Intrinsic value of Fidelity Southern - LION

Previous Close

$23.85

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$23.85

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as LION.

We calculate the intrinsic value of LION 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 0.6

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  271
  278
  285
  293
  302
  311
  322
  333
  346
  359
  373
  388
  404
  422
  440
  459
  480
  501
  524
  548
  573
  600
  628
  658
  689
  722
  757
  794
  832
  873
Variable operating expenses, $m
  208
  213
  218
  225
  231
  239
  247
  256
  265
  275
  286
  298
  310
  323
  337
  352
  368
  384
  402
  420
  440
  460
  482
  505
  529
  554
  581
  609
  638
  669
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
  208
  213
  218
  225
  231
  239
  247
  256
  265
  275
  286
  298
  310
  323
  337
  352
  368
  384
  402
  420
  440
  460
  482
  505
  529
  554
  581
  609
  638
  669
Operating income, $m
  63
  65
  66
  68
  70
  73
  75
  78
  81
  84
  87
  90
  94
  98
  102
  107
  112
  117
  122
  128
  134
  140
  146
  153
  161
  168
  176
  185
  194
  203
EBITDA, $m
  521
  533
  546
  562
  579
  597
  618
  640
  663
  689
  716
  745
  776
  809
  844
  881
  920
  962
  1,005
  1,051
  1,100
  1,152
  1,206
  1,263
  1,323
  1,386
  1,453
  1,523
  1,597
  1,674
Interest expense (income), $m
  20
  219
  201
  205
  210
  216
  222
  229
  237
  245
  253
  263
  273
  283
  295
  307
  320
  333
  348
  363
  379
  396
  414
  433
  452
  473
  496
  519
  543
  569
  596
Earnings before tax, $m
  -156
  -136
  -139
  -142
  -146
  -150
  -154
  -159
  -164
  -170
  -176
  -182
  -189
  -197
  -204
  -213
  -222
  -231
  -241
  -251
  -262
  -274
  -286
  -299
  -313
  -327
  -342
  -358
  -375
  -393
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
  -156
  -136
  -139
  -142
  -146
  -150
  -154
  -159
  -164
  -170
  -176
  -182
  -189
  -197
  -204
  -213
  -222
  -231
  -241
  -251
  -262
  -274
  -286
  -299
  -313
  -327
  -342
  -358
  -375
  -393

