Intrinsic value of Intersections - INTX

Previous Close

$3.34

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

  Value-price divergence*

-171%

Previous close

$3.34

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

 
Value-price divergence*

-171%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of INTX 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 2016), $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
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -13.73
  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
  176
  180
  184
  188
  194
  200
  206
  213
  221
  229
  238
  247
  257
  268
  279
  291
  304
  317
  332
  347
  363
  379
  397
  416
  435
  456
  478
  501
  525
  551
  577
Variable operating expenses, $m
 
  213
  218
  224
  230
  237
  245
  253
  262
  271
  282
  292
  304
  316
  330
  344
  359
  375
  392
  410
  429
  449
  469
  492
  515
  539
  565
  592
  621
  651
  683
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
  203
  213
  218
  224
  230
  237
  245
  253
  262
  271
  282
  292
  304
  316
  330
  344
  359
  375
  392
  410
  429
  449
  469
  492
  515
  539
  565
  592
  621
  651
  683
Operating income, $m
  -28
  -34
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -44
  -45
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -63
  -66
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -96
  -100
  -105
EBITDA, $m
  -21
  -33
  -33
  -34
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -45
  -47
  -48
  -51
  -53
  -55
  -57
  -60
  -63
  -66
  -69
  -72
  -75
  -79
  -83
  -87
  -91
  -95
  -100
  -105
Interest expense (income), $m
  2
  3
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  18
  19
  20
  22
Earnings before tax, $m
  -30
  -36
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -109
  -115
  -121
  -127
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
  0
Net income, $m
  -30
  -36
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -109
  -115
  -121
  -127

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  11
  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
  53
  43
  44
  45
  46
  48
  49
  51
  53
  55
  57
  59
  61
  64
  67
  69
  72
  76
  79
  83
  87
  91
  95
  99
  104
  109
  114
  120
  125
  131
  138
Adjusted assets (=assets-cash), $m
  42
  43
  44
  45
  46
  48
  49
  51
  53
  55
  57
  59
  61
  64
  67
  69
  72
  76
  79
  83
  87
  91
  95
  99
  104
  109
  114
  120
  125
  131
  138
Revenue / Adjusted assets
  4.190
  4.186
  4.182
  4.178
  4.217
  4.167
  4.204
  4.176
  4.170
  4.164
  4.175
  4.186
  4.213
  4.188
  4.164
  4.217
  4.222
  4.171
  4.203
  4.181
  4.172
  4.165
  4.179
  4.202
  4.183
  4.183
  4.193
  4.175
  4.200
  4.206
  4.181
Average production assets, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
Working capital, $m
  2
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
Total debt, $m
  14
  7
  7
  8
  10
  11
  12
  14
  15
  17
  19
  21
  23
  25
  28
  31
  33
  36
  39
  42
  46
  49
  53
  57
  62
  66
  71
  76
  81
  86
  92
Total liabilities, $m
  45
  39
  39
  40
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  60
  63
  65
  68
  71
  74
  78
  81
  85
  89
  94
  98
  103
  108
  113
  118
  124
Total equity, $m
  7
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
Total liabilities and equity, $m
  52
  43
  43
  44
  47
  48
  49
  51
  52
  54
  57
  59
  61
  63
  67
  70
  72
  76
  79
  82
  87
  90
  94
  99
  104
  109
  114
  120
  126
  131
  138
Debt-to-equity ratio
  2.000
  1.530
  1.700
  1.880
  2.080
  2.280
  2.490
  2.710
  2.920
  3.140
  3.360
  3.570
  3.780
  3.990
  4.190
  4.390
  4.590
  4.770
  4.960
  5.130
  5.300
  5.470
  5.620
  5.780
  5.920
  6.060
  6.190
  6.320
  6.450
  6.560
  6.680
Adjusted equity ratio
  -0.095
  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
  -30
  -36
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -50
  -52
  -55
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -81
  -85
  -89
  -94
  -99
  -104
  -109
  -115
  -121
  -127
Depreciation, amort., depletion, $m
  7
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
Funds from operations, $m
  -13
  -35
  -35
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -89
  -93
  -98
  -103
  -108
  -114
  -120
  -126
Change in working capital, $m
  -9
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  -4
  -35
  -35
  -36
  -37
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -54
  -57
  -59
  -62
  -65
  -69
  -72
  -76
  -80
  -84
  -88
  -93
  -97
  -102
  -108
  -113
  -119
  -125
Maintenance CAPEX, $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
  -1
  -1
  -1
  -1
  -1
  -1
New CAPEX, $m
  -7
  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 investing activities, $m
  -7
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
Free cash flow, $m
  -11
  -35
  -35
  -36
  -37
  -39
  -40
  -42
  -43
  -45
  -47
  -50
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -76
  -80
  -84
  -89
  -93
  -98
  -103
  -108
  -114
  -120
  -126
Issuance/(repayment) of debt, $m
  13
  -4
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
Issuance/(repurchase) of shares, $m
  0
  42
  36
  37
  39
  40
  41
  43
  45
  47
  49
  50
  52
  55
  58
  60
  63
  66
  70
  73
  77
  81
  85
  90
  94
  99
  104
  110
  115
  121
  127
Cash from financing (excl. dividends), $m  
  10
  38
  37
  38
  40
  41
  42
  45
  47
  49
  51
  52
  54
  57
  60
  63
  66
  69
  73
  76
  80
  85
  89
  94
  98
  103
  109
  115
  120
  126
  133
Total cash flow (excl. dividends), $m
  0
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
Retained Cash Flow (-), $m
  26
  -42
  -36
  -37
  -39
  -40
  -41
  -43
  -45
  -47
  -49
  -50
  -52
  -55
  -58
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -90
  -94
  -99
  -104
  -110
  -115
  -121
  -127
Prev. year cash balance distribution, $m
 
