Intrinsic value of J. Alexander's Holdings, Inc. - JAX

Previous Close

$10.69

  Intrinsic Value

$1.72

stock screener

  Rating & Target

str. sell

-84%

Previous close

$10.69

 
Intrinsic value

$1.72

 
Up/down potential

-84%

 
Rating

str. sell

We calculate the intrinsic value of JAX 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 0.2

 

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, %
  3.00
  3.20
  3.38
  3.54
  3.69
  3.82
  3.94
  4.04
  4.14
  4.23
  4.30
  4.37
  4.44
  4.49
  4.54
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
Revenue, $m
  249
  257
  266
  275
  286
  296
  308
  321
  334
  348
  363
  379
  396
  413
  432
  452
  473
  495
  518
  543
  568
  596
  624
  654
  686
  719
  754
  791
  830
  871
Variable operating expenses, $m
  242
  250
  258
  267
  276
  287
  298
  310
  323
  336
  346
  361
  377
  394
  412
  431
  451
  472
  494
  518
  542
  568
  596
  624
  655
  686
  720
  755
  792
  831
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
  242
  250
  258
  267
  276
  287
  298
  310
  323
  336
  346
  361
  377
  394
  412
  431
  451
  472
  494
  518
  542
  568
  596
  624
  655
  686
  720
  755
  792
  831
Operating income, $m
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  17
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  32
  33
  35
  36
  38
  40
EBITDA, $m
  21
  22
  23
  24
  24
  25
  26
  27
  29
  30
  31
  32
  34
  35
  37
  39
  41
  42
  44
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  75
Interest expense (income), $m
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
Earnings before tax, $m
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  14
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
Tax expense, $m
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
Net income, $m
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23

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
  180
  186
  192
  199
  206
  214
  222
  231
  241
  251
  262
  273
  285
  298
  312
  326
  341
  357
  374
  392
  410
  430
  450
  472
  495
  519
  544
  571
  599
  628
Adjusted assets (=assets-cash), $m
  180
  186
  192
  199
  206
  214
  222
  231
  241
  251
  262
  273
  285
  298
  312
  326
  341
  357
  374
  392
  410
  430
  450
  472
  495
  519
  544
  571
  599
  628
Revenue / Adjusted assets
  1.383
  1.382
  1.385
  1.382
  1.388
  1.383
  1.387
  1.390
  1.386
  1.386
  1.385
  1.388
  1.389
  1.386
  1.385
  1.387
  1.387
  1.387
  1.385
  1.385
  1.385
  1.386
  1.387
  1.386
  1.386
  1.385
  1.386
  1.385
  1.386
  1.387
Average production assets, $m
  131
  135
  140
  145
  150
  156
  162
  168
  175
  183
  191
  199
  208
  217
  227
  237
  248
  260
  272
  285
  298
  313
  328
  344
  360
  378
  396
  415
  436
  457
Working capital, $m
  -17
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -46
  -48
  -51
  -53
  -56
  -58
Total debt, $m
  17
  19
  21
  23
  26
  29
  31
  35
  38
  41
  45
  49
  53
  58
  63
  68
  73
  78
  84
  90
  97
  104
  111
  118
  126
  135
  144
  153
  163
  173
Total liabilities, $m
  63
  65
  67
  69
  72
  74
  77
  80
  84
  87
  91
  95
  99
  104
  108
  113
  119
  124
  130
  136
  143
  150
  157
  164
  172
  181
  189
  199
  208
  219
Total equity, $m
  117
  121
  125
  130
  134
  139
  145
  151
  157
  164
  171
  178
  186
  194
  203
  213
  222
  233
  244
  255
  267
  280
  294
  308
  323
  338
  355
  372
  390
  410
Total liabilities and equity, $m
  180
  186
  192
  199
  206
  213
  222
  231
  241
  251
  262
  273
  285
  298
  311
  326
  341
  357
  374
  391
  410
  430
  451
  472
  495
  519
  544
  571
  598
  629
Debt-to-equity ratio
  0.140
  0.150
  0.170
  0.180
  0.190
  0.200
  0.220
  0.230
  0.240
  0.250
  0.270
  0.280
  0.290
  0.300
  0.310
  0.320
  0.330
  0.340
  0.350
  0.350
  0.360
  0.370
  0.380
  0.380
  0.390
  0.400
  0.400
  0.410
  0.420
  0.420
Adjusted equity ratio
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652
  0.652

