Intrinsic value of International Speedway Cl A - ISCA

Previous Close

$40.45

  Intrinsic Value

$7.23

stock screener

  Rating & Target

str. sell

-82%

Previous close

$40.45

 
Intrinsic value

$7.23

 
Up/down potential

-82%

 
Rating

str. sell

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

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 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 1.8

 

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, %
  2.48
  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
  4.87
Revenue, $m
  661
  676
  694
  713
  735
  758
  784
  812
  842
  875
  909
  946
  985
  1,027
  1,072
  1,118
  1,168
  1,221
  1,276
  1,335
  1,397
  1,462
  1,531
  1,603
  1,680
  1,760
  1,845
  1,934
  2,027
  2,126
  2,229
Variable operating expenses, $m
 
  587
  601
  618
  636
  657
  679
  702
  728
  755
  785
  804
  838
  873
  911
  951
  993
  1,038
  1,085
  1,135
  1,187
  1,243
  1,301
  1,363
  1,428
  1,496
  1,568
  1,644
  1,723
  1,807
  1,895
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
  551
  587
  601
  618
  636
  657
  679
  702
  728
  755
  785
  804
  838
  873
  911
  951
  993
  1,038
  1,085
  1,135
  1,187
  1,243
  1,301
  1,363
  1,428
  1,496
  1,568
  1,644
  1,723
  1,807
  1,895
Operating income, $m
  110
  90
  92
  95
  98
  102
  106
  110
  114
  119
  124
  142
  148
  154
  161
  168
  175
  183
  191
  200
  210
  219
  230
  241
  252
  264
  277
  290
  304
  319
  334
EBITDA, $m
  212
  198
  204
  209
  216
  223
  230
  238
  247
  257
  267
  278
  289
  301
  314
  328
  343
  358
  375
  392
  410
  429
  449
  471
  493
  517
  541
  567
  595
  624
  654
Interest expense (income), $m
  14
  14
  15
  16
  17
  18
  20
  21
  23
  25
  27
  29
  31
  34
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  72
  77
  82
  87
  92
  98
  104
Earnings before tax, $m
  124
  76
  77
  79
  81
  84
  86
  89
  91
  94
  98
  113
  116
  120
  124
  129
  133
  138
  143
  148
  154
  160
  166
  173
  180
  187
  195
  203
  212
  221
  230
Tax expense, $m
  48
  20
  21
  21
  22
  23
  23
  24
  25
  25
  26
  30
  31
  32
  34
  35
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
Net income, $m
  76
  55
  57
  58
  59
  61
  63
  65
  67
  69
  71
  82
  85
  88
  91
  94
  97
  101
  104
  108
  113
  117
  121
  126
  131
  137
  142
  148
  155
  161
  168

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  264
  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
  2,173
  1,954
  2,005
  2,061
  2,123
  2,192
  2,267
  2,347
  2,435
  2,528
  2,628
  2,735
  2,848
  2,969
  3,097
  3,233
  3,376
  3,528
  3,689
  3,858
  4,037
  4,226
  4,424
  4,634
  4,854
  5,087
  5,331
  5,588
  5,859
  6,144
  6,443
Adjusted assets (=assets-cash), $m
  1,909
  1,954
  2,005
  2,061
  2,123
  2,192
  2,267
  2,347
  2,435
  2,528
  2,628
  2,735
  2,848
  2,969
  3,097
  3,233
  3,376
  3,528
  3,689
  3,858
  4,037
  4,226
  4,424
  4,634
  4,854
  5,087
  5,331
  5,588
  5,859
  6,144
  6,443
Revenue / Adjusted assets
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
  0.346
Average production assets, $m
  1,632
  1,669
  1,712
  1,760
  1,813
  1,872
  1,936
  2,005
  2,079
  2,159
  2,244
  2,335
  2,432
  2,535
  2,645
  2,760
  2,883
  3,013
  3,150
  3,295
  3,447
  3,608
  3,778
  3,957
  4,145
  4,344
  4,552
  4,772
  5,003
  5,246
  5,502
Working capital, $m
  218
  -44
  -45
  -46
  -48
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -70
  -73
  -76
  -79
  -83
  -87
  -91
  -95
  -100
  -104
  -109
  -114
  -120
  -126
  -132
  -138
  -145
Total debt, $m
  263
  278
  298
  321
  346
  373
  403
  436
  471
  509
  549
  592
  638
  686
  738
  793
  851
  912
  977
  1,045
  1,117
  1,193
  1,273
  1,357
  1,446
  1,540
  1,638
  1,742
  1,851
  1,966
  2,087
Total liabilities, $m
  772
  788
  808
  831
  856
  883
  913
  946
  981
  1,019
  1,059
  1,102
  1,148
  1,196
  1,248
  1,303
  1,361
  1,422
  1,487
  1,555
  1,627
  1,703
  1,783
  1,867
  1,956
  2,050
  2,148
  2,252
  2,361
  2,476
  2,597
Total equity, $m
  1,400
  1,167
  1,197
  1,230
  1,268
  1,309
  1,353
  1,401
  1,453
  1,509
  1,569
  1,633
  1,700
  1,772
  1,849
  1,930
  2,016
  2,106
  2,202
  2,303
  2,410
  2,523
  2,641
  2,766
  2,898
  3,037
  3,183
  3,336
  3,498
  3,668
  3,847
Total liabilities and equity, $m
  2,172
  1,955
  2,005
  2,061
  2,124
  2,192
  2,266
  2,347
  2,434
  2,528
  2,628
  2,735
  2,848
  2,968
  3,097
  3,233
  3,377
  3,528
  3,689
  3,858
  4,037
  4,226
  4,424
  4,633
  4,854
  5,087
  5,331
  5,588
  5,859
  6,144
  6,444
Debt-to-equity ratio
  0.188
  0.240
  0.250
  0.260
  0.270
  0.290
  0.300
  0.310
  0.320
  0.340
  0.350
  0.360
  0.380
  0.390
  0.400
  0.410
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.490
  0.500
  0.510
  0.510
  0.520
  0.530
  0.540
  0.540
Adjusted equity ratio
  0.595
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597
  0.597

