Intrinsic value of Joint - JYNT

Previous Close

$4.65

  Intrinsic Value

$0.07

stock screener

  Rating & Target

str. sell

-98%

  Value-price divergence*

-139%

Previous close

$4.65

 
Intrinsic value

$0.07

 
Up/down potential

-98%

 
Rating

str. sell

 
Value-price divergence*

-139%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

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 2016), $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
2016(a)
   2017
   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

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  50.00
  20.00
  18.50
  17.15
  15.94
  14.84
  13.86
  12.97
  12.17
  11.46
  10.81
  10.23
  9.71
  9.24
  8.81
  8.43
  8.09
  7.78
  7.50
  7.25
  7.03
  6.82
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
  5.87
  5.79
  5.71
Revenue, $m
  21
  25
  30
  35
  41
  47
  53
  60
  67
  75
  83
  91
  100
  110
  119
  129
  140
  151
  162
  174
  186
  199
  212
  226
  240
  255
  270
  286
  303
  321
  339
Variable operating expenses, $m
 
  42
  50
  58
  67
  77
  88
  99
  111
  124
  137
  151
  166
  181
  197
  214
  231
  249
  268
  287
  307
  328
  350
  373
  396
  421
  447
  473
  501
  530
  560
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
  36
  42
  50
  58
  67
  77
  88
  99
  111
  124
  137
  151
  166
  181
  197
  214
  231
  249
  268
  287
  307
  328
  350
  373
  396
  421
  447
  473
  501
  530
  560
Operating income, $m
  -15
  -17
  -20
  -23
  -27
  -31
  -35
  -39
  -44
  -49
  -54
  -60
  -66
  -72
  -78
  -84
  -91
  -98
  -106
  -113
  -121
  -130
  -138
  -147
  -157
  -166
  -176
  -187
  -198
  -209
  -221
EBITDA, $m
  -12
  -15
  -18
  -21
  -24
  -28
  -32
  -36
  -40
  -45
  -49
  -54
  -60
  -65
  -71
  -77
  -83
  -90
  -96
  -103
  -111
  -118
  -126
  -134
  -143
  -152
  -161
  -171
  -181
  -191
  -202
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
Earnings before tax, $m
  -15
  -17
  -20
  -23
  -27
  -31
  -35
  -40
  -45
  -50
  -55
  -61
  -67
  -73
  -79
  -86
  -93
  -100
  -108
  -116
  -124
  -132
  -141
  -150
  -160
  -170
  -180
  -191
  -202
  -214
  -226
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
  0
Net income, $m
  -15
  -17
  -20
  -23
  -27
  -31
  -35
  -40
  -45
  -50
  -55
  -61
  -67
  -73
  -79
  -86
  -93
  -100
  -108
  -116
  -124
  -132
  -141
  -150
  -160
  -170
  -180
  -191
  -202
  -214
  -226

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3
  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
  17
  17
  20
  23
  27
  31
  35
  40
  45
  50
  55
  61
  67
  73
  80
  86
  93
  100
  108
  116
  124
  132
  141
  150
  160
  170
  180
  191
  202
  214
  226
Adjusted assets (=assets-cash), $m
  14
  17
  20
  23
  27
  31
  35
  40
  45
  50
  55
  61
  67
  73
  80
  86
  93
  100
  108
  116
  124
  132
  141
  150
  160
  170
  180
  191
  202
  214
  226
Revenue / Adjusted assets
  1.500
  1.471
  1.500
  1.522
  1.519
  1.516
  1.514
  1.500
  1.489
  1.500
  1.509
  1.492
  1.493
  1.507
  1.488
  1.500
  1.505
  1.510
  1.500
  1.500
  1.500
  1.508
  1.504
  1.507
  1.500
  1.500
  1.500
  1.497
  1.500
  1.500
  1.500
Average production assets, $m
  6
  7
  9
  10
  12
  13
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  40
  43
  46
  50
  53
  57
  61
  65
  69
  73
  77
  82
  87
  92
  97
Working capital, $m
  0
  -4
  -4
  -5
  -6
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -16
  -17
  -18
  -20
  -22
  -23
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -39
  -41
  -43
  -46
  -48
Total debt, $m
  0
  2
  4
  7
  9
  12
  15
  19
  22
  26
  30
  34
  38
  42
  47
  52
  57
  62
  67
  73
  79
  85
  91
  97
  104
  111
  119
  126
  134
  143
  151
Total liabilities, $m
  10
  12
  14
  17
  19
  22
  25
  29
  32
  36
  40
  44
  48
  52
  57
  62
  67
  72
  77
  83
  89
  95
  101
  107
  114
  121
  129
  136
  144
  153
  161
Total equity, $m
  7
  5
  6
  7
  8
  9
  10
  11
  13
  14
  16
  17
  19
  21
  23
  25
  27
  29
  31
  33
  35
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65
Total liabilities and equity, $m
  17
  17
  20
  24
  27
  31
  35
  40
  45
  50
  56
  61
  67
  73
  80
  87
  94
  101
  108
  116
  124
  133
  141
  150
  160
  170
  181
  191
  202
  214
  226
Debt-to-equity ratio
  0.000
  0.420
  0.740
  1.000
  1.200
  1.370
  1.510
  1.620
  1.720
  1.800
  1.860
  1.920
  1.970
  2.020
  2.060
  2.090
  2.120
  2.150
  2.170
  2.190
  2.210
  2.230
  2.250
  2.260
  2.280
  2.290
  2.300
  2.310
  2.320
  2.330
  2.340
Adjusted equity ratio
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286
  0.286

