Intrinsic value of Lamar Advertising Company - LAMR

Previous Close

$79.85

  Intrinsic Value

$44.95

stock screener

  Rating & Target

sell

-44%

Previous close

$79.85

 
Intrinsic value

$44.95

 
Up/down potential

-44%

 
Rating

sell

We calculate the intrinsic value of LAMR 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 8.0

 

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, %
  7.40
  7.16
  6.94
  6.75
  6.57
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.44
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
Revenue, $m
  1,747
  1,873
  2,003
  2,138
  2,278
  2,424
  2,577
  2,735
  2,900
  3,072
  3,251
  3,438
  3,634
  3,837
  4,050
  4,273
  4,506
  4,749
  5,003
  5,270
  5,549
  5,841
  6,146
  6,467
  6,803
  7,154
  7,523
  7,910
  8,315
  8,740
Variable operating expenses, $m
  1,209
  1,275
  1,344
  1,416
  1,490
  1,568
  1,648
  1,732
  1,820
  1,911
  1,722
  1,821
  1,925
  2,033
  2,146
  2,264
  2,387
  2,516
  2,651
  2,792
  2,939
  3,094
  3,256
  3,426
  3,604
  3,790
  3,985
  4,190
  4,405
  4,630
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
  1,209
  1,275
  1,344
  1,416
  1,490
  1,568
  1,648
  1,732
  1,820
  1,911
  1,722
  1,821
  1,925
  2,033
  2,146
  2,264
  2,387
  2,516
  2,651
  2,792
  2,939
  3,094
  3,256
  3,426
  3,604
  3,790
  3,985
  4,190
  4,405
  4,630
Operating income, $m
  538
  597
  658
  722
  788
  857
  928
  1,003
  1,080
  1,161
  1,529
  1,617
  1,709
  1,805
  1,905
  2,009
  2,119
  2,233
  2,353
  2,478
  2,609
  2,747
  2,890
  3,041
  3,199
  3,364
  3,538
  3,720
  3,910
  4,110
EBITDA, $m
  981
  1,051
  1,124
  1,200
  1,279
  1,361
  1,447
  1,536
  1,628
  1,725
  1,825
  1,930
  2,040
  2,154
  2,274
  2,399
  2,530
  2,666
  2,809
  2,959
  3,115
  3,279
  3,451
  3,631
  3,819
  4,017
  4,224
  4,441
  4,669
  4,907
Interest expense (income), $m
  0
  156
  170
  184
  199
  214
  230
  246
  264
  282
  300
  320
  340
  361
  383
  406
  431
  456
  482
  510
  538
  569
  600
  633
  668
  704
  742
  782
  824
  868
  914
Earnings before tax, $m
  382
  427
  474
  523
  574
  627
  682
  739
  799
  861
  1,209
  1,277
  1,347
  1,421
  1,498
  1,579
  1,663
  1,751
  1,843
  1,940
  2,041
  2,146
  2,257
  2,373
  2,495
  2,622
  2,756
  2,896
  3,043
  3,197
Tax expense, $m
  103
  115
  128
  141
  155
  169
  184
  200
  216
  232
  326
  345
  364
  384
  405
  426
  449
  473
  498
  524
  551
  579
  609
  641
  674
  708
  744
  782
  821
  863
Net income, $m
  279
  312
  346
  382
  419
  458
  498
  540
  583
  628
  883
  932
  984
  1,037
  1,094
  1,153
  1,214
  1,278
  1,346
  1,416
  1,490
  1,567
  1,648
  1,732
  1,821
  1,914
  2,012
  2,114
  2,221
  2,333

