Intrinsic value of Command Security - MOC

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$3.13

  Intrinsic Value

$3.03

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  Rating & Target

hold

-3%

Previous close

$3.13

 
Intrinsic value

$3.03

 
Up/down potential

-3%

 
Rating

hold

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of MOC 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Command Security (MOC) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  21.80
  19.00
  17.60
  16.34
  15.21
  14.19
  13.27
  12.44
  11.70
  11.03
  10.42
  9.88
  9.39
  8.95
  8.56
  8.20
  7.88
  7.59
  7.33
  7.10
  6.89
  6.70
  6.53
  6.38
  6.24
  6.12
  6.01
  5.90
  5.81
  5.73
  5.66
Revenue, $m
  162
  193
  227
  264
  304
  347
  393
  442
  494
  548
  605
  665
  727
  792
  860
  931
  1,004
  1,081
  1,160
  1,242
  1,328
  1,417
  1,509
  1,606
  1,706
  1,810
  1,919
  2,032
  2,150
  2,273
  2,402
Variable operating expenses, $m
 
  180
  211
  246
  283
  323
  366
  412
  460
  511
  564
  620
  678
  739
  802
  868
  936
  1,007
  1,081
  1,158
  1,237
  1,320
  1,407
  1,496
  1,590
  1,687
  1,788
  1,894
  2,004
  2,119
  2,239
Fixed operating expenses, $m
 
  13
  14
  14
  14
  15
  15
  15
  16
  16
  17
  17
  17
  18
  18
  19
  19
  20
  20
  21
  21
  22
  22
  23
  24
  24
  25
  25
  26
  27
  27
Total operating expenses, $m
  164
  193
  225
  260
  297
  338
  381
  427
  476
  527
  581
  637
  695
  757
  820
  887
  955
  1,027
  1,101
  1,179
  1,258
  1,342
  1,429
  1,519
  1,614
  1,711
  1,813
  1,919
  2,030
  2,146
  2,266
Operating income, $m
  -2
  0
  2
  4
  6
  9
  12
  15
  18
  21
  25
  28
  32
  36
  40
  44
  49
  54
  59
  64
  69
  75
  80
  86
  92
  99
  106
  113
  120
  128
  136
EBITDA, $m
  -2
  0
  2
  4
  6
  9
  12
  15
  18
  21
  25
  29
  32
  36
  41
  45
  50
  54
  59
  64
  70
  75
  81
  87
  94
  100
  107
  114
  122
  129
  138
Interest expense (income), $m
  0
  0
  1
  1
  1
  1
  1
  2
  2
  2
  3
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  11
  11
  12
Earnings before tax, $m
  -2
  -1
  1
  3
  5
  8
  10
  13
  16
  19
  22
  25
  29
  32
  36
  40
  44
  49
  53
  58
  63
  68
  73
  79
  84
  90
  96
  103
  110
  117
  124
Tax expense, $m
  0
  0
  0
  1
  1
  2
  3
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  16
  17
  18
  20
  21
  23
  24
  26
  28
  30
  32
  34
Net income, $m
  -2
  -1
  1
  2
  4
  6
  7
  9
  12
  14
  16
  18
  21
  24
  27
  29
  32
  36
  39
  42
  46
  49
  53
  57
  62
  66
  70
  75
  80
  85
  91

