Intrinsic value of Mimecast Limited - MIME

Previous Close

$45.27

  Intrinsic Value

$50.94

stock screener

  Rating & Target

hold

+13%

Previous close

$45.27

 
Intrinsic value

$50.94

 
Up/down potential

+13%

 
Rating

hold

We calculate the intrinsic value of MIME 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 2.7

 

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, %
  38.90
  35.51
  32.46
  29.71
  27.24
  25.02
  23.02
  21.21
  19.59
  18.13
  16.82
  15.64
  14.57
  13.62
  12.76
  11.98
  11.28
  10.65
  10.09
  9.58
  9.12
  8.71
  8.34
  8.00
  7.70
  7.43
  7.19
  6.97
  6.77
  6.60
Revenue, $m
  364
  493
  653
  847
  1,078
  1,348
  1,658
  2,010
  2,404
  2,839
  3,317
  3,836
  4,395
  4,993
  5,630
  6,305
  7,016
  7,763
  8,547
  9,365
  10,219
  11,110
  12,036
  12,999
  14,001
  15,042
  16,123
  17,247
  18,415
  19,630
Variable operating expenses, $m
  347
  469
  621
  805
  1,024
  1,280
  1,574
  1,907
  2,281
  2,694
  3,145
  3,637
  4,167
  4,735
  5,339
  5,979
  6,653
  7,362
  8,104
  8,881
  9,691
  10,535
  11,413
  12,327
  13,277
  14,264
  15,289
  16,355
  17,463
  18,615
Fixed operating expenses, $m
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
  28
  28
  29
  29
  30
  31
  31
  32
  33
  33
  34
  35
  36
  36
Total operating expenses, $m
  366
  489
  641
  826
  1,045
  1,302
  1,596
  1,930
  2,304
  2,718
  3,169
  3,662
  4,192
  4,761
  5,365
  6,006
  6,681
  7,390
  8,133
  8,910
  9,721
  10,566
  11,444
  12,359
  13,310
  14,297
  15,323
  16,390
  17,499
  18,651
Operating income, $m
  -2
  4
  12
  22
  33
  47
  62
  80
  100
  122
  147
  174
  202
  233
  265
  299
  335
  373
  413
  455
  499
  544
  591
  640
  691
  745
  800
  857
  917
  979
EBITDA, $m
  23
  37
  55
  77
  103
  134
  169
  210
  255
  304
  359
  418
  482
  551
  624
  701
  783
  869
  959
  1,053
  1,151
  1,253
  1,359
  1,470
  1,585
  1,704
  1,828
  1,958
  2,092
  2,231
Interest expense (income), $m
  0
  4
  9
  16
  25
  35
  47
  61
  78
  96
  117
  140
  165
  193
  222
  254
  288
  323
  361
  401
  442
  485
  530
  578
  627
  678
  730
  786
  843
  902
  964
Earnings before tax, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  2
  3
  5
  7
  8
  9
  10
  11
  11
  12
  12
  13
  13
  13
  13
  14
  14
  14
  14
  14
  14
  15
  15
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
  4
Net income, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  2
  3
  3
  5
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  10
  10
  10
  10
  10
  10
  11
  11
  11

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
  498
  675
  894
  1,159
  1,475
  1,844
  2,268
  2,749
  3,288
  3,884
  4,538
  5,247
  6,012
  6,831
  7,702
  8,625
  9,598
  10,620
  11,692
  12,812
  13,980
  15,198
  16,465
  17,783
  19,153
  20,577
  22,056
  23,594
  25,192
  26,854
Adjusted assets (=assets-cash), $m
  498
  675
  894
  1,159
  1,475
  1,844
  2,268
  2,749
  3,288
  3,884
  4,538
  5,247
  6,012
  6,831
  7,702
  8,625
  9,598
  10,620
  11,692
  12,812
  13,980
  15,198
  16,465
  17,783
  19,153
  20,577
  22,056
  23,594
  25,192
  26,854
Revenue / Adjusted assets
  0.731
  0.730
  0.730
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
  0.731
Average production assets, $m
  116
  157
  208
  270
  344
  430
  529
  641
  767
  906
  1,058
  1,224
  1,402
  1,593
  1,796
  2,011
  2,238
  2,477
  2,726
  2,988
  3,260
  3,544
  3,839
  4,147
  4,466
  4,798
  5,143
  5,502
  5,875
  6,262
Working capital, $m
  -114
  -155
  -205
  -266
  -339
  -423
  -521
  -631
  -755
  -892
  -1,042
  -1,204
  -1,380
  -1,568
  -1,768
  -1,980
  -2,203
  -2,438
  -2,684
  -2,941
  -3,209
  -3,488
  -3,779
  -4,082
  -4,396
  -4,723
  -5,063
  -5,416
  -5,782
  -6,164
Total debt, $m
  170
  297
  454
  644
  870
  1,134
  1,438
  1,783
  2,168
  2,595
  3,063
  3,571
  4,119
  4,705
  5,329
  5,989
  6,686
  7,418
  8,185
  8,987
  9,824
  10,696
  11,603
  12,547
  13,528
  14,547
  15,606
  16,707
  17,852
  19,041
Total liabilities, $m
  356
  483
  640
  830
  1,056
  1,320
  1,624
  1,969
  2,354
  2,781
  3,249
  3,757
  4,305
  4,891
  5,515
  6,175
  6,872
  7,604
  8,371
  9,173
  10,010
  10,882
  11,789
  12,733
  13,713
  14,733
  15,792
  16,893
  18,038
  19,227
Total equity, $m
  141
  192
  254
  329
  419
  524
  644
  781
  934
  1,103
  1,289
  1,490
  1,707
  1,940
  2,187
  2,449
  2,726
  3,016
  3,320
  3,638
  3,970
  4,316
  4,676
  5,050
  5,439
  5,844
  6,264
  6,701
  7,155
  7,627
Total liabilities and equity, $m
  497
  675
  894
  1,159
  1,475
  1,844
  2,268
  2,750
  3,288
  3,884
  4,538
  5,247
  6,012
  6,831
  7,702
  8,624
  9,598
  10,620
  11,691
  12,811
  13,980
  15,198
  16,465
  17,783
  19,152
  20,577
  22,056
  23,594
  25,193
  26,854
Debt-to-equity ratio
  1.210
  1.550
  1.790
  1.960
  2.080
  2.170
  2.230
  2.280
  2.320
  2.350
  2.380
  2.400
  2.410
  2.430
  2.440
  2.450
  2.450
  2.460
  2.470
  2.470
  2.470
  2.480
  2.480
  2.480
  2.490
  2.490
  2.490
  2.490
  2.500
  2.500
Adjusted equity ratio
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284
  0.284

