Intrinsic value of MiX Telematics Limited - MIXT

Previous Close

$18.19

  Intrinsic Value

$8.32

stock screener

  Rating & Target

str. sell

-54%

Previous close

$18.19

 
Intrinsic value

$8.32

 
Up/down potential

-54%

 
Rating

str. sell

We calculate the intrinsic value of MIXT 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, %
  28.90
  26.51
  24.36
  22.42
  20.68
  19.11
  17.70
  16.43
  15.29
  14.26
  13.33
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
Revenue, $m
  186
  235
  292
  358
  431
  514
  605
  704
  812
  928
  1,051
  1,183
  1,322
  1,468
  1,622
  1,783
  1,951
  2,126
  2,309
  2,499
  2,696
  2,902
  3,115
  3,337
  3,567
  3,807
  4,056
  4,315
  4,585
  4,866
Variable operating expenses, $m
  138
  173
  213
  259
  311
  369
  434
  504
  579
  661
  740
  833
  931
  1,034
  1,142
  1,255
  1,374
  1,497
  1,626
  1,760
  1,899
  2,043
  2,194
  2,350
  2,512
  2,681
  2,856
  3,039
  3,229
  3,426
Fixed operating expenses, $m
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  31
  31
  32
  33
Total operating expenses, $m
  155
  191
  231
  278
  330
  388
  454
  524
  600
  682
  762
  855
  954
  1,057
  1,166
  1,279
  1,399
  1,522
  1,652
  1,786
  1,926
  2,070
  2,222
  2,379
  2,541
  2,711
  2,887
  3,070
  3,261
  3,459
Operating income, $m
  30
  44
  61
  80
  101
  125
  152
  180
  212
  246
  289
  328
  368
  411
  456
  503
  552
  604
  657
  713
  771
  831
  893
  958
  1,026
  1,096
  1,169
  1,245
  1,324
  1,406
EBITDA, $m
  53
  71
  92
  117
  144
  175
  209
  247
  287
  330
  377
  426
  478
  533
  591
  651
  714
  780
  849
  920
  994
  1,072
  1,152
  1,235
  1,322
  1,412
  1,506
  1,603
  1,705
  1,810
Interest expense (income), $m
  0
  1
  7
  14
  22
  32
  43
  55
  68
  83
  98
  115
  133
  152
  173
  194
  216
  240
  264
  290
  317
  344
  373
  403
  434
  466
  500
  535
  571
  609
  648
Earnings before tax, $m
  29
  37
  47
  57
  69
  82
  97
  112
  129
  147
  174
  195
  216
  239
  262
  287
  313
  339
  367
  396
  426
  458
  490
  524
  559
  596
  634
  674
  715
  758
Tax expense, $m
  8
  10
  13
  15
  19
  22
  26
  30
  35
  40
  47
  53
  58
  64
  71
  77
  84
  92
  99
  107
  115
  124
  132
  142
  151
  161
  171
  182
  193
  205
Net income, $m
  21
  27
  34
  42
  50
  60
  71
  82
  94
  108
  127
  142
  158
  174
  191
  209
  228
  248
  268
  289
  311
  334
  358
  383
  408
  435
  463
  492
  522
  553

