -92
  -104
  -117
  -130
  -144
  -159
  -174
  -190
  -206
  -224
  -241
  -260
  -279
  -299
  -320
  -341
  -364
  -387
  -411
  -437
  -463
Maintenance CAPEX, $m
  -69
  -83
  -98
  -116
  -134
  -155
  -176
  -200
  -224
  -250
  -278
  -307
  -337
  -368
  -401
  -435
  -471
  -508
  -546
  -586
  -628
  -671
  -716
  -762
  -811
  -861
  -914
  -969
  -1,026
  -1,085
New CAPEX, $m
  -86
  -95
  -105
  -114
  -124
  -133
  -142
  -151
  -159
  -167
  -176
  -184
  -192
  -200
  -209
  -217
  -226
  -234
  -244
  -253
  -263
  -274
  -285
  -296
  -308
  -321
  -334
  -348
  -363
  -379
Cash from investing activities, $m
  -155
  -178
  -203
  -230
  -258
  -288
  -318
  -351
  -383
  -417
  -454
  -491
  -529
  -568
  -610
  -652
  -697
  -742
  -790
  -839
  -891
  -945
  -1,001
  -1,058
  -1,119
  -1,182
  -1,248
  -1,317
  -1,389
  -1,464
Free cash flow, $m
  -177
  -199
  -231
  -265
  -301
  -339
  -379
  -421
  -464
  -510
  -558
  -608
  -659
  -713
  -769
  -826
  -886
  -949
  -1,014
  -1,081
  -1,151
  -1,223
  -1,299
  -1,378
  -1,460
  -1,546
  -1,635
  -1,728
  -1,826
  -1,928
Issuance/(repayment) of debt, $m
  44
  120
  132
  144
  156
  167
  179
  190
  200
  211
  221
  232
  242
  252
  263
  273
  284
  295
  307
  319
  331
  345
  358
  373
  388
  404
  421
  439
  458
  477
Issuance/(repurchase) of shares, $m
  232
  184
  209
  236
  266
  298
  333
  369
  407
  448
  444
  489
  535
  583
  634
  686
  740
  797
  856
  917
  980
  1,046
  1,115
  1,187
  1,261
  1,338
  1,419
  1,503
  1,591
  1,682
Cash from financing (excl. dividends), $m  
  276
  304
  341
  380
  422
  465
  512
  559
  607
  659
  665
  721
  777
  835
  897
  959
  1,024
  1,092
  1,163
  1,236
  1,311
  1,391
  1,473
  1,560
  1,649
  1,742
  1,840
  1,942
  2,049
  2,159
Total cash flow (excl. dividends), $m
  98
  104
  110
  116
  122
  127
  133
  138
  143
  148
  108
  113
  118
  123
  128
  133
  138
  144
  149
  155
  161
  167
  174
  181
  189
  196
  205
  213
  222
  232
Retained Cash Flow (-), $m
  -232
  -184
  -209
  -236
  -266
  -298
  -333
  -369
  -407
  -448
  -444
  -489
  -535
  -583
  -634
  -686
  -740
  -797
  -856
  -917
  -980
  -1,046
  -1,115
  -1,187
  -1,261
  -1,338
  -1,419
  -1,503
  -1,591
  -1,682
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
  -133
  -79
  -99
  -121
  -145
  -171
  -200
  -231
  -264
  -299
  -337
  -376
  -417
  -461
  -506
  -553
  -602
  -654
  -707
  -762
  -819
  -879
  -941
  -1,005
  -1,072
  -1,142
  -1,214
  -1,290
  -1,368
  -1,450
Discount rate, %
  14.40
  15.12
  15.88
  16.67
  17.50
  18.38
  19.30
  20.26
  21.28
  22.34
  23.46
  24.63
  25.86
  27.15
  28.51
  29.94
  31.43
  33.01
  34.66
  36.39
  38.21
  40.12
  42.12
  44.23
  46.44
  48.76
  51.20
  53.76
  56.45
  59.27
PV of cash for distribution, $m
  -116
  -60
  -64
  -65
  -65
  -62
  -58
  -53
  -47
  -40
  -33
  -27
  -21
  -16
  -12
  -8
  -6
  -4
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  13.9
  4.0
  1.2
  0.4
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Internap Corporation is a technology provider of Internet infrastructure. The Company provides Internet infrastructure through both Colocation Business and Enterprise Services and Cloud Services. The Company operates through two segments: Data Center and Network Services, and Cloud and Hosting Services. Its Data Center and Network Services segment consists of colocation and Internet Protocol (IP) connectivity services. Colocation involves providing physical space within data centers and associated services, such as power, interconnection, environmental controls, monitoring and security while allowing its customers to deploy and manage their servers, storage and other equipment in its secure data centers. Its cloud and hosting services segment consists of hosted Infrastructure-as-a-Service as a cloud platform or through managed hosting. For both Infrastructure-as-a-Service options, the Company provides and maintains the hardware, data center infrastructure and interconnection.

FINANCIAL RATIOS  of  Internap Corporation (INAP)

Valuation Ratios
P/E Ratio -0.3
Price to Sales 0.1
Price to Book -8.8
Price to Tangible Book
Price to Cash Flow 0.8
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -6.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -19.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.4%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity -9075%
Total Debt to Equity -9350%
Interest Coverage -3
Management Effectiveness
Return On Assets -19.2%
Ret/ On Assets - 3 Yr. Avg. -8.6%
Return On Total Capital -29.1%
Ret/ On T. Cap. - 3 Yr. Avg. -15.4%
Return On Equity -227.3%
Return On Equity - 3 Yr. Avg. -95.7%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 47.7%
Gross Margin - 3 Yr. Avg. 45.9%
EBITDA Margin -5.7%
EBITDA Margin - 3 Yr. Avg. 11.6%
Operating Margin -31.2%
Oper. Margin - 3 Yr. Avg. -14.5%
Pre-Tax Margin -41.6%
Pre-Tax Margin - 3 Yr. Avg. -23.4%
Net Profit Margin -41.9%
Net Profit Margin - 3 Yr. Avg. -22.9%
Effective Tax Rate -0.8%
Eff/ Tax Rate - 3 Yr. Avg. 2.5%
Payout Ratio 0%

INAP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INAP stock intrinsic value calculation we used $281 million for the last fiscal year's total revenue generated by Internap Corporation. The default revenue input number comes from 0001 income statement of Internap Corporation. 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 INAP stock valuation model: a) initial revenue growth rate of 20.4% 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 14.4%, whose default value for INAP is calculated based on our internal credit rating of Internap Corporation, 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 Internap Corporation.
    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 INAP stock the variable cost ratio is equal to 131.3%.

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 INAP 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 11.2% for Internap Corporation.

Corporate tax rate of 27% is the nominal tax rate for Internap Corporation. 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 INAP 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 INAP are equal to 149.2%.

Life of production assets of 6.1 years is the average useful life of capital assets used in Internap Corporation 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 INAP is equal to -7.3%. 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 - $-5.101 million for Internap Corporation - 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 25.512 million for Internap Corporation 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 Internap Corporation at the current share price and the inputted number of shares is $0.1 billion.

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