Intrinsic value of International Speedway Cl A - ISCA

Previous Close

$44.00

  Intrinsic Value

$10.39

stock screener

  Rating & Target

str. sell

-76%

Previous close

$44.00

 
Intrinsic value

$10.39

 
Up/down potential

-76%

 
Rating

str. sell

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 2017), $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
   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
   2047

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
  684
  700
  718
  738
  761
  785
  812
  841
  872
  906
  941
  980
  1,020
  1,064
  1,109
  1,158
  1,210
  1,264
  1,322
  1,382
  1,446
  1,514
  1,585
  1,660
  1,739
  1,822
  1,910
  2,002
  2,099
  2,201
Variable operating expenses, $m
  570
  583
  597
  613
  630
  650
  671
  694
  718
  745
  744
  774
  806
  840
  876
  915
  955
  998
  1,044
  1,092
  1,142
  1,196
  1,252
  1,311
  1,373
  1,439
  1,508
  1,581
  1,658
  1,738
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
  570
  583
  597
  613
  630
  650
  671
  694
  718
  745
  744
  774
  806
  840
  876
  915
  955
  998
  1,044
  1,092
  1,142
  1,196
  1,252
  1,311
  1,373
  1,439
  1,508
  1,581
  1,658
  1,738
Operating income, $m
  114
  118
  121
  126
  130
  135
  141
  147
  154
  161
  198
  206
  215
  224
  233
  244
  254
  266
  278
  291
  304
  318
  333
  349
  366
  383
  402
  421
  441
  463
EBITDA, $m
  324
  331
  340
  349
  360
  371
  384
  398
  413
  428
  445
  463
  483
  503
  525
  548
  572
  598
  625
  654
  684
  716
  750
  785
  823
  862
  904
  947
  993
  1,041
Interest expense (income), $m
  14
  14
  14
  15
  17
  18
  19
  21
  22
  24
  26
  28
  30
  32
  35
  37
  40
  43
  46
  49
  53
  56
  60
  64
  68
  73
  77
  82
  88
  93
  99
Earnings before tax, $m
  100
  103
  106
  109
  113
  116
  121
  125
  130
  135
  170
  176
  182
  189
  196
  204
  212
  220
  229
  238
  248
  258
  269
  281
  293
  306
  319
  333
  348
  364
Tax expense, $m
  27
  28
  29
  29
  30
  31
  33
  34
  35
  36
  46
  48
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  76
  79
  83
  86
  90
  94
  98
Net income, $m
  73
  75
  77
  80
  82
  85
  88
  91
  95
  99
  124
  129
  133
  138
  143
  149
  154
  161
  167
  174
  181
  189
  197
  205
  214
  223
  233
  243
  254
  266