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  2
  3
  3
  5
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  10
  10
  10
  10
  10
  10
  11
  11
  11
Depreciation, amort., depletion, $m
  25
  33
  43
  56
  70
  87
  107
  130
  155
  183
  212
  245
  280
  319
  359
  402
  448
  495
  545
  598
  652
  709
  768
  829
  893
  960
  1,029
  1,100
  1,175
  1,252
Funds from operations, $m
  19
  28
  39
  53
  69
  87
  108
  131
  157
  186
  217
  251
  287
  326
  367
  411
  456
  504
  555
  607
  662
  719
  778
  839
  903
  970
  1,039
  1,111
  1,186
  1,263
Change in working capital, $m
  -32
  -41
  -50
  -61
  -72
  -85
  -97
  -110
  -124
  -137
  -150
  -163
  -176
  -188
  -200
  -212
  -223
  -235
  -246
  -257
  -268
  -279
  -291
  -303
  -314
  -327
  -340
  -353
  -367
  -381
Cash from operations, $m
  51
  68
  89
  114
  141
  172
  205
  242
  281
  323
  367
  414
  463
  514
  567
  622
  680
  739
  801
  864
  930
  998
  1,069
  1,142
  1,218
  1,297
  1,379
  1,464
  1,552
  1,645
Maintenance CAPEX, $m
  -17
  -23
  -31
  -42
  -54
  -69
  -86
  -106
  -128
  -153
  -181
  -212
  -245
  -280
  -319
  -359
  -402
  -448
  -495
  -545
  -598
  -652
  -709
  -768
  -829
  -893
  -960
  -1,029
  -1,100
  -1,175
New CAPEX, $m
  -33
  -41
  -51
  -62
  -74
  -86
  -99
  -112
  -126
  -139
  -152
  -165
  -178
  -191
  -203
  -215
  -227
  -238
  -250
  -261
  -273
  -284
  -296
  -307
  -319
  -332
  -345
  -359
  -373
  -388
Cash from investing activities, $m
  -50
  -64
  -82
  -104
  -128
  -155
  -185
  -218
  -254
  -292
  -333
  -377
  -423
  -471
  -522
  -574
  -629
  -686
  -745
  -806
  -871
  -936
  -1,005
  -1,075
  -1,148
  -1,225
  -1,305
  -1,388
  -1,473
  -1,563
Free cash flow, $m
  2
  4
  7
  10
  13
  17
  20
  24
  27
  31
  33
  37
  40
  43
  45
  48
  51
  53
  55
  58
  60
  62
  64
  67
  69
  71
  74
  77
  79
  82
Issuance/(repayment) of debt, $m
  100
  127
  157
  190
  226
  264
  304
  345
  386
  427
  468
  508
  548
  586
  624
  661
  697
  732
  767
  802
  837
  872
  907
  944
  981
  1,019
  1,059
  1,101
  1,144
  1,190
Issuance/(repurchase) of shares, $m
  46
  55
  66
  78
  91
  105
  120
  135
  150
  166
  180
  195
  210
  225
  240
  254
  268
  281
  295
  309
  322
  336
  350
  364
  379
  394
  410
  426
  443
  461
Cash from financing (excl. dividends), $m  
  146
  182
  223
  268
  317
  369
  424
  480
  536
  593
  648
  703
  758
  811
  864
  915
  965
  1,013
  1,062
  1,111
  1,159
  1,208
  1,257
  1,308
  1,360
  1,413
  1,469
  1,527
  1,587
  1,651
Total cash flow (excl. dividends), $m
  147
  186
  230
  278
  331
  386
  444
  503
  563
  623
  681
  740
  798
  854
  909
  962
  1,015
  1,066
  1,117
  1,168
  1,219
  1,270
  1,322
  1,375
  1,429
  1,485
  1,543
  1,604
  1,667
  1,733
Retained Cash Flow (-), $m
  -46
  -55
  -66
  -78
  -91
  -105
  -121
  -137
  -153
  -169
  -186
  -202
  -217
  -232
  -247
  -262
  -276
  -290
  -304
  -318
  -332
  -346
  -360
  -374
  -389
  -404
  -420
  -437
  -454
  -472
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
  101
  131
  164
  200
  239
  281
  324
  367
  410
  454
  496
  539
  580
  621
  661
  700
  739
  776
  813
  850
  887
  924
  962
  1,000
  1,040
  1,081
  1,123
  1,167
  1,213
  1,261
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
  97
  120
  142
  165
  186
  204
  219
  229
  236
  238
  235
  230
  221
  209
  194
  178
  161
  143
  125
  108
  92
  77
  63
  51
  40
  32
  24
  18
  13
  9
Current shareholders' claim on cash, %
  95.7
  92.1
  89.0
  86.4
  84.0
  82.0
  80.1
  78.5
  77.0
  75.7
  74.4
  73.3
  72.3
  71.4
  70.5
  69.7
  68.9
  68.2
  67.6
  67.0
  66.4
  65.8
  65.3
  64.8
  64.3
  63.8
  63.4
  63.0
  62.5
  62.1