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  11
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
Depreciation, amort., depletion, $m
  14
  14
  15
  15
  15
  16
  16
  17
  17
  18
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
  35
Funds from operations, $m
  19
  19
  20
  20
  21
  22
  23
  23
  24
  25
  25
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
Change in working capital, $m
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
Cash from operations, $m
  19
  20
  20
  21
  22
  23
  23
  24
  25
  26
  26
  27
  28
  29
  31
  32
  33
  35
  36
  38
  40
  42
  44
  46
  48
  50
  52
  55
  57
  60
Maintenance CAPEX, $m
  -10
  -10
  -10
  -11
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -33
New CAPEX, $m
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
Cash from investing activities, $m
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -20
  -22
  -22
  -24
  -25
  -26
  -27
  -29
  -31
  -32
  -34
  -36
  -37
  -39
  -41
  -43
  -44
  -47
  -49
  -51
  -54
Free cash flow, $m
  6
  6
  6
  6
  6
  5
  5
  5
  5
  5
  4
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
Issuance/(repayment) of debt, $m
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
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  
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  6
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
Total cash flow (excl. dividends), $m
  8
  8
  8
  8
  8
  8
  8
  9
  9
  9
  8
  8
  9
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
Retained Cash Flow (-), $m
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
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
  4
  4
  4
  4
  3
  3
  3
  3
  2
  2
  1
  1
  1
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
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
  4
  4
  3
  3
  3
  2
  2
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  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

J. Alexander's Holdings, Inc., through its subsidiaries, owns and operates three complementary dining restaurant concepts: J. Alexander's, Redlands Grill and Stoney River Steakhouse and Grill (Stoney River). The Company is engaged in providing contemporary American cuisines. J. Alexander's is an upscale dining restaurant offering a contemporary American menu. J. Alexander's menu features rib of beef; hardwood-grilled steaks, seafood and chicken; pasta; salads; soups; and assorted sandwiches, appetizers and desserts. Stoney River's menu features its Coffee-Cured Filet Mignon made with select tenderloin, as well as other beef options. On Sundays, Redlands Grill offers a selection of made-from-scratch brunch items, including Belgian waffles, eggs benedict, huevos ranchero, quiche, omelettes, and lemon and ricotta hotcakes. The Redlands Grill on West End also has a wine program that offers over 35 wines by the glass and maintains over 140 bottles.

FINANCIAL RATIOS  of  J. Alexander's Holdings, Inc. (JAX)

Valuation Ratios
P/E Ratio 22.4
Price to Sales 0.7
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 9.8
Price to Free Cash Flow -31.4
Growth Rates
Sales Growth Rate 0.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 90.9%
Cap. Spend. - 3 Yr. Gr. Rate 24.6%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 14.9%
Total Debt to Equity 22.8%
Interest Coverage 11
Management Effectiveness
Return On Assets 4.8%
Ret/ On Assets - 3 Yr. Avg. 6%
Return On Total Capital 5.8%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 7%
Return On Equity - 3 Yr. Avg. 7.3%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 18.2%
Gross Margin - 3 Yr. Avg. 18.1%
EBITDA Margin 9.1%
EBITDA Margin - 3 Yr. Avg. 9.3%
Operating Margin 5%
Oper. Margin - 3 Yr. Avg. 4.9%
Pre-Tax Margin 4.5%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 3.2%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 30%
Eff/ Tax Rate - 3 Yr. Avg. 14.8%
Payout Ratio 0%

JAX stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JAX stock intrinsic value calculation we used $242 million for the last fiscal year's total revenue generated by J. Alexander's Holdings, Inc.. The default revenue input number comes from 0001 income statement of J. Alexander's Holdings, 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 JAX stock valuation model: a) initial revenue growth rate of 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 JAX is calculated based on our internal credit rating of J. Alexander's Holdings, 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 J. Alexander's Holdings, 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 JAX stock the variable cost ratio is equal to 97.1%.

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 JAX 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 J. Alexander's Holdings, Inc..

Corporate tax rate of 27% is the nominal tax rate for J. Alexander's Holdings, 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 JAX 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 JAX are equal to 52.5%.

Life of production assets of 13.2 years is the average useful life of capital assets used in J. Alexander's Holdings, 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 JAX is equal to -6.7%. 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 - $113.815 million for J. Alexander's Holdings, 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 14.695 million for J. Alexander's Holdings, 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 J. Alexander's Holdings, Inc. at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
DFRG Del Frisco' 6.73 3.95  sell
RUTH Ruth's Hos 22.48 20.96  hold
STKS The ONE Group 3.23 6.98  str.buy
DRI Darden Restaur 121.23 76.20  sell
BLMN Bloomin' B 18.74 9.99  str.sell
KONA Kona Grill, In 0.300 0.11  str.sell
ARKR Ark Restaurant 19.91 15.28  sell
CAKE The Cheesecake 44.21 10.55  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.