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
  4,881
  5,230
  5,594
  5,971
  6,364
  6,772
  7,197
  7,640
  8,101
  8,581
  9,082
  9,604
  10,150
  10,719
  11,314
  11,935
  12,585
  13,265
  13,976
  14,720
  15,499
  16,315
  17,169
  18,064
  19,002
  19,984
  21,015
  22,095
  23,227
  24,415
Adjusted assets (=assets-cash), $m
  4,881
  5,230
  5,594
  5,971
  6,364
  6,772
  7,197
  7,640
  8,101
  8,581
  9,082
  9,604
  10,150
  10,719
  11,314
  11,935
  12,585
  13,265
  13,976
  14,720
  15,499
  16,315
  17,169
  18,064
  19,002
  19,984
  21,015
  22,095
  23,227
  24,415
Revenue / Adjusted assets
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
  0.358
Average production assets, $m
  2,789
  2,989
  3,196
  3,412
  3,636
  3,869
  4,112
  4,365
  4,628
  4,903
  5,189
  5,488
  5,799
  6,124
  6,464
  6,819
  7,191
  7,579
  7,985
  8,411
  8,856
  9,322
  9,810
  10,321
  10,857
  11,418
  12,007
  12,624
  13,271
  13,950
Working capital, $m
  98
  105
  112
  120
  128
  136
  144
  153
  162
  172
  182
  193
  203
  215
  227
  239
  252
  266
  280
  295
  311
  327
  344
  362
  381
  401
  421
  443
  466
  489
Total debt, $m
  3,141
  3,404
  3,677
  3,960
  4,255
  4,562
  4,881
  5,213
  5,559
  5,920
  6,296
  6,689
  7,098
  7,526
  7,972
  8,439
  8,927
  9,438
  9,972
  10,531
  11,116
  11,728
  12,370
  13,042
  13,746
  14,484
  15,258
  16,069
  16,919
  17,811
Total liabilities, $m
  3,666
  3,928
  4,201
  4,484
  4,779
  5,086
  5,405
  5,737
  6,084
  6,444
  6,820
  7,213
  7,622
  8,050
  8,497
  8,963
  9,451
  9,962
  10,496
  11,055
  11,640
  12,252
  12,894
  13,566
  14,270
  15,008
  15,782
  16,593
  17,444
  18,336
Total equity, $m
  1,215
  1,302
  1,393
  1,487
  1,585
  1,686
  1,792
  1,902
  2,017
  2,137
  2,261
  2,391
  2,527
  2,669
  2,817
  2,972
  3,134
  3,303
  3,480
  3,665
  3,859
  4,062
  4,275
  4,498
  4,731
  4,976
  5,233
  5,502
  5,784
  6,079
Total liabilities and equity, $m
  4,881
  5,230
  5,594
  5,971
  6,364
  6,772
  7,197
  7,639
  8,101
  8,581
  9,081
  9,604
  10,149
  10,719
  11,314
  11,935
  12,585
  13,265
  13,976
  14,720
  15,499
  16,314
  17,169
  18,064
  19,001
  19,984
  21,015
  22,095
  23,228
  24,415
Debt-to-equity ratio
  2.580
  2.610
  2.640
  2.660
  2.690
  2.710
  2.720
  2.740
  2.760
  2.770
  2.780
  2.800
  2.810
  2.820
  2.830
  2.840
  2.850
  2.860
  2.870
  2.870
  2.880
  2.890
  2.890
  2.900
  2.910
  2.910
  2.920
  2.920
  2.930
  2.930
Adjusted equity ratio
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249
  0.249

