Intrinsic value of Malibu Boats, Inc. - MBUU

Previous Close

$37.31

  Intrinsic Value

$436.63

stock screener

  Rating & Target

str. buy

+999%

Previous close

$37.31

 
Intrinsic value

$436.63

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of MBUU 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 0.8

 

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, %
  45.00
  41.00
  37.40
  34.16
  31.24
  28.62
  26.26
  24.13
  22.22
  20.50
  18.95
  17.55
  16.30
  15.17
  14.15
  13.24
  12.41
  11.67
  11.00
  10.40
  9.86
  9.38
  8.94
  8.55
  8.19
  7.87
  7.58
  7.33
  7.09
  6.88
Revenue, $m
  721
  1,016
  1,396
  1,873
  2,458
  3,162
  3,992
  4,955
  6,056
  7,298
  8,681
  10,204
  11,867
  13,667
  15,601
  17,666
  19,859
  22,177
  24,617
  27,178
  29,858
  32,658
  35,577
  38,618
  41,781
  45,069
  48,488
  52,040
  55,731
  59,568
Variable operating expenses, $m
  612
  858
  1,174
  1,570
  2,057
  2,642
  3,333
  4,134
  5,049
  6,082
  7,219
  8,486
  9,869
  11,366
  12,975
  14,692
  16,516
  18,443
  20,472
  22,602
  24,832
  27,160
  29,588
  32,116
  34,747
  37,482
  40,325
  43,279
  46,349
  49,539
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
  612
  858
  1,174
  1,570
  2,057
  2,642
  3,333
  4,134
  5,049
  6,082
  7,219
  8,486
  9,869
  11,366
  12,975
  14,692
  16,516
  18,443
  20,472
  22,602
  24,832
  27,160
  29,588
  32,116
  34,747
  37,482
  40,325
  43,279
  46,349
  49,539
Operating income, $m
  109
  158
  222
  303
  401
  520
  659
  822
  1,007
  1,216
  1,461
  1,718
  1,998
  2,301
  2,626
  2,974
  3,343
  3,733
  4,144
  4,575
  5,027
  5,498
  5,990
  6,501
  7,034
  7,588
  8,163
  8,761
  9,382
  10,028
EBITDA, $m
  133
  188
  259
  347
  455
  586
  739
  918
  1,122
  1,352
  1,608
  1,890
  2,198
  2,531
  2,890
  3,272
  3,678
  4,108
  4,560
  5,034
  5,530
  6,049
  6,590
  7,153
  7,739
  8,348
  8,981
  9,639
  10,323
  11,033
Interest expense (income), $m
  0
  7
  14
  23
  35
  50
  68
  90
  116
  146
  181
  220
  263
  310
  362
  418
  479
  543
  612
  684
  760
  840
  924
  1,011
  1,102
  1,197
  1,296
  1,398
  1,505
  1,616
  1,731
Earnings before tax, $m
  101
  144
  199
  267
  351
  451
  569
  705
  861
  1,035
  1,242
  1,455
  1,688
  1,939
  2,208
  2,495
  2,800
  3,122
  3,460
  3,815
  4,187
  4,574
  4,979
  5,399
  5,837
  6,292
  6,765
  7,256
  7,767
  8,297
Tax expense, $m
  27
  39
  54
  72
  95
  122
  154
  190
  232
  280
  335
  393
  456
  523
  596
  674
  756
  843
  934
  1,030
  1,130
  1,235
  1,344
  1,458
  1,576
  1,699
  1,826
  1,959
  2,097
  2,240
Net income, $m
  74
  105
  145
  195
  256
  329
  415
  515
  628
  756
  907
  1,062
  1,232
  1,415
  1,612
  1,822
  2,044
  2,279
  2,526
  2,785
  3,056
  3,339
  3,634
  3,941
  4,261
  4,593
  4,938
  5,297
  5,670
  6,057

