Intrinsic value of Intevac, Inc. - IVAC

Previous Close

$4.81

  Intrinsic Value

$35.53

stock screener

  Rating & Target

str. buy

+639%

Previous close

$4.81

 
Intrinsic value

$35.53

 
Up/down potential

+639%

 
Rating

str. buy

We calculate the intrinsic value of IVAC 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, %
  27.50
  25.25
  23.23
  21.40
  19.76
  18.29
  16.96
  15.76
  14.69
  13.72
  12.85
  12.06
  11.35
  10.72
  10.15
  9.63
  9.17
  8.75
  8.38
  8.04
  7.74
  7.46
  7.22
  6.99
  6.79
  6.62
  6.45
  6.31
  6.18
  6.06
Revenue, $m
  121
  152
  187
  227
  272
  322
  376
  435
  499
  568
  641
  718
  799
  885
  975
  1,069
  1,167
  1,269
  1,375
  1,486
  1,601
  1,720
  1,844
  1,973
  2,107
  2,247
  2,392
  2,543
  2,700
  2,863
Variable operating expenses, $m
  58
  73
  89
  108
  130
  153
  179
  207
  237
  269
  303
  339
  378
  418
  461
  505
  551
  599
  650
  702
  756
  813
  871
  932
  996
  1,061
  1,130
  1,201
  1,275
  1,353
Fixed operating expenses, $m
  55
  56
  58
  59
  60
  62
  63
  64
  66
  67
  69
  70
  72
  73
  75
  76
  78
  80
  82
  83
  85
  87
  89
  91
  93
  95
  97
  99
  102
  104
Total operating expenses, $m
  113
  129
  147
  167
  190
  215
  242
  271
  303
  336
  372
  409
  450
  491
  536
  581
  629
  679
  732
  785
  841
  900
  960
  1,023
  1,089
  1,156
  1,227
  1,300
  1,377
  1,457
Operating income, $m
  8
  23
  40
  60
  82
  107
  134
  164
  197
  231
  269
  309
  350
  394
  439
  487
  537
  590
  644
  700
  759
  820
  884
  950
  1,019
  1,090
  1,165
  1,242
  1,323
  1,407
EBITDA, $m
  12
  28
  46
  67
  90
  117
  145
  177
  211
  247
  286
  327
  371
  417
  465
  515
  568
  623
  680
  739
  801
  865
  932
  1,002
  1,074
  1,149
  1,227
  1,309
  1,394
  1,482
Interest expense (income), $m
  0
  0
  0
  1
  2
  2
  3
  4
  5
  6
  7
  9
  10
  11
  13
  15
  16
  18
  20
  22
  24
  26
  28
  30
  32
  35
  37
  40
  42
  45
  48
Earnings before tax, $m
  8
  22
  39
  58
  80
  104
  130
  159
  190
  224
  261
  299
  339
  381
  425
  471
  519
  570
  622
  677
  734
  793
  854
  918
  984
  1,053
  1,125
  1,200
  1,278
  1,359
Tax expense, $m
  2
  6
  10
  16
  22
  28
  35
  43
  51
  60
  70
  81
  91
  103
  115
  127
  140
  154
  168
  183
  198
  214
  231
  248
  266
  284
  304
  324
  345
  367
Net income, $m
  6
  16
  28
  42
  58
  76
  95
  116
  139
  163
  190
  218
  247
  278
  310
  344
  379
  416
  454
  494
  536
  579
  623
  670
  718
  769
  821
  876
  933
  992

