Intrinsic value of Johnson Outdoors Inc. - JOUT

Previous Close

$77.59

  Intrinsic Value

$75.51

stock screener

  Rating & Target

hold

-3%

Previous close

$77.59

 
Intrinsic value

$75.51

 
Up/down potential

-3%

 
Rating

hold

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 0.8

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  555
  568
  582
  599
  617
  637
  658
  682
  707
  734
  763
  794
  827
  862
  899
  939
  981
  1,025
  1,071
  1,121
  1,173
  1,227
  1,285
  1,346
  1,410
  1,477
  1,548
  1,623
  1,702
  1,784
Variable operating expenses, $m
  376
  385
  394
  405
  417
  431
  445
  461
  478
  496
  510
  530
  552
  576
  601
  627
  655
  684
  715
  748
  783
  819
  858
  899
  941
  987
  1,034
  1,084
  1,136
  1,192
Fixed operating expenses, $m
  117
  119
  122
  124
  127
  130
  133
  136
  139
  142
  145
  148
  151
  155
  158
  161
  165
  169
  172
  176
  180
  184
  188
  192
  196
  201
  205
  210
  214
  219
Total operating expenses, $m
  493
  504
  516
  529
  544
  561
  578
  597
  617
  638
  655
  678
  703
  731
  759
  788
  820
  853
  887
  924
  963
  1,003
  1,046
  1,091
  1,137
  1,188
  1,239
  1,294
  1,350
  1,411
Operating income, $m
  62
  64
  66
  69
  72
  76
  80
  85
  91
  97
  109
  116
  124
  132
  141
  151
  161
  172
  184
  196
  210
  224
  239
  255
  272
  290
  309
  330
  351
  374
EBITDA, $m
  79
  81
  84
  87
  90
  95
  100
  105
  111
  117
  124
  132
  141
  150
  159
  170
  181
  193
  206
  219
  234
  249
  265
  283
  301
  321
  341
  363
  386
  411
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  11
  12
  12
  13
Earnings before tax, $m
  62
  64
  66
  69
  72
  75
  79
  84
  89
  95
  107
  113
  121
  129
  137
  146
  156
  167
  178
  190
  203
  217
  231
  246
  263
  280
  299
  318
  339
  361
Tax expense, $m
  17
  17
  18
  18
  19
  20
  21
  23
  24
  26
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  55
  58
  62
  67
  71
  76
  81
  86
  91
  97
Net income, $m
  45
  47
  48
  50
  52
  55
  58
  61
  65
  69
  78
  83
  88
  94
  100
  107
  114
  122
  130
  139
  148
  158
  169
  180
  192
  205
  218
  232
  247
  263

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
  345
  353
  362
  372
  383
  396
  409
  424
  439
  456
  474
  494
  514
  536
  559
  584
  609
  637
  666
  696
  729
  763
  799
  836
  876
  918
  962
  1,009
  1,058
  1,109
Adjusted assets (=assets-cash), $m
  345
  353
  362
  372
  383
  396
  409
  424
  439
  456
  474
  494
  514
  536
  559
  584
  609
  637
  666
  696
  729
  763
  799
  836
  876
  918
  962
  1,009
  1,058
  1,109
Revenue / Adjusted assets
  1.609
  1.609
  1.608
  1.610
  1.611
  1.609
  1.609
  1.608
  1.610
  1.610
  1.610
  1.607
  1.609
  1.608
  1.608
  1.608
  1.611
  1.609
  1.608
  1.611
  1.609
  1.608
  1.608
  1.610
  1.610
  1.609
  1.609
  1.609
  1.609
  1.609
Average production assets, $m
  66
  68
  69
  71
  73
  76
  78
  81
  84
  87
  91
  95
  98
  103
  107
  112
  117
  122
  127
  133
  140
  146
  153
  160
  168
  176
  184
  193
  203
  212
Working capital, $m
  43
  44
  45
  47
  48
  50
  51
  53
  55
  57
  60
  62
  65
  67
  70
  73
  76
  80
  84
  87
  91
  96
  100
  105
  110
  115
  121
  127
  133
  139
Total debt, $m
  2
  5
  8
  12
  16
  20
  24
  29
  35
  41
  47
  54
  61
  68
  76
  85
  94
  103
  113
  124
  135
  146
  159
  172
  186
  200
  215
  231
  248
  266
Total liabilities, $m
  119
  122
  125
  128
  132
  137
  141
  146
  152
  157
  164
  170
  177
  185
  193
  201
  210
  220
  230
  240
  251
  263
  276
  289
  302
  317
  332
  348
  365
  383
Total equity, $m
  226
  231
  237
  244
  251
  259
  268
  278
  288
  299
  311
  323
  337
  351
  366
  382
  399
  417
  436
  456
  477
  500
  523
  548
  574
  601
  630
  661
  693
  726
Total liabilities and equity, $m
  345
  353
  362
  372
  383
  396
  409
  424
  440
  456
  475
  493
  514
  536
  559
  583
  609
  637
  666
  696
  728
  763
  799
  837
  876
  918
  962
  1,009
  1,058
  1,109
Debt-to-equity ratio
  0.010
  0.020
  0.030
  0.050
  0.060
  0.080
  0.090
  0.110
  0.120
  0.140
  0.150
  0.170
  0.180
  0.190
  0.210
  0.220
  0.230
  0.250
  0.260
  0.270
  0.280
  0.290
  0.300
  0.310
  0.320
  0.330
  0.340
  0.350
  0.360
  0.370
Adjusted equity ratio
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655
  0.655

