Intrinsic value of John B. Sanfilippo&Son - JBSS

Previous Close

$63.92

  Intrinsic Value

$6.73

stock screener

  Rating & Target

str. sell

-89%

Previous close

$63.92

 
Intrinsic value

$6.73

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of JBSS 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 0.6

 

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, %
  17.20
  15.98
  14.88
  13.89
  13.00
  12.20
  11.48
  10.84
  10.25
  9.73
  9.25
  8.83
  8.45
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
Revenue, $m
  992
  1,151
  1,322
  1,506
  1,702
  1,909
  2,128
  2,359
  2,601
  2,854
  3,118
  3,393
  3,680
  3,978
  4,288
  4,610
  4,945
  5,293
  5,654
  6,030
  6,421
  6,828
  7,251
  7,692
  8,152
  8,631
  9,130
  9,651
  10,196
  10,764
Variable operating expenses, $m
  939
  1,089
  1,251
  1,424
  1,610
  1,806
  2,014
  2,232
  2,461
  2,700
  2,950
  3,210
  3,481
  3,763
  4,056
  4,361
  4,678
  5,007
  5,349
  5,704
  6,074
  6,459
  6,860
  7,277
  7,711
  8,165
  8,637
  9,130
  9,645
  10,183
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
  939
  1,089
  1,251
  1,424
  1,610
  1,806
  2,014
  2,232
  2,461
  2,700
  2,950
  3,210
  3,481
  3,763
  4,056
  4,361
  4,678
  5,007
  5,349
  5,704
  6,074
  6,459
  6,860
  7,277
  7,711
  8,165
  8,637
  9,130
  9,645
  10,183
Operating income, $m
  54
  62
  71
  81
  92
  103
  115
  127
  140
  154
  168
  183
  199
  215
  232
  249
  267
  286
  305
  326
  347
  369
  392
  415
  440
  466
  493
  521
  551
  581
EBITDA, $m
  72
  83
  96
  109
  123
  138
  154
  171
  188
  207
  226
  246
  266
  288
  311
  334
  358
  383
  409
  437
  465
  494
  525
  557
  590
  625
  661
  699
  738
  779
Interest expense (income), $m
  3
  3
  5
  7
  8
  10
  12
  15
  17
  20
  22
  25
  28
  31
  34
  37
  40
  44
  47
  51
  55
  59
  63
  68
  72
  77
  82
  87
  92
  98
  104
Earnings before tax, $m
  50
  57
  65
  73
  82
  91
  100
  110
  121
  132
  144
  156
  168
  181
  195
  209
  223
  239
  254
  271
  288
  306
  324
  343
  363
  384
  406
  429
  453
  478
Tax expense, $m
  14
  15
  18
  20
  22
  24
  27
  30
  33
  36
  39
  42
  45
  49
  53
  56
  60
  64
  69
  73
  78
  83
  87
  93
  98
  104
  110
  116
  122
  129
Net income, $m
  37
  42
  47
  53
  60
  66
  73
  81
  88
  96
  105
  114
  123
  132
  142
  152
  163
  174
  186
  198
  210
  223
  237
  251
  265
  281
  297
  313
  331
  349

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
  466
  541
  621
  708
  800
  897
  1,000
  1,109
  1,222
  1,341
  1,465
  1,595
  1,729
  1,869
  2,015
  2,166
  2,324
  2,487
  2,657
  2,834
  3,017
  3,209
  3,408
  3,615
  3,831
  4,056
  4,291
  4,535
  4,791
  5,058
Adjusted assets (=assets-cash), $m
  466
  541
  621
  708
  800
  897
  1,000
  1,109
  1,222
  1,341
  1,465
  1,595
  1,729
  1,869
  2,015
  2,166
  2,324
  2,487
  2,657
  2,834
  3,017
  3,209
  3,408
  3,615
  3,831
  4,056
  4,291
  4,535
  4,791
  5,058
Revenue / Adjusted assets
  2.129
  2.128
  2.129
  2.127
  2.128
  2.128
  2.128
  2.127
  2.128
  2.128
  2.128
  2.127
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
  2.128
Average production assets, $m
  150
  174
  200
  227
  257
  288
  321
  356
  393
  431
  471
  512
  556
  601
  647
  696
  747
  799
  854
  911
  970
  1,031
  1,095
  1,162
  1,231
  1,303
  1,379
  1,457
  1,540
  1,625
Working capital, $m
  205
  238
  274
  312
  352
  395
  441
  488
  538
  591
  645
  702
  762
  823
  888
  954
  1,024
  1,096
  1,170
  1,248
  1,329
  1,413
  1,501
  1,592
  1,687
  1,787
  1,890
  1,998
  2,111
  2,228
Total debt, $m
  87
  117
  150
  185
  223
  262
  305
  349
  395
  444
  494
  547
  602
  659
  719
  780
  844
  911
  981
  1,053
  1,128
  1,206
  1,287
  1,371
  1,459
  1,551
  1,647
  1,747
  1,851
  1,960
Total liabilities, $m
  190
  221
  253
  289
  326
  366
  408
  452
  499
  547
  598
  651
  706
  763
  822
  884
  948
  1,015
  1,084
  1,156
  1,231
  1,309
  1,390
  1,475
  1,563
  1,655
  1,751
  1,850
  1,955
  2,064
Total equity, $m
  276
  320
  368
  419
  473
  531
  592
  656
  724
  794
  867
  944
  1,024
  1,107
  1,193
  1,283
  1,376
  1,472
  1,573
  1,678
  1,786
  1,899
  2,017
  2,140
  2,268
  2,401
  2,540
  2,685
  2,836
  2,995
Total liabilities and equity, $m
  466
  541
  621
  708
  799
  897
  1,000
  1,108
  1,223
  1,341
  1,465
  1,595
  1,730
  1,870
  2,015
  2,167
  2,324
  2,487
  2,657
  2,834
  3,017
  3,208
  3,407
  3,615
  3,831
  4,056
  4,291
  4,535
  4,791
  5,059
Debt-to-equity ratio
  0.310
  0.370
  0.410
  0.440
  0.470
  0.490
  0.510
  0.530
  0.550
  0.560
  0.570
  0.580
  0.590
  0.600
  0.600
  0.610
  0.610
  0.620
  0.620
  0.630
  0.630
  0.630
  0.640
  0.640
  0.640
  0.650
  0.650
  0.650
  0.650
  0.650
Adjusted equity ratio
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592
  0.592