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
  148
  185
  229
  277
  332
  393
  460
  532
  610
  694
  783
  878
  977
  1,082
  1,192
  1,307
  1,426
  1,551
  1,681
  1,816
  1,957
  2,103
  2,255
  2,412
  2,576
  2,747
  2,924
  3,108
  3,300
  3,500
Adjusted assets (=assets-cash), $m
  148
  185
  229
  277
  332
  393
  460
  532
  610
  694
  783
  878
  977
  1,082
  1,192
  1,307
  1,426
  1,551
  1,681
  1,816
  1,957
  2,103
  2,255
  2,412
  2,576
  2,747
  2,924
  3,108
  3,300
  3,500
Revenue / Adjusted assets
  0.818
  0.822
  0.817
  0.819
  0.819
  0.819
  0.817
  0.818
  0.818
  0.818
  0.819
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
  0.818
Average production assets, $m
  16
  20
  24
  30
  36
  42
  49
  57
  65
  74
  84
  94
  105
  116
  128
  140
  153
  166
  180
  195
  210
  225
  242
  259
  276
  294
  313
  333
  354
  375
Working capital, $m
  38
  47
  58
  71
  85
  100
  117
  136
  156
  177
  200
  224
  249
  276
  304
  333
  364
  396
  429
  464
  499
  537
  575
  616
  657
  701
  746
  793
  842
  893
Total debt, $m
  9
  19
  31
  45
  60
  77
  96
  116
  138
  161
  186
  212
  240
  269
  300
  332
  366
  400
  437
  474
  514
  554
  597
  641
  686
  734
  783
  835
  888
  944
Total liabilities, $m
  41
  52
  64
  77
  93
  110
  128
  148
  170
  194
  219
  245
  273
  302
  333
  365
  398
  433
  469
  507
  546
  587
  629
  673
  719
  766
  816
  867
  921
  977
Total equity, $m
  107
  134
  165
  200
  240
  283
  331
  384
  440
  500
  565
  633
  705
  780
  859
  942
  1,028
  1,118
  1,212
  1,310
  1,411
  1,516
  1,626
  1,739
  1,857
  1,980
  2,108
  2,241
  2,380
  2,524
Total liabilities and equity, $m
  148
  186
  229
  277
  333
  393
  459
  532
  610
  694
  784
  878
  978
  1,082
  1,192
  1,307
  1,426
  1,551
  1,681
  1,817
  1,957
  2,103
  2,255
  2,412
  2,576
  2,746
  2,924
  3,108
  3,301
  3,501
Debt-to-equity ratio
  0.080
  0.140
  0.190
  0.220
  0.250
  0.270
  0.290
  0.300
  0.310
  0.320
  0.330
  0.340
  0.340
  0.350
  0.350
  0.350
  0.360
  0.360
  0.360
  0.360
  0.360
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
Adjusted equity ratio
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721
  0.721

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6
  16
  28
  42
  58
  76
  95
  116
  139
  163
  190
  218
  247
  278
  310
  344
  379
  416
  454
  494
  536
  579
  623
  670
  718
  769
  821
  876
  933
  992
Depreciation, amort., depletion, $m
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  17
  19
  21
  23
  26
  28
  31
  33
  36
  39
  42
  45
  48
  52
  55
  59
  63
  67
  71
  75
Funds from operations, $m
  10
  21
  34
  49
  66
  85
  106
  129
  153
  179
  207
  237
  268
  301
  336
  372
  410
  449
  490
  533
  577
  624
  672
  722
  774
  828
  884
  942
  1,003
  1,067
Change in working capital, $m
  8
  10
  11
  12
  14
  16
  17
  18
  20
  21
  23
  24
  25
  27
  28
  29
  31
  32
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
Cash from operations, $m
  2
  12
  23
  37
  52
  70
  89
  110
  133
  158
  184
  213
  243
  274
  308
  343
  379
  417
  457
  499
  542
  586
  633
  681
  732
  784
  839
  895
  954
  1,016
Maintenance CAPEX, $m
  -2
  -3
  -4
  -5
  -6
  -7
  -8
  -10
  -11
  -13
  -15
  -17
  -19
  -21
  -23
  -26
  -28
  -31
  -33
  -36
  -39
  -42
  -45
  -48
  -52
  -55
  -59
  -63
  -67
  -71
New CAPEX, $m
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
Cash from investing activities, $m
  -5
  -7
  -9
  -10
  -12
  -14
  -15
  -18
  -19
  -22
  -25
  -27
  -30
  -32
  -35
  -38
  -41
  -44
  -47
  -50
  -54
  -58
  -61
  -65
  -70
  -73
  -78
  -83
  -88
  -92
Free cash flow, $m
  -4
  4
  15
  27
  41
  56
  73
  93
  113
  136
  160
  186
  213
  242
  273
  305
  338
  373
  410
  448
  488
  529
  572
  616
  663
  711
  761
  813
  867
  924
Issuance/(repayment) of debt, $m
  9
  10
  12
  14
  15
  17
  19
  20
  22
  23
  25
  26
  28
  29
  31
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  48
  49
  51
  54
  56
Issuance/(repurchase) of shares, $m
  18
  11
  3
  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  
  27
  21
  15
  14
  15
  17
  19
  20
  22
  23
  25
  26
  28
  29
  31
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
  48
  49
  51
  54
  56
Total cash flow (excl. dividends), $m
  22
  26
  29
  40
  56
  73
  92
  113
  135
  159
  185
  212
  241
  271
  303
  337
  372
  408
  446
  486
  527
  570
  614
  660
  708
  758
  810
  864
  921
  980
Retained Cash Flow (-), $m
  -23
  -27
  -31
  -35
  -40
  -44
  -48
  -52
  -56
  -60
  -64
  -68
  -72
  -76
  -79
  -83
  -86
  -90
  -94
  -97
  -101
  -105
  -109
  -114
  -118
  -123
  -128
  -133
  -138
  -144
Prev. year cash balance distribution, $m
  6
  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
  5
  -1
  -2
  5
  16
  29
  44
  61
  79
  99
  120
  144
  169
  196
  224
  254
  285
  318
  353
  388
  426
  464
  505
  547
  590
  635
  682
  731
  782
  835
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
  5
  -1
  -1
  4
  13
  21
  30
  38
  45
  52
  57
  61
  64
  66
  66
  65
  62
  59
  54
  49
  44
  39
  33
  28
  23
  19
  15
  11
  9
  6
Current shareholders' claim on cash, %
  85.4
  78.9
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6
  77.6