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
  530
  748
  1,027
  1,378
  1,809
  2,327
  2,938
  3,646
  4,457
  5,370
  6,387
  7,509
  8,732
  10,057
  11,480
  12,999
  14,613
  16,318
  18,114
  19,998
  21,971
  24,031
  26,179
  28,416
  30,744
  33,164
  35,679
  38,293
  41,009
  43,832
Adjusted assets (=assets-cash), $m
  530
  748
  1,027
  1,378
  1,809
  2,327
  2,938
  3,646
  4,457
  5,370
  6,387
  7,509
  8,732
  10,057
  11,480
  12,999
  14,613
  16,318
  18,114
  19,998
  21,971
  24,031
  26,179
  28,416
  30,744
  33,164
  35,679
  38,293
  41,009
  43,832
Revenue / Adjusted assets
  1.360
  1.358
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
  1.359
Average production assets, $m
  101
  142
  195
  262
  344
  443
  559
  694
  848
  1,022
  1,215
  1,429
  1,661
  1,913
  2,184
  2,473
  2,780
  3,105
  3,446
  3,805
  4,180
  4,572
  4,981
  5,406
  5,849
  6,310
  6,788
  7,286
  7,802
  8,339
Working capital, $m
  10
  14
  20
  26
  34
  44
  56
  69
  85
  102
  122
  143
  166
  191
  218
  247
  278
  310
  345
  380
  418
  457
  498
  541
  585
  631
  679
  729
  780
  834
Total debt, $m
  213
  350
  527
  750
  1,022
  1,350
  1,737
  2,185
  2,698
  3,276
  3,920
  4,630
  5,405
  6,243
  7,144
  8,106
  9,127
  10,207
  11,343
  12,536
  13,785
  15,089
  16,448
  17,865
  19,338
  20,870
  22,462
  24,116
  25,836
  27,623
Total liabilities, $m
  336
  473
  650
  872
  1,145
  1,473
  1,859
  2,308
  2,821
  3,399
  4,043
  4,753
  5,528
  6,366
  7,267
  8,229
  9,250
  10,329
  11,466
  12,659
  13,908
  15,212
  16,571
  17,987
  19,461
  20,993
  22,585
  24,239
  25,959
  27,746
Total equity, $m
  195
  274
  377
  506
  664
  854
  1,078
  1,338
  1,636
  1,971
  2,344
  2,756
  3,205
  3,691
  4,213
  4,771
  5,363
  5,989
  6,648
  7,339
  8,063
  8,819
  9,608
  10,429
  11,283
  12,171
  13,094
  14,053
  15,050
  16,086
Total liabilities and equity, $m
  531
  747
  1,027
  1,378
  1,809
  2,327
  2,937
  3,646
  4,457
  5,370
  6,387
  7,509
  8,733
  10,057
  11,480
  13,000
  14,613
  16,318
  18,114
  19,998
  21,971
  24,031
  26,179
  28,416
  30,744
  33,164
  35,679
  38,292
  41,009
  43,832
Debt-to-equity ratio
  1.090
  1.280
  1.400
  1.480
  1.540
  1.580
  1.610
  1.630
  1.650
  1.660
  1.670
  1.680
  1.690
  1.690
  1.700
  1.700
  1.700
  1.700
  1.710
  1.710
  1.710
  1.710
  1.710
  1.710
  1.710
  1.710
  1.720
  1.720
  1.720
  1.720
Adjusted equity ratio
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367
  0.367

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  74
  105
  145
  195
  256
  329
  415
  515
  628
  756
  907
  1,062
  1,232
  1,415
  1,612
  1,822
  2,044
  2,279
  2,526
  2,785
  3,056
  3,339
  3,634
  3,941
  4,261
  4,593
  4,938
  5,297
  5,670
  6,057
Depreciation, amort., depletion, $m
  25
  30
  36
  44
  54
  66
  80
  96
  115
  136
  146
  172
  200
  231
  263
  298
  335
  374
  415
  458
  504
  551
  600
  651
  705
  760
  818
  878
  940
  1,005
Funds from operations, $m
  99
  135
  181
  239
  310
  395
  495
  611
  743
  891
  1,053
  1,234
  1,432
  1,646
  1,875
  2,120
  2,379
  2,653
  2,941
  3,244
  3,560
  3,890
  4,234
  4,593
  4,966
  5,353
  5,756
  6,175
  6,610
  7,062
Change in working capital, $m
  3
  4
  5
  7
  8
  10
  12
  13
  15
  17
  19
  21
  23
  25
  27
  29
  31
  32
  34
  36
  38
  39
  41
  43
  44
  46
  48
  50
  52
  54
Cash from operations, $m
  96
  131
  176
  233
  302
  385
  484
  598
  728
  874
  1,034
  1,213
  1,409
  1,621
  1,848
  2,091
  2,348
  2,621
  2,907
  3,208
  3,522
  3,851
  4,194
  4,550
  4,921
  5,307
  5,708
  6,125
  6,558
  7,008
Maintenance CAPEX, $m
  -8
  -12
  -17
  -24
  -32
  -41
  -53
  -67
  -84
  -102
  -123
  -146
  -172
  -200
  -231
  -263
  -298
  -335
  -374
  -415
  -458
  -504
  -551
  -600
  -651
  -705
  -760
  -818
  -878
  -940
New CAPEX, $m
  -31
  -41
  -53
  -67
  -82
  -98
  -116
  -135
  -154
  -174
  -194
  -213
  -233
  -252
  -271
  -289
  -307
  -324
  -342
  -359
  -375
  -392
  -409
  -426
  -443
  -460
  -479
  -497
  -517
  -537
Cash from investing activities, $m
  -39
  -53
  -70
  -91
  -114
  -139
  -169
  -202
  -238
  -276
  -317
  -359
  -405
  -452
  -502
  -552
  -605
  -659
  -716
  -774
  -833
  -896
  -960
  -1,026
  -1,094
  -1,165
  -1,239
  -1,315
  -1,395
  -1,477
Free cash flow, $m
  56
  77
  106
  142
  189
  246
  314
  395
  490
  598
  717
  853
  1,004
  1,168
  1,347
  1,539
  1,743
  1,961
  2,191
  2,434
  2,689
  2,955
  3,234
  3,525
  3,827
  4,142
  4,469
  4,810
  5,163
  5,531
Issuance/(repayment) of debt, $m
  104
  138
  177
  222
  273
  328
  387
  449
  513
  578
  644
  710
  775
  838
  901
  962
  1,021
  1,080
  1,137
  1,193
  1,249
  1,304
  1,360
  1,416
  1,473
  1,532
  1,592
  1,655
  1,719
  1,787
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  
  104
  138
  177
  222
  273
  328
  387
  449
  513
  578
  644
  710
  775
  838
  901
  962
  1,021
  1,080
  1,137
  1,193
  1,249
  1,304
  1,360
  1,416
  1,473
  1,532
  1,592
  1,655
  1,719
  1,787
Total cash flow (excl. dividends), $m
  160
  215
  283
  365
  461
  573
  701
  844
  1,003
  1,176
  1,361
  1,563
  1,779
  2,007
  2,248
  2,500
  2,765
  3,041
  3,328
  3,627
  3,937
  4,260
  4,594
  4,941
  5,300
  5,674
  6,062
  6,464
  6,883
  7,318
Retained Cash Flow (-), $m
  -60
  -80
  -103
  -129
  -158
  -190
  -224
  -260
  -297
  -335
  -373
  -411
  -449
  -486
  -522
  -558
  -592
  -626
  -659
  -692
  -724
  -756
  -788
  -821
  -854
  -888
  -923
  -959
  -997
  -1,036
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
  100
  135
  180
  236
  303
  383
  477
  584
  705
  841
  988
  1,152
  1,329
  1,521
  1,725
  1,943
  2,173
  2,415
  2,669
  2,935
  3,213
  3,503
  3,805
  4,120
  4,446
  4,786
  5,139
  5,505
  5,886
  6,282
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
  96
  124
  157
  194
  235
  278
  322
  365
  405
  441
  469
  491
  505
  511
  507
  494
  473
  445
  411
  373
  332
  291
  249
  210
  173
  140
  110
  85
  64
  47
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

