Intrinsic value of Joint - JYNT

Previous Close

$8.28

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$8.28

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of JYNT 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 2017), $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 0.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  22.60
  20.84
  19.26
  17.83
  16.55
  15.39
  14.35
  13.42
  12.58
  11.82
  11.14
  10.52
  9.97
  9.47
  9.03
  8.62
  8.26
  7.94
  7.64
  7.38
  7.14
  6.93
  6.73
  6.56
  6.40
  6.26
  6.14
  6.02
  5.92
  5.83
Revenue, $m
  31
  37
  44
  52
  61
  70
  80
  91
  102
  114
  127
  140
  154
  169
  184
  200
  217
  234
  252
  270
  290
  310
  330
  352
  375
  398
  423
  448
  475
  502
Variable operating expenses, $m
  53
  65
  77
  90
  105
  122
  139
  157
  177
  198
  220
  243
  267
  292
  319
  346
  375
  404
  435
  467
  501
  535
  571
  609
  648
  688
  731
  775
  821
  868
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
  53
  65
  77
  90
  105
  122
  139
  157
  177
  198
  220
  243
  267
  292
  319
  346
  375
  404
  435
  467
  501
  535
  571
  609
  648
  688
  731
  775
  821
  868
Operating income, $m
  -23
  -28
  -33
  -38
  -45
  -52
  -59
  -67
  -75
  -84
  -93
  -102
  -113
  -123
  -134
  -146
  -158
  -170
  -184
  -197
  -211
  -226
  -241
  -257
  -273
  -290
  -308
  -327
  -346
  -366
EBITDA, $m
  -21
  -26
  -31
  -36
  -42
  -48
  -55
  -63
  -71
  -79
  -88
  -97
  -107
  -117
  -128
  -139
  -150
  -162
  -174
  -187
  -201
  -214
  -229
  -244
  -260
  -276
  -293
  -310
  -329
  -348
Interest expense (income), $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  12
Earnings before tax, $m
  -23
  -28
  -33
  -39
  -45
  -53
  -60
  -68
  -77
  -86
  -95
  -105
  -116
  -127
  -138
  -150
  -163
  -175
  -189
  -203
  -217
  -233
  -248
  -265
  -282
  -299
  -318
  -337
  -357
  -378
Tax expense, $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
Net income, $m
  -23
  -28
  -33
  -39
  -45
  -53
  -60
  -68
  -77
  -86
  -95
  -105
  -116
  -127
  -138
  -150
  -163
  -175
  -189
  -203
  -217
  -233
  -248
  -265
  -282
  -299
  -318
  -337
  -357
  -378

