Intrinsic value of LRAD - LRAD

Previous Close

$2.75

  Intrinsic Value

$0.27

stock screener

  Rating & Target

str. sell

-90%

Previous close

$2.75

 
Intrinsic value

$0.27

 
Up/down potential

-90%

 
Rating

str. sell

We calculate the intrinsic value of LRAD 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 0.1

 

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, %
  37.00
  33.80
  30.92
  28.33
  26.00
  23.90
  22.01
  20.31
  18.77
  17.40
  16.16
  15.04
  14.04
  13.13
  12.32
  11.59
  10.93
  10.34
  9.80
  9.32
  8.89
  8.50
  8.15
  7.84
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
Revenue, $m
  28
  37
  49
  63
  79
  98
  119
  143
  170
  200
  232
  267
  305
  345
  387
  432
  479
  529
  580
  635
  691
  750
  811
  874
  940
  1,009
  1,080
  1,154
  1,232
  1,312
Variable operating expenses, $m
  24
  32
  41
  53
  67
  83
  101
  122
  145
  170
  197
  227
  259
  293
  329
  367
  407
  449
  493
  539
  587
  637
  689
  743
  799
  857
  918
  981
  1,046
  1,115
Fixed operating expenses, $m
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
Total operating expenses, $m
  28
  36
  45
  57
  71
  88
  106
  127
  150
  175
  202
  232
  264
  298
  335
  373
  413
  455
  499
  545
  593
  643
  696
  750
  806
  864
  925
  988
  1,054
  1,123
Operating income, $m
  0
  1
  3
  5
  7
  10
  13
  17
  21
  25
  30
  35
  40
  46
  53
  59
  66
  74
  81
  89
  98
  106
  115
  125
  134
  145
  155
  166
  178
  189
EBITDA, $m
  0
  2
  3
  5
  8
  11
  14
  18
  22
  26
  31
  36
  42
  48
  55
  61
  69
  76
  84
  92
  101
  110
  119
  129
  139
  150
  161
  172
  184
  196
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  10
  11
  11
  12
Earnings before tax, $m
  0
  1
  3
  5
  7
  10
  12
  16
  19
  24
  28
  33
  38
  44
  49
  56
  62
  69
  76
  84
  91
  100
  108
  117
  126
  135
  145
  156
  166
  177
Tax expense, $m
  0
  0
  1
  1
  2
  3
  3
  4
  5
  6
  8
  9
  10
  12
  13
  15
  17
  19
  21
  23
  25
  27
  29
  32
  34
  37
  39
  42
  45
  48
Net income, $m
  0
  1
  2
  3
  5
  7
  9
  12
  14
  17
  20
  24
  28
  32
  36
  41
  45
  50
  56
  61
  67
  73
  79
  85
  92
  99
  106
  114
  121
  129

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
  35
  47
  62
  79
  100
  124
  151
  182
  216
  254
  295
  339
  387
  437
  491
  548
  608
  671
  737
  805
  877
  951
  1,029
  1,110
  1,193
  1,281
  1,371
  1,465
  1,563
  1,665
Adjusted assets (=assets-cash), $m
  35
  47
  62
  79
  100
  124
  151
  182
  216
  254
  295
  339
  387
  437
  491
  548
  608
  671
  737
  805
  877
  951
  1,029
  1,110
  1,193
  1,281
  1,371
  1,465
  1,563
  1,665
Revenue / Adjusted assets
  0.800
  0.787
  0.790
  0.797
  0.790
  0.790
  0.788
  0.786
  0.787
  0.787
  0.786
  0.788
  0.788
  0.789
  0.788
  0.788
  0.788
  0.788
  0.787
  0.789
  0.788
  0.789
  0.788
  0.787
  0.788
  0.788
  0.788
  0.788
  0.788
  0.788
Average production assets, $m
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  8
  9
  10
  11
  12
  14
  15
  16
  18
  19
  21
  23
  24
  26
  28
  30
  32
  34
Working capital, $m
  11
  15
  20
  26
  32
  40
  49
  59
  70
  82
  96
  110
  125
  142
  159
  178
  197
  218
  239
  261
  285
  309
  334
  360
  387
  416
  445
  476
  507
  540
Total debt, $m
  1
  3
  5
  8
  11
  14
  18
  23
  28
  33
  39
  45
  52
  60
  68
  76
  84
  94
  103
  113
  123
  134
  146
  157
  169
  182
  195
  209
  223
  238
Total liabilities, $m
  5
  7
  9
  12
  15
  18
  22
  26
  31
  37
  43
  49
  56
  63
  71
  79
  88
  97
  107
  117
  127
  138
  149
  161
  173
  186
  199
  212
  227
  241
Total equity, $m
  30
  40
  53
  68
  86
  106
  129
  156
  185
  217
  252
  290
  330
  374
  420
  469
  520
  574
  630
  689
  750
  813
  880
  949
  1,020
  1,095
  1,172
  1,253
  1,336
  1,423
Total liabilities and equity, $m
  35
  47
  62
  80
  101
  124
  151
  182
  216
  254
  295
  339
  386
  437
  491
  548
  608
  671
  737
  806
  877
  951
  1,029
  1,110
  1,193
  1,281
  1,371
  1,465
  1,563
  1,664
Debt-to-equity ratio
  0.050
  0.080
  0.100
  0.120
  0.130
  0.130
  0.140
  0.150
  0.150
  0.150
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.160
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
  0.170
Adjusted equity ratio
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855
  0.855