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -15
  -17
  -20
  -23
  -27
  -31
  -35
  -40
  -45
  -50
  -55
  -61
  -67
  -73
  -79
  -86
  -93
  -100
  -108
  -116
  -124
  -132
  -141
  -150
  -160
  -170
  -180
  -191
  -202
  -214
  -226
Depreciation, amort., depletion, $m
  3
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  11
  11
  12
  13
  14
  15
  15
  16
  17
  18
  19
Funds from operations, $m
  -14
  -15
  -18
  -21
  -24
  -28
  -32
  -36
  -41
  -45
  -50
  -56
  -61
  -67
  -73
  -79
  -85
  -92
  -99
  -106
  -113
  -121
  -129
  -138
  -146
  -155
  -165
  -175
  -185
  -196
  -207
Change in working capital, $m
  -3
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
Cash from operations, $m
  -11
  -14
  -17
  -20
  -24
  -27
  -31
  -35
  -40
  -44
  -49
  -54
  -60
  -65
  -71
  -77
  -84
  -90
  -97
  -104
  -112
  -119
  -127
  -136
  -144
  -153
  -163
  -172
  -183
  -193
  -204
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -14
  -15
  -15
  -16
  -17
  -18
New CAPEX, $m
  -2
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Cash from investing activities, $m
  -3
  -2
  -2
  -3
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -15
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
Free cash flow, $m
  -14
  -17
  -20
  -23
  -27
  -31
  -36
  -40
  -45
  -50
  -56
  -61
  -67
  -74
  -80
  -87
  -94
  -101
  -109
  -117
  -125
  -134
  -142
  -152
  -161
  -171
  -182
  -192
  -204
  -216
  -228
Issuance/(repayment) of debt, $m
  0
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
Issuance/(repurchase) of shares, $m
  0
  18
  21
  24
  28
  32
  37
  41
  46
  51
  57
  62
  68
  75
  81
  88
  95
  102
  110
  118
  126
  135
  144
  153
  163
  173
  183
  194
  205
  217
  230
Cash from financing (excl. dividends), $m  
  0
  20
  23
  26
  31
  35
  40
  44
  49
  55
  61
  66
  72
  79
  86
  93
  100
  107
  115
  124
  132
  141
  150
  160
  170
  180
  190
  202
  213
  225
  239
Total cash flow (excl. dividends), $m
  -14
  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
  14
  -18
  -21
  -24
  -28
  -32
  -37
  -41
  -46
  -51
  -57
  -62
  -68
  -75
  -81
  -88
  -95
  -102
  -110
  -118
  -126
  -135
  -144
  -153
  -163
  -173
  -183
  -194
  -205
  -217
  -230
Prev. year cash balance distribution, $m
 
  3
  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
 
  -12
  -18
  -21
  -25
  -28
  -33
  -37
  -42
  -47
  -52
  -57
  -63
  -69
  -76
  -82
  -89
  -96
  -103
  -111
  -119
  -127
  -136
  -145
  -154
  -164
  -174
  -185
  -196
  -207
  -219
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
 
  -11
  -16
  -18
  -20
  -22
  -24
  -25
  -26
  -27
  -27
  -27
  -27
  -26
  -25
  -24
  -23
  -21
  -19
  -17
  -15
  -13
  -11
  -10
  -8
  -6
  -5
  -4
  -3
  -2
  -2
Current shareholders' claim on cash, %
  100
  67.1
  45.3
  30.7
  20.9
  14.3
  9.8
  6.7
  4.6
  3.2
  2.2
  1.5
  1.1
  0.7
  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 -4
Price to Sales 2.9
Price to Book 8.6
Price to Tangible Book
Price to Cash Flow -5.5
Price to Free Cash Flow -4.7
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 $21 million for the last fiscal year's total revenue generated by Joint. The default revenue input number comes from 2016 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 20% 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 166.7%.

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 3.5% 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 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 JYNT are equal to 28.6%.

Life of production assets of 2.8 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 -14.3%. 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 - $7 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 13.484 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

▶ 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]
▶ The Joint Corp. Appoints Peter Holt Chief Operating Officer   [May-02-16 06:30AM  GlobeNewswire]
▶ 10th Joint Clinic to Open in Chicago Area   [Feb-02-16 04:05PM  GlobeNewswire]
▶ The Joint Chiropractic Opens in Cary, North Carolina   [Feb-01-16 10:01AM  at noodls]
Financial statements of JYNT
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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