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  279
  312
  346
  382
  419
  458
  498
  540
  583
  628
  883
  932
  984
  1,037
  1,094
  1,153
  1,214
  1,278
  1,346
  1,416
  1,490
  1,567
  1,648
  1,732
  1,821
  1,914
  2,012
  2,114
  2,221
  2,333
Depreciation, amort., depletion, $m
  443
  454
  466
  478
  491
  505
  518
  533
  548
  564
  297
  314
  331
  350
  369
  390
  411
  433
  456
  481
  506
  533
  561
  590
  620
  652
  686
  721
  758
  797
Funds from operations, $m
  722
  766
  812
  860
  910
  962
  1,016
  1,072
  1,131
  1,192
  1,179
  1,246
  1,315
  1,387
  1,463
  1,542
  1,625
  1,711
  1,802
  1,897
  1,996
  2,099
  2,208
  2,322
  2,441
  2,567
  2,698
  2,835
  2,979
  3,131
Change in working capital, $m
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  16
  17
  18
  19
  20
  21
  22
  23
  24
Cash from operations, $m
  715
  759
  805
  853
  902
  954
  1,008
  1,064
  1,122
  1,182
  1,169
  1,235
  1,304
  1,376
  1,451
  1,530
  1,612
  1,698
  1,788
  1,882
  1,980
  2,083
  2,191
  2,304
  2,423
  2,547
  2,677
  2,814
  2,957
  3,107
Maintenance CAPEX, $m
  -148
  -159
  -171
  -183
  -195
  -208
  -221
  -235
  -249
  -264
  -280
  -297
  -314
  -331
  -350
  -369
  -390
  -411
  -433
  -456
  -481
  -506
  -533
  -561
  -590
  -620
  -652
  -686
  -721
  -758
New CAPEX, $m
  -191
  -200
  -208
  -216
  -224
  -233
  -243
  -253
  -263
  -274
  -286
  -299
  -312
  -325
  -340
  -355
  -371
  -388
  -406
  -425
  -445
  -466
  -488
  -511
  -536
  -562
  -589
  -617
  -647
  -679
Cash from investing activities, $m
  -339
  -359
  -379
  -399
  -419
  -441
  -464
  -488
  -512
  -538
  -566
  -596
  -626
  -656
  -690
  -724
  -761
  -799
  -839
  -881
  -926
  -972
  -1,021
  -1,072
  -1,126
  -1,182
  -1,241
  -1,303
  -1,368
  -1,437
Free cash flow, $m
  375
  400
  427
  454
  483
  513
  544
  576
  609
  644
  603
  640
  679
  719
  761
  805
  851
  899
  948
  1,000
  1,054
  1,111
  1,170
  1,232
  1,297
  1,365
  1,436
  1,510
  1,588
  1,670
Issuance/(repayment) of debt, $m
  253
  262
  273
  284
  295
  307
  319
  332
  346
  361
  376
  392
  410
  428
  447
  467
  488
  510
  534
  559
  585
  613
  642
  672
  704
  738
  774
  811
  850
  892
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  
  253
  262
  273
  284
  295
  307
  319
  332
  346
  361
  376
  392
  410
  428
  447
  467
  488
  510
  534
  559
  585
  613
  642
  672
  704
  738
  774
  811
  850
  892
Total cash flow (excl. dividends), $m
  628
  663
  700
  738
  778
  820
  863
  908
  955
  1,004
  979
  1,033
  1,088
  1,147
  1,208
  1,272
  1,339
  1,409
  1,482
  1,559
  1,639
  1,724
  1,812
  1,904
  2,001
  2,103
  2,210
  2,321
  2,439
  2,562
Retained Cash Flow (-), $m
  -84
  -87
  -90
  -94
  -98
  -102
  -106
  -110
  -115
  -120
  -125
  -130
  -136
  -142
  -148
  -155
  -162
  -169
  -177
  -185
  -194
  -203
  -213
  -223
  -234
  -245
  -257
  -269
  -282
  -296
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
  545
  576
  609
  644
  680
  718
  757
  798
  840
  885
  854
  902
  953
  1,005
  1,060
  1,117
  1,177
  1,240
  1,305
  1,374
  1,445
  1,520
  1,599
  1,682
  1,768
  1,858
  1,953
  2,053
  2,157
  2,266
Discount rate, %
  9.70
  10.19
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.21
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.38
  29.79
  31.28
  32.85
  34.49
  36.21
  38.03
  39.93
PV of cash for distribution, $m
  496
  474
  449
  421
  390
  356
  322
  287
  252
  218
  170
  143
  118
  96
  76
  59
  45
  33
  24
  17
  12
  8
  5
  3
  2
  1
  1
  0
  0
  0
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

Lamar Advertising Company is a publicly owned equity real estate investment trust. The firm primarily engages in selling advertising space on billboards, buses, shelters, benches, and logo plates. Lamar Advertising Company was founded in 1902 and is headquartered in Baton Rouge, Louisiana.

FINANCIAL RATIOS  of  Lamar Advertising Company (LAMR)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

LAMR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LAMR stock intrinsic value calculation we used $1627 million for the last fiscal year's total revenue generated by Lamar Advertising Company. The default revenue input number comes from 0001 income statement of Lamar Advertising Company. 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 LAMR stock valuation model: a) initial revenue growth rate of 7.4% 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 9.7%, whose default value for LAMR is calculated based on our internal credit rating of Lamar Advertising Company, 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 Lamar Advertising Company.
    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 LAMR stock the variable cost ratio is equal to 70.4%.

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 LAMR 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 Lamar Advertising Company.

Corporate tax rate of 27% is the nominal tax rate for Lamar Advertising Company. 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 LAMR 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 LAMR are equal to 159.6%.

Life of production assets of 17.5 years is the average useful life of capital assets used in Lamar Advertising Company 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 LAMR is equal to 5.6%. 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 - $1131.784 million for Lamar Advertising Company - 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 99.640 million for Lamar Advertising Company 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 Lamar Advertising Company at the current share price and the inputted number of shares is $8.0 billion.

RELATED COMPANIES Price Int.Val. Rating
CCO Clear Channel 5.22 0.21  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.