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  45
  47
  48
  50
  52
  55
  58
  61
  65
  69
  78
  83
  88
  94
  100
  107
  114
  122
  130
  139
  148
  158
  169
  180
  192
  205
  218
  232
  247
  263
Depreciation, amort., depletion, $m
  17
  17
  18
  18
  18
  19
  19
  20
  20
  21
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
  32
  33
  35
  37
Funds from operations, $m
  62
  64
  66
  68
  71
  74
  77
  81
  85
  90
  93
  99
  105
  112
  119
  126
  134
  143
  152
  162
  172
  183
  195
  208
  221
  235
  250
  266
  282
  300
Change in working capital, $m
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
Cash from operations, $m
  62
  63
  65
  67
  69
  72
  75
  79
  83
  88
  91
  97
  103
  109
  116
  123
  131
  139
  148
  158
  168
  179
  191
  203
  216
  230
  244
  260
  276
  293
Maintenance CAPEX, $m
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -28
  -29
  -30
  -32
  -33
  -35
New CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
Cash from investing activities, $m
  -13
  -13
  -14
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -18
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -33
  -36
  -37
  -38
  -41
  -42
  -45
Free cash flow, $m
  49
  50
  51
  53
  55
  57
  60
  63
  66
  70
  73
  77
  82
  88
  94
  100
  107
  114
  122
  130
  139
  148
  158
  169
  181
  193
  205
  219
  233
  249
Issuance/(repayment) of debt, $m
  2
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
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
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
Total cash flow (excl. dividends), $m
  51
  53
  54
  56
  59
  61
  64
  68
  72
  76
  79
  84
  89
  95
  102
  108
  116
  123
  132
  141
  150
  160
  171
  182
  194
  207
  221
  235
  250
  266
Retained Cash Flow (-), $m
  -4
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -26
  -27
  -29
  -30
  -32
  -34
Prev. year cash balance distribution, $m
  58
  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
  104
  47
  48
  50
  51
  53
  56
  58
  61
  65
  67
  71
  76
  81
  86
  92
  99
  105
  113
  121
  129
  138
  147
  157
  168
  180
  192
  205
  218
  233
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
  100
  43
  42
  41
  40
  39
  38
  36
  35
  34
  32
  30
  29
  27
  25
  23
  21
  19
  17
  15
  13
  11
  10
  8
  7
  5
  4
  3
  2
  2
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

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 Inc. (JOUT)

Valuation Ratios
P/E Ratio 22.2
Price to Sales 1.6
Price to Book 3.2
Price to Tangible Book
Price to Cash Flow 16.9
Price to Free Cash Flow 22.8
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 $544 million for the last fiscal year's total revenue generated by Johnson Outdoors Inc.. The default revenue input number comes from 0001 income statement of Johnson Outdoors 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 JOUT stock valuation model: a) initial revenue growth rate of 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 JOUT is calculated based on our internal credit rating of Johnson Outdoors 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 Johnson Outdoors 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 JOUT stock the variable cost ratio is equal to 67.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $114 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 5.4% for Johnson Outdoors Inc..

Corporate tax rate of 27% is the nominal tax rate for Johnson Outdoors 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 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 11.9%.

Life of production assets of 5.8 years is the average useful life of capital assets used in Johnson Outdoors 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 JOUT is equal to 7.8%. 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 - $279.197 million for Johnson Outdoors 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 10.039 million for Johnson Outdoors 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 Johnson Outdoors Inc. at the current share price and the inputted number of shares is $0.8 billion.

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