Intrinsic value of nLIGHT, Inc. - LASR

Previous Close

$24.47

  Intrinsic Value

$209.44

stock screener

  Rating & Target

str. buy

+756%

Previous close

$24.47

 
Intrinsic value

$209.44

 
Up/down potential

+756%

 
Rating

str. buy

We calculate the intrinsic value of LASR 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 0.9

 

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, %
  47.20
  42.98
  39.18
  35.76
  32.69
  29.92
  27.43
  25.18
  23.17
  21.35
  19.71
  18.24
  16.92
  15.73
  14.65
  13.69
  12.82
  12.04
  11.33
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
  6.99
Revenue, $m
  205
  293
  407
  553
  733
  953
  1,214
  1,520
  1,872
  2,272
  2,720
  3,216
  3,760
  4,352
  4,989
  5,672
  6,399
  7,170
  7,982
  8,836
  9,732
  10,667
  11,644
  12,662
  13,721
  14,823
  15,968
  17,158
  18,395
  19,681
Variable operating expenses, $m
  98
  141
  196
  266
  352
  458
  583
  730
  899
  1,090
  1,305
  1,543
  1,804
  2,088
  2,394
  2,722
  3,071
  3,440
  3,830
  4,240
  4,670
  5,119
  5,587
  6,076
  6,584
  7,113
  7,662
  8,233
  8,827
  9,444
Fixed operating expenses, $m
  64
  66
  67
  69
  70
  72
  73
  75
  77
  78
  80
  82
  84
  85
  87
  89
  91
  93
  95
  97
  99
  102
  104
  106
  109
  111
  113
  116
  118
  121
Total operating expenses, $m
  162
  207
  263
  335
  422
  530
  656
  805
  976
  1,168
  1,385
  1,625
  1,888
  2,173
  2,481
  2,811
  3,162
  3,533
  3,925
  4,337
  4,769
  5,221
  5,691
  6,182
  6,693
  7,224
  7,775
  8,349
  8,945
  9,565
Operating income, $m
  42
  86
  144
  219
  311
  424
  558
  715
  897
  1,103
  1,335
  1,591
  1,872
  2,178
  2,508
  2,861
  3,237
  3,636
  4,057
  4,499
  4,962
  5,447
  5,953
  6,480
  7,029
  7,599
  8,193
  8,809
  9,450
  10,116
EBITDA, $m
  48
  94
  156
  234
  332
  450
  592
  758
  949
  1,166
  1,410
  1,680
  1,976
  2,298
  2,646
  3,018
  3,414
  3,834
  4,277
  4,743
  5,231
  5,742
  6,274
  6,829
  7,407
  8,008
  8,633
  9,283
  9,958
  10,659
Interest expense (income), $m
  0
  1
  3
  5
  7
  11
  15
  20
  26
  33
  41
  50
  60
  71
  84
  97
  112
  127
  144
  161
  180
  199
  219
  241
  263
  286
  310
  335
  361
  388
  416
Earnings before tax, $m
  41
  83
  140
  211
  300
  409
  538
  690
  864
  1,063
  1,285
  1,531
  1,801
  2,094
  2,411
  2,750
  3,110
  3,493
  3,896
  4,319
  4,763
  5,228
  5,712
  6,217
  6,743
  7,289
  7,857
  8,448
  9,062
  9,700
Tax expense, $m
  11
  23
  38
  57
  81
  110
  145
  186
  233
  287
  347
  413
  486
  566
  651
  742
  840
  943
  1,052
  1,166
  1,286
  1,411
  1,542
  1,679
  1,820
  1,968
  2,122
  2,281
  2,447
  2,619
Net income, $m
  30
  61
  102
  154
  219
  298
  393
  504
  631
  776
  938
  1,118
  1,315
  1,529
  1,760
  2,007
  2,271
  2,550
  2,844
  3,153
  3,477
  3,816
  4,170
  4,538
  4,922
  5,321
  5,736
  6,167
  6,615
  7,081

