Intrinsic value of Lamar Advertising Cl A - LAMR

Previous Close

$71.55

  Intrinsic Value

$51.14

stock screener

  Rating & Target

sell

-29%

Previous close

$71.55

 
Intrinsic value

$51.14

 
Up/down potential

-29%

 
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 6.0

 

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, %
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.11
  5.09
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
Revenue, $m
  1,629
  1,721
  1,817
  1,917
  2,021
  2,131
  2,245
  2,365
  2,490
  2,622
  2,759
  2,903
  3,054
  3,212
  3,378
  3,552
  3,734
  3,925
  4,125
  4,336
  4,556
  4,787
  5,030
  5,285
  5,552
  5,832
  6,126
  6,435
  6,759
  7,100
Variable operating expenses, $m
  971
  1,012
  1,054
  1,098
  1,144
  1,192
  1,243
  1,295
  1,350
  1,408
  1,215
  1,279
  1,345
  1,415
  1,488
  1,564
  1,644
  1,729
  1,817
  1,909
  2,007
  2,108
  2,215
  2,327
  2,445
  2,569
  2,698
  2,834
  2,977
  3,127
Fixed operating expenses, $m
  159
  163
  167
  170
  174
  178
  182
  186
  190
  194
  198
  203
  207
  212
  216
  221
  226
  231
  236
  241
  246
  252
  257
  263
  269
  275
  281
  287
  293
  300
Total operating expenses, $m
  1,130
  1,175
  1,221
  1,268
  1,318
  1,370
  1,425
  1,481
  1,540
  1,602
  1,413
  1,482
  1,552
  1,627
  1,704
  1,785
  1,870
  1,960
  2,053
  2,150
  2,253
  2,360
  2,472
  2,590
  2,714
  2,844
  2,979
  3,121
  3,270
  3,427
Operating income, $m
  499
  546
  596
  649
  704
  761
  821
  884
  950
  1,019
  1,346
  1,422
  1,502
  1,586
  1,674
  1,767
  1,864
  1,966
  2,073
  2,185
  2,303
  2,427
  2,557
  2,694
  2,838
  2,989
  3,148
  3,314
  3,489
  3,673
EBITDA, $m
  900
  956
  1,015
  1,077
  1,141
  1,208
  1,279
  1,353
  1,430
  1,512
  1,597
  1,686
  1,780
  1,878
  1,981
  2,090
  2,203
  2,322
  2,448
  2,579
  2,717
  2,862
  3,015
  3,175
  3,343
  3,519
  3,705
  3,899
  4,104
  4,319
Interest expense (income), $m
  0
  138
  147
  157
  168
  179
  190
  202
  215
  228
  241
  256
  271
  286
  303
  320
  338
  357
  377
  397
  419
  442
  466
  491
  518
  545
  575
  605
  637
  671
  706
Earnings before tax, $m
  360
  399
  439
  481
  525
  571
  619
  670
  723
  778
  1,090
  1,152
  1,216
  1,283
  1,354
  1,429
  1,507
  1,589
  1,675
  1,766
  1,861
  1,961
  2,066
  2,176
  2,292
  2,414
  2,542
  2,677
  2,818
  2,967
Tax expense, $m
  97
  108
  119
  130
  142
  154
  167
  181
  195
  210
  294
  311
  328
  347
  366
  386
  407
  429
  452
  477
  502
  529
  558
  588
  619
  652
  686
  723
  761
  801
Net income, $m
  263
  291
  320
  351
  383
  417
  452
  489
  527
  568
  796
  841
  888
  937
  989
  1,043
  1,100
  1,160
  1,223
  1,289
  1,359
  1,432
  1,508
  1,589
  1,674
  1,762
  1,856
  1,954
  2,057
  2,166