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1
  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
  42
  49
  57
  67
  77
  88
  99
  112
  125
  139
  153
  168
  184
  201
  218
  236
  254
  273
  294
  314
  336
  359
  382
  406
  432
  458
  486
  514
  544
  575
  608
Adjusted assets (=assets-cash), $m
  41
  49
  57
  67
  77
  88
  99
  112
  125
  139
  153
  168
  184
  201
  218
  236
  254
  273
  294
  314
  336
  359
  382
  406
  432
  458
  486
  514
  544
  575
  608
Revenue / Adjusted assets
  3.951
  3.939
  3.982
  3.940
  3.948
  3.943
  3.970
  3.946
  3.952
  3.942
  3.954
  3.958
  3.951
  3.940
  3.945
  3.945
  3.953
  3.960
  3.946
  3.955
  3.952
  3.947
  3.950
  3.956
  3.949
  3.952
  3.949
  3.953
  3.952
  3.953
  3.951
Average production assets, $m
  1
  1
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  4
  5
  5
  6
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
Working capital, $m
  9
  25
  29
  34
  40
  45
  51
  57
  64
  71
  79
  86
  95
  103
  112
  121
  131
  140
  151
  161
  173
  184
  196
  209
  222
  235
  249
  264
  280
  296
  312
Total debt, $m
  13
  17
  22
  28
  34
  41
  48
  55
  63
  72
  80
  90
  99
  109
  120
  131
  142
  154
  166
  179
  192
  206
  220
  235
  250
  266
  283
  301
  319
  338
  358
Total liabilities, $m
  26
  30
  35
  41
  47
  54
  61
  68
  76
  85
  93
  103
  112
  122
  133
  144
  155
  167
  179
  192
  205
  219
  233
  248
  263
  279
  296
  314
  332
  351
  371
Total equity, $m
  16
  19
  22
  26
  30
  34
  39
  44
  49
  54
  60
  66
  72
  78
  85
  92
  99
  107
  114
  123
  131
  140
  149
  158
  168
  179
  189
  201
  212
  224
  237
Total liabilities and equity, $m
  42
  49
  57
  67
  77
  88
  100
  112
  125
  139
  153
  169
  184
  200
  218
  236
  254
  274
  293
  315
  336
  359
  382
  406
  431
  458
  485
  515
  544
  575
  608
Debt-to-equity ratio
  0.813
  0.880
  0.980
  1.060
  1.130
  1.180
  1.230
  1.270
  1.300
  1.320
  1.350
  1.370
  1.380
  1.400
  1.410
  1.420
  1.430
  1.440
  1.450
  1.460
  1.460
  1.470
  1.480
  1.480
  1.490
  1.490
  1.500
  1.500
  1.500
  1.510
  1.510
Adjusted equity ratio
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390
  0.390

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -2
  -1
  1
  2
  4
  6
  7
  9
  12
  14
  16
  18
  21
  24
  27
  29
  32
  36
  39
  42
  46
  49
  53
  57
  62
  66
  70
  75
  80
  85
  91
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Funds from operations, $m
  -12
  -1
  1
  2
  4
  6
  8
  10
  12
  14
  16
  19
  21
  24
  27
  30
  33
  36
  40
  43
  47
  50
  54
  58
  63
  67
  72
  76
  81
  87
  92
Change in working capital, $m
  -6
  4
  4
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
Cash from operations, $m
  -6
  -5
  -3
  -2
  -1
  0
  2
  3
  5
  7
  9
  11
  13
  16
  18
  21
  23
  26
  29
  32
  35
  39
  42
  46
  50
  53
  57
  62
  66
  71
  75
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
New CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from investing activities, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
Free cash flow, $m
  -6
  -5
  -4
  -3
  -2
  0
  1
  3
  5
  6
  8
  10
  13
  15
  17
  20
  22
  25
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
  64
  69
  73
Issuance/(repayment) of debt, $m
  5
  5
  5
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
Issuance/(repurchase) of shares, $m
  0
  4
  2
  1
  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  
  5
  9
  7
  7
  6
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
Total cash flow (excl. dividends), $m
  0
  4
  4
  4
  5
  6
  8
  10
  13
  15
  17
  20
  22
  25
  28
  31
  34
  37
  40
  44
  47
  51
  55
  59
  63
  68
  72
  77
  82
  88
  93
Retained Cash Flow (-), $m
  2
  -4
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
  -12
  -13
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
 
  0
  1
  1
  1
  2
  4
  6
  7
  9
  12
  14
  16
  19
  21
  24
  27
  29
  33
  36
  39
  42
  46
  50
  54
  58
  62
  66
  71
  75
  80
Discount rate, %
 
  9.00
  9.45
  9.92
  10.42
  10.94
  11.49
  12.06
  12.66
  13.30
  13.96
  14.66
  15.39
  16.16
  16.97
  17.82
  18.71
  19.65
  20.63
  21.66
  22.74
  23.88
  25.07
  26.33
  27.64
  29.03
  30.48
  32.00
  33.60
  35.28
  37.05
PV of cash for distribution, $m
 
