Intrinsic value of Johnson Outdoors Cl A - JOUT

Previous Close

$70.38

  Intrinsic Value

$151.17

stock screener

  Rating & Target

str. buy

+115%

Previous close

$70.38

 
Intrinsic value

$151.17

 
Up/down potential

+115%

 
Rating

str. buy

We calculate the intrinsic value of JOUT 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, %
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
Revenue, $m
  540
  591
  644
  700
  758
  818
  881
  946
  1,014
  1,084
  1,157
  1,233
  1,312
  1,395
  1,480
  1,570
  1,663
  1,760
  1,861
  1,966
  2,077
  2,192
  2,312
  2,438
  2,570
  2,707
  2,851
  3,002
  3,160
  3,326
Variable operating expenses, $m
  322
  352
  384
  417
  451
  487
  524
  563
  603
  644
  685
  730
  777
  826
  876
  929
  984
  1,042
  1,101
  1,164
  1,229
  1,297
  1,369
  1,443
  1,521
  1,603
  1,688
  1,777
  1,871
  1,969
Fixed operating expenses, $m
  158
  162
  165
  169
  173
  177
  181
  184
  189
  193
  197
  201
  206
  210
  215
  220
  224
  229
  234
  240
  245
  250
  256
  261
  267
  273
  279
  285
  291
  298
Total operating expenses, $m
  480
  514
  549
  586
  624
  664
  705
  747
  792
  837
  882
  931
  983
  1,036
  1,091
  1,149
  1,208
  1,271
  1,335
  1,404
  1,474
  1,547
  1,625
  1,704
  1,788
  1,876
  1,967
  2,062
  2,162
  2,267
Operating income, $m
  59
  77
  95
  114
  134
  155
  176
  199
  223
  247
  275
  302
  330
  359
  389
  421
  454
  489
  525
  563
  603
  644
  688
  733
  781
  832
  885
  940
  998
  1,059
EBITDA, $m
  74
  92
  112
  132
  153
  175
  198
  222
  247
  273
  301
  329
  359
  389
  422
  455
  490
  527
  566
  606
  648
  692
  738
  787
  838
  891
  947
  1,006
  1,067
  1,132
Interest expense (income), $m
  0
  0
  2
  5
  7
  10
  12
  15
  18
  21
  24
  27
  31
  34
  38
  42
  46
  50
  54
  59
  63
  68
  73
  79
  84
  90
  96
  102
  109
  116
  123
Earnings before tax, $m
  59
  74
  90
  107
  124
  142
  161
  181
  202
  223
  248
  271
  295
  321
  347
  375
  404
  435
  466
  500
  534
  571
  609
  649
  692
  736
  782
  831
  882
  936
Tax expense, $m
  16
  20
  24
  29
  34
  38
  44
  49
  54
  60
  67
  73
  80
  87
  94
  101
  109
  117
  126
  135
  144
  154
  164
  175
  187
  199
  211
  224
  238
  253
Net income, $m
  43
  54
  66
  78
  91
  104
  118
  132
  147
  163
  181
  198
  216
  234
  254
  274
  295
  317
  340
  365
  390
  417
  445
  474
  505
  537
  571
  607
  644
  683