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
  2,074
  2,122
  2,176
  2,237
  2,305
  2,380
  2,461
  2,548
  2,643
  2,744
  2,853
  2,969
  3,092
  3,223
  3,362
  3,509
  3,665
  3,830
  4,005
  4,189
  4,383
  4,587
  4,803
  5,031
  5,270
  5,522
  5,788
  6,067
  6,361
  6,670
Adjusted assets (=assets-cash), $m
  2,074
  2,122
  2,176
  2,237
  2,305
  2,380
  2,461
  2,548
  2,643
  2,744
  2,853
  2,969
  3,092
  3,223
  3,362
  3,509
  3,665
  3,830
  4,005
  4,189
  4,383
  4,587
  4,803
  5,031
  5,270
  5,522
  5,788
  6,067
  6,361
  6,670
Revenue / Adjusted assets
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
Average production assets, $m
  1,799
  1,840
  1,887
  1,940
  1,999
  2,064
  2,134
  2,210
  2,292
  2,380
  2,474
  2,575
  2,682
  2,795
  2,916
  3,043
  3,179
  3,322
  3,473
  3,632
  3,801
  3,978
  4,166
  4,363
  4,570
  4,789
  5,019
  5,262
  5,516
  5,784
Working capital, $m
  -25
  -25
  -26
  -27
  -27
  -28
  -29
  -30
  -31
  -33
  -34
  -35
  -37
  -38
  -40
  -42
  -44
  -46
  -48
  -50
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -72
  -76
  -79
Total debt, $m
  268
  286
  306
  328
  353
  380
  409
  441
  476
  513
  553
  595
  640
  688
  738
  792
  849
  909
  973
  1,040
  1,111
  1,186
  1,264
  1,347
  1,435
  1,527
  1,624
  1,726
  1,833
  1,946
Total liabilities, $m
  757
  774
  794
  817
  841
  869
  898
  930
  965
  1,002
  1,041
  1,084
  1,129
  1,176
  1,227
  1,281
  1,338
  1,398
  1,462
  1,529
  1,600
  1,674
  1,753
  1,836
  1,924
  2,016
  2,113
  2,214
  2,322
  2,435
Total equity, $m
  1,317
  1,347
  1,382
  1,421
  1,464
  1,511
  1,563
  1,618
  1,678
  1,743
  1,812
  1,885
  1,963
  2,047
  2,135
  2,228
  2,328
  2,432
  2,543
  2,660
  2,783
  2,913
  3,050
  3,194
  3,347
  3,507
  3,675
  3,853
  4,039
  4,235
Total liabilities and equity, $m
  2,074
  2,121
  2,176
  2,238
  2,305
  2,380
  2,461
  2,548
  2,643
  2,745
  2,853
  2,969
  3,092
  3,223
  3,362
  3,509
  3,666
  3,830
  4,005
  4,189
  4,383
  4,587
  4,803
  5,030
  5,271
  5,523
  5,788
  6,067
  6,361
  6,670
Debt-to-equity ratio
  0.200
  0.210
  0.220
  0.230
  0.240
  0.250
  0.260
  0.270
  0.280
  0.290
  0.310
  0.320
  0.330
  0.340
  0.350
  0.360
  0.360
  0.370
  0.380
  0.390
  0.400
  0.410
  0.410
  0.420
  0.430
  0.440
  0.440
  0.450
  0.450
  0.460
Adjusted equity ratio
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635
  0.635

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  73
  75
  77
  80
  82
  85
  88
  91
  95
  99
  124
  129
  133
  138
  143
  149
  154
  161
  167
  174
  181
  189
  197
  205
  214
  223
  233
  243
  254
  266
Depreciation, amort., depletion, $m
  210
  214
  218
  224
  230
  236
  243
  251
  259
  268
  247
  257
  268
  280
  292
  304
  318
  332
  347
  363
  380
  398
  417
  436
  457
  479
  502
  526
  552
  578
Funds from operations, $m
  283
  289
  296
  303
  312
  321
  331
  342
  354
  366
  372
  386
  401
  418
  435
  453
  472
  493
  514
  537
  561
  586
  613
  641
  671
  702
  735
  769
  806
  844
Change in working capital, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
Cash from operations, $m
  283
  289
  296
  304
  313
  322
  332
  343
  355
  367
  373
  387
  403
  419
  436
  455
  474
  495
  516
  539
  563
  589
  616
  644
  674
  705
  738
  773
  809
  848
Maintenance CAPEX, $m
  -176
  -180
  -184
  -189
  -194
  -200
  -206
  -213
  -221
  -229
  -238
  -247
  -257
  -268
  -280
  -292
  -304
  -318
  -332
  -347
  -363
  -380
  -398
  -417
  -436
  -457
  -479
  -502
  -526
  -552
New CAPEX, $m
  -34
  -41
  -47
  -53
  -59
  -65
  -70
  -76
  -82
  -88
  -94
  -100
  -107
  -114
  -121
  -128
  -135
  -143
  -151
  -160
  -168
  -178
  -187
  -197
  -208
  -219
  -230
  -242
  -255
  -268
Cash from investing activities, $m
  -210
  -221
  -231
  -242
  -253
  -265
  -276
  -289
  -303
  -317
  -332
  -347
  -364
  -382
  -401
  -420
  -439
  -461
  -483
  -507
  -531
  -558
  -585
  -614
  -644
  -676
  -709
  -744
  -781
  -820
Free cash flow, $m
  73
  68
  65
  62
  60
  57
  55
  54
  52
  50
  41
  40
  38
  37
  36
  35
  35
  34
  33
  32
  32
  31
  31
  30
  30
  29
  29
  29
  28
  28
Issuance/(repayment) of debt, $m
  13
  17
  20
  22
  25
  27
  30
  32
  34
  37
  40
  42
  45
  48
  51
  54
  57
  60
  64
  67
  71
  75
  79
  83
  87
  92
  97
  102
  107
  113
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  
  13
  17
  20
  22
  25
  27
  30
  32
  34
  37
  40
  42
  45
  48
  51
  54
  57
  60
  64
  67
  71
  75
  79
  83
  87
  92
  97
  102
  107
  113
Total cash flow (excl. dividends), $m
  86
  86
  85
  85
  84
  85
  85
  86
  86
  87
  80
  82
  83
  85
  87
  89
  91
  94
  97
  100
  103
  106
  109
  113
  117
  121
  126
  131
  136
  141
Retained Cash Flow (-), $m
  -24
  -30
  -35
  -39
  -43
  -47
  -51
  -56
  -60
  -64
  -69
  -74
  -78
  -83
  -88
  -94
  -99
  -105
  -111
  -117
  -123
  -130
  -137
  -144
  -152
  -160
  -169
  -177
  -187
  -196
Prev. year cash balance distribution, $m
  167
  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
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
Cash available for distribution, $m
  229
  55
  50
  46
  41
  37
  34
  30
  26
  23
  12
  8
  5
  2
  -1
  -4
  -8
  -11
  -14
  -17
  -21
  -24
  -28
  -31
  -35
  -39
  -43
  -47
  -51
  -55
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
  219
  51
  44
  38
  32
  27
  23
  19
  15
  12
  5
  4
  2
  1
  0
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  0
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 Cl A (ISCA)