Mimecast Limited is a provider of cloud security and risk management services for corporate information and e-mail. The Company's suite of cloud services protects customers from the business and data security risks. It also mitigates the business disruption that e-mail failure or downtime causes. In addition, its archiving services secure, store and manage critical corporate communications and information to address the compliance and e-discovery requirements. It has developed its cloud architecture to offer customers e-mail security, continuity and archiving capabilities in a single service. It has developed an operating system (OS) called Mime OS for native cloud services. It protects inbound and outbound e-mail from malware, spam, threats, e-mail denial of service (DoS) and distributed denial of service (DDoS), data leaks and other security threats. It also offers service bundles, and Mimecast mobile and desktop applications.

FINANCIAL RATIOS  of  Mimecast Limited (MIME)

Valuation Ratios
P/E Ratio -490.9
Price to Sales 13.1
Price to Book 29.9
Price to Tangible Book
Price to Cash Flow 74.4
Price to Free Cash Flow 163.6
Growth Rates
Sales Growth Rate 31.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 28.6%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 56
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 2.4%
Interest Coverage 0
Management Effectiveness
Return On Assets -2.6%
Ret/ On Assets - 3 Yr. Avg. -1.2%
Return On Total Capital -5.9%
Ret/ On T. Cap. - 3 Yr. Avg. -3.9%
Return On Equity -6.3%
Return On Equity - 3 Yr. Avg. -4.5%
Asset Turnover 1
Profitability Ratios
Gross Margin 72.7%
Gross Margin - 3 Yr. Avg. 70.4%
EBITDA Margin 4.8%
EBITDA Margin - 3 Yr. Avg. 7.2%
Operating Margin -5.3%
Oper. Margin - 3 Yr. Avg. -3.4%
Pre-Tax Margin -1.6%
Pre-Tax Margin - 3 Yr. Avg. -1%
Net Profit Margin -2.7%
Net Profit Margin - 3 Yr. Avg. -1.6%
Effective Tax Rate -66.7%
Eff/ Tax Rate - 3 Yr. Avg. -38.9%
Payout Ratio 0%

MIME stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MIME stock intrinsic value calculation we used $262 million for the last fiscal year's total revenue generated by Mimecast Limited. The default revenue input number comes from 0001 income statement of Mimecast Limited. 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 MIME stock valuation model: a) initial revenue growth rate of 38.9% 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 MIME is calculated based on our internal credit rating of Mimecast Limited, 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 Mimecast Limited.
    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 MIME stock the variable cost ratio is equal to 95.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $19 million in the base year in the intrinsic value calculation for MIME 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 Mimecast Limited.

Corporate tax rate of 27% is the nominal tax rate for Mimecast Limited. 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 MIME 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 MIME are equal to 31.9%.

Life of production assets of 4.7 years is the average useful life of capital assets used in Mimecast Limited 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 MIME is equal to -31.4%. 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 - $101.692 million for Mimecast Limited - 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 60.369 million for Mimecast Limited 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 Mimecast Limited at the current share price and the inputted number of shares is $2.7 billion.

RELATED COMPANIES Price Int.Val. Rating
CYRN CYREN Ltd. 2.17 0.07  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.