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
  21
  25
  30
  35
  41
  47
  54
  61
  69
  77
  85
  94
  104
  114
  124
  134
  146
  157
  169
  182
  195
  208
  222
  237
  252
  268
  284
  301
  319
  338
Adjusted assets (=assets-cash), $m
  21
  25
  30
  35
  41
  47
  54
  61
  69
  77
  85
  94
  104
  114
  124
  134
  146
  157
  169
  182
  195
  208
  222
  237
  252
  268
  284
  301
  319
  338
Revenue / Adjusted assets
  1.476
  1.480
  1.467
  1.486
  1.488
  1.489
  1.481
  1.492
  1.478
  1.481
  1.494
  1.489
  1.481
  1.482
  1.484
  1.493
  1.486
  1.490
  1.491
  1.484
  1.487
  1.490
  1.486
  1.485
  1.488
  1.485
  1.489
  1.488
  1.489
  1.485
Average production assets, $m
  11
  13
  16
  19
  22
  25
  29
  33
  37
  41
  46
  51
  56
  61
  67
  73
  79
  85
  91
  98
  105
  112
  120
  128
  136
  145
  153
  163
  172
  182
Working capital, $m
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -8
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
Total debt, $m
  4
  7
  10
  14
  18
  23
  27
  33
  38
  44
  50
  56
  63
  70
  77
  85
  93
  101
  109
  118
  127
  137
  147
  157
  168
  179
  191
  203
  216
  229
Total liabilities, $m
  15
  18
  21
  25
  29
  33
  38
  43
  49
  55
  61
  67
  74
  81
  88
  95
  103
  112
  120
  129
  138
  148
  158
  168
  179
  190
  202
  214
  226
  240
Total equity, $m
  6
  7
  9
  10
  12
  14
  16
  18
  20
  22
  25
  27
  30
  33
  36
  39
  42
  46
  49
  53
  56
  60
  64
  69
  73
  78
  82
  87
  93
  98
Total liabilities and equity, $m
  21
  25
  30
  35
  41
  47
  54
  61
  69
  77
  86
  94
  104
  114
  124
  134
  145
  158
  169
  182
  194
  208
  222
  237
  252
  268
  284
  301
  319
  338
Debt-to-equity ratio
  0.640
  0.950
  1.190
  1.380
  1.530
  1.660
  1.760
  1.840
  1.910
  1.960
  2.010
  2.050
  2.090
  2.120
  2.150
  2.170
  2.190
  2.210
  2.230
  2.240
  2.260
  2.270
  2.280
  2.290
  2.300
  2.310
  2.320
  2.320
  2.330
  2.340
Adjusted equity ratio
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -23
  -28
  -33
  -39
  -45
  -53
  -60
  -68
  -77
  -86
  -95
  -105
  -116
  -127
  -138
  -150
  -163
  -175
  -189
  -203
  -217
  -233
  -248
  -265
  -282
  -299
  -318
  -337
  -357
  -378
Depreciation, amort., depletion, $m
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  14
  15
  16
  17
  18
Funds from operations, $m
  -21
  -26
  -31
  -37
  -43
  -49
  -57
  -64
  -73
  -81
  -90
  -100
  -110
  -120
  -131
  -143
  -155
  -167
  -180
  -193
  -207
  -221
  -236
  -252
  -268
  -285
  -302
  -321
  -340
  -360
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  -21
  -26
  -31
  -36
  -42
  -49
  -56
  -64
  -72
  -81
  -90
  -99
  -109
  -120
  -131
  -142
  -154
  -166
  -179
  -192
  -206
  -221
  -235
  -251
  -267
  -284
  -301
  -320
  -339
  -358
Maintenance CAPEX, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
New CAPEX, $m
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
Cash from investing activities, $m
  -3
  -3
  -4
  -5
  -5
  -5
  -7
  -7
  -7
  -8
  -9
  -10
  -10
  -11
  -12
  -13
  -13
  -14
  -14
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -23
  -24
  -26
  -27
Free cash flow, $m
  -24
  -29
  -35
  -41
  -47
  -55
  -62
  -71
  -80
  -89
  -99
  -109
  -120
  -131
  -142
  -155
  -167
  -180
  -194
  -208
  -223
  -238
  -254
  -271
  -288
  -306
  -325
  -344
  -365
  -386
Issuance/(repayment) of debt, $m
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
Issuance/(repurchase) of shares, $m
  24
  29
  34
  41
  47
  54
  62
  70
  79
  88
  97
  108
  118
  129
  141
  153
  166
  179
  192
  207
  221
  237
  252
  269
  286
  304
  323
  342
  362
  383
Cash from financing (excl. dividends), $m  
  27
  32
  37
  45
  51
  58
  67
  75
  84
  94
  103
  114
  125
  136
  148
  161
  174
  187
  201
  216
  230
  247
  262
  279
  297
  315
  335
  354
  375
  396
Total cash flow (excl. dividends), $m
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
Retained Cash Flow (-), $m
  -24
  -29
  -34
  -41
  -47
  -54
  -62
  -70
  -79
  -88
  -97
  -108
  -118
  -129
  -141
  -153
  -166
  -179
  -192
  -207
  -221
  -237
  -252
  -269
  -286
  -304
  -323
  -342
  -362
  -383
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
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  10
  10
  11
  11
Cash available for distribution, $m
  -21
  -26
  -31
  -37
  -43
  -50
  -58
  -66
  -74
  -83
  -92
  -102
  -113
  -124
  -135
  -147
  -159
  -172
  -186
  -199
  -214
  -229
  -244
  -260
  -277
  -295
  -313
  -332
  -352
  -372
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
  -20
  -24
  -27
  -30
  -34
  -36
  -39
  -41
  -43
  -44
  -44
  -44
  -43
  -42
  -40
  -37
  -35
  -32
  -29
  -25
  -22
  -19
  -16
  -13
  -11
  -9
  -7
  -5
  -4
  -3
Current shareholders' claim on cash, %
  67.7
  45.6
  30.9
  21.0
  14.3
  9.8
  6.7
  4.7
  3.2
  2.2
  1.6
  1.1
  0.8
  0.5
  0.4
  0.3
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