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  1
  2
  3
  5
  7
  9
  12
  14
  17
  20
  24
  28
  32
  36
  41
  45
  50
  56
  61
  67
  73
  79
  85
  92
  99
  106
  114
  121
  129
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
Funds from operations, $m
  0
  1
  2
  4
  5
  7
  10
  12
  15
  18
  22
  25
  29
  34
  38
  43
  48
  53
  59
  64
  70
  77
  83
  90
  97
  104
  112
  120
  128
  136
Change in working capital, $m
  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
  31
  32
  33
Cash from operations, $m
  -3
  -3
  -2
  -2
  -1
  0
  1
  2
  4
  6
  8
  11
  14
  17
  21
  24
  28
  33
  37
  42
  47
  52
  58
  64
  70
  76
  82
  89
  96
  103
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Cash from investing activities, $m
  0
  0
  0
  0
  0
  0
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
Free cash flow, $m
  -3
  -3
  -3
  -3
  -2
  -1
  0
  1
  3
  4
  6
  9
  12
  14
  18
  21
  25
  29
  33
  38
  42
  47
  52
  58
  63
  69
  75
  82
  88
  95
Issuance/(repayment) of debt, $m
  1
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
Issuance/(repurchase) of shares, $m
  8
  9
  10
  12
  13
  13
  14
  15
  15
  15
  15
  14
  13
  12
  10
  8
  6
  3
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  9
  11
  12
  15
  16
  16
  18
  19
  20
  20
  21
  20
  20
  19
  18
  16
  15
  12
  11
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
Total cash flow (excl. dividends), $m
  7
  8
  10
  12
  14
  16
  18
  20
  23
  25
  27
  29
  31
  33
  36
  38
  39
  41
  43
  48
  53
  58
  64
  69
  76
  82
  88
  95
  102
  110
Retained Cash Flow (-), $m
  -9
  -10
  -12
  -15
  -18
  -20
  -23
  -26
  -29
  -32
  -35
  -38
  -41
  -43
  -46
  -49
  -51
  -54
  -56
  -59
  -61
  -64
  -66
  -69
  -72
  -74
  -77
  -80
  -84
  -87
Prev. year cash balance distribution, $m
  13
  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
  -2
  -3
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -12
  -13
  -11
  -9
  -6
  -3
  1
  4
  7
  11
  15
  19
  23
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
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -3
  -3
  -3
  -3
  -2
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  86.7
  77.3
  70.2
  64.7
  60.2
  56.7
  53.9
  51.5
  49.7
  48.1
  46.9
  45.9
  45.1
  44.5
  44.0
  43.7
  43.4
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3
  43.3

LRAD Corporation is engaged in the design, development and commercialization of directed sound technologies and products. The Company develops and delivers directed acoustic products that beam, focus and control sound over relatively short and long distances. Its long range acoustic device (LRAD) offers directional long-range acoustic hailing devices (AHDs). The LRAD Directional Products include LRAD 100X, LRAD 300X, LRAD 450XL, LRAD 500X, LRAD 500RX, LRAD RXL, LRAD 1000X, LRAD 1000RX and LRAD 2000X. The Company's LRAD Omnidirectional Products include LRAD 360X, LRAD 360Xm, LRAD 360XT, LRAD DS-60, LRAD SOUND SHIELD and SoundSaber. The Company's LRAD is deployed by the United States Army, Navy, Marine Corps and Coast Guard, as well as international military services and commercial maritime, commercial security, and public safety organizations around the globe. Its LRAD product line provides a range of systems from single user portable to permanently installed, remotely operated units.