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
  360
  394
  430
  467
  505
  546
  587
  631
  676
  723
  771
  822
  875
  930
  987
  1,046
  1,108
  1,173
  1,240
  1,311
  1,384
  1,461
  1,541
  1,625
  1,713
  1,805
  1,901
  2,002
  2,107
  2,217
Adjusted assets (=assets-cash), $m
  360
  394
  430
  467
  505
  546
  587
  631
  676
  723
  771
  822
  875
  930
  987
  1,046
  1,108
  1,173
  1,240
  1,311
  1,384
  1,461
  1,541
  1,625
  1,713
  1,805
  1,901
  2,002
  2,107
  2,217
Revenue / Adjusted assets
  1.500
  1.500
  1.498
  1.499
  1.501
  1.498
  1.501
  1.499
  1.500
  1.499
  1.501
  1.500
  1.499
  1.500
  1.499
  1.501
  1.501
  1.500
  1.501
  1.500
  1.501
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
  1.500
Average production assets, $m
  67
  74
  81
  88
  95
  102
  110
  118
  127
  136
  145
  154
  164
  174
  185
  196
  208
  220
  233
  246
  260
  274
  289
  305
  321
  338
  356
  375
  395
  416
Working capital, $m
  51
  56
  61
  66
  71
  77
  83
  89
  95
  102
  109
  116
  123
  131
  139
  148
  156
  165
  175
  185
  195
  206
  217
  229
  242
  254
  268
  282
  297
  313
Total debt, $m
  11
  22
  35
  47
  60
  74
  88
  103
  118
  134
  150
  167
  185
  204
  223
  243
  264
  286
  309
  332
  357
  383
  410
  439
  468
  499
  532
  566
  601
  639
Total liabilities, $m
  122
  133
  145
  158
  171
  184
  199
  213
  228
  244
  261
  278
  296
  314
  334
  354
  375
  396
  419
  443
  468
  494
  521
  549
  579
  610
  643
  677
  712
  749
Total equity, $m
  238
  261
  284
  309
  335
  361
  389
  418
  447
  478
  511
  544
  579
  615
  653
  693
  734
  777
  821
  868
  916
  967
  1,020
  1,076
  1,134
  1,195
  1,258
  1,325
  1,395
  1,468
Total liabilities and equity, $m
  360
  394
  429
  467
  506
  545
  588
  631
  675
  722
  772
  822
  875
  929
  987
  1,047
  1,109
  1,173
  1,240
  1,311
  1,384
  1,461
  1,541
  1,625
  1,713
  1,805
  1,901
  2,002
  2,107
  2,217
Debt-to-equity ratio
  0.050
  0.090
  0.120
  0.150
  0.180
  0.200
  0.230
  0.250
  0.260
  0.280
  0.290
  0.310
  0.320
  0.330
  0.340
  0.350
  0.360
  0.370
  0.380
  0.380
  0.390
  0.400
  0.400
  0.410
  0.410
  0.420
  0.420
  0.430
  0.430
  0.440
Adjusted equity ratio
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662
  0.662

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  43
  54
  66
  78
  91
  104
  118
  132
  147
  163
  181
  198
  216
  234
  254
  274
  295
  317
  340
  365
  390
  417
  445
  474
  505
  537
  571
  607
  644
  683
Depreciation, amort., depletion, $m
  14
  15
  17
  18
  19
  20
  22
  23
  25
  26
  25
  27
  29
  31
  32
  34
  36
  39
  41
  43
  46
  48
  51
  53
  56
  59
  63
  66
  69
  73
Funds from operations, $m
  58
  70
  83
  96
  110
  124
  140
  155
  172
  189
  206
  225
  244
  265
  286
  308
  332
  356
  381
  408
  436
  465
  495
  527
  561
  596
  634
  672
  713
  756
Change in working capital, $m
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
Cash from operations, $m
  53
  65
  78
  91
  104
  119
  134
  149
  166
  182
  199
  218
  237
  257
  278
  300
  323
  347
  372
  398
  425
  454
  484
  516
  549
  584
  620
  658
  698
  741
Maintenance CAPEX, $m
  -11
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -21
  -22
  -24
  -25
  -27
  -29
  -31
  -32
  -34
  -36
  -39
  -41
  -43
  -46
  -48
  -51
  -53
  -56
  -59
  -63
  -66
  -69
New CAPEX, $m
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
Cash from investing activities, $m
  -17
  -18
  -20
  -21
  -22
  -25
  -26
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -43
  -46
  -48
  -52
  -54
  -57
  -60
  -63
  -67
  -69
  -73
  -77
  -82
  -86
  -90
Free cash flow, $m
  36
  47
  58
  70
  82
  95
  108
  122
  136
  151
  167
  183
  200
  218
  237
  256
  277
  298
  320
  344
  368
  394
  421
  449
  479
  510
  543
  577
  613
  651
Issuance/(repayment) of debt, $m
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
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  
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
Total cash flow (excl. dividends), $m
  48
  58
  70
  82
  95
  108
  122
  137
  152
  167
  183
  200
  218
  237
  256
  276
  298
  320
  343
  368
  393
  420
  448
  478
  509
  541
  575
  611
  648
  688
Retained Cash Flow (-), $m
  -21
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -31
  -32
  -34
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -56
  -58
  -61
  -64
  -67
  -70
  -73
Prev. year cash balance distribution, $m
  26
  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
  52
  36
  46
  58
  69
  82
  94
  108
  122
  136
  151
  167
  183
  200
  218
  237
  257
  277
  299
  321
  345
  369
  395
  422
  450
  480
  511
  544
  579
  615
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
  50
  33
  40
  47
  54
  59
  64
  67
  70
  71
  72
  71
  70
  67
  64
  60
  56
  51
  46
  41
  36
  31
  26
  21
  18
  14
  11
  8
  6
  5
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
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Johnson Outdoors Inc. is a manufacturer and marketer of branded seasonal, outdoor recreation products. The Company operates through four segments: Marine Electronics, Outdoor Equipment, Watercraft and Diving. Its Marine Electronics segment's brands are Minn Kota, Humminbird and Cannon. Its Outdoor Equipment segment's brands are Eureka!, Jetboil and Silva. Its Watercraft segment designs and markets Necky sea touring kayaks; sit on top Ocean Kayaks, and Old Town canoes and kayaks for family recreation, touring, angling and tripping. The Company manufactures and markets underwater diving products for recreational divers, which it sells and distributes under the SCUBAPRO brand name. It markets a line of underwater diving and snorkeling equipment, including regulators, buoyancy compensators, dive computers and gauges, wetsuits, masks, fins, snorkels and accessories. The Company's products are used for fishing from a boat, diving, paddling, hiking and camping.

