Intrinsic value of Identiv, Inc. - INVE

Previous Close

$4.82

  Intrinsic Value

$0.36

stock screener

  Rating & Target

str. sell

-93%

Previous close

$4.82

 
Intrinsic value

$0.36

 
Up/down potential

-93%

 
Rating

str. sell

We calculate the intrinsic value of INVE 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, %
  29.70
  27.23
  25.01
  23.01
  21.21
  19.59
  18.13
  16.81
  15.63
  14.57
  13.61
  12.75
  11.98
  11.28
  10.65
  10.09
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
  6.44
  6.29
  6.16
Revenue, $m
  78
  99
  124
  152
  185
  221
  261
  304
  352
  403
  458
  517
  579
  644
  712
  784
  859
  938
  1,019
  1,104
  1,193
  1,285
  1,380
  1,479
  1,583
  1,690
  1,801
  1,917
  2,038
  2,163
Variable operating expenses, $m
  93
  119
  148
  182
  221
  264
  312
  365
  422
  483
  548
  618
  692
  771
  853
  939
  1,028
  1,122
  1,220
  1,322
  1,427
  1,537
  1,652
  1,770
  1,894
  2,022
  2,155
  2,294
  2,439
  2,589
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
  93
  119
  148
  182
  221
  264
  312
  365
  422
  483
  548
  618
  692
  771
  853
  939
  1,028
  1,122
  1,220
  1,322
  1,427
  1,537
  1,652
  1,770
  1,894
  2,022
  2,155
  2,294
  2,439
  2,589
Operating income, $m
  -16
  -20
  -25
  -30
  -36
  -44
  -51
  -60
  -69
  -80
  -90
  -102
  -114
  -127
  -140
  -154
  -169
  -184
  -200
  -217
  -235
  -253
  -271
  -291
  -311
  -332
  -354
  -377
  -401
  -425
EBITDA, $m
  -14
  -18
  -22
  -28
  -33
  -40
  -47
  -55
  -64
  -73
  -83
  -93
  -105
  -116
  -129
  -142
  -155
  -169
  -184
  -200
  -216
  -232
  -249
  -267
  -286
  -305
  -325
  -346
  -368
  -391
Interest expense (income), $m
  2
  2
  3
  4
  6
  7
  9
  11
  13
  16
  18
  21
  24
  27
  31
  34
  38
  42
  46
  50
  55
  60
  64
  69
  75
  80
  86
  92
  98
  104
  111
Earnings before tax, $m
  -18
  -23
  -29
  -36
  -44
  -53
  -62
  -73
  -85
  -98
  -111
  -126
  -141
  -157
  -174
  -192
  -211
  -230
  -251
  -272
  -294
  -317
  -341
  -366
  -391
  -418
  -446
  -475
  -505
  -536
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
  -18
  -23
  -29
  -36
  -44
  -53
  -62
  -73
  -85
  -98
  -111
  -126
  -141
  -157
  -174
  -192
  -211
  -230
  -251
  -272
  -294
  -317
  -341
  -366
  -391
  -418
  -446
  -475
  -505
  -536

