Intrinsic value of Mesa Laboratories, Inc. - MLAB

Previous Close

$226.22

  Intrinsic Value

$66.90

stock screener

  Rating & Target

str. sell

-70%

Previous close

$226.22

 
Intrinsic value

$66.90

 
Up/down potential

-70%

 
Rating

str. sell

We calculate the intrinsic value of MLAB 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 0.9

 

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, %
  12.70
  11.93
  11.24
  10.61
  10.05
  9.55
  9.09
  8.68
  8.31
  7.98
  7.68
  7.42
  7.17
  6.96
  6.76
  6.59
  6.43
  6.28
  6.16
  6.04
  5.94
  5.84
  5.76
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
Revenue, $m
  108
  121
  135
  149
  164
  180
  196
  213
  231
  249
  268
  288
  309
  330
  353
  376
  400
  425
  451
  479
  507
  537
  568
  600
  633
  669
  705
  744
  784
  826
Variable operating expenses, $m
  88
  97
  107
  117
  127
  138
  150
  162
  175
  188
  191
  205
  219
  235
  251
  267
  284
  302
  321
  340
  360
  381
  403
  426
  450
  475
  501
  528
  557
  587
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
  88
  97
  107
  117
  127
  138
  150
  162
  175
  188
  191
  205
  219
  235
  251
  267
  284
  302
  321
  340
  360
  381
  403
  426
  450
  475
  501
  528
  557
  587
Operating income, $m
  21
  24
  28
  32
  37
  41
  46
  51
  56
  61
  78
  83
  89
  96
  102
  109
  116
  123
  131
  139
  147
  155
  164
  174
  183
  194
  204
  215
  227
  239
EBITDA, $m
  38
  42
  47
  52
  57
  63
  68
  74
  80
  87
  93
  100
  108
  115
  123
  131
  139
  148
  157
  167
  177
  187
  198
  209
  221
  233
  246
  259
  273
  288
Interest expense (income), $m
  1
  2
  3
  3
  4
  4
  5
  6
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  15
  16
  17
  19
  20
  21
  22
  23
  25
  26
  28
Earnings before tax, $m
  18
  21
  25
  28
  32
  36
  40
  45
  49
  54
  70
  75
  80
  85
  91
  97
  103
  109
  116
  123
  130
  138
  146
  154
  163
  171
  181
  191
  201
  212
Tax expense, $m
  5
  6
  7
  8
  9
  10
  11
  12
  13
  15
  19
  20
  22
  23
  25
  26
  28
  30
  31
  33
  35
  37
  39
  42
  44
  46
  49
  51
  54
  57
Net income, $m
  13
  16
  18
  21
  24
  26
  29
  33
  36
  39
  51
  54
  58
  62
  66
  71
  75
  80
  85
  90
  95
  101
  106
  112
  119
  125
  132
  139
  147
  154