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  76
  55
  57
  58
  59
  61
  63
  65
  67
  69
  71
  82
  85
  88
  91
  94
  97
  101
  104
  108
  113
  117
  121
  126
  131
  137
  142
  148
  155
  161
  168
Depreciation, amort., depletion, $m
  102
  109
  111
  114
  117
  121
  124
  128
  133
  137
  142
  136
  141
  147
  154
  160
  168
  175
  183
  192
  200
  210
  220
  230
  241
  253
  265
  277
  291
  305
  320
Funds from operations, $m
  245
  164
  168
  172
  177
  182
  187
  193
  199
  206
  214
  218
  226
  235
  245
  254
  265
  276
  288
  300
  313
  327
  341
  356
  372
  389
  407
  426
  445
  466
  488
Change in working capital, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
Cash from operations, $m
  246
  165
  169
  173
  178
  183
  189
  195
  201
  208
  216
  221
  229
  238
  247
  257
  268
  279
  291
  304
  317
  331
  346
  361
  377
  395
  413
  432
  452
  473
  495
Maintenance CAPEX, $m
  0
  -95
  -97
  -100
  -102
  -105
  -109
  -113
  -117
  -121
  -126
  -130
  -136
  -141
  -147
  -154
  -160
  -168
  -175
  -183
  -192
  -200
  -210
  -220
  -230
  -241
  -253
  -265
  -277
  -291
  -305
New CAPEX, $m
  -141
  -37
  -43
  -48
  -53
  -59
  -64
  -69
  -74
  -80
  -85
  -91
  -97
  -103
  -109
  -116
  -123
  -130
  -137
  -145
  -153
  -161
  -170
  -179
  -188
  -198
  -209
  -220
  -231
  -243
  -256
Cash from investing activities, $m
  -64
  -132
  -140
  -148
  -155
  -164
  -173
  -182
  -191
  -201
  -211
  -221
  -233
  -244
  -256
  -270
  -283
  -298
  -312
  -328
  -345
  -361
  -380
  -399
  -418
  -439
  -462
  -485
  -508
  -534
  -561
Free cash flow, $m
  182
  33
  29
  26
  22
  19
  16
  13
  11
  8
  5
  -1
  -4
  -7
  -9
  -12
  -15
  -18
  -21
  -24
  -27
  -31
  -34
  -37
  -41
  -45
  -49
  -53
  -57
  -61
  -66
Issuance/(repayment) of debt, $m
  -3
  18
  20
  23
  25
  28
  30
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  89
  94
  99
  104
  109
  115
  121
Issuance/(repurchase) of shares, $m
  -56
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  2
  4
  5
  7
  9
  11
Cash from financing (excl. dividends), $m  
  -60
  18
  20
  23
  25
  28
  30
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65
  68
  72
  76
  80
  84
  89
  96
  103
  109
  116
  124
  132
Total cash flow (excl. dividends), $m
  122
  51
  49
  48
  48
  47
  46
  46
  46
  45
  45
  42
  42
  42
  42
  43
  43
  43
  44
  44
  45
  45
  46
  47
  48
  51
  53
  56
  59
  62
  65
Retained Cash Flow (-), $m
  -7
  -28
  -30
  -34
  -37
  -41
  -45
  -48
  -52
  -56
  -60
  -64
  -68
  -72
  -76
  -81
  -86
  -91
  -96
  -101
  -107
  -113
  -119
  -125
  -132
  -139
  -146
  -154
  -162
  -170
  -179
Prev. year cash balance distribution, $m
 
  261
  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
 
  284
  19
  15
  10
  6
  2
  -2
  -6
  -10
  -14
  -22
  -26
  -30
  -34
  -39
  -43
  -47
  -52
  -57
  -62
  -67
  -73
  -78
  -84
  -88
  -93
  -97
  -103
  -108
  -113
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
 
  272
  18
  13
  8
  5
  1
  -2
  -4
  -6
  -8
  -10
  -11
  -11
  -11
  -11
  -11
  -10
  -10
  -9
  -8
  -7
  -6
  -5
  -4
  -3
  -3
  -2
  -2
  -1
  -1
Current shareholders' claim on cash, %
  100
  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
  99.9
  99.8
  99.7
  99.6
  99.4
  99.1

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 24.6
Price to Sales 2.8
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 7.6
Price to Free Cash Flow 17.8
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 $661 million for the last fiscal year's total revenue generated by International Speedway Cl A. The default revenue input number comes from 2016 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 2.3% 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 86.8%.

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 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 5.3% 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%.

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 246.8%.

Life of production assets of 17.2 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 -6.5%. 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 - $1400 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 44.277 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 $1.8 billion.

RELATED COMPANIES Price Int.Val. Rating
TRK Speedway Motor 19.63 4.58  str.sell
DVD Dover Motorspo 2.05 1.13  sell
CHDN Churchill Down 227.25 141.22  sell

COMPANY NEWS

▶ 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]
▶ What Hedge Funds Think of Semtech Corporation (SMTC)?   [Dec-04-16 05:21PM  at Insider Monkey]
▶ [$$] International Speedway Swings to Profit   [09:06AM  at The Wall Street Journal]
Financial statements of ISCA
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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