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
  56
  72
  90
  110
  134
  160
  189
  221
  255
  293
  332
  375
  420
  467
  517
  569
  623
  680
  739
  801
  865
  932
  1,001
  1,073
  1,148
  1,225
  1,306
  1,390
  1,478
  1,569
Adjusted assets (=assets-cash), $m
  56
  72
  90
  110
  134
  160
  189
  221
  255
  293
  332
  375
  420
  467
  517
  569
  623
  680
  739
  801
  865
  932
  1,001
  1,073
  1,148
  1,225
  1,306
  1,390
  1,478
  1,569
Revenue / Adjusted assets
  1.393
  1.375
  1.378
  1.382
  1.381
  1.381
  1.381
  1.376
  1.380
  1.375
  1.380
  1.379
  1.379
  1.379
  1.377
  1.378
  1.379
  1.379
  1.379
  1.378
  1.379
  1.379
  1.379
  1.378
  1.379
  1.380
  1.379
  1.379
  1.379
  1.379
Average production assets, $m
  6
  8
  10
  12
  15
  18
  21
  24
  28
  32
  37
  41
  46
  52
  57
  63
  69
  75
  82
  88
  95
  103
  110
  118
  127
  135
  144
  153
  163
  173
Working capital, $m
  18
  23
  29
  35
  43
  51
  61
  71
  82
  94
  107
  120
  135
  150
  166
  183
  200
  219
  238
  257
  278
  299
  322
  345
  369
  394
  420
  447
  475
  504
Total debt, $m
  19
  25
  33
  43
  53
  65
  78
  92
  108
  124
  142
  161
  181
  202
  225
  248
  272
  298
  324
  352
  381
  411
  442
  474
  507
  542
  578
  616
  655
  696
Total liabilities, $m
  25
  32
  40
  49
  60
  72
  85
  99
  114
  131
  149
  168
  188
  209
  231
  255
  279
  305
  331
  359
  388
  417
  448
  481
  514
  549
  585
  623
  662
  703
Total equity, $m
  31
  40
  50
  61
  74
  88
  104
  122
  141
  161
  183
  207
  232
  258
  285
  314
  344
  375
  408
  442
  477
  514
  552
  592
  633
  676
  721
  767
  816
  866
Total liabilities and equity, $m
  56
  72
  90
  110
  134
  160
  189
  221
  255
  292
  332
  375
  420
  467
  516
  569
  623
  680
  739
  801
  865
  931
  1,000
  1,073
  1,147
  1,225
  1,306
  1,390
  1,478
  1,569
Debt-to-equity ratio
  0.600
  0.640
  0.680
  0.700
  0.720
  0.740
  0.750
  0.760
  0.760
  0.770
  0.770
  0.780
  0.780
  0.790
  0.790
  0.790
  0.790
  0.790
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
  0.800
Adjusted equity ratio
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552
  0.552

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -18
  -23
  -29
  -36
  -44
  -53
  -62
  -73
  -85
  -98
  -111
  -126
  -141
  -157
  -174
  -192
  -211
  -230
  -251
  -272
  -294
  -317
  -341
  -366
  -391
  -418
  -446
  -475
  -505
  -536
Depreciation, amort., depletion, $m
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  7
  8
  9
  10
  11
  13
  14
  15
  16
  18
  19
  21
  22
  24
  25
  27
  29
  31
  33
  35
Funds from operations, $m
  -16
  -21
  -27
  -33
  -41
  -49
  -58
  -68
  -79
  -91
  -104
  -117
  -132
  -147
  -163
  -180
  -197
  -215
  -235
  -254
  -275
  -296
  -319
  -342
  -366
  -391
  -417
  -444
  -472
  -502
Change in working capital, $m
  4
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  14
  15
  16
  17
  18
  18
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
Cash from operations, $m
  -20
  -26
  -32
  -40
  -48
  -57
  -67
  -78
  -90
  -103
  -117
  -131
  -146
  -162
  -179
  -196
  -215
  -234
  -254
  -274
  -296
  -318
  -341
  -365
  -390
  -416
  -443
  -471
  -500
  -531
Maintenance CAPEX, $m
  -1
  -1
  -2
  -2
  -2
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -13
  -14
  -15
  -16
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -29
  -31
  -33
New CAPEX, $m
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
Cash from investing activities, $m
  -2
  -3
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -10
  -12
  -13
  -14
  -15
  -17
  -19
  -20
  -22
  -23
  -25
  -26
  -29
  -30
  -32
  -34
  -36
  -38
  -41
  -43
Free cash flow, $m
  -23
  -29
  -36
  -44
  -53
  -63
  -74
  -86
  -99
  -113
  -127
  -143
  -159
  -177
  -195
  -214
  -233
  -254
  -275
  -297
  -320
  -344
  -369
  -395
  -422
  -450
  -479
  -509
  -541
  -574
Issuance/(repayment) of debt, $m
  6
  7
  8
  9
  10
  12
  13
  14
  15
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  39
  41
Issuance/(repurchase) of shares, $m
  25
  31
  39
  47
  57
  67
  78
  91
  104
  118
  133
  149
  166
  183
  202
  221
  241
  262
  284
  306
  329
  354
  379
  405
  433
  461
  490
  521
  553
  586
Cash from financing (excl. dividends), $m  
  31
  38
  47
  56
  67
  79
  91
  105
  119
  135
  151
  168
  186
  204
  224
  244
  265
  287
  311
  334
  358
  384
  410
  437
  467
  496
  526
  559
  592
  627
Total cash flow (excl. dividends), $m
  8
  9
  11
  12
  14
  16
  17
  19
  21
  22
  24
  25
  26
  28
  29
  31
  32
  34
  35
  36
  38
  39
  41
  42
  44
  46
  48
  50
  52
  54
Retained Cash Flow (-), $m
  -25
  -31
  -39
  -47
  -57
  -67
  -78
  -91
  -104
  -118
  -133
  -149
  -166
  -183
  -202
  -221
  -241
  -262
  -284
  -306
  -329
  -354
  -379
  -405
  -433
  -461
  -490
  -521
  -553
  -586
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
  -17
  -22
  -28
  -35
  -43
  -51
  -61
  -72
  -84
  -96
  -110
  -124
  -139
  -155
  -172
  -190
  -209
  -228
  -249
  -270
  -292
  -314
  -338
  -363
  -388
  -415
  -443
  -472
  -502
  -533
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
  -16
  -20
  -24
  -29
  -33
  -37
  -41
  -45
  -48
  -50
  -52
  -53
  -53
  -52
  -51
  -48
  -45
  -42
  -38
  -34
  -30
  -26
  -22
  -18
  -15
  -12
  -10
  -7
  -5
  -4
Current shareholders' claim on cash, %
  75.1
  56.7
  43.1
  33.0
  25.4
  19.7
  15.3
  11.9
  9.4
  7.4
  5.8
  4.6
  3.7
  2.9
  2.3
  1.9
  1.5
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1