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
  4,451
  4,702
  4,963
  5,237
  5,523
  5,822
  6,135
  6,462
  6,804
  7,163
  7,539
  7,932
  8,345
  8,777
  9,229
  9,704
  10,202
  10,724
  11,272
  11,846
  12,448
  13,080
  13,743
  14,439
  15,169
  15,935
  16,739
  17,583
  18,468
  19,398
Adjusted assets (=assets-cash), $m
  4,451
  4,702
  4,963
  5,237
  5,523
  5,822
  6,135
  6,462
  6,804
  7,163
  7,539
  7,932
  8,345
  8,777
  9,229
  9,704
  10,202
  10,724
  11,272
  11,846
  12,448
  13,080
  13,743
  14,439
  15,169
  15,935
  16,739
  17,583
  18,468
  19,398
Revenue / Adjusted assets
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
  0.366
Average production assets, $m
  2,563
  2,707
  2,858
  3,015
  3,180
  3,352
  3,532
  3,720
  3,917
  4,124
  4,340
  4,567
  4,804
  5,053
  5,314
  5,587
  5,874
  6,174
  6,489
  6,820
  7,167
  7,530
  7,912
  8,313
  8,733
  9,174
  9,637
  10,123
  10,632
  11,168
Working capital, $m
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
Total debt, $m
  2,731
  2,916
  3,109
  3,311
  3,522
  3,742
  3,973
  4,215
  4,468
  4,732
  5,009
  5,300
  5,604
  5,923
  6,257
  6,608
  6,975
  7,360
  7,764
  8,188
  8,633
  9,099
  9,588
  10,102
  10,640
  11,206
  11,799
  12,422
  13,075
  13,761
Total liabilities, $m
  3,285
  3,470
  3,663
  3,865
  4,076
  4,297
  4,527
  4,769
  5,022
  5,286
  5,564
  5,854
  6,158
  6,477
  6,811
  7,162
  7,529
  7,914
  8,318
  8,742
  9,187
  9,653
  10,142
  10,656
  11,195
  11,760
  12,353
  12,976
  13,629
  14,315
Total equity, $m
  1,166
  1,232
  1,300
  1,372
  1,447
  1,525
  1,607
  1,693
  1,783
  1,877
  1,975
  2,078
  2,186
  2,299
  2,418
  2,543
  2,673
  2,810
  2,953
  3,104
  3,261
  3,427
  3,601
  3,783
  3,974
  4,175
  4,386
  4,607
  4,839
  5,082
Total liabilities and equity, $m
  4,451
  4,702
  4,963
  5,237
  5,523
  5,822
  6,134
  6,462
  6,805
  7,163
  7,539
  7,932
  8,344
  8,776
  9,229
  9,705
  10,202
  10,724
  11,271
  11,846
  12,448
  13,080
  13,743
  14,439
  15,169
  15,935
  16,739
  17,583
  18,468
  19,397
Debt-to-equity ratio
  2.340
  2.370
  2.390
  2.410
  2.430
  2.450
  2.470
  2.490
  2.510
  2.520
  2.540
  2.550
  2.560
  2.580
  2.590
  2.600
  2.610
  2.620
  2.630
  2.640
  2.650
  2.660
  2.660
  2.670
  2.680
  2.680
  2.690
  2.700
  2.700
  2.710
Adjusted equity ratio
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262
  0.262