Valuation Ratios
P/E Ratio 26.8
Price to Sales 3.1
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 8.3
Price to Free Cash Flow 19.4
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 $671 million for the last fiscal year's total revenue generated by International Speedway Cl A. The default revenue input number comes from 2017 income statement of International Speedway Cl A. 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 Cl A, 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 Cl A.
    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 83.4%.

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 Cl A.

Corporate tax rate of 27% is the nominal tax rate for International Speedway Cl A. 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 0.4%.

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 262.8%.

Life of production assets of 10 years is the average useful life of capital assets used in International Speedway Cl A 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 -3.6%. 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 - $1460 million for International Speedway Cl A - 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 45 million for International Speedway Cl A 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 Cl A at the current share price and the inputted number of shares is $2.0 billion.

RELATED COMPANIES Price Int.Val. Rating
TRK Speedway Motor 17.30 5.17  str.sell
DVD Dover Motorspo 2.01 0.40  str.sell
CHDN Churchill Down 305.00 92.21  str.sell

COMPANY NEWS

▶ AP source: NASCAR memo: France family 'dedicated' to sport   [May-08-18 08:41PM  Associated Press]
▶ International Speedway Corp. exec on One Daytona, more opportunities and bass fishing   [Apr-20-18 12:07PM  American City Business Journals]
▶ International Speedway posts 1Q profit   [07:44AM  Associated Press]
▶ International Speedway posts 4Q profit   [08:12AM  Associated Press]
▶ Company News For Oct 6, 2017   [Oct-06-17 10:40AM  Zacks]
▶ International Speedway posts 3Q profit   [08:22AM  Associated Press]
▶ International Speedway posts 2Q profit   [Jul-03-17 09:22PM  Associated Press]
▶ International Speedway posts 2Q profit   [09:22PM  Associated Press]
▶ Story Stocks from Briefing.com   [11:01AM  Briefing.com]
▶ $150M One Daytona mixed-use project inks 3 new tenants   [May-16-17 12:10PM  American City Business Journals]
▶ International Speedway posts 1Q profit   [07:38AM  Associated Press]
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