Intrinsic value of International Speedway Corporation - ISCA

Previous Close

$45.35

  Intrinsic Value

$40.19

stock screener

  Rating & Target

hold

-11%

Previous close

$45.35

 
Intrinsic value

$40.19

 
Up/down potential

-11%

 
Rating

hold

We calculate the intrinsic value of ISCA 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 2.0

 

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, %
  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
  689
  704
  722
  743
  765
  790
  817
  846
  877
  911
  947
  986
  1,026
  1,070
  1,116
  1,165
  1,217
  1,272
  1,329
  1,390
  1,455
  1,523
  1,595
  1,670
  1,750
  1,833
  1,921
  2,014
  2,112
  2,214
Variable operating expenses, $m
  586
  596
  608
  621
  635
  650
  667
  686
  706
  727
  598
  622
  648
  676
  705
  736
  768
  803
  840
  878
  919
  962
  1,007
  1,055
  1,105
  1,158
  1,213
  1,272
  1,334
  1,398
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
  586
  596
  608
  621
  635
  650
  667
  686
  706
  727
  598
  622
  648
  676
  705
  736
  768
  803
  840
  878
  919
  962
  1,007
  1,055
  1,105
  1,158
  1,213
  1,272
  1,334
  1,398
Operating income, $m
  102
  108
  115
  122
  130
  140
  149
  160
  172
  184
  349
  363
  378
  394
  411
  429
  448
  468
  490
  512
  536
  561
  587
  615
  645
  675
  708
  742
  778
  816
EBITDA, $m
  354
  362
  371
  381
  393
  406
  420
  434
  451
  468
  486
  506
  527
  549
  573
  598
  625
  653
  683
  714
  747
  782
  819
  858
  898
  941
  987
  1,034
  1,084
  1,137
Interest expense (income), $m
  14
  14
  14
  15
  16
  17
  18
  19
  21
  22
  24
  25
  27
  29
  31
  33
  35
  38
  40
  43
  46
  49
  52
  55
  59
  62
  66
  70
  75
  79
  84
Earnings before tax, $m
  88
  94
  99
  106
  113
  121
  130
  139
  150
  161
  324
  336
  349
  363
  378
  394
  411
  428
  447
  467
  487
  509
  532
  557
  582
  609
  638
  668
  699
  732
Tax expense, $m
  24
  25
  27
  29
  31
  33
  35
  38
  40
  43
  87
  91
  94
  98
  102
  106
  111
  116
  121
  126
  132
  138
  144
  150
  157
  165
  172
  180
  189
  198
Net income, $m
  65
  68
  73
  77
  83
  89
  95
  102
  109
  117
  236
  245
  255
  265
  276
  288
  300
  313
  326
  341
  356
  372
  389
  406
  425
  445
  466
  487
  510
  534

