Intrinsic value of The Meet Group, Inc. - MEET

Previous Close

$5.60

  Intrinsic Value

$0.04

stock screener

  Rating & Target

str. sell

-99%

Previous close

$5.60

 
Intrinsic value

$0.04

 
Up/down potential

-99%

 
Rating

str. sell

We calculate the intrinsic value of MEET 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 0.4

 

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, %
  30.80
  28.22
  25.90
  23.81
  21.93
  20.23
  18.71
  17.34
  16.11
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
Revenue, $m
  234
  300
  378
  468
  571
  686
  814
  956
  1,109
  1,276
  1,454
  1,645
  1,847
  2,060
  2,285
  2,521
  2,767
  3,025
  3,293
  3,572
  3,863
  4,165
  4,479
  4,806
  5,145
  5,498
  5,864
  6,245
  6,642
  7,055
Variable operating expenses, $m
  336
  425
  530
  652
  791
  948
  1,122
  1,313
  1,521
  1,747
  1,970
  2,228
  2,502
  2,791
  3,095
  3,415
  3,749
  4,097
  4,461
  4,839
  5,233
  5,643
  6,068
  6,510
  6,970
  7,447
  7,944
  8,460
  8,997
  9,557
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
  336
  425
  530
  652
  791
  948
  1,122
  1,313
  1,521
  1,747
  1,970
  2,228
  2,502
  2,791
  3,095
  3,415
  3,749
  4,097
  4,461
  4,839
  5,233
  5,643
  6,068
  6,510
  6,970
  7,447
  7,944
  8,460
  8,997
  9,557
Operating income, $m
  -102
  -125
  -153
  -184
  -221
  -262
  -307
  -357
  -412
  -471
  -516
  -583
  -655
  -731
  -810
  -894
  -981
  -1,073
  -1,168
  -1,267
  -1,370
  -1,477
  -1,589
  -1,704
  -1,825
  -1,950
  -2,080
  -2,215
  -2,356
  -2,502
EBITDA, $m
  -74
  -95
  -119
  -148
  -180
  -216
  -257
  -301
  -350
  -402
  -459
  -519
  -582
  -650
  -721
  -795
  -873
  -954
  -1,038
  -1,127
  -1,218
  -1,314
  -1,413
  -1,516
  -1,622
  -1,734
  -1,849
  -1,969
  -2,094
  -2,225
Interest expense (income), $m
  0
  2
  3
  5
  6
  8
  10
  13
  16
  19
  22
  25
  29
  33
  38
  42
  47
  52
  57
  63
  68
  74
  81
  87
  94
  101
  108
  116
  123
  131
  140
Earnings before tax, $m
  -104
  -128
  -157
  -191
  -229
  -272
  -320
  -373
  -431
  -493
  -541
  -613
  -688
  -768
  -853
  -941
  -1,033
  -1,130
  -1,231
  -1,335
  -1,444
  -1,558
  -1,676
  -1,798
  -1,925
  -2,058
  -2,195
  -2,338
  -2,487
  -2,642
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
  -104
  -128
  -157
  -191
  -229
  -272
  -320
  -373
  -431
  -493
  -541
  -613
  -688
  -768
  -853
  -941
  -1,033
  -1,130
  -1,231
  -1,335
  -1,444
  -1,558
  -1,676
  -1,798
  -1,925
  -2,058
  -2,195
  -2,338
  -2,487
  -2,642