Identiv, Inc. is a global security technology company. The Company operates through four segments: Physical access control systems (PACS), Identity, Credentials and All Other. PACS segment provides solutions and services that enable the issuance, management and use of secure identity credentials in diverse markets. PACS business offers Hirsch line of controllers, including the advanced MX line, Hirsch's Velocity management software and its Identiv connected physical access manager software, EDGE controller and reader package. Identity segment offers products to secure enterprise information, including login and printers through delivery of smart card reader products and identity management through its idOnDemand service. Credentials segment offers access cards, radio frequency identification (RFID) and near field communication products, including cards, labels, tags and stickers, as well as RF components. All Other segment includes products, such as Chipdrive and Digital Media readers.

FINANCIAL RATIOS  of  Identiv, Inc. (INVE)

Valuation Ratios
P/E Ratio -3.8
Price to Sales 1
Price to Book 13.4
Price to Tangible Book
Price to Cash Flow -8.9
Price to Free Cash Flow -7.7
Growth Rates
Sales Growth Rate -8.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -12.9%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 350%
Total Debt to Equity 575%
Interest Coverage -6
Management Effectiveness
Return On Assets -25.5%
Ret/ On Assets - 3 Yr. Avg. -34.1%
Return On Total Capital -43.8%
Ret/ On T. Cap. - 3 Yr. Avg. -50.6%
Return On Equity -155.6%
Return On Equity - 3 Yr. Avg. -110%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 42.9%
Gross Margin - 3 Yr. Avg. 40.4%
EBITDA Margin -16.1%
EBITDA Margin - 3 Yr. Avg. -29.8%
Operating Margin -19.6%
Oper. Margin - 3 Yr. Avg. -32%
Pre-Tax Margin -25%
Pre-Tax Margin - 3 Yr. Avg. -37.1%
Net Profit Margin -25%
Net Profit Margin - 3 Yr. Avg. -37.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

INVE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INVE stock intrinsic value calculation we used $60 million for the last fiscal year's total revenue generated by Identiv, Inc.. The default revenue input number comes from 0001 income statement of Identiv, 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 INVE stock valuation model: a) initial revenue growth rate of 29.7% 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 INVE is calculated based on our internal credit rating of Identiv, 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 Identiv, 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 INVE stock the variable cost ratio is equal to 120%.

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 INVE 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 16.9% for Identiv, Inc..

Corporate tax rate of 27% is the nominal tax rate for Identiv, 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 INVE 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 INVE are equal to 8%.

Life of production assets of 2.7 years is the average useful life of capital assets used in Identiv, 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 INVE is equal to 23.3%. 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 - $24.031 million for Identiv, 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 15.483 million for Identiv, 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 Identiv, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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