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
  217
  274
  341
  417
  503
  600
  706
  822
  947
  1,082
  1,227
  1,380
  1,542
  1,713
  1,892
  2,080
  2,276
  2,481
  2,694
  2,916
  3,146
  3,386
  3,635
  3,893
  4,162
  4,442
  4,733
  5,035
  5,350
  5,677
Adjusted assets (=assets-cash), $m
  217
  274
  341
  417
  503
  600
  706
  822
  947
  1,082
  1,227
  1,380
  1,542
  1,713
  1,892
  2,080
  2,276
  2,481
  2,694
  2,916
  3,146
  3,386
  3,635
  3,893
  4,162
  4,442
  4,733
  5,035
  5,350
  5,677
Revenue / Adjusted assets
  0.857
  0.858
  0.856
  0.859
  0.857
  0.857
  0.857
  0.856
  0.857
  0.858
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
  0.857
Average production assets, $m
  77
  97
  121
  148
  179
  213
  251
  292
  337
  385
  436
  491
  549
  609
  673
  740
  810
  882
  958
  1,037
  1,119
  1,204
  1,293
  1,385
  1,480
  1,580
  1,683
  1,791
  1,903
  2,019
Working capital, $m
  2
  2
  3
  4
  4
  5
  6
  7
  8
  9
  11
  12
  13
  15
  16
  18
  20
  21
  23
  25
  27
  29
  31
  33
  36
  38
  41
  43
  46
  49
Total debt, $m
  13
  27
  43
  61
  82
  105
  130
  158
  188
  220
  255
  291
  330
  371
  414
  459
  505
  554
  605
  658
  713
  771
  830
  892
  956
  1,023
  1,092
  1,165
  1,240
  1,318
Total liabilities, $m
  52
  65
  81
  100
  120
  143
  169
  196
  226
  259
  293
  330
  369
  409
  452
  497
  544
  593
  644
  697
  752
  809
  869
  931
  995
  1,062
  1,131
  1,203
  1,279
  1,357
Total equity, $m
  165
  209
  259
  317
  383
  456
  537
  625
  721
  824
  934
  1,050
  1,174
  1,304
  1,440
  1,583
  1,732
  1,888
  2,050
  2,219
  2,394
  2,577
  2,766
  2,963
  3,168
  3,380
  3,601
  3,832
  4,071
  4,320
Total liabilities and equity, $m
  217
  274
  340
  417
  503
  599
  706
  821
  947
  1,083
  1,227
  1,380
  1,543
  1,713
  1,892
  2,080
  2,276
  2,481
  2,694
  2,916
  3,146
  3,386
  3,635
  3,894
  4,163
  4,442
  4,732
  5,035
  5,350
  5,677
Debt-to-equity ratio
  0.080
  0.130
  0.160
  0.190
  0.210
  0.230
  0.240
  0.250
  0.260
  0.270
  0.270
  0.280
  0.280
  0.280
  0.290
  0.290
  0.290
  0.290
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.300
  0.310
Adjusted equity ratio
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761
  0.761

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  21
  27
  34
  42
  50
  60
  71
  82
  94
  108
  127
  142
  158
  174
  191
  209
  228
  248
  268
  289
  311
  334
  358
  383
  408
  435
  463
  492
  522
  553
Depreciation, amort., depletion, $m
  23
  27
  32
  37
  43
  50
  58
  66
  75
  85
  87
  98
  110
  122
  135
  148
  162
  176
  192
  207
  224
  241
  259
  277
  296
  316
  337
  358
  381
  404
Funds from operations, $m
  44
  54
  66
  79
  94
  110
  128
  148
  169
  192
  214
  240
  267
  296
  326
  357
  390
  424
  460
  497
  535
  575
  616
  660
  704
  751
  799
  850
  902
  957
Change in working capital, $m
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
Cash from operations, $m
  44
  54
  65
  78
  93
  110
  128
  147
  168
  191
  213
  239
  266
  295
  325
  356
  388
  422
  458
  495
  533
  573
  614
  657
  702
  749
  797
  847
  900
  954
Maintenance CAPEX, $m
  -12
  -15
  -19
  -24
  -30
  -36
  -43
  -50
  -58
  -67
  -77
  -87
  -98
  -110
  -122
  -135
  -148
  -162
  -176
  -192
  -207
  -224
  -241
  -259
  -277
  -296
  -316
  -337
  -358
  -381
New CAPEX, $m
  -17
  -20
  -24
  -27
  -31
  -34
  -38
  -41
  -45
  -48
  -51
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -99
  -103
  -108
  -112
  -117
Cash from investing activities, $m
  -29
  -35
  -43
  -51
  -61
  -70
  -81
  -91
  -103
  -115
  -128
  -142
  -156
  -171
  -186
  -202
  -218
  -235
  -252
  -271
  -289
  -309
  -330
  -351
  -373
  -395
  -419
  -445
  -470
  -498
Free cash flow, $m
  15
  18
  22
  27
  33
  39
  47
  56
  65
  76
  85
  97
  110
  124
  139
  154
  171
  188
  206
  224
  244
  264
  285
  307
  330
  353
  378
  403
  430
  457
Issuance/(repayment) of debt, $m
  12
  14
  16
  18
  21
  23
  25
  28
  30
  32
  34
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  64
  67
  69
  72
  75
  78
Issuance/(repurchase) of shares, $m
  16
  17
  17
  16
  15
  13
  10
  6
  1
  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  
  28
  31
  33
  34
  36
  36
  35
  34
  31
  32
  34
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  64
  67
  69
  72
  75
  78
Total cash flow (excl. dividends), $m
  42
  48
  55
  62
  69
  76
  83
  90
  96
  108
  119
  134
  149
  165
  182
  199
  218
  237
  257
  277
  299
  321
  344
  369
  394
  420
  447
  475
  505
  536
Retained Cash Flow (-), $m
  -37
  -44
  -51
  -58
  -66
  -73
  -81
  -88
  -96
  -103
  -110
  -117
  -123
  -130
  -136
  -143
  -149
  -156
  -162
  -169
  -175
  -182
  -189
  -197
  -205
  -213
  -221
  -230
  -240
  -249
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
  5
  4
  4
  3
  3
  2
  2
  1
  1
  5
  10
  17
  26
  35
  45
  56
  68
  81
  94
  109
  123
  139
  155
  172
  189
  207
  226
  245
  265
  286
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
  5
  4
  3
  3
  2
  2
  1
  1
  0
  3
  5
  7
  10
  12
  13
  14
  15
  15
  15
  14
  13
  12
  10
  9
  7
  6
  5
  4
  3
  2
Current shareholders' claim on cash, %
  96.4
  93.5
  91.2
  89.5
  88.2
  87.2
  86.7
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3
  86.3