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
  2,106
  2,154
  2,209
  2,271
  2,340
  2,416
  2,498
  2,587
  2,683
  2,786
  2,896
  3,014
  3,139
  3,272
  3,413
  3,563
  3,721
  3,888
  4,065
  4,252
  4,449
  4,657
  4,876
  5,107
  5,350
  5,606
  5,876
  6,159
  6,457
  6,771
Adjusted assets (=assets-cash), $m
  2,106
  2,154
  2,209
  2,271
  2,340
  2,416
  2,498
  2,587
  2,683
  2,786
  2,896
  3,014
  3,139
  3,272
  3,413
  3,563
  3,721
  3,888
  4,065
  4,252
  4,449
  4,657
  4,876
  5,107
  5,350
  5,606
  5,876
  6,159
  6,457
  6,771
Revenue / Adjusted assets
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
Average production assets, $m
  1,679
  1,717
  1,761
  1,811
  1,866
  1,926
  1,992
  2,063
  2,139
  2,221
  2,309
  2,403
  2,502
  2,609
  2,721
  2,840
  2,967
  3,100
  3,241
  3,390
  3,547
  3,713
  3,887
  4,072
  4,265
  4,469
  4,684
  4,910
  5,148
  5,398
Working capital, $m
  -34
  -35
  -35
  -36
  -37
  -39
  -40
  -41
  -43
  -45
  -46
  -48
  -50
  -52
  -55
  -57
  -60
  -62
  -65
  -68
  -71
  -75
  -78
  -82
  -86
  -90
  -94
  -99
  -103
  -108
Total debt, $m
  268
  282
  298
  317
  337
  359
  383
  410
  438
  468
  501
  536
  573
  612
  653
  698
  744
  794
  846
  901
  959
  1,020
  1,085
  1,153
  1,225
  1,300
  1,380
  1,464
  1,552
  1,644
Total liabilities, $m
  621
  635
  652
  670
  690
  713
  737
  763
  792
  822
  854
  889
  926
  965
  1,007
  1,051
  1,098
  1,147
  1,199
  1,254
  1,313
  1,374
  1,438
  1,507
  1,578
  1,654
  1,733
  1,817
  1,905
  1,998
Total equity, $m
  1,484
  1,519
  1,558
  1,601
  1,650
  1,703
  1,761
  1,824
  1,892
  1,964
  2,042
  2,125
  2,213
  2,307
  2,406
  2,512
  2,623
  2,741
  2,866
  2,998
  3,137
  3,283
  3,438
  3,600
  3,772
  3,952
  4,142
  4,342
  4,553
  4,774
Total liabilities and equity, $m
  2,105
  2,154
  2,210
  2,271
  2,340
  2,416
  2,498
  2,587
  2,684
  2,786
  2,896
  3,014
  3,139
  3,272
  3,413
  3,563
  3,721
  3,888
  4,065
  4,252
  4,450
  4,657
  4,876
  5,107
  5,350
  5,606
  5,875
  6,159
  6,458
  6,772
Debt-to-equity ratio
  0.180
  0.190
  0.190
  0.200
  0.200
  0.210
  0.220
  0.220
  0.230
  0.240
  0.250
  0.250
  0.260
  0.270
  0.270
  0.280
  0.280
  0.290
  0.300
  0.300
  0.310
  0.310
  0.320
  0.320
  0.320
  0.330
  0.330
  0.340
  0.340
  0.340
Adjusted equity ratio
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705
  0.705

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  65
  68
  73
  77
  83
  89
  95
  102
  109
  117
  236
  245
  255
  265
  276
  288
  300
  313
  326
  341
  356
  372
  389
  406
  425
  445
  466
  487
  510
  534
Depreciation, amort., depletion, $m
  251
  254
  256
  259
  263
  266
  270
  274
  279
  284
  137
  143
  149
  155
  162
  169
  177
  185
  193
  202
  211
  221
  231
  242
  254
  266
  279
  292
  306
  321
Funds from operations, $m
  316
  322
  329
  337
  345
  355
  365
  376
  388
  401
  374
  388
  404
  420
  438
  457
  476
  497
  519
  542
  567
  593
  620
  649
  679
  711
  744
  780
  817
  856
Change in working capital, $m
  -1
  -1
  -1
  -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
Cash from operations, $m
  317
  323
  330
  338
  346
  356
  366
  378
  390
  403
  375
  390
  406
  423
  440
  459
  479
  500
  522
  545
  570
  596
  624
  652
  683
  715
  749
  784
  821
  861
Maintenance CAPEX, $m
  -98
  -100
  -102
  -105
  -108
  -111
  -115
  -119
  -123
  -127
  -132
  -137
  -143
  -149
  -155
  -162
  -169
  -177
  -185
  -193
  -202
  -211
  -221
  -231
  -242
  -254
  -266
  -279
  -292
  -306
New CAPEX, $m
  -33
  -39
  -44
  -50
  -55
  -60
  -66
  -71
  -76
  -82
  -88
  -94
  -100
  -106
  -113
  -119
  -126
  -133
  -141
  -149
  -157
  -166
  -175
  -184
  -194
  -204
  -215
  -226
  -238
  -250
Cash from investing activities, $m
  -131
  -139
  -146
  -155
  -163
  -171
  -181
  -190
  -199
  -209
  -220
  -231
  -243
  -255
  -268
  -281
  -295
  -310
  -326
  -342
  -359
  -377
  -396
  -415
  -436
  -458
  -481
  -505
  -530
  -556
Free cash flow, $m
  186
  184
  183
  183
  184
  185
  186
  188
  190
  193
  155
  159
  163
  168
  173
  178
  184
  190
  196
  204
  211
  219
  228
  237
  247
  257
  268
  279
  291
  304
Issuance/(repayment) of debt, $m
  12
  14
  16
  18
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  76
  79
  84
  88
  93
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  12
  14
  16
  18
  20
  22
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  49
  52
  55
  58
  61
  65
  68
  72
  76
  79
  84
  88
  93
Total cash flow (excl. dividends), $m
  198
  199
  200
  202
  204
  207
  210
  214
  219
  223
  188
  194
  200
  207
  214
  222
  230
  239
  249
  259
  269
  281
  293
  305
  318
  332
  347
  363
  379
  397
Retained Cash Flow (-), $m
  -27
  -34
  -39
  -44
  -49
  -53
  -58
  -63
  -68
  -73
  -78
  -83
  -88
  -94
  -100
  -105
  -112
  -118
  -125
  -132
  -139
  -147
  -154
  -163
  -171
  -180
  -190
  -200
  -210
  -221
Prev. year cash balance distribution, $m
  178
  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
  350
  164
  161
  158
  155
  154
  152
  151
  151
  151
  110
  111
  112
  113
  115
  117
  119
  121
  124
  127
  130
  134
  138
  142
  147
  152
  157
  163
  169
  176
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
  335
  151
  140
  130
  121
  112
  103
  95
  87
  79
  52
  47
  43
  38
  34
  30
  26
  22
  19
  16
  13
  11
  9
  7
  6
  4
  3
  3
  2
  1
Current shareholders' claim on cash, %
  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
  100.0