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
  147
  210
  293
  398
  528
  686
  874
  1,094
  1,347
  1,635
  1,957
  2,314
  2,705
  3,131
  3,589
  4,081
  4,604
  5,158
  5,743
  6,357
  7,001
  7,674
  8,377
  9,109
  9,871
  10,664
  11,488
  12,344
  13,234
  14,159
Adjusted assets (=assets-cash), $m
  147
  210
  293
  398
  528
  686
  874
  1,094
  1,347
  1,635
  1,957
  2,314
  2,705
  3,131
  3,589
  4,081
  4,604
  5,158
  5,743
  6,357
  7,001
  7,674
  8,377
  9,109
  9,871
  10,664
  11,488
  12,344
  13,234
  14,159
Revenue / Adjusted assets
  1.395
  1.395
  1.389
  1.389
  1.388
  1.389
  1.389
  1.389
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
  1.390
Average production assets, $m
  28
  40
  56
  76
  101
  132
  168
  210
  258
  314
  375
  444
  519
  601
  689
  783
  883
  989
  1,102
  1,219
  1,343
  1,472
  1,607
  1,747
  1,894
  2,046
  2,204
  2,368
  2,539
  2,716
Working capital, $m
  32
  45
  63
  85
  113
  147
  187
  234
  288
  350
  419
  495
  579
  670
  768
  874
  985
  1,104
  1,229
  1,361
  1,499
  1,643
  1,793
  1,950
  2,113
  2,283
  2,459
  2,642
  2,833
  3,031
Total debt, $m
  39
  69
  107
  156
  216
  290
  377
  479
  597
  731
  881
  1,047
  1,229
  1,427
  1,640
  1,868
  2,112
  2,369
  2,641
  2,927
  3,226
  3,540
  3,866
  4,207
  4,561
  4,930
  5,313
  5,711
  6,125
  6,555
Total liabilities, $m
  68
  98
  136
  185
  245
  319
  406
  509
  626
  760
  910
  1,076
  1,258
  1,456
  1,669
  1,898
  2,141
  2,398
  2,670
  2,956
  3,256
  3,569
  3,895
  4,236
  4,590
  4,959
  5,342
  5,740
  6,154
  6,584
Total equity, $m
  79
  113
  157
  213
  282
  367
  467
  585
  721
  874
  1,047
  1,238
  1,447
  1,675
  1,920
  2,183
  2,463
  2,760
  3,072
  3,401
  3,746
  4,106
  4,482
  4,873
  5,281
  5,705
  6,146
  6,604
  7,080
  7,575
Total liabilities and equity, $m
  147
  211
  293
  398
  527
  686
  873
  1,094
  1,347
  1,634
  1,957
  2,314
  2,705
  3,131
  3,589
  4,081
  4,604
  5,158
  5,742
  6,357
  7,002
  7,675
  8,377
  9,109
  9,871
  10,664
  11,488
  12,344
  13,234
  14,159
Debt-to-equity ratio
  0.500
  0.610
  0.680
  0.730
  0.770
  0.790
  0.810
  0.820
  0.830
  0.840
  0.840
  0.850
  0.850
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
Adjusted equity ratio
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535
  0.535