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
  350
  449
  566
  701
  854
  1,027
  1,219
  1,430
  1,661
  1,910
  2,177
  2,462
  2,765
  3,084
  3,421
  3,773
  4,143
  4,528
  4,930
  5,348
  5,783
  6,236
  6,706
  7,194
  7,702
  8,230
  8,779
  9,349
  9,943
  10,561
Adjusted assets (=assets-cash), $m
  350
  449
  566
  701
  854
  1,027
  1,219
  1,430
  1,661
  1,910
  2,177
  2,462
  2,765
  3,084
  3,421
  3,773
  4,143
  4,528
  4,930
  5,348
  5,783
  6,236
  6,706
  7,194
  7,702
  8,230
  8,779
  9,349
  9,943
  10,561
Revenue / Adjusted assets
  0.669
  0.668
  0.668
  0.668
  0.669
  0.668
  0.668
  0.669
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
  0.668
Average production assets, $m
  132
  169
  212
  263
  321
  386
  458
  537
  624
  717
  817
  924
  1,038
  1,158
  1,284
  1,417
  1,555
  1,700
  1,851
  2,008
  2,171
  2,341
  2,517
  2,701
  2,891
  3,090
  3,296
  3,510
  3,733
  3,965
Working capital, $m
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -7
  -7
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -21
  -22
  -23
  -25
  -27
  -28
Total debt, $m
  59
  85
  116
  151
  192
  237
  288
  344
  405
  470
  541
  616
  696
  781
  869
  962
  1,060
  1,162
  1,268
  1,378
  1,493
  1,612
  1,737
  1,866
  2,000
  2,139
  2,284
  2,434
  2,591
  2,754
Total liabilities, $m
  93
  119
  149
  185
  225
  271
  322
  378
  438
  504
  575
  650
  730
  814
  903
  996
  1,094
  1,195
  1,301
  1,412
  1,527
  1,646
  1,770
  1,899
  2,033
  2,173
  2,318
  2,468
  2,625
  2,788
Total equity, $m
  258
  331
  416
  516
  629
  756
  897
  1,053
  1,222
  1,406
  1,602
  1,812
  2,035
  2,270
  2,518
  2,777
  3,049
  3,333
  3,628
  3,936
  4,256
  4,589
  4,935
  5,295
  5,669
  6,057
  6,461
  6,881
  7,318
  7,773
Total liabilities and equity, $m
  351
  450
  565
  701
  854
  1,027
  1,219
  1,431
  1,660
  1,910
  2,177
  2,462
  2,765
  3,084
  3,421
  3,773
  4,143
  4,528
  4,929
  5,348
  5,783
  6,235
  6,705
  7,194
  7,702
  8,230
  8,779
  9,349
  9,943
  10,561
Debt-to-equity ratio
  0.230
  0.260
  0.280
  0.290
  0.300
  0.310
  0.320
  0.330
  0.330
  0.330
  0.340
  0.340
  0.340
  0.340
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
  0.350
Adjusted equity ratio
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736
  0.736

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -104
  -128
  -157
  -191
  -229
  -272
  -320
  -373
  -431
  -493
  -541
  -613
  -688
  -768
  -853
  -941
  -1,033
  -1,130
  -1,231
  -1,335
  -1,444
  -1,558
  -1,676
  -1,798
  -1,925
  -2,058
  -2,195
  -2,338
  -2,487
  -2,642
Depreciation, amort., depletion, $m
  28
  30
  33
  37
  41
  45
  51
  56
  62
  69
  57
  65
  73
  81
  90
  99
  109
  119
  129
  140
  152
  164
  176
  189
  202
  216
  230
  245
  261
  277
Funds from operations, $m
  -76
  -98
  -124
  -154
  -188
  -227
  -270
  -317
  -368
  -424
  -484
  -548
  -616
  -687
  -763
  -842
  -925
  -1,011
  -1,101
  -1,195
  -1,293
  -1,394
  -1,500
  -1,609
  -1,723
  -1,842
  -1,965
  -2,093
  -2,226
  -2,365
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
Cash from operations, $m
  -76
  -98
  -123
  -153
  -188
  -226
  -269
  -316
  -368
  -424
  -483
  -547
  -615
  -686
  -762
  -841
  -924
  -1,010
  -1,100
  -1,194
  -1,291
  -1,393
  -1,498
  -1,608
  -1,722
  -1,840
  -1,963
  -2,091
  -2,224
  -2,363
Maintenance CAPEX, $m
  -7
  -9
  -12
  -15
  -18
  -22
  -27
  -32
  -38
  -44
  -50
  -57
  -65
  -73
  -81
  -90
  -99
  -109
  -119
  -129
  -140
  -152
  -164
  -176
  -189
  -202
  -216
  -230
  -245
  -261
New CAPEX, $m
  -31
  -37
  -44
  -51
  -58
  -65
  -72
  -79
  -86
  -93
  -100
  -107
  -114
  -120
  -126
  -132
  -139
  -145
  -151
  -157
  -163
  -170
  -177
  -183
  -191
  -198
  -206
  -214
  -223
  -232
Cash from investing activities, $m
  -38
  -46
  -56
  -66
  -76
  -87
  -99
  -111
  -124
  -137
  -150
  -164
  -179
  -193
  -207
  -222
  -238
  -254
  -270
  -286
  -303
  -322
  -341
  -359
  -380
  -400
  -422
  -444
  -468
  -493
Free cash flow, $m
  -114
  -144
  -179
  -219
  -264
  -314
  -368
  -428
  -492
  -561
  -634
  -711
  -793
  -879
  -969
  -1,063
  -1,161
  -1,263
  -1,370
  -1,480
  -1,595
  -1,715
  -1,839
  -1,967
  -2,101
  -2,241
  -2,385
  -2,536
  -2,693
  -2,856
Issuance/(repayment) of debt, $m
  22
  26
  31
  36
  41
  46
  51
  56
  61
  66
  71
  75
  80
  84
  89
  93
  97
  102
  106
  110
  115
  119
  124
  129
  134
  139
  145
  151
  157
  163
Issuance/(repurchase) of shares, $m
  164
  201
  243
  290
  342
  399
  462
  529
  600
  676
  738
  822
  911
  1,004
  1,100
  1,201
  1,305
  1,414
  1,526
  1,643
  1,765
  1,891
  2,022
  2,158
  2,299
  2,446
  2,599
  2,758
  2,924
  3,097
Cash from financing (excl. dividends), $m  
  186
  227
  274
  326
  383
  445
  513
  585
  661
  742
  809
  897
  991
  1,088
  1,189
  1,294
  1,402
  1,516
  1,632
  1,753
  1,880
  2,010
  2,146
  2,287
  2,433
  2,585
  2,744
  2,909
  3,081
  3,260
Total cash flow (excl. dividends), $m
  73
  83
  95
  107
  119
  131
  144
  157
  169
  181
  175
  186
  198
  209
  220
  231
  241
  252
  263
  273
  284
  296
  307
  319
  332
  345
  359
  373
  388
  404
Retained Cash Flow (-), $m
  -164
  -201
  -243
  -290
  -342
  -399
  -462
  -529
  -600
  -676
  -738
  -822
  -911
  -1,004
  -1,100
  -1,201
  -1,305
  -1,414
  -1,526
  -1,643
  -1,765
  -1,891
  -2,022
  -2,158
  -2,299
  -2,446
  -2,599
  -2,758
  -2,924
  -3,097
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
  -92
  -118
  -148
  -183
  -223
  -268
  -317
  -372
  -431
  -495
  -563
  -636
  -713
  -795
  -880
  -970
  -1,064
  -1,162
  -1,264
  -1,370
  -1,480
  -1,595
  -1,714
  -1,838
  -1,967
  -2,101
  -2,240
  -2,385
  -2,536
  -2,693
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
  -88
  -108
  -129
  -151
  -173
  -194
  -214
  -232
  -248
  -259
  -267
  -271
  -271
  -267
  -258
  -246
  -231
  -214
  -195
  -174
  -153
  -132
  -112
  -94
  -77
  -61
  -48
  -37
  -28
  -20
Current shareholders' claim on cash, %
  71.9
  52.6
  39.1
  29.5
  22.5
  17.3
  13.4
  10.5
  8.3
  6.6
  5.3
  4.3
  3.4
  2.8
  2.3
  1.9
  1.5
  1.3
  1.0
  0.8
  0.7
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.2
  0.1