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  37
  42
  47
  53
  60
  66
  73
  81
  88
  96
  105
  114
  123
  132
  142
  152
  163
  174
  186
  198
  210
  223
  237
  251
  265
  281
  297
  313
  331
  349
Depreciation, amort., depletion, $m
  18
  21
  24
  28
  31
  35
  39
  43
  48
  53
  57
  62
  68
  73
  79
  85
  91
  97
  104
  111
  118
  126
  134
  142
  150
  159
  168
  178
  188
  198
Funds from operations, $m
  55
  63
  72
  81
  91
  101
  112
  124
  136
  149
  162
  176
  190
  205
  221
  237
  254
  272
  290
  309
  328
  349
  370
  392
  415
  439
  465
  491
  518
  547
Change in working capital, $m
  30
  33
  35
  38
  41
  43
  45
  48
  50
  52
  55
  57
  59
  62
  64
  67
  69
  72
  75
  78
  81
  84
  88
  91
  95
  99
  103
  108
  113
  118
Cash from operations, $m
  25
  30
  36
  43
  50
  58
  67
  76
  86
  97
  108
  119
  131
  144
  157
  171
  185
  200
  215
  231
  247
  265
  282
  301
  320
  340
  361
  383
  406
  429
Maintenance CAPEX, $m
  -16
  -18
  -21
  -24
  -28
  -31
  -35
  -39
  -43
  -48
  -53
  -57
  -62
  -68
  -73
  -79
  -85
  -91
  -97
  -104
  -111
  -118
  -126
  -134
  -142
  -150
  -159
  -168
  -178
  -188
New CAPEX, $m
  -22
  -24
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -38
  -40
  -42
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -61
  -64
  -67
  -69
  -72
  -75
  -79
  -82
  -86
Cash from investing activities, $m
  -38
  -42
  -47
  -52
  -58
  -62
  -68
  -74
  -80
  -86
  -93
  -99
  -105
  -113
  -120
  -128
  -136
  -144
  -152
  -161
  -170
  -179
  -190
  -201
  -211
  -222
  -234
  -247
  -260
  -274
Free cash flow, $m
  -13
  -12
  -11
  -9
  -7
  -4
  -1
  2
  6
  10
  15
  20
  25
  31
  37
  43
  49
  56
  63
  70
  77
  85
  93
  101
  109
  118
  127
  136
  146
  156
Issuance/(repayment) of debt, $m
  28
  30
  33
  35
  38
  40
  42
  44
  46
  49
  51
  53
  55
  57
  59
  62
  64
  67
  69
  72
  75
  78
  81
  85
  88
  92
  96
  100
  104
  109
Issuance/(repurchase) of shares, $m
  4
  2
  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  
  32
  32
  33
  35
  38
  40
  42
  44
  46
  49
  51
  53
  55
  57
  59
  62
  64
  67
  69
  72
  75
  78
  81
  85
  88
  92
  96
  100
  104
  109
Total cash flow (excl. dividends), $m
  19
  21
  22
  26
  31
  35
  41
  46
  53
  59
  66
  73
  80
  88
  96
  105
  114
  123
  132
  142
  152
  163
  174
  185
  197
  210
  223
  236
  250
  265
Retained Cash Flow (-), $m
  -41
  -44
  -48
  -51
  -54
  -58
  -61
  -64
  -67
  -70
  -73
  -77
  -80
  -83
  -86
  -90
  -93
  -97
  -101
  -105
  -109
  -113
  -118
  -123
  -128
  -133
  -139
  -145
  -151
  -158
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
  -22
  -23
  -25
  -25
  -24
  -22
  -20
  -18
  -15
  -11
  -8
  -4
  1
  5
  10
  15
  20
  26
  32
  37
  44
  50
  56
  63
  70
  76
  84
  91
  99
  106
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
  -21
  -21
  -22
  -21
  -19
  -16
  -14
  -11
  -8
  -6
  -4
  -2
  0
  2
  3
  4
  4
  5
  5
  5
  5
  4
  4
  3
  3
  2
  2
  1
  1
  1
Current shareholders' claim on cash, %
  99.3
  99.0
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9
  98.9

