Intrinsic value of NV5 Global, Inc. - NVEE

Previous Close

$79.09

  Intrinsic Value

$28.66

stock screener

  Rating & Target

str. sell

-64%

Previous close

$79.09

 
Intrinsic value

$28.66

 
Up/down potential

-64%

 
Rating

str. sell

We calculate the intrinsic value of NVEE 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 1.0

 

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, %
  22.70
  20.93
  19.34
  17.90
  16.61
  15.45
  14.41
  13.47
  12.62
  11.86
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.66
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
Revenue, $m
  513
  620
  740
  873
  1,018
  1,175
  1,344
  1,525
  1,718
  1,921
  2,136
  2,361
  2,597
  2,844
  3,102
  3,370
  3,649
  3,939
  4,240
  4,554
  4,880
  5,218
  5,570
  5,936
  6,316
  6,712
  7,125
  7,554
  8,002
  8,469
Variable operating expenses, $m
  454
  543
  644
  755
  876
  1,008
  1,150
  1,301
  1,462
  1,633
  1,789
  1,977
  2,175
  2,382
  2,597
  2,822
  3,055
  3,298
  3,551
  3,813
  4,086
  4,369
  4,664
  4,970
  5,289
  5,621
  5,966
  6,326
  6,701
  7,091
Fixed operating expenses, $m
  8
  8
  9
  9
  9
  9
  9
  10
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  12
  13
  13
  13
  13
  14
  14
  14
  15
  15
  15
Total operating expenses, $m
  462
  551
  653
  764
  885
  1,017
  1,159
  1,311
  1,472
  1,643
  1,799
  1,987
  2,186
  2,393
  2,608
  2,833
  3,067
  3,310
  3,563
  3,825
  4,099
  4,382
  4,677
  4,983
  5,303
  5,635
  5,980
  6,341
  6,716
  7,106
Operating income, $m
  51
  68
  88
  109
  133
  158
  185
  214
  246
  278
  337
  374
  412
  452
  493
  537
  582
  629
  678
  728
  781
  836
  893
  952
  1,014
  1,078
  1,144
  1,214
  1,287
  1,362
EBITDA, $m
  86
  106
  128
  152
  179
  208
  239
  272
  307
  345
  384
  425
  469
  514
  561
  611
  662
  715
  770
  828
  888
  950
  1,015
  1,082
  1,152
  1,225
  1,300
  1,379
  1,462
  1,547
Interest expense (income), $m
  0
  3
  4
  6
  8
  10
  12
  14
  17
  20
  23
  26
  30
  33
  37
  41
  45
  49
  53
  58
  63
  68
  73
  78
  84
  89
  95
  102
  108
  115
  122
Earnings before tax, $m
  49
  64
  82
  102
  123
  146
  171
  197
  226
  255
  311
  344
  379
  415
  453
  492
  533
  575
  620
  666
  713
  763
  815
  868
  924
  982
  1,043
  1,106
  1,172
  1,240
Tax expense, $m
  13
  17
  22
  27
  33
  39
  46
  53
  61
  69
  84
  93
  102
  112
  122
  133
  144
  155
  167
  180
  193
  206
  220
  234
  250
  265
  282
  299
  316
  335
Net income, $m
  35
  47
  60
  74
  90
  107
  125
  144
  165
  187
  227
  251
  277
  303
  330
  359
  389
  420
  452
  486
  521
  557
  595
  634
  675
  717
  761
  807
  855
  905