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
  3,932
  4,023
  4,126
  4,242
  4,371
  4,512
  4,665
  4,832
  5,011
  5,203
  5,409
  5,629
  5,862
  6,111
  6,374
  6,654
  6,949
  7,262
  7,592
  7,941
  8,309
  8,698
  9,107
  9,538
  9,992
  10,470
  10,973
  11,503
  12,060
  12,646
Adjusted assets (=assets-cash), $m
  3,932
  4,023
  4,126
  4,242
  4,371
  4,512
  4,665
  4,832
  5,011
  5,203
  5,409
  5,629
  5,862
  6,111
  6,374
  6,654
  6,949
  7,262
  7,592
  7,941
  8,309
  8,698
  9,107
  9,538
  9,992
  10,470
  10,973
  11,503
  12,060
  12,646
Revenue / Adjusted assets
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
  0.069
Average production assets, $m
  4,574
  4,679
  4,800
  4,935
  5,084
  5,248
  5,427
  5,621
  5,829
  6,053
  6,292
  6,547
  6,819
  7,108
  7,415
  7,740
  8,084
  8,448
  8,832
  9,238
  9,666
  10,118
  10,594
  11,095
  11,623
  12,179
  12,765
  13,381
  14,029
  14,710
Working capital, $m
  -4,260
  -4,358
  -4,470
  -4,596
  -4,735
  -4,888
  -5,054
  -5,235
  -5,429
  -5,637
  -5,860
  -6,098
  -6,351
  -6,620
  -6,906
  -7,208
  -7,529
  -7,867
  -8,225
  -8,603
  -9,002
  -9,423
  -9,866
  -10,333
  -10,825
  -11,343
  -11,888
  -12,462
  -13,065
  -13,700
Total debt, $m
  3,723
  3,804
  3,897
  4,001
  4,117
  4,244
  4,382
  4,532
  4,693
  4,866
  5,052
  5,249
  5,460
  5,683
  5,920
  6,172
  6,438
  6,719
  7,017
  7,331
  7,662
  8,011
  8,380
  8,768
  9,176
  9,607
  10,059
  10,536
  11,037
  11,565
Total liabilities, $m
  3,539
  3,620
  3,713
  3,818
  3,934
  4,061
  4,199
  4,349
  4,510
  4,683
  4,868
  5,066
  5,276
  5,500
  5,737
  5,988
  6,254
  6,536
  6,833
  7,147
  7,478
  7,828
  8,196
  8,584
  8,993
  9,423
  9,876
  10,352
  10,854
  11,381
Total equity, $m
  393
  402
  413
  424
  437
  451
  467
  483
  501
  520
  541
  563
  586
  611
  637
  665
  695
  726
  759
  794
  831
  870
  911
  954
  999
  1,047
  1,097
  1,150
  1,206
  1,265
Total liabilities and equity, $m
  3,932
  4,022
  4,126
  4,242
  4,371
  4,512
  4,666
  4,832
  5,011
  5,203
  5,409
  5,629
  5,862
  6,111
  6,374
  6,653
  6,949
  7,262
  7,592
  7,941
  8,309
  8,698
  9,107
  9,538
  9,992
  10,470
  10,973
  11,502
  12,060
  12,646
Debt-to-equity ratio
  9.470
  9.460
  9.440
  9.430
  9.420
  9.410
  9.390
  9.380
  9.370
  9.350
  9.340
  9.330
  9.310
  9.300
  9.290
  9.280
  9.260
  9.250
  9.240
  9.230
  9.220
  9.210
  9.200
  9.190
  9.180
  9.180
  9.170
  9.160
  9.150
  9.150
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -156
  -136
  -139
  -142
  -146
  -150
  -154
  -159
  -164
  -170
  -176
  -182
  -189
  -197
  -204
  -213
  -222
  -231
  -241
  -251
  -262
  -274
  -286
  -299
  -313
  -327
  -342
  -358
  -375
  -393
Depreciation, amort., depletion, $m
  457
  468
  480
  493
  508
  525
  543
  562
  583
  605
  629
  655
  682
  711
  741
  774
  808
  845
  883
  924
  967
  1,012
  1,059
  1,110
  1,162
  1,218
  1,276
  1,338
  1,403
  1,471
Funds from operations, $m
  302
  332
  341
  351
  363
  375
  389
  403
  419
  435
  453
  472
  493
  514
  537
  561
  587
  614
  642
  673
  704
  738
  773
  810
  850
  891
  934
  980
  1,028
  1,078
Change in working capital, $m
  -84
  -98
  -112
  -126
  -139
  -153
  -166
  -180
  -194
  -208
  -223
  -238
  -253
  -269
  -286
  -303
  -320
  -339
  -358
  -378
  -399
  -421
  -443
  -467
  -492
  -518
  -545
  -574
  -604
  -635
Cash from operations, $m
  385
  430
  453
  477
  502
  528
  555
  583
  613
  644
  676
  710
  746
  783
  823
  864
  907
  953
  1,000
  1,050
  1,103
  1,158
  1,216
  1,277
  1,341
  1,409
  1,479
  1,553
  1,631
  1,713
Maintenance CAPEX, $m
  -448
  -457
  -468
  -480
  -493
  -508
  -525
  -543
  -562
  -583
  -605
  -629
  -655
  -682
  -711
  -741
  -774
  -808
  -845
  -883
  -924
  -967
  -1,012
  -1,059
  -1,110
  -1,162
  -1,218
  -1,276
  -1,338
  -1,403
New CAPEX, $m
  -91
  -105
  -120
  -135
  -150
  -164
  -179
  -193
  -208
  -224
  -239
  -255
  -272
  -289
  -307
  -325
  -344
  -364
  -384
  -406
  -428
  -452
  -476
  -502
  -528
  -556
  -585
  -616
  -648
  -682
Cash from investing activities, $m
  -539
  -562
  -588
  -615
  -643
  -672
  -704
  -736
  -770
  -807
  -844
  -884
  -927
  -971
  -1,018
  -1,066
  -1,118
  -1,172
  -1,229
  -1,289
  -1,352
  -1,419
  -1,488
  -1,561
  -1,638
  -1,718
  -1,803
  -1,892
  -1,986
  -2,085
Free cash flow, $m
  -154
  -133
  -135
  -138
  -141
  -145
  -149
  -153
  -158
  -163
  -168
  -174
  -181
  -188
  -195
  -203
  -211
  -220
  -229
  -239
  -249
  -260
  -271
  -283
  -296
  -310
  -324
  -339
  -355
  -371
Issuance/(repayment) of debt, $m
  -328
  81
  93
  104
  116
  127
  138
  150
  161
  173
  185
  198
  210
  224
  237
  251
  266
  281
  297
  314
  331
  349
  368
  388
  409
  430
  453
  477
  501
  527
Issuance/(repurchase) of shares, $m
  549
  145
  149
  154
  159
  164
  170
  176
  182
  189
  196
  204
  213
  221
  231
  241
  251
  262
  274
  286
  299
  313
  327
  342
  358
  375
  393
  411
  431
  451
Cash from financing (excl. dividends), $m  
  221
  226
  242
  258
  275
  291
  308
  326
  343
  362
  381
  402
  423
  445
  468
  492
  517
  543
  571
  600
  630
  662
  695
  730
  767
  805
  846
  888
  932
  978
Total cash flow (excl. dividends), $m
  67
  94
  107
  120
  133
  146
  159
  172
  186
  199
  213
  228
  242
  257
  273
  290
  306
  324
  342
  362
  382
  402
  424
  447
  471
  495
  522
  549
  577
  607
Retained Cash Flow (-), $m
  -549
  -145
  -149
  -154
  -159
  -164
  -170
  -176
  -182
  -189
  -196
  -204
  -213
  -221
  -231
  -241
  -251
  -262
  -274
  -286
  -299
  -313
  -327
  -342
  -358
  -375
  -393
  -411
  -431
  -451
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
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
Cash available for distribution, $m
  -482
  -52
  -42
  -34
  -25
  -18
  -10
  -3
  4
  10
  17
  23
  30
  36
  42
  49
  55
  62
  69
  75
  82
  90
  97
  105
  112
  120
  129
  138
  147
  156
Discount rate, %
  14.70
  15.44
  16.21
  17.02
  17.87
  18.76
  19.70
  20.68
  21.72
  22.80
  23.94
  25.14
  26.40
  27.72
  29.10
  30.56
  32.09
  33.69
  35.38
  37.15
  39.00
  40.95
  43.00
  45.15
  47.41
  49.78
  52.27
  54.88
  57.63
  60.51
PV of cash for distribution, $m
  -420
  -39
  -27
  -18
  -11
  -6
  -3
  -1
  1
  1
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  36.5
  26.6
  19.4
  14.1
  10.3
  7.5
  5.4
  3.9
  2.9
  2.1
  1.5
  1.1
  0.8
  0.6
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Fidelity Southern Corporation is a bank holding company. The Company conducts its operations through its subsidiary bank, Fidelity Bank, which is a state chartered bank (the Bank). The Company provides an array of financial products and services for business and retail customers in the metropolitan Atlanta and Jacksonville, Orlando and Sarasota-Bradenton, Florida markets. The Company provides mortgage loans, indirect automobile loans and Small Business Administration (SBA) loans throughout the South and parts of the Midwest. It delivers its products and services through a network of offices located in Southern states. As of December 31, 2016, it owned 55 and leased 10 retail bank branches and it leased 27 loan production offices. The Company is primarily engaged in attracting deposits from individuals and businesses and using these deposits and borrowed funds to originate commercial, residential mortgage, construction and installment loans.