Intevac, Inc. (Intevac) is a provider of vacuum deposition equipment for a range of thin-film applications, and digital night-vision technologies and products to the defense industry. The Company's segments include Thin-film Equipment and Photonics. The Company designs, manufactures, markets and services capital equipment used to deposit thin films and lubricants onto substrates to produce magnetic disks that are used in hard disk drives. Its thin film equipment products include 200 Lean Disk Sputtering System, 200 Lean Etch and Deposition System, AccuLuber Disk Lubrication System, INTEVAC VERTEX System, INTEVAC MATRIX Implant System, ENERGi Implant System and INTEVAC MATRIX System. The Company's photonic segment develops, manufactures and sells compact digital-optical products for the capture and display of low-light images.

FINANCIAL RATIOS  of  Intevac, Inc. (IVAC)

Valuation Ratios
P/E Ratio -14.4
Price to Sales 1.3
Price to Book 1.4
Price to Tangible Book
Price to Cash Flow 25.2
Price to Free Cash Flow 100.7
Growth Rates
Sales Growth Rate 6.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 8.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -6.8%
Ret/ On Assets - 3 Yr. Avg. -11.7%
Return On Total Capital -9.4%
Ret/ On T. Cap. - 3 Yr. Avg. -14.4%
Return On Equity -9.4%
Return On Equity - 3 Yr. Avg. -14.4%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 37.5%
Gross Margin - 3 Yr. Avg. 32.6%
EBITDA Margin -2.5%
EBITDA Margin - 3 Yr. Avg. -9.7%
Operating Margin -10%
Oper. Margin - 3 Yr. Avg. -16.9%
Pre-Tax Margin -8.8%
Pre-Tax Margin - 3 Yr. Avg. -16.5%
Net Profit Margin -8.8%
Net Profit Margin - 3 Yr. Avg. -20.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -14%
Payout Ratio 0%

IVAC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the IVAC stock intrinsic value calculation we used $95 million for the last fiscal year's total revenue generated by Intevac, Inc.. The default revenue input number comes from 0001 income statement of Intevac, 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 IVAC stock valuation model: a) initial revenue growth rate of 27.5% 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 IVAC is calculated based on our internal credit rating of Intevac, 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 Intevac, 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 IVAC stock the variable cost ratio is equal to 48.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $54 million in the base year in the intrinsic value calculation for IVAC 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 Intevac, Inc..

Corporate tax rate of 27% is the nominal tax rate for Intevac, 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 IVAC 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 IVAC are equal to 13.1%.

Life of production assets of 2.8 years is the average useful life of capital assets used in Intevac, 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 IVAC is equal to 31.2%. 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 - $89.624 million for Intevac, 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 22.911 million for Intevac, 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 Intevac, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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