Intrinsic value of J. Jill, Inc. - JILL

Previous Close

$5.04

  Intrinsic Value

$21.70

stock screener

  Rating & Target

str. buy

+331%

Previous close

$5.04

 
Intrinsic value

$21.70

 
Up/down potential

+331%

 
Rating

str. buy

We calculate the intrinsic value of JILL 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, %
  7.50
  7.25
  7.02
  6.82
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
  5.87
  5.78
  5.71
  5.64
  5.57
  5.51
  5.46
  5.42
  5.38
  5.34
  5.30
  5.27
  5.25
  5.22
  5.20
  5.18
  5.16
  5.15
  5.13
  5.12
Revenue, $m
  750
  805
  861
  920
  981
  1,045
  1,111
  1,180
  1,251
  1,326
  1,404
  1,485
  1,570
  1,658
  1,751
  1,847
  1,948
  2,054
  2,164
  2,280
  2,400
  2,527
  2,660
  2,798
  2,944
  3,096
  3,256
  3,424
  3,599
  3,784
Variable operating expenses, $m
  625
  668
  713
  759
  807
  857
  909
  963
  1,020
  1,079
  1,105
  1,169
  1,236
  1,306
  1,379
  1,455
  1,534
  1,617
  1,704
  1,795
  1,890
  1,990
  2,094
  2,204
  2,318
  2,438
  2,564
  2,696
  2,834
  2,979
Fixed operating expenses, $m
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
  73
  74
  76
  78
  79
  81
  83
  85
  86
  88
Total operating expenses, $m
  672
  716
  762
  809
  858
  909
  963
  1,018
  1,076
  1,136
  1,163
  1,229
  1,297
  1,368
  1,443
  1,520
  1,601
  1,685
  1,774
  1,866
  1,963
  2,064
  2,170
  2,282
  2,397
  2,519
  2,647
  2,781
  2,920
  3,067
Operating income, $m
  78
  88
  99
  111
  123
  135
  148
  161
  175
  190
  240
  256
  273
  290
  308
  327
  348
  368
  390
  413
  438
  463
  489
  517
  547
  577
  609
  643
  679
  716
EBITDA, $m
  136
  148
  161
  174
  188
  202
  217
  233
  249
  266
  284
  302
  322
  342
  363
  385
  408
  432
  458
  484
  512
  542
  572
  604
  638
  674
  711
  750
  791
  834
Interest expense (income), $m
  16
  18
  21
  23
  26
  28
  31
  34
  37
  40
  44
  47
  51
  54
  58
  62
  66
  71
  75
  80
  85
  90
  96
  102
  108
  114
  121
  128
  135
  143
  151
Earnings before tax, $m
  60
  68
  76
  85
  94
  104
  114
  124
  135
  147
  193
  205
  218
  232
  246
  261
  277
  293
  310
  328
  347
  367
  388
  410
  432
  457
  482
  508
  536
  565
Tax expense, $m
  16
  18
  21
  23
  25
  28
  31
  34
  36
  40
  52
  55
  59
  63
  66
  71
  75
  79
  84
  89
  94
  99
  105
  111
  117
  123
  130
  137
  145
  153
Net income, $m
  43
  49
  56
  62
  69
  76
  83
  91
  99
  107
  141
  150
  159
  169
  180
  191
  202
  214
  227
  240
  253
  268
  283
  299
  316
  333
  352
  371
  391
  413