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  263
  291
  320
  351
  383
  417
  452
  489
  527
  568
  796
  841
  888
  937
  989
  1,043
  1,100
  1,160
  1,223
  1,289
  1,359
  1,432
  1,508
  1,589
  1,674
  1,762
  1,856
  1,954
  2,057
  2,166
Depreciation, amort., depletion, $m
  402
  410
  419
  428
  437
  447
  458
  469
  480
  492
  251
  264
  278
  292
  307
  323
  340
  357
  375
  394
  414
  435
  457
  481
  505
  530
  557
  585
  615
  646
Funds from operations, $m
  665
  701
  739
  779
  821
  864
  910
  958
  1,008
  1,060
  1,047
  1,105
  1,165
  1,229
  1,296
  1,366
  1,440
  1,517
  1,598
  1,683
  1,773
  1,867
  1,966
  2,069
  2,178
  2,293
  2,413
  2,539
  2,672
  2,812
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  665
  702
  739
  779
  821
  864
  910
  958
  1,008
  1,060
  1,047
  1,105
  1,166
  1,229
  1,296
  1,366
  1,440
  1,517
  1,598
  1,684
  1,773
  1,867
  1,966
  2,070
  2,179
  2,293
  2,414
  2,540
  2,673
  2,812
Maintenance CAPEX, $m
  -140
  -148
  -156
  -165
  -174
  -184
  -194
  -204
  -215
  -226
  -238
  -251
  -264
  -278
  -292
  -307
  -323
  -340
  -357
  -375
  -394
  -414
  -435
  -457
  -481
  -505
  -530
  -557
  -585
  -615
New CAPEX, $m
  -139
  -144
  -151
  -157
  -165
  -172
  -180
  -188
  -197
  -206
  -216
  -227
  -237
  -249
  -261
  -273
  -287
  -301
  -315
  -331
  -347
  -364
  -382
  -401
  -420
  -441
  -463
  -486
  -510
  -535
Cash from investing activities, $m
  -279
  -292
  -307
  -322
  -339
  -356
  -374
  -392
  -412
  -432
  -454
  -478
  -501
  -527
  -553
  -580
  -610
  -641
  -672
  -706
  -741
  -778
  -817
  -858
  -901
  -946
  -993
  -1,043
  -1,095
  -1,150
Free cash flow, $m
  386
  409
  432
  457
  482
  508
  536
  565
  596
  627
  592
  627
  664
  703
  743
  786
  830
  877
  926
  978
  1,032
  1,089
  1,149
  1,212
  1,278
  1,348
  1,420
  1,497
  1,578
  1,662
Issuance/(repayment) of debt, $m
  174
  185
  193
  202
  211
  221
  231
  242
  253
  265
  277
  290
  304
  319
  334
  350
  367
  385
  404
  424
  445
  466
  489
  513
  539
  565
  593
  623
  654
  686
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  
  174
  185
  193
  202
  211
  221
  231
  242
  253
  265
  277
  290
  304
  319
  334
  350
  367
  385
  404
  424
  445
  466
  489
  513
  539
  565
  593
  623
  654
  686
Total cash flow (excl. dividends), $m
  560
  594
  625
  658
  693
  729
  767
  807
  848
  892
  870
  918
  969
  1,022
  1,077
  1,136
  1,198
  1,262
  1,330
  1,402
  1,477
  1,556
  1,638
  1,725
  1,817
  1,913
  2,014
  2,120
  2,231
  2,348
Retained Cash Flow (-), $m
  -63
  -66
  -69
  -72
  -75
  -78
  -82
  -86
  -90
  -94
  -98
  -103
  -108
  -113
  -119
  -124
  -130
  -137
  -143
  -150
  -158
  -166
  -174
  -182
  -191
  -201
  -211
  -221
  -232
  -244
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
  497
  528
  557
  587
  618
  651
  685
  721
  759
  798
  771
  815
  860
  908
  959
  1,012
  1,067
  1,126
  1,187
  1,251
  1,319
  1,390
  1,465
  1,543
  1,626
  1,712
  1,803
  1,899
  1,999
  2,105
Discount rate, %
  9.10
  9.56
  10.03
  10.53
  11.06
  11.61
  12.19
  12.80
  13.44
  14.12
  14.82
  15.56
  16.34
  17.16
  18.02
  18.92
  19.86
  20.86
  21.90
  23.00
  24.15
  25.35
  26.62
  27.95
  29.35
  30.82
  32.36
  33.97
  35.67
  37.46
PV of cash for distribution, $m
  456
  440
  418
  393
  366
  337
  306
  275
  244
  213
  169
  144
  120
  99
  80
  63
  49
  37
  28
  20
  14
  10
  6
  4
  3
  2
  1
  1
  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 Cl A (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 $1541.26 million for the last fiscal year's total revenue generated by Lamar Advertising Cl A. The default revenue input number comes from 0001 income statement of Lamar Advertising 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 LAMR stock valuation model: a) initial revenue growth rate of 5.7% 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 9.1%, whose default value for LAMR is calculated based on our internal credit rating of Lamar Advertising 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 Lamar Advertising 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 LAMR stock the variable cost ratio is equal to 60.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $156 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 Cl A.

Corporate tax rate of 27% is the nominal tax rate for Lamar Advertising 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 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 157.3%.

Life of production assets of 17.3 years is the average useful life of capital assets used in Lamar Advertising 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 LAMR is equal to -0.2%. 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 - $1103.493 million for Lamar Advertising 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 84.012 million for Lamar Advertising 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 Lamar Advertising Cl A at the current share price and the inputted number of shares is $6.0 billion.

RELATED COMPANIES Price Int.Val. Rating
CCO Clear Channel 5.85 16.41  str.buy
OUT Outfront Media 19.56 19.91  hold

COMPANY NEWS

▶ Lamar: 3Q Earnings Snapshot   [06:09AM  Associated Press]
▶ 5 Fabulous Income Investments   [Nov-01-18 10:13AM  Kiplinger]
▶ Lamar: 2Q Earnings Snapshot   [06:09AM  Associated Press]
▶ Q2 Earnings Outlook For Lamar Advertising   [Aug-07-18 02:54PM  Benzinga]
▶ 3 High-Yield Stocks Still Worth Buying   [May-21-18 12:41PM  Motley Fool]
▶ Lamar: 1Q Earnings Snapshot   [May-02-18 06:06AM  Associated Press]
▶ 6 Most Undervalued Stocks In Chuck Akre's Portfolio   [Apr-19-18 10:27AM  Benzinga]
▶ Lamar reports 4Q results   [06:29AM  Associated Press]
▶ Billboards to Hotels: The Right REITs for Growth & Income   [Feb-05-18 05:59AM  Investopedia]

CONTACT US       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.