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
  185
  207
  230
  255
  280
  307
  335
  364
  394
  426
  459
  493
  528
  565
  603
  643
  684
  727
  772
  818
  867
  917
  970
  1,025
  1,083
  1,143
  1,206
  1,271
  1,340
  1,412
Adjusted assets (=assets-cash), $m
  185
  207
  230
  255
  280
  307
  335
  364
  394
  426
  459
  493
  528
  565
  603
  643
  684
  727
  772
  818
  867
  917
  970
  1,025
  1,083
  1,143
  1,206
  1,271
  1,340
  1,412
Revenue / Adjusted assets
  0.584
  0.585
  0.587
  0.584
  0.586
  0.586
  0.585
  0.585
  0.586
  0.585
  0.584
  0.584
  0.585
  0.584
  0.585
  0.585
  0.585
  0.585
  0.584
  0.586
  0.585
  0.586
  0.586
  0.585
  0.584
  0.585
  0.585
  0.585
  0.585
  0.585
Average production assets, $m
  89
  100
  111
  123
  136
  149
  162
  176
  191
  206
  222
  238
  255
  273
  292
  311
  331
  352
  373
  396
  419
  444
  469
  496
  524
  553
  583
  615
  648
  683
Working capital, $m
  12
  14
  15
  17
  19
  20
  22
  24
  26
  28
  30
  33
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
  64
  68
  72
  76
  80
  84
  89
  93
Total debt, $m
  55
  63
  72
  82
  92
  103
  114
  125
  137
  150
  163
  176
  190
  205
  220
  235
  252
  269
  286
  305
  324
  344
  365
  386
  409
  433
  458
  484
  511
  539
Total liabilities, $m
  73
  82
  91
  101
  111
  121
  132
  144
  156
  168
  181
  195
  209
  223
  238
  254
  270
  287
  305
  323
  342
  362
  383
  405
  428
  451
  476
  502
  529
  558
Total equity, $m
  112
  125
  139
  154
  170
  186
  203
  220
  239
  258
  277
  298
  319
  342
  365
  389
  414
  440
  467
  495
  524
  555
  587
  620
  655
  691
  729
  769
  811
  854
Total liabilities and equity, $m
  185
  207
  230
  255
  281
  307
  335
  364
  395
  426
  458
  493
  528
  565
  603
  643
  684
  727
  772
  818
  866
  917
  970
  1,025
  1,083
  1,142
  1,205
  1,271
  1,340
  1,412
Debt-to-equity ratio
  0.490
  0.510
  0.520
  0.530
  0.540
  0.550
  0.560
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
  0.600
  0.610
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.630
  0.630
  0.630
  0.630
  0.630
Adjusted equity ratio
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605
  0.605

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  13
  16
  18
  21
  24
  26
  29
  33
  36
  39
  51
  54
  58
  62
  66
  71
  75
  80
  85
  90
  95
  101
  106
  112
  119
  125
  132
  139
  147
  154
Depreciation, amort., depletion, $m
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  16
  17
  18
  19
  21
  22
  23
  25
  26
  28
  30
  31
  33
  35
  37
  39
  41
  44
  46
  48
Funds from operations, $m
  30
  33
  37
  40
  44
  48
  52
  56
  60
  65
  67
  71
  76
  82
  87
  93
  99
  105
  111
  118
  125
  132
  140
  148
  156
  164
  173
  183
  193
  203
Change in working capital, $m
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
Cash from operations, $m
  29
  32
  35
  39
  42
  46
  50
  54
  58
  63
  64
  69
  74
  79
  85
  90
  96
  102
  108
  115
  122
  129
  136
  144
  152
  160
  169
  178
  188
  198
Maintenance CAPEX, $m
  -6
  -6
  -7
  -8
  -9
  -10
  -11
  -11
  -12
  -14
  -15
  -16
  -17
  -18
  -19
  -21
  -22
  -23
  -25
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -41
  -44
  -46
New CAPEX, $m
  -10
  -11
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -23
  -23
  -24
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
Cash from investing activities, $m
  -16
  -17
  -18
  -20
  -21
  -23
  -25
  -25
  -27
  -29
  -31
  -32
  -34
  -36
  -37
  -40
  -42
  -44
  -47
  -49
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -73
  -77
  -81
Free cash flow, $m
  13
  15
  17
  19
  21
  23
  26
  28
  31
  34
  34
  37
  40
  43
  47
  50
  54
  58
  62
  66
  70
  75
  79
  84
  89
  94
  100
  105
  111
  117
Issuance/(repayment) of debt, $m
  8
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
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  
  8
  9
  9
  10
  10
  11
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
Total cash flow (excl. dividends), $m
  22
  24
  26
  29
  31
  34
  37
  40
  43
  46
  47
  50
  54
  58
  62
  66
  70
  75
  79
  84
  89
  95
  100
  106
  112
  118
  124
  131
  138
  146
Retained Cash Flow (-), $m
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -40
  -42
  -43
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
  9
  10
  12
  14
  16
  18
  20
  22
  25
  27
  27
  30
  33
  36
  39
  42
  45
  49
  52
  56
  60
  64
  68
  72
  77
  82
  86
  91
  97
  102
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
  9
  9
  10
  11
  12
  13
  14
  14
  14
  14
  13
  13
  12
  12
  11
  11
  10
  9
  8
  7
  6
  5
  4
  4
  3
  2
  2
  1
  1
  1
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