International Speedway Corporation is an owner of motorsports entertainment facilities and promoter of motorsports themed entertainment activities in the United States. The Company's motorsports themed event operations consist of racing events at its motorsports entertainment facilities. As of November 30, 2016, the Company owned and/or operated 13 of the nation's motorsports entertainment facilities: Daytona International Speedway in Florida; Talladega Superspeedway in Alabama; Michigan International Speedway in Michigan; Auto Club Speedway of Southern California in California; Kansas Speedway in Kansas; Richmond International Raceway in Virginia; Darlington Raceway in South Carolina; Chicagoland Speedway in Illinois; Martinsville Speedway in Virginia; Phoenix International Raceway in Arizona; Homestead-Miami Speedway in Florida; Watkins Glen International in New York, and Route 66 Raceway in Illinois.

FINANCIAL RATIOS  of  International Speedway Corporation (ISCA)

Valuation Ratios
P/E Ratio 27.6
Price to Sales 3.2
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 8.5
Price to Free Cash Flow 20
Growth Rates
Sales Growth Rate 2.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -9%
Cap. Spend. - 3 Yr. Gr. Rate 10.4%
Financial Strength
Quick Ratio 88
Current Ratio 0
LT Debt to Equity 18.6%
Total Debt to Equity 18.8%
Interest Coverage 10
Management Effectiveness
Return On Assets 3.9%
Ret/ On Assets - 3 Yr. Avg. 3.6%
Return On Total Capital 4.6%
Ret/ On T. Cap. - 3 Yr. Avg. 4.1%
Return On Equity 5.4%
Return On Equity - 3 Yr. Avg. 4.9%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 49.3%
Gross Margin - 3 Yr. Avg. 47.8%
EBITDA Margin 36.3%
EBITDA Margin - 3 Yr. Avg. 33%
Operating Margin 16.6%
Oper. Margin - 3 Yr. Avg. 14.7%
Pre-Tax Margin 18.8%
Pre-Tax Margin - 3 Yr. Avg. 16.1%
Net Profit Margin 11.5%
Net Profit Margin - 3 Yr. Avg. 10.2%
Effective Tax Rate 38.7%
Eff/ Tax Rate - 3 Yr. Avg. 36.6%
Payout Ratio 25%

ISCA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ISCA stock intrinsic value calculation we used $675 million for the last fiscal year's total revenue generated by International Speedway Corporation. The default revenue input number comes from 0001 income statement of International Speedway 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 ISCA 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 ISCA is calculated based on our internal credit rating of International Speedway 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 International Speedway 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 ISCA stock the variable cost ratio is equal to 85.6%.

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 ISCA 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 International Speedway Corporation.

Corporate tax rate of 27% is the nominal tax rate for International Speedway 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 ISCA 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 ISCA are equal to 243.8%.

Life of production assets of 16.8 years is the average useful life of capital assets used in International Speedway 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 ISCA is equal to -4.9%. 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 - $1635.958 million for International Speedway 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 43.305 million for International Speedway 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 International Speedway Corporation at the current share price and the inputted number of shares is $2.0 billion.

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