MiX Telematics Limited is a South Africa-based provider of fleet and mobile asset management solutions delivered as Software-as-a-Service (SaaS) to customers. The Company's operating segments include Africa, Europe, Americas, Middle East and Australasia, Brazil and Central Services Organization. The Company's products and services provide enterprise fleets, small fleets and consumers with solutions for safety, risk management and security. The Company's solutions include MiX Fleet Manager, which consists of an on-board computer, an online tracking and information portal, as well as access to fleet and driver reports and analytics; MiX SafeDrive provides In-Vehicle Monitoring Systems (IVMS) that monitor driver performance, identify unsafe behaviors and provide audible alerts; Matrix is focused on personal safety and consumer telematics through vehicle tracking-and-recovery products and services, and Beam-e, which is a wireless device that fits into vehicles, motorbikes or caravan.

FINANCIAL RATIOS  of  MiX Telematics Limited (MIXT)

Valuation Ratios
P/E Ratio 1138.8
Price to Sales 88.4
Price to Book 94
Price to Tangible Book
Price to Cash Flow 427
Price to Free Cash Flow 1024.9
Growth Rates
Sales Growth Rate 4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.7%
Cap. Spend. - 3 Yr. Gr. Rate 18.5%
Financial Strength
Quick Ratio 28
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 5.6%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 7%
Ret/ On T. Cap. - 3 Yr. Avg. 8.3%
Return On Equity 7.1%
Return On Equity - 3 Yr. Avg. 8.4%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 68.1%
Gross Margin - 3 Yr. Avg. 68.4%
EBITDA Margin 18.1%
EBITDA Margin - 3 Yr. Avg. 23.6%
Operating Margin 8.6%
Oper. Margin - 3 Yr. Avg. 9.7%
Pre-Tax Margin 9.5%
Pre-Tax Margin - 3 Yr. Avg. 15.2%
Net Profit Margin 7.8%
Net Profit Margin - 3 Yr. Avg. 10.3%
Effective Tax Rate 18.2%
Eff/ Tax Rate - 3 Yr. Avg. 29.9%
Payout Ratio 44.4%

MIXT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MIXT stock intrinsic value calculation we used $144 million for the last fiscal year's total revenue generated by MiX Telematics Limited. The default revenue input number comes from 0001 income statement of MiX Telematics 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 MIXT stock valuation model: a) initial revenue growth rate of 28.9% 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 MIXT is calculated based on our internal credit rating of MiX Telematics 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 MiX Telematics 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 MIXT stock the variable cost ratio is equal to 75.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17 million in the base year in the intrinsic value calculation for MIXT 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 52.3% for MiX Telematics Limited.

Corporate tax rate of 27% is the nominal tax rate for MiX Telematics 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 MIXT 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 MIXT are equal to 41.5%.

Life of production assets of 0 years is the average useful life of capital assets used in MiX Telematics 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 MIXT is equal to 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 - $127.923355818 million for MiX Telematics 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 22.790 million for MiX Telematics 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 MiX Telematics Limited at the current share price and the inputted number of shares is $0.4 billion.

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