FINANCIAL RATIOS  of  LRAD (LRAD)

Valuation Ratios
P/E Ratio -88.4
Price to Sales 4.4
Price to Book 2.5
Price to Tangible Book
Price to Cash Flow -88.4
Price to Free Cash Flow -88.4
Growth Rates
Sales Growth Rate 25%
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 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. 7.3%
Return On Total Capital -2.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity -2.9%
Return On Equity - 3 Yr. Avg. 8.1%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 50%
Gross Margin - 3 Yr. Avg. 51%
EBITDA Margin -5%
EBITDA Margin - 3 Yr. Avg. -1.8%
Operating Margin -5%
Oper. Margin - 3 Yr. Avg. -3.9%
Pre-Tax Margin -5%
Pre-Tax Margin - 3 Yr. Avg. -1.8%
Net Profit Margin -5%
Net Profit Margin - 3 Yr. Avg. 15.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -300%
Payout Ratio 0%

LRAD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LRAD stock intrinsic value calculation we used $20.314178 million for the last fiscal year's total revenue generated by LRAD. The default revenue input number comes from 0001 income statement of LRAD. 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 LRAD stock valuation model: a) initial revenue growth rate of 37% 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 LRAD is calculated based on our internal credit rating of LRAD, 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 LRAD.
    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 LRAD stock the variable cost ratio is equal to 85%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4 million in the base year in the intrinsic value calculation for LRAD 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 LRAD.

Corporate tax rate of 27% is the nominal tax rate for LRAD. 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 LRAD 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 LRAD are equal to 2.6%.

Life of production assets of 3.6 years is the average useful life of capital assets used in LRAD 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 LRAD is equal to 41.2%. 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 - $35.184039 million for LRAD - 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 32.394 million for LRAD 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 LRAD at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
UUU Universal Secu 1.20 20.49  str.buy
UEIC Universal Elec 34.50 15.99  str.sell
NSSC NAPCO Security 16.83 0.65  str.sell

COMPANY NEWS

▶ Penny Stocks to Watch for November 2018   [Nov-01-18 08:50AM  Investopedia]
▶ Rite Aid Stock Is Sick Heres How to Remedy Your Portfolio   [Sep-29-18 05:03AM  GoBankingRates]
▶ LRAD: Fiscal 3Q Earnings Snapshot   [Aug-14-18 04:07PM  Associated Press]
▶ LRAD Corporation to Host Earnings Call   [02:30PM  ACCESSWIRE]
▶ LRAD: Fiscal 2Q Earnings Snapshot   [May-15-18 04:09PM  Associated Press]
▶ LRAD reports 1Q loss   [Feb-09-18 05:01AM  Associated Press]
▶ LRAD Corporation to Host Earnings Call   [12:20PM  ACCESSWIRE]
▶ Is It The Right Time To Buy LRAD Corporation (NASDAQ:LRAD)?   [Feb-06-18 08:19AM  Simply Wall St.]
▶ ETFs with exposure to LRAD Corp. : December 18, 2017   [Dec-18-17 03:53PM  Capital Cube]
▶ LRAD posts 4Q profit   [Dec-14-17 09:11AM  Associated Press]
▶ ETFs with exposure to LRAD Corp. : November 20, 2017   [Nov-20-17 12:50PM  Capital Cube]
▶ ETFs with exposure to LRAD Corp. : September 28, 2017   [Sep-28-17 10:15AM  Capital Cube]
▶ LRAD(R) Corporation Announces US Navy Orders   [Sep-20-17 09:00AM  ACCESSWIRE]
▶ LRAD reports 3Q loss   [Aug-10-17 08:02PM  Associated Press]
▶ ETFs with exposure to LRAD Corp. : May 8, 2017   [May-08-17 04:51PM  Capital Cube]
▶ LRAD posts 2Q profit   [May-04-17 05:03AM  Associated Press]
▶ ETFs with exposure to LRAD Corp. : April 5, 2017   [Apr-05-17 05:04PM  Capital Cube]
▶ LRAD reports 1Q loss   [Feb-09-17 05:01AM  Associated Press]

CONTACT US       ASSET ALLOCATION

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

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