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
  642
  689
  737
  788
  840
  894
  951
  1,010
  1,071
  1,135
  1,202
  1,271
  1,344
  1,420
  1,499
  1,581
  1,668
  1,758
  1,853
  1,952
  2,055
  2,164
  2,277
  2,396
  2,521
  2,651
  2,788
  2,931
  3,082
  3,239
Adjusted assets (=assets-cash), $m
  642
  689
  737
  788
  840
  894
  951
  1,010
  1,071
  1,135
  1,202
  1,271
  1,344
  1,420
  1,499
  1,581
  1,668
  1,758
  1,853
  1,952
  2,055
  2,164
  2,277
  2,396
  2,521
  2,651
  2,788
  2,931
  3,082
  3,239
Revenue / Adjusted assets
  1.168
  1.168
  1.168
  1.168
  1.168
  1.169
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
  1.168
Average production assets, $m
  308
  331
  354
  378
  403
  429
  457
  485
  514
  545
  577
  610
  645
  682
  720
  759
  801
  844
  889
  937
  987
  1,039
  1,093
  1,150
  1,210
  1,273
  1,338
  1,407
  1,479
  1,555
Working capital, $m
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
Total debt, $m
  273
  306
  340
  375
  411
  450
  489
  530
  573
  618
  665
  713
  764
  817
  873
  930
  991
  1,054
  1,120
  1,190
  1,262
  1,338
  1,417
  1,501
  1,588
  1,679
  1,775
  1,875
  1,981
  2,091
Total liabilities, $m
  450
  482
  516
  551
  588
  626
  666
  707
  750
  795
  841
  890
  941
  994
  1,049
  1,107
  1,168
  1,231
  1,297
  1,366
  1,439
  1,514
  1,594
  1,677
  1,764
  1,856
  1,952
  2,052
  2,157
  2,268
Total equity, $m
  193
  207
  221
  236
  252
  268
  285
  303
  321
  341
  361
  381
  403
  426
  450
  474
  500
  527
  556
  585
  617
  649
  683
  719
  756
  795
  836
  879
  925
  972
Total liabilities and equity, $m
  643
  689
  737
  787
  840
  894
  951
  1,010
  1,071
  1,136
  1,202
  1,271
  1,344
  1,420
  1,499
  1,581
  1,668
  1,758
  1,853
  1,951
  2,056
  2,163
  2,277
  2,396
  2,520
  2,651
  2,788
  2,931
  3,082
  3,240
Debt-to-equity ratio
  1.420
  1.480
  1.540
  1.590
  1.630
  1.680
  1.710
  1.750
  1.780
  1.810
  1.840
  1.870
  1.900
  1.920
  1.940
  1.960
  1.980
  2.000
  2.020
  2.030
  2.050
  2.060
  2.070
  2.090
  2.100
  2.110
  2.120
  2.130
  2.140
  2.150
Adjusted equity ratio
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  43
  49
  56
  62
  69
  76
  83
  91
  99
  107
  141
  150
  159
  169
  180
  191
  202
  214
  227
  240
  253
  268
  283
  299
  316
  333
  352
  371
  391
  413
Depreciation, amort., depletion, $m
  58
  60
  61
  63
  65
  67
  69
  71
  74
  76
  44
  46
  49
  52
  55
  58
  61
  64
  67
  71
  75
  79
  83
  87
  92
  96
  101
  107
  112
  118
Funds from operations, $m
  101
  109
  117
  125
  134
  143
  152
  162
  172
  183
  185
  196
  208
  221
  234
  248
  263
  278
  294
  311
  328
  347
  366
  386
  407
  430
  453
  478
  503
  531
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  101
  109
  117
  125
  134
  143
  152
  162
  172
  182
  184
  196
  208
  221
  234
  248
  262
  277
  293
  310
  328
  346
  365
  385
  407
  429
  452
  477
  503
  530
Maintenance CAPEX, $m
  -22
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -92
  -96
  -101
  -107
  -112
New CAPEX, $m
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -50
  -52
  -54
  -57
  -60
  -63
  -66
  -69
  -72
  -76
Cash from investing activities, $m
  -43
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -70
  -73
  -77
  -81
  -85
  -90
  -95
  -99
  -104
  -109
  -114
  -121
  -127
  -133
  -140
  -147
  -155
  -162
  -170
  -179
  -188
Free cash flow, $m
  58
  63
  68
  74
  80
  86
  92
  99
  106
  113
  111
  119
  127
  135
  144
  154
  163
  173
  184
  195
  207
  219
  232
  246
  260
  275
  290
  307
  324
  342
Issuance/(repayment) of debt, $m
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  76
  79
  83
  87
  91
  96
  100
  105
  110
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  
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  60
  63
  66
  69
  72
  76
  79
  83
  87
  91
  96
  100
  105
  110
Total cash flow (excl. dividends), $m
  89
  96
  102
  109
  116
  124
  132
  140
  149
  158
  158
  167
  178
  188
  200
  211
  224
  237
  250
  264
  279
  295
  312
  329
  347
  366
  386
  407
  429
  452
Retained Cash Flow (-), $m
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -45
  -47
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
  76
  82
  88
  94
  101
  108
  115
  122
  130
  138
  138
  147
  156
  166
  176
  187
  198
  210
  222
  235
  248
  263
  277
  293
  310
  327
  345
  364
  384
  405
Discount rate, %
  6.60
  6.93
  7.28
  7.64
  8.02
  8.42
  8.84
  9.29
  9.75
  10.24
  10.75
  11.29
  11.85
  12.45
  13.07
  13.72
  14.41
  15.13
  15.88
  16.68
  17.51
  18.39
  19.31
  20.27
  21.29
  22.35
  23.47
  24.64
  25.87
  27.17
PV of cash for distribution, $m
  71
  71
  71
  70
  69
  66
  63
  60
  56
  52
  45
  41
  36
  32
  28
  24
  20
  17
  13
  11
  8
  6
  5
  3
  2
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
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J.Jill, Inc. (J.Jill) operates as a specialty retailer in the women’s apparel industry. J.Jill is a women’s apparel brand focused on customer in the 40-65 age segment. The Company operates an integrated omni-channel platform that is diversified across its retail stores, Website and catalogs. It operates in the retail and direct channels segment. Its direct channel consists of its Website and catalog orders. As of January 28, 2017, it operated 275 stores in 43 states. The Company also offers a range of footwear and accessories, including scarves, jewelry and hosiery. Its products are marketed under the J.Jill brand name and sold through its direct and retail channels. It offers two sub-brands as extensions of its brand aesthetic: Pure Jill and Wearever. Its Website provides customers with access to the J.Jill product offering and features content, including updates on new collections and guidance on how to wear and wardrobe its styles.