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  30
  61
  102
  154
  219
  298
  393
  504
  631
  776
  938
  1,118
  1,315
  1,529
  1,760
  2,007
  2,271
  2,550
  2,844
  3,153
  3,477
  3,816
  4,170
  4,538
  4,922
  5,321
  5,736
  6,167
  6,615
  7,081
Depreciation, amort., depletion, $m
  6
  8
  12
  16
  21
  27
  34
  42
  52
  63
  75
  89
  104
  120
  138
  157
  177
  198
  220
  244
  269
  294
  321
  349
  379
  409
  441
  474
  508
  543
Funds from operations, $m
  36
  69
  113
  170
  240
  325
  427
  546
  683
  839
  1,013
  1,207
  1,419
  1,649
  1,898
  2,164
  2,447
  2,747
  3,064
  3,397
  3,746
  4,111
  4,491
  4,888
  5,301
  5,730
  6,177
  6,641
  7,123
  7,624
Change in working capital, $m
  10
  14
  18
  22
  28
  34
  40
  47
  54
  62
  69
  76
  84
  91
  98
  105
  112
  119
  125
  132
  138
  144
  150
  157
  163
  170
  176
  183
  190
  198
Cash from operations, $m
  25
  56
  96
  147
  212
  291
  386
  499
  629
  777
  944
  1,130
  1,335
  1,558
  1,799
  2,059
  2,335
  2,629
  2,939
  3,265
  3,608
  3,966
  4,341
  4,731
  5,138
  5,561
  6,000
  6,457
  6,932
  7,426
Maintenance CAPEX, $m
  -4
  -6
  -8
  -11
  -15
  -20
  -26
  -34
  -42
  -52
  -63
  -75
  -89
  -104
  -120
  -138
  -157
  -177
  -198
  -220
  -244
  -269
  -294
  -321
  -349
  -379
  -409
  -441
  -474
  -508
New CAPEX, $m
  -9
  -12
  -16
  -20
  -25
  -30
  -36
  -42
  -49
  -55
  -62
  -68
  -75
  -82
  -88
  -94
  -100
  -106
  -112
  -118
  -124
  -129
  -135
  -140
  -146
  -152
  -158
  -164
  -171
  -177
Cash from investing activities, $m
  -13
  -18
  -24
  -31
  -40
  -50
  -62
  -76
  -91
  -107
  -125
  -143
  -164
  -186
  -208
  -232
  -257
  -283
  -310
  -338
  -368
  -398
  -429
  -461
  -495
  -531
  -567
  -605
  -645
  -685
Free cash flow, $m
  13
  38
  72
  116
  172
  241
  324
  423
  538
  670
  820
  987
  1,171
  1,373
  1,591
  1,827
  2,078
  2,346
  2,629
  2,927
  3,241
  3,569
  3,912
  4,269
  4,642
  5,030
  5,433
  5,852
  6,288
  6,741
Issuance/(repayment) of debt, $m
  22
  29
  38
  49
  60
  73
  87
  102
  118
  134
  150
  166
  182
  198
  213
  228
  243
  258
  272
  286
  299
  313
  327
  340
  354
  369
  383
  398
  414
  430
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  
  22
  29
  38
  49
  60
  73
  87
  102
  118
  134
  150
  166
  182
  198
  213
  228
  243
  258
  272
  286
  299
  313
  327
  340
  354
  369
  383
  398
  414
  430
Total cash flow (excl. dividends), $m
  34
  67
  110
  165
  232
  314
  412
  525
  656
  804
  969
  1,153
  1,353
  1,570
  1,805
  2,055
  2,322
  2,604
  2,901
  3,213
  3,540
  3,882
  4,238
  4,610
  4,996
  5,398
  5,816
  6,251
  6,702
  7,171
Retained Cash Flow (-), $m
  -25
  -34
  -44
  -56
  -70
  -84
  -101
  -118
  -136
  -154
  -172
  -191
  -209
  -228
  -245
  -263
  -280
  -296
  -313
  -329
  -345
  -360
  -376
  -392
  -408
  -424
  -441
  -458
  -476
  -495
Prev. year cash balance distribution, $m
  8
  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
  17
  33
  66
  109
  163
  230
  311
  408
  520
  650
  797
  962
  1,144
  1,343
  1,559
  1,792
  2,042
  2,307
  2,588
  2,884
  3,196
  3,522
  3,862
  4,218
  4,589
  4,974
  5,375
  5,792
  6,226
  6,676
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
  16
  31
  58
  89
  126
  167
  210
  255
  299
  341
  379
  410
  435
  451
  458
  455
  444
  425
  398
  367
  331
  292
  253
  215
  179
  145
  115
  90
  68
  50
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

FINANCIAL RATIOS  of  nLIGHT, Inc. (LASR)

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%

LASR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LASR stock intrinsic value calculation we used $139 million for the last fiscal year's total revenue generated by nLIGHT, Inc.. The default revenue input number comes from 0001 income statement of nLIGHT, 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 LASR stock valuation model: a) initial revenue growth rate of 47.2% 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 LASR is calculated based on our internal credit rating of nLIGHT, 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 nLIGHT, 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 LASR stock the variable cost ratio is equal to 48.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $63 million in the base year in the intrinsic value calculation for LASR 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 6.8% for nLIGHT, Inc..

Corporate tax rate of 27% is the nominal tax rate for nLIGHT, 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 LASR 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 LASR are equal to 13.8%.

Life of production assets of 2.6 years is the average useful life of capital assets used in nLIGHT, 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 LASR is equal to 15.4%. 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 - $61.283 million for nLIGHT, 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 36.572 million for nLIGHT, 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 nLIGHT, Inc. at the current share price and the inputted number of shares is $0.9 billion.

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