John B. Sanfilippo & Son, Inc. is a processor and distributor of peanuts, pecans, cashews, walnuts, almonds and other nuts. The Company offers nuts under a range of private brands and under the Fisher, Orchard Valley Harvest, Fisher Nut Exactly and Sunshine Country brand names. The Company also markets and distributes a diverse product line of food and snack products, including snack mixes, salad toppings, snacks, snack bites, trail mixes, dried fruit, and chocolate and yogurt coated products under private brands and brand names. The Company's principal products are raw and processed nuts. The Company's nut product line includes black walnuts, English walnuts, macadamia nuts, pistachios, pine nuts, Brazil nuts and filberts. The Company's products are sold through various distribution channels to buyers of nuts, including food retailers, commercial ingredient users, contract packaging customers and international customers.

FINANCIAL RATIOS  of  John B. Sanfilippo&Son (JBSS)

Valuation Ratios
P/E Ratio 20
Price to Sales 0.9
Price to Book 3.1
Price to Tangible Book
Price to Cash Flow 13.6
Price to Free Cash Flow 17.2
Growth Rates
Sales Growth Rate -11%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -26.7%
Cap. Spend. - 3 Yr. Gr. Rate 1.9%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 11.1%
Total Debt to Equity 25.1%
Interest Coverage 19
Management Effectiveness
Return On Assets 9.6%
Ret/ On Assets - 3 Yr. Avg. 8.3%
Return On Total Capital 12.2%
Ret/ On T. Cap. - 3 Yr. Avg. 10.2%
Return On Equity 14.8%
Return On Equity - 3 Yr. Avg. 13.1%
Asset Turnover 2.1
Profitability Ratios
Gross Margin 16.8%
Gross Margin - 3 Yr. Avg. 15.3%
EBITDA Margin 8.6%
EBITDA Margin - 3 Yr. Avg. 7.6%
Operating Margin 7%
Oper. Margin - 3 Yr. Avg. 6.1%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 5.4%
Net Profit Margin 4.3%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 34.6%
Payout Ratio 155.6%

JBSS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JBSS stock intrinsic value calculation we used $846.635 million for the last fiscal year's total revenue generated by John B. Sanfilippo&Son. The default revenue input number comes from 0001 income statement of John B. Sanfilippo&Son. 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 JBSS stock valuation model: a) initial revenue growth rate of 17.2% 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 JBSS is calculated based on our internal credit rating of John B. Sanfilippo&Son, 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 John B. Sanfilippo&Son.
    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 JBSS stock the variable cost ratio is equal to 94.6%.

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 JBSS 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 5.6% for John B. Sanfilippo&Son.

Corporate tax rate of 27% is the nominal tax rate for John B. Sanfilippo&Son. 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 JBSS 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 JBSS are equal to 15.1%.

Life of production assets of 8.2 years is the average useful life of capital assets used in John B. Sanfilippo&Son 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 JBSS is equal to 20.7%. 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 - $235.468 million for John B. Sanfilippo&Son - 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 8.748 million for John B. Sanfilippo&Son 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 John B. Sanfilippo&Son at the current share price and the inputted number of shares is $0.6 billion.

RELATED COMPANIES Price Int.Val. Rating
PEP PepsiCo 117.14 118.49  hold

COMPANY NEWS

▶ John B. Sanfilippo: Fiscal 1Q Earnings Snapshot   [Oct-30-18 06:35PM  Associated Press]
▶ 5 Family-Owned Stocks to Buy   [Oct-12-18 02:32PM  InvestorPlace]
▶ John B. Sanfilippo & Son, Inc. to Host Earnings Call   [Aug-23-18 08:00AM  ACCESSWIRE]
▶ John B. Sanfilippo: Fiscal 4Q Earnings Snapshot   [Aug-22-18 04:31PM  Associated Press]
▶ John B. Sanfilippo: Fiscal 3Q Earnings Snapshot   [May-03-18 06:34PM  Associated Press]
▶ John B. Sanfilippo posts 2Q profit   [Feb-05-18 04:48PM  Associated Press]
▶ John B. Sanfilippo & Son, Inc. to Host Earnings Call   [Oct-31-17 08:20AM  ACCESSWIRE]
▶ John B. Sanfilippo posts 1Q profit   [Oct-30-17 05:19PM  Associated Press]
▶ John B. Sanfilippo posts 4Q profit   [Aug-23-17 09:26PM  Associated Press]
▶ John B. Sanfilippo posts 3Q profit   [May-03-17 07:49PM  Associated Press]
▶ Five Small-Caps For The Long-Term Investor   [Apr-12-17 11:13AM  Forbes]
▶ John B. Sanfilippo posts 2Q profit   [Feb-01-17 05:42PM  Associated Press]

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