FINANCIAL RATIOS  of  J. Jill, Inc. (JILL)

Valuation Ratios
P/E Ratio 9.2
Price to Sales 0.3
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow 3.3
Price to Free Cash Flow 7.4
Growth Rates
Sales Growth Rate 13.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.8%
Cap. Spend. - 3 Yr. Gr. Rate 6.5%
Financial Strength
Quick Ratio 4
Current Ratio 0
LT Debt to Equity 214.6%
Total Debt to Equity 217.1%
Interest Coverage 4
Management Effectiveness
Return On Assets 5.8%
Ret/ On Assets - 3 Yr. Avg. 6.3%
Return On Total Capital 6%
Ret/ On T. Cap. - 3 Yr. Avg. 6.6%
Return On Equity 16.6%
Return On Equity - 3 Yr. Avg. 15.3%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 67%
Gross Margin - 3 Yr. Avg. 65.9%
EBITDA Margin 14.6%
EBITDA Margin - 3 Yr. Avg. 11.7%
Operating Margin 9.2%
Oper. Margin - 3 Yr. Avg. 7.1%
Pre-Tax Margin 6.4%
Pre-Tax Margin - 3 Yr. Avg. 3.9%
Net Profit Margin 3.8%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 41.5%
Eff/ Tax Rate - 3 Yr. Avg. 53.5%
Payout Ratio 0%

JILL stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JILL stock intrinsic value calculation we used $698 million for the last fiscal year's total revenue generated by J. Jill, Inc.. The default revenue input number comes from 0001 income statement of J. Jill, 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 JILL stock valuation model: a) initial revenue growth rate of 7.5% 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 6.6%, whose default value for JILL is calculated based on our internal credit rating of J. Jill, 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. Jill, 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 JILL stock the variable cost ratio is equal to 83.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $46 million in the base year in the intrinsic value calculation for JILL 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 7.6% for J. Jill, Inc..

Corporate tax rate of 27% is the nominal tax rate for J. Jill, 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 JILL 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 JILL are equal to 41.1%.

Life of production assets of 13.2 years is the average useful life of capital assets used in J. Jill, 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 JILL is equal to 0.5%. 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 - $179.316 million for J. Jill, 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 43.673 million for J. Jill, 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. Jill, Inc. at the current share price and the inputted number of shares is $0.2 billion.

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