Mesa Laboratories, Inc. is focused primarily on quality control products and services. The Company operates through four segments: Instruments, Continuous Monitoring, Biological Indicators and Cold Chain. The Instruments Division designs, manufactures and markets quality control instruments and disposable products. Its Biological Indicators Division provides testing services, along with the manufacturing and marketing of biological indicators and distribution of chemical indicators used to assess the effectiveness of sterilization processes. Its Continuous Monitoring Division designs, develops and markets systems, which are used to monitor various environmental parameters. Its Cold Chain Division provides parameter (primarily temperature) monitoring of products in a cold chain. The Company's brands include DataTrace, DialyGuard, DryCal, Torqo, SureTorque, BGI, Mesa, PCD, Apex, CheckPoint, Mesa and TempTrust.

FINANCIAL RATIOS  of  Mesa Laboratories, Inc. (MLAB)

Valuation Ratios
P/E Ratio 76.7
Price to Sales 9
Price to Book 8.6
Price to Tangible Book
Price to Cash Flow 105.5
Price to Free Cash Flow -211
Growth Rates
Sales Growth Rate 10.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 50%
Cap. Spend. - 3 Yr. Gr. Rate 64.4%
Financial Strength
Quick Ratio 6
Current Ratio 0
LT Debt to Equity 55.1%
Total Debt to Equity 56.1%
Interest Coverage 15
Management Effectiveness
Return On Assets 7.1%
Ret/ On Assets - 3 Yr. Avg. 8.5%
Return On Total Capital 7.8%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 12%
Return On Equity - 3 Yr. Avg. 13.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 56.4%
Gross Margin - 3 Yr. Avg. 59%
EBITDA Margin 25.5%
EBITDA Margin - 3 Yr. Avg. 28.3%
Operating Margin 18.1%
Oper. Margin - 3 Yr. Avg. 20.2%
Pre-Tax Margin 14.9%
Pre-Tax Margin - 3 Yr. Avg. 18.3%
Net Profit Margin 11.7%
Net Profit Margin - 3 Yr. Avg. 12.9%
Effective Tax Rate 21.4%
Eff/ Tax Rate - 3 Yr. Avg. 28.7%
Payout Ratio 18.2%

MLAB stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MLAB stock intrinsic value calculation we used $96 million for the last fiscal year's total revenue generated by Mesa Laboratories, Inc.. The default revenue input number comes from 0001 income statement of Mesa Laboratories, 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 MLAB stock valuation model: a) initial revenue growth rate of 12.7% 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 MLAB is calculated based on our internal credit rating of Mesa Laboratories, 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 Mesa Laboratories, 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 MLAB stock the variable cost ratio is equal to 82.3%.

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 MLAB 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 Mesa Laboratories, Inc..

Corporate tax rate of 27% is the nominal tax rate for Mesa Laboratories, 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 MLAB 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 MLAB are equal to 82.7%.

Life of production assets of 14.1 years is the average useful life of capital assets used in Mesa Laboratories, 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 MLAB is equal to 11.3%. 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 - $99.361 million for Mesa Laboratories, 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 3.869 million for Mesa Laboratories, 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 Mesa Laboratories, Inc. at the current share price and the inputted number of shares is $0.9 billion.

RELATED COMPANIES Price Int.Val. Rating
DHR Danaher Corpor 129.69 98.24  sell
MMM 3M Company 204.66 144.94  sell
AME AMTEK, Inc. 79.41 94.29  hold
PRCP Perceptron, In 7.58 12.26  str.buy
FTV Fortive Corpor 82.23 87.04  hold
EMR Emerson Electr 66.86 77.64  hold
ESE ESCO Technolog 68.76 55.30  sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

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