  8
  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
 
  -32
  -34
  -35
  -36
  -37
  -39
  -40
  -42
  -44
  -45
  -47
  -50
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -80
  -85
  -89
  -93
  -98
  -103
  -109
  -114
  -120
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
 
  -31
  -31
  -31
  -30
  -29
  -28
  -27
  -26
  -25
  -24
  -23
  -21
  -20
  -18
  -17
  -15
  -14
  -12
  -11
  -9
  -8
  -7
  -6
  -5
  -4
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  100
  50.0
  27.1
  14.6
  7.9
  4.2
  2.3
  1.2
  0.6
  0.3
  0.2
  0.1
  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

Intersections Inc. uses data to enable consumers reduce risk through subscription services. The Company's operating segments include Personal Information Services, Insurance and Other Consumer Services, and Bail Bonds Industry Solutions. The Company's Personal Information Services business segment focuses on helping consumers understand, monitor, manage and protect against the risks associated with third parties misusing their personal information and violating their privacy. The Company's Insurance and Other Consumer Services business segment focuses on helping consumers use insurance and other services to manage various personal risks and achieve personal goals. The Company's Bail Bonds Industry Solutions business segment focuses on automating the bail bonds industry. The Company offers IDENTITY GUARD portfolio of services. The Company's insurance products are sold and administered pursuant to contracts with insurance companies.

FINANCIAL RATIOS  of  Intersections (INTX)

Valuation Ratios
P/E Ratio -2.6
Price to Sales 0.5
Price to Book 11.3
Price to Tangible Book
Price to Cash Flow -19.8
Price to Free Cash Flow -7.2
Growth Rates
Sales Growth Rate -13.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 75%
Cap. Spend. - 3 Yr. Gr. Rate 7%
Financial Strength
Quick Ratio 4
Current Ratio 0.2
LT Debt to Equity 157.1%
Total Debt to Equity 200%
Interest Coverage -14
Management Effectiveness
Return On Assets -45.5%
Ret/ On Assets - 3 Yr. Avg. -40.7%
Return On Total Capital -107.1%
Ret/ On T. Cap. - 3 Yr. Avg. -76.9%
Return On Equity -150%
Return On Equity - 3 Yr. Avg. -92.7%
Asset Turnover 2.9
Profitability Ratios
Gross Margin 68.2%
Gross Margin - 3 Yr. Avg. 66.9%
EBITDA Margin -11.9%
EBITDA Margin - 3 Yr. Avg. -13.6%
Operating Margin -15.3%
Oper. Margin - 3 Yr. Avg. -17%
Pre-Tax Margin -17%
Pre-Tax Margin - 3 Yr. Avg. -17.8%
Net Profit Margin -17%
Net Profit Margin - 3 Yr. Avg. -17.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 5.3%
Payout Ratio 0%

INTX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INTX stock intrinsic value calculation we used $176 million for the last fiscal year's total revenue generated by Intersections. The default revenue input number comes from 2016 income statement of Intersections. 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 INTX 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 4.3%, whose default value for INTX is calculated based on our internal credit rating of Intersections, 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 Intersections.
    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 INTX stock the variable cost ratio is equal to 118.8%.

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 INTX 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 25% for Intersections.

Corporate tax rate of 27% is the nominal tax rate for Intersections. 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 INTX 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 INTX are equal to 0.6%.

Life of production assets of 1.6 years is the average useful life of capital assets used in Intersections 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 INTX is equal to -3.4%. 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 - $7 million for Intersections - 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 21.678 million for Intersections 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 Intersections at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ Intersections Inc (INTX): How Does It Impact Your Portfolio?   [Oct-09-17 09:19PM  Simply Wall St.]
▶ Intersections Inc. Reports Second Quarter 2017 Results   [Aug-10-17 04:05PM  Business Wire]
▶ ETFs with exposure to Intersections, Inc. : May 16, 2017   [May-16-17 12:53PM  Capital Cube]
▶ Intersections Inc. Reports First Quarter 2017 Results   [May-11-17 04:30PM  Business Wire]
▶ ETFs with exposure to Intersections, Inc. : April 7, 2017   [Apr-07-17 04:53PM  Capital Cube]
▶ Intersections Inc. Sells Captira Analytical, LLC   [Feb-21-17 08:30AM  PR Newswire]
▶ Intersections Inc. Adds Melvin R. Seiler to its Board   [Feb-13-17 04:05PM  PR Newswire]
▶ Intersections Inc. Board Names Johan Roets as Next CEO   [Jan-10-17 04:05PM  PR Newswire]
▶ Is Intersections Inc. (INTX) Going to Burn These Hedge Funds?   [Dec-07  10:51PM  at Insider Monkey]
Financial statements of INTX
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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