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
  539
  652
  778
  918
  1,070
  1,235
  1,413
  1,604
  1,806
  2,020
  2,246
  2,483
  2,731
  2,991
  3,261
  3,543
  3,837
  4,142
  4,459
  4,789
  5,131
  5,487
  5,857
  6,242
  6,642
  7,058
  7,492
  7,944
  8,414
  8,905
Adjusted assets (=assets-cash), $m
  539
  652
  778
  918
  1,070
  1,235
  1,413
  1,604
  1,806
  2,020
  2,246
  2,483
  2,731
  2,991
  3,261
  3,543
  3,837
  4,142
  4,459
  4,789
  5,131
  5,487
  5,857
  6,242
  6,642
  7,058
  7,492
  7,944
  8,414
  8,905
Revenue / Adjusted assets
  0.952
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
  0.951
Average production assets, $m
  137
  166
  198
  233
  272
  314
  359
  407
  459
  513
  570
  630
  694
  759
  828
  900
  974
  1,052
  1,132
  1,216
  1,303
  1,393
  1,487
  1,585
  1,686
  1,792
  1,902
  2,017
  2,137
  2,261
Working capital, $m
  109
  131
  157
  185
  216
  249
  285
  323
  364
  407
  453
  501
  551
  603
  658
  714
  774
  835
  899
  965
  1,034
  1,106
  1,181
  1,258
  1,339
  1,423
  1,510
  1,602
  1,696
  1,795
Total debt, $m
  74
  106
  141
  179
  222
  267
  317
  369
  425
  485
  547
  613
  682
  754
  829
  907
  988
  1,072
  1,160
  1,252
  1,346
  1,445
  1,547
  1,654
  1,765
  1,880
  2,000
  2,125
  2,256
  2,392
Total liabilities, $m
  149
  181
  216
  254
  296
  342
  392
  444
  500
  560
  622
  688
  757
  828
  903
  982
  1,063
  1,147
  1,235
  1,326
  1,421
  1,520
  1,622
  1,729
  1,840
  1,955
  2,075
  2,200
  2,331
  2,467
Total equity, $m
  390
  472
  563
  663
  774
  893
  1,022
  1,160
  1,306
  1,461
  1,624
  1,795
  1,975
  2,162
  2,358
  2,562
  2,774
  2,995
  3,224
  3,462
  3,710
  3,967
  4,235
  4,513
  4,802
  5,103
  5,417
  5,743
  6,084
  6,439
Total liabilities and equity, $m
  539
  653
  779
  917
  1,070
  1,235
  1,414
  1,604
  1,806
  2,021
  2,246
  2,483
  2,732
  2,990
  3,261
  3,544
  3,837
  4,142
  4,459
  4,788
  5,131
  5,487
  5,857
  6,242
  6,642
  7,058
  7,492
  7,943
  8,415
  8,906
Debt-to-equity ratio
  0.190
  0.220
  0.250
  0.270
  0.290
  0.300
  0.310
  0.320
  0.330
  0.330
  0.340
  0.340
  0.350
  0.350
  0.350
  0.350
  0.360
  0.360
  0.360
  0.360
  0.360
  0.360
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
  0.370
Adjusted equity ratio
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723
  0.723

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  35
  47
  60
  74
  90
  107
  125
  144
  165
  187
  227
  251
  277
  303
  330
  359
  389
  420
  452
  486
  521
  557
  595
  634
  675
  717
  761
  807
  855
  905
Depreciation, amort., depletion, $m
  35
  38
  40
  43
  46
  50
  54
  57
  62
  66
  47
  52
  57
  62
  68
  74
  80
  86
  93
  100
  107
  114
  122
  130
  138
  147
  156
  165
  175
  185
Funds from operations, $m
  71
  85
  100
  117
  136
  156
  178
  202
  226
  253
  274
  303
  333
  365
  398
  433
  469
  506
  545
  586
  628
  671
  717
  764
  813
  864
  917
  973
  1,031
  1,091
Change in working capital, $m
  20
  23
  25
  28
  31
  33
  36
  38
  41
  43
  46
  48
  50
  52
  55
  57
  59
  62
  64
  66
  69
  72
  75
  78
  81
  84
  87
  91
  95
  99
Cash from operations, $m
  51
  62
  75
  89
  105
  123
  142
  163
  186
  209
  228
  255
  283
  313
  344
  376
  410
  445
  481
  519
  559
  600
  642
  686
  732
  780
  830
  882
  936
  992
Maintenance CAPEX, $m
  -9
  -11
  -14
  -16
  -19
  -22
  -26
  -29
  -33
  -38
  -42
  -47
  -52
  -57
  -62
  -68
  -74
  -80
  -86
  -93
  -100
  -107
  -114
  -122
  -130
  -138
  -147
  -156
  -165
  -175
New CAPEX, $m
  -25
  -29
  -32
  -35
  -39
  -42
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -72
  -74
  -77
  -81
  -84
  -87
  -90
  -94
  -98
  -102
  -106
  -110
  -115
  -120
  -125
Cash from investing activities, $m
  -34
  -40
  -46
  -51
  -58
  -64
  -71
  -77
  -84
  -92
  -99
  -107
  -115
  -123
  -131
  -140
  -148
  -157
  -167
  -177
  -187
  -197
  -208
  -220
  -232
  -244
  -257
  -271
  -285
  -300
Free cash flow, $m
  16
  22
  29
  38
  47
  59
  71
  85
  101
  118
  129
  148
  169
  190
  213
  237
  262
  287
  315
  343
  372
  402
  434
  467
  501
  536
  573
  611
  651
  692
Issuance/(repayment) of debt, $m
  28
  31
  35
  39
  42
  46
  49
  53
  56
  59
  63
  66
  69
  72
  75
  78
  81
  85
  88
  91
  95
  99
  102
  107
  111
  115
  120
  125
  130
  136
Issuance/(repurchase) of shares, $m
  37
  35
  31
  27
  21
  13
  4
  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  
  65
  66
  66
  66
  63
  59
  53
  53
  56
  59
  63
  66
  69
  72
  75
  78
  81
  85
  88
  91
  95
  99
  102
  107
  111
  115
  120
  125
  130
  136
Total cash flow (excl. dividends), $m
  81
  88
  95
  103
  110
  118
  125
  138
  157
  177
  191
  214
  237
  262
  288
  315
  343
  372
  402
  434
  467
  501
  536
  573
  612
  651
  693
  736
  781
  828
Retained Cash Flow (-), $m
  -72
  -82
  -91
  -101
  -110
  -120
  -129
  -138
  -146
  -155
  -163
  -171
  -180
  -188
  -196
  -204
  -212
  -221
  -229
  -238
  -248
  -257
  -267
  -278
  -289
  -301
  -314
  -327
  -340
  -355
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
  8
  6
  4
  2
  0
  -2
  -4
  1
  11
  22
  28
  42
  58
  74
  92
  111
  131
  151
  173
  196
  219
  244
  269
  295
  322
  350
  379
  410
  441
  473
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
  8
  6
  4
  2
  0
  -1
  -3
  0
  6
  12
  13
  18
  22
  25
  27
  28
  28
  28
  27
  25
  23
  20
  18
  15
  13
  10
  8
  6
  5
  4
Current shareholders' claim on cash, %
  96.4
  93.8
  91.8
  90.4
  89.5
  89.1
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9
  88.9