FINANCIAL RATIOS  of  Johnson Outdoors Cl A (JOUT)

Valuation Ratios
P/E Ratio 20.1
Price to Sales 1.4
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 15.3
Price to Free Cash Flow 20.7
Growth Rates
Sales Growth Rate 13.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate -1.6%
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 10.5%
Ret/ On Assets - 3 Yr. Avg. 6.4%
Return On Total Capital 15.3%
Ret/ On T. Cap. - 3 Yr. Avg. 9.1%
Return On Equity 15.5%
Return On Equity - 3 Yr. Avg. 9.3%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 43%
Gross Margin - 3 Yr. Avg. 41.2%
EBITDA Margin 12.4%
EBITDA Margin - 3 Yr. Avg. 9.2%
Operating Margin 9.4%
Oper. Margin - 3 Yr. Avg. 6.2%
Pre-Tax Margin 9.8%
Pre-Tax Margin - 3 Yr. Avg. 6.3%
Net Profit Margin 7.1%
Net Profit Margin - 3 Yr. Avg. 4.3%
Effective Tax Rate 27.1%
Eff/ Tax Rate - 3 Yr. Avg. 33.3%
Payout Ratio 11.4%

JOUT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JOUT stock intrinsic value calculation we used $490.565 million for the last fiscal year's total revenue generated by Johnson Outdoors Cl A. The default revenue input number comes from 0001 income statement of Johnson Outdoors 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 JOUT stock valuation model: a) initial revenue growth rate of 10% 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 JOUT is calculated based on our internal credit rating of Johnson Outdoors 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 Johnson Outdoors 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 JOUT stock the variable cost ratio is equal to 59.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $155 million in the base year in the intrinsic value calculation for JOUT 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 20.5% for Johnson Outdoors Cl A.

Corporate tax rate of 27% is the nominal tax rate for Johnson Outdoors 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 JOUT 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 JOUT are equal to 12.5%.

Life of production assets of 5.7 years is the average useful life of capital assets used in Johnson Outdoors 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 JOUT is equal to 9.4%. 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 - $243.004 million for Johnson Outdoors 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 8.855 million for Johnson Outdoors 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 Johnson Outdoors Cl A at the current share price and the inputted number of shares is $0.6 billion.

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