The Meet Group, Inc., formerly MeetMe, Inc., offers a portfolio of mobile applications. The Company operates location-based social networks for meeting new people on mobile platforms, including on iPhone, Android, iPad and other tablets, and on the Web that facilitate interactions among users, and helps users to connect and chat with each other. The Company offers online marketing capabilities, which enable marketers to display their advertisements in different formats and in different locations. The Company holds interest in Skout, Inc. (Skout), which serves as a global mobile network for meeting new people. The Company's social networking products include Chat, Profile and Friends. Its social discovery products facilitate interactions among members. The Company's social discovery products include Meet, Discuss and Buzz, and Interested. The Company's products also include Social Theater.

FINANCIAL RATIOS  of  The Meet Group, Inc. (MEET)

Valuation Ratios
P/E Ratio 7.2
Price to Sales 4.3
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 12.7
Price to Free Cash Flow 13.2
Growth Rates
Sales Growth Rate 33.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
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 28.8%
Ret/ On Assets - 3 Yr. Avg. 10.4%
Return On Total Capital 30.8%
Ret/ On T. Cap. - 3 Yr. Avg. 10.8%
Return On Equity 30.9%
Return On Equity - 3 Yr. Avg. 10.8%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 28.9%
EBITDA Margin - 3 Yr. Avg. 15.7%
Operating Margin 23.7%
Oper. Margin - 3 Yr. Avg. 9.8%
Pre-Tax Margin 23.7%
Pre-Tax Margin - 3 Yr. Avg. 8.4%
Net Profit Margin 60.5%
Net Profit Margin - 3 Yr. Avg. 20.7%
Effective Tax Rate -155.6%
Eff/ Tax Rate - 3 Yr. Avg. -51.9%
Payout Ratio 0%

MEET stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MEET stock intrinsic value calculation we used $179 million for the last fiscal year's total revenue generated by The Meet Group, Inc.. The default revenue input number comes from 0001 income statement of The Meet Group, 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 MEET stock valuation model: a) initial revenue growth rate of 30.8% 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 MEET is calculated based on our internal credit rating of The Meet Group, 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 The Meet Group, 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 MEET stock the variable cost ratio is equal to 145.8%.

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 MEET 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 The Meet Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for The Meet Group, 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 MEET 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 MEET are equal to 56.2%.

Life of production assets of 14.3 years is the average useful life of capital assets used in The Meet Group, 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 MEET is equal to -0.4%. 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 - $197.220826 million for The Meet Group, 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 74.932 million for The Meet Group, 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 The Meet Group, Inc. at the current share price and the inputted number of shares is $0.4 billion.

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