NV5 Global, Inc., formerly NV5 Holdings, Inc., is a holding company. The Company provides professional and technical engineering and consulting solutions to public and private sector clients in the infrastructure, energy, construction, real estate and environmental markets. It focuses on five business verticals: construction quality assurance, infrastructure, energy, program management, and environmental solutions. Its segments include infrastructure, engineering and support services (INF), which provides to clients an array of services in the area of engineering, design and support services, including energy services; construction quality assurance (CQA), which provides construction inspection; geotechnical and engineering services; construction claims and litigation services, and environmental quality testing services, and program management services (PM), which provides program management for transportation and vertical construction projects, including construction management.

FINANCIAL RATIOS  of  NV5 Global, Inc. (NVEE)

Valuation Ratios
P/E Ratio 69.7
Price to Sales 3.7
Price to Book 5.6
Price to Tangible Book
Price to Cash Flow 55.7
Price to Free Cash Flow 59.7
Growth Rates
Sales Growth Rate 44.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 3
Current Ratio 0
LT Debt to Equity 14.9%
Total Debt to Equity 22.3%
Interest Coverage 0
Management Effectiveness
Return On Assets 7.2%
Ret/ On Assets - 3 Yr. Avg. 8.9%
Return On Total Capital 8.8%
Ret/ On T. Cap. - 3 Yr. Avg. 11.2%
Return On Equity 10.5%
Return On Equity - 3 Yr. Avg. 13.2%
Asset Turnover 1.3
Profitability Ratios
Gross Margin 48.2%
Gross Margin - 3 Yr. Avg. 44.8%
EBITDA Margin 10.7%
EBITDA Margin - 3 Yr. Avg. 10.1%
Operating Margin 8%
Oper. Margin - 3 Yr. Avg. 8.2%
Pre-Tax Margin 8%
Pre-Tax Margin - 3 Yr. Avg. 7.9%
Net Profit Margin 5.4%
Net Profit Margin - 3 Yr. Avg. 5%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 36.4%
Payout Ratio 0%

NVEE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVEE stock intrinsic value calculation we used $418 million for the last fiscal year's total revenue generated by NV5 Global, Inc.. The default revenue input number comes from 0001 income statement of NV5 Global, 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 NVEE stock valuation model: a) initial revenue growth rate of 22.7% 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 NVEE is calculated based on our internal credit rating of NV5 Global, 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 NV5 Global, 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 NVEE stock the variable cost ratio is equal to 89.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $8 million in the base year in the intrinsic value calculation for NVEE 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 NV5 Global, Inc..

Corporate tax rate of 27% is the nominal tax rate for NV5 Global, 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 NVEE 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 NVEE are equal to 26.7%.

Life of production assets of 12.2 years is the average useful life of capital assets used in NV5 Global, 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 NVEE is equal to 21.2%. 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 - $317.542 million for NV5 Global, 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 12.551 million for NV5 Global, 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 NV5 Global, Inc. at the current share price and the inputted number of shares is $1.0 billion.

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