FINANCIAL RATIOS  of  Fidelity Southern (LION)

Valuation Ratios
P/E Ratio 16.1
Price to Sales 0
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow -20.9
Price to Free Cash Flow -17
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -41.7%
Cap. Spend. - 3 Yr. Gr. Rate -6.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 38.3%
Total Debt to Equity 38.3%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.3%
Ret/ On Assets - 3 Yr. Avg. 1.3%
Return On Total Capital 8.1%
Ret/ On T. Cap. - 3 Yr. Avg. 7.3%
Return On Equity 11.7%
Return On Equity - 3 Yr. Avg. 12.5%
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 36.1%
Eff/ Tax Rate - 3 Yr. Avg. 35.6%
Payout Ratio 30.8%

LION stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LION stock intrinsic value calculation we used $266 million for the last fiscal year's total revenue generated by Fidelity Southern. The default revenue input number comes from 2017 income statement of Fidelity Southern. 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 LION stock valuation model: a) initial revenue growth rate of 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 14.7%, whose default value for LION is calculated based on our internal credit rating of Fidelity Southern, 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 Fidelity Southern.
    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 LION stock the variable cost ratio is equal to 76.7%.

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 LION 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 Fidelity Southern.

Corporate tax rate of 27% is the nominal tax rate for Fidelity Southern. 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 LION stock is equal to 1.7%.

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 LION are equal to 1685.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Fidelity Southern 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 LION is equal to -1570.1%. 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 - $0 million for Fidelity Southern - 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 27 million for Fidelity Southern 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 Fidelity Southern at the current share price and the inputted number of shares is $0.6 billion.

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COMPANY NEWS

▶ Fidelity Southern: 2Q Earnings Snapshot   [Jul-19-18 12:48PM  Associated Press]
▶ Fidelity Southern: 1Q Earnings Snapshot   [Apr-19-18 10:49AM  Associated Press]
▶ Fidelity Southern posts 4Q profit   [Jan-18-18 05:25PM  Associated Press]
▶ Fidelity Southern Corporation (LION): Will The Growth Last?   [Oct-19-17 06:57PM  Simply Wall St.]
▶ Fidelity Southern posts 3Q profit   [01:48PM  Associated Press]
▶ New Strong Sell Stocks for August 29th   [Aug-29-17 09:54AM  Zacks]
▶ Fidelity Southern misses Street 2Q forecasts   [Jul-20-17 10:35PM  Associated Press]
▶ IberiaBank expands Florida presence with new position   [Jun-23-17 03:10PM  American City Business Journals]
▶ Fidelity Southern tops Street 1Q forecasts   [Apr-20-17 02:38PM  Associated Press]
▶ Top Ranked Value Stocks to Buy for February 2nd   [Feb-02-17 10:14AM  Zacks]
▶ Is Fidelity Southern Corporation (LION) A Good Stock To Buy?   [Dec-19-16 11:03PM  at Insider Monkey]
▶ Fidelity Southern Set to Join the S&P SmallCap 600   [Oct-31-16 06:27PM  PR Newswire]
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