  0
  1
  1
  1
  1
  2
  2
  3
  3
  3
  3
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  89.3
  83.5
  81.0
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9
  80.9

Command Security Corporation is a security services company. The Company provides uniformed security officers and aviation security services to commercial, financial, industrial, aviation and Governmental customers throughout the United States. The Company provides security services to its customers through Command Security, its security division, and aviation security services through its Aviation Safeguards division. The Company's security services division provides security services to Governmental, quasi-Governmental and financial institutions, healthcare facilities, colleges and universities, residential communities, commercial real estate, industrial, distribution, logistics and retail customers. The Company's Aviation Safeguards provides aviation security services and passenger assistance services to over 50 domestic and international airlines, airports, airport authorities and the general aviation community at approximately nine international airports.

FINANCIAL RATIOS  of  Command Security (MOC)

Valuation Ratios
P/E Ratio -15.4
Price to Sales 0.2
Price to Book 1.9
Price to Tangible Book
Price to Cash Flow -5.1
Price to Free Cash Flow -5.1
Growth Rates
Sales Growth Rate 21.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 81.3%
Interest Coverage 0
Management Effectiveness
Return On Assets -5.1%
Ret/ On Assets - 3 Yr. Avg. -3.6%
Return On Total Capital -7.4%
Ret/ On T. Cap. - 3 Yr. Avg. -5.1%
Return On Equity -11.8%
Return On Equity - 3 Yr. Avg. -7.4%
Asset Turnover 4.2
Profitability Ratios
Gross Margin 11.1%
Gross Margin - 3 Yr. Avg. 12%
EBITDA Margin -1.2%
EBITDA Margin - 3 Yr. Avg. -0.4%
Operating Margin -1.2%
Oper. Margin - 3 Yr. Avg. -0.9%
Pre-Tax Margin -1.2%
Pre-Tax Margin - 3 Yr. Avg. -0.9%
Net Profit Margin -1.2%
Net Profit Margin - 3 Yr. Avg. -0.9%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 25%
Payout Ratio 0%

MOC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the MOC stock intrinsic value calculation we used $162 million for the last fiscal year's total revenue generated by Command Security. The default revenue input number comes from 2017 income statement of Command Security. 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 MOC stock valuation model: a) initial revenue growth rate of 19% 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 9%, whose default value for MOC is calculated based on our internal credit rating of Command Security, 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 Command Security.
    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 MOC stock the variable cost ratio is equal to 93.2%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $13 million in the base year in the intrinsic value calculation for MOC 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 3.5% for Command Security.

Corporate tax rate of 27% is the nominal tax rate for Command Security. 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 MOC 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 MOC are equal to 0.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Command Security 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 MOC is equal to 13%. 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 - $16 million for Command Security - 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 9.752 million for Command Security 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 Command Security at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Command Security Corporation Announces $50M Contract Award   [May-16-17 08:00AM  GlobeNewswire]
▶ Command Security Corporation Announces $80M Contract Award   [May-02-17 08:00AM  GlobeNewswire]
▶ Here's Why Command Security (MOC) Stock Gained 29% Today   [Jun-06-16 04:51PM  TheStreet.com]
▶ Heres Why These Five Stocks Are Surging Today   [11:21AM  Insider Monkey]
▶ Heres Why These Five Stocks Are Surging Today   [11:21AM  at Insider Monkey]
▶ 10-Q for Command Security Corp.   [Aug-09  08:13PM  at Company Spotlight]
▶ JFK, La Guardia Airport Workers Call Off Job Action   [01:39PM  at The Wall Street Journal]
▶ Airport Workers to go on Strike at LGA and JFK   [10:22AM  at Fox Business]
▶ 10-K for Command Security Corp.   [Jun-28  08:09PM  at Company Spotlight]
▶ 10-Q for Command Security Corp.   [Feb-19  07:07PM  Company Spotlight]
▶ 10-Q for Command Security Corp.   [Nov-14  07:09PM  Company Spotlight]
▶ COMMAND SECURITY CORP Files SEC form 10-K, Annual Report   [Jun-16  04:32PM  EDGAR Online]
▶ TASER Gets $5.8M Foreign Orders   [Dec-11  04:20PM  Zacks]
Financial statements of MOC
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