The Joint Corp. develops, owns, operates, supports and manages chiropractic clinics through direct ownership, management arrangements, franchising and the sale of regional developer rights throughout the United States. The Company is franchisor and operator of chiropractic clinics. The Company offers its patients the opportunity to visit its clinics without an appointment and receive prompt attention. The Company has approximately 310 franchised, company-owned, or managed clinics in operation in over 30 states. In addition to its approximately 310 operating clinics, the Company has granted franchises either directly or through its regional developers for an additional over 170 clinics. The Company offers a range of membership and wellness packages. Each patient's records are digitally updated for ready retrieval in its data storage system by its chiropractors in compliance with various applicable medical records security and privacy regulations.

FINANCIAL RATIOS  of  Joint (JYNT)

Valuation Ratios
P/E Ratio -7.2
Price to Sales 5.1
Price to Book 15.4
Price to Tangible Book
Price to Cash Flow -9.8
Price to Free Cash Flow -8.3
Growth Rates
Sales Growth Rate 50%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0.2
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -60%
Ret/ On Assets - 3 Yr. Avg. -35.1%
Return On Total Capital -103.4%
Ret/ On T. Cap. - 3 Yr. Avg. -63.6%
Return On Equity -107.1%
Return On Equity - 3 Yr. Avg. -65.3%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 85.7%
Gross Margin - 3 Yr. Avg. 78.6%
EBITDA Margin -57.1%
EBITDA Margin - 3 Yr. Avg. -47.6%
Operating Margin -71.4%
Oper. Margin - 3 Yr. Avg. -54.8%
Pre-Tax Margin -71.4%
Pre-Tax Margin - 3 Yr. Avg. -54.8%
Net Profit Margin -71.4%
Net Profit Margin - 3 Yr. Avg. -59.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -16.7%
Payout Ratio 0%

JYNT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the JYNT stock intrinsic value calculation we used $25 million for the last fiscal year's total revenue generated by Joint. The default revenue input number comes from 2017 income statement of Joint. 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 JYNT stock valuation model: a) initial revenue growth rate of 22.6% 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 JYNT is calculated based on our internal credit rating of Joint, 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 Joint.
    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 JYNT stock the variable cost ratio is equal to 174.9%.

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 JYNT 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 Joint.

Corporate tax rate of 27% is the nominal tax rate for Joint. 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 JYNT stock is equal to 2.4%.

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 JYNT are equal to 36.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Joint 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 JYNT is equal to -4.2%. 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 - $5 million for Joint - 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 13 million for Joint 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 Joint at the current share price and the inputted number of shares is $0.1 billion.

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COMPANY NEWS

▶ When Can We Expect A Profit From The Joint Corp (NASDAQ:JYNT)?   [Jun-27-18 12:25PM  Simply Wall St.]
▶ The Joint Corp. CFO to Depart in July   [Jun-21-18 07:05AM  GlobeNewswire]
▶ Chiropractic franchise sees growth potential in Sacramento   [Jun-07-18 10:21AM  American City Business Journals]
▶ Entrepreneur: Turnaround CEO adjusts chiropractic operations   [May-11-18 02:00PM  American City Business Journals]
▶ The Joint Corp. Reports First Quarter Financial Results   [May-10-18 04:05PM  GlobeNewswire]
▶ 4 Breakout Stocks Offering Phenomenal Returns   [Apr-24-18 08:15AM  Zacks]
▶ The Joint Corp. Acquires Clinic in San Diego   [Apr-09-18 07:05AM  GlobeNewswire]
▶ Joint Corp to Host Earnings Call   [02:00PM  ACCESSWIRE]
▶ The Joint Corp. Opens 400th Clinic   [Jan-18-18 07:05AM  GlobeNewswire]
▶ Joint Corp to Host Earnings Call   [01:10PM  ACCESSWIRE]
▶ 5 Stocks to Buy for the Post-Obamacare Era   [Feb-27-17 05:07PM  Zacks]
▶ Will Joint (JYNT) Continue to Surge Higher?   [Feb-14-17 10:30AM  Zacks]
▶ The Joint Corp. Appoints Jorge Armenteros VP of Operations   [Jan-23-17 07:00AM  GlobeNewswire]
▶ The Joint Corp. Tops Single Day System-Wide Sales Record   [Dec-07-16 03:30PM  GlobeNewswire]
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