Malibu Boats, Inc. is a designer, manufacturer and marketer of performance sport boats. The Company's segments include the U.S. and Australia. Each segment is engaged in the manufacturing, distribution, marketing and sale of performance sport boats. Its U.S. segment serves markets in North America, South America, Europe and Asia. Its Australia segment serves the Australian and New Zealand markets. The Company's boats are used for water sports, including water skiing, wakeboarding and wake surfing, as well as general recreational boating. The Company sells its boats under Malibu and Axis Wake Research (Axis) brand names. The Company's boats are constructed of fiberglass, equipped with inboard propulsion systems and available in a range of sizes and hull designs. The Company also offers various accessories and aftermarket parts. The Company's boat models include Malibu M Series, Malibu Wakesetter, Malibu Response and Axis.

FINANCIAL RATIOS  of  Malibu Boats, Inc. (MBUU)

Valuation Ratios
P/E Ratio 23.9
Price to Sales 2.4
Price to Book 13.7
Price to Tangible Book
Price to Cash Flow 18.6
Price to Free Cash Flow 24.8
Growth Rates
Sales Growth Rate 11.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 8.4%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 108.2%
Total Debt to Equity 108.2%
Interest Coverage 0
Management Effectiveness
Return On Assets 12.6%
Ret/ On Assets - 3 Yr. Avg. 10.5%
Return On Total Capital 29.8%
Ret/ On T. Cap. - 3 Yr. Avg. 28.2%
Return On Equity 87.5%
Return On Equity - 3 Yr. Avg. 191.7%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 26.6%
Gross Margin - 3 Yr. Avg. 26.4%
EBITDA Margin 19.9%
EBITDA Margin - 3 Yr. Avg. 16.7%
Operating Margin 13.8%
Oper. Margin - 3 Yr. Avg. 14%
Pre-Tax Margin 17.4%
Pre-Tax Margin - 3 Yr. Avg. 14.7%
Net Profit Margin 9.9%
Net Profit Margin - 3 Yr. Avg. 7.9%
Effective Tax Rate 36.7%
Eff/ Tax Rate - 3 Yr. Avg. 34.1%
Payout Ratio 0%

MBUU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MBUU stock intrinsic value calculation we used $497 million for the last fiscal year's total revenue generated by Malibu Boats, Inc.. The default revenue input number comes from 0001 income statement of Malibu Boats, 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 MBUU stock valuation model: a) initial revenue growth rate of 45% 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 MBUU is calculated based on our internal credit rating of Malibu Boats, 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 Malibu Boats, 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 MBUU stock the variable cost ratio is equal to 85.7%.

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 MBUU 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 6.7% for Malibu Boats, Inc..

Corporate tax rate of 27% is the nominal tax rate for Malibu Boats, 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 MBUU 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 MBUU are equal to 14%.

Life of production assets of 8.3 years is the average useful life of capital assets used in Malibu Boats, 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 MBUU is equal to 1.4%. 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 - $134.369 million for Malibu Boats, 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 20.837 million for Malibu Boats, 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 Malibu Boats, Inc. at the current share price and the inputted number of shares is $0.8 billion.

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