Intrinsic value of Novume Solutions, Inc. - NVMM

Previous Close

$0.69

  Intrinsic Value

$3.27

stock screener

  Rating & Target

str. buy

+376%

Previous close

$0.69

 
Intrinsic value

$3.27

 
Up/down potential

+376%

 
Rating

str. buy

We calculate the intrinsic value of NVMM 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 0.0

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  35
  54
  81
  118
  166
  229
  307
  403
  519
  656
  814
  995
  1,200
  1,428
  1,679
  1,953
  2,249
  2,568
  2,908
  3,270
  3,652
  4,054
  4,477
  4,919
  5,380
  5,862
  6,363
  6,885
  7,427
  7,991
Variable operating expenses, $m
  35
  53
  79
  114
  161
  220
  296
  388
  499
  630
  781
  955
  1,151
  1,369
  1,610
  1,873
  2,157
  2,463
  2,789
  3,136
  3,503
  3,888
  4,294
  4,717
  5,160
  5,622
  6,103
  6,603
  7,124
  7,664
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
  35
  53
  79
  114
  161
  220
  296
  388
  499
  630
  781
  955
  1,151
  1,369
  1,610
  1,873
  2,157
  2,463
  2,789
  3,136
  3,503
  3,888
  4,294
  4,717
  5,160
  5,622
  6,103
  6,603
  7,124
  7,664
Operating income, $m
  1
  1
  2
  4
  6
  8
  12
  16
  20
  26
  33
  41
  49
  58
  69
  80
  92
  105
  119
  134
  149
  166
  183
  201
  220
  240
  260
  282
  304
  327
EBITDA, $m
  2
  3
  5
  7
  10
  13
  18
  23
  30
  38
  47
  58
  69
  83
  97
  113
  130
  148
  168
  189
  211
  234
  259
  284
  311
  339
  368
  398
  429
  462
Interest expense (income), $m
  0
  0
  1
  2
  3
  5
  8
  11
  14
  19
  25
  32
  39
  48
  58
  70
  82
  96
  110
  126
  143
  161
  179
  199
  220
  242
  265
  288
  313
  339
  366
Earnings before tax, $m
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  1
  1
  0
  -1
  -2
  -4
  -5
  -7
  -9
  -11
  -14
  -16
  -19
  -22
  -25
  -28
  -31
  -35
  -39
Tax expense, $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
Net income, $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  0
  -1
  -2
  -4
  -5
  -7
  -9
  -11
  -14
  -16
  -19
  -22
  -25
  -28
  -31
  -35
  -39

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
  33
  51
  76
  110
  156
  214
  288
  378
  486
  614
  762
  932
  1,123
  1,337
  1,572
  1,828
  2,106
  2,404
  2,723
  3,062
  3,419
  3,796
  4,192
  4,606
  5,038
  5,489
  5,958
  6,447
  6,954
  7,482
Adjusted assets (=assets-cash), $m
  33
  51
  76
  110
  156
  214
  288
  378
  486
  614
  762
  932
  1,123
  1,337
  1,572
  1,828
  2,106
  2,404
  2,723
  3,062
  3,419
  3,796
  4,192
  4,606
  5,038
  5,489
  5,958
  6,447
  6,954
  7,482
Revenue / Adjusted assets
  1.061
  1.059
  1.066
  1.073
  1.064
  1.070
  1.066
  1.066
  1.068
  1.068
  1.068
  1.068
  1.069
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
  1.068
Average production assets, $m
  4
  6
  9
  14
  19
  26
  35
  46
  60
  75
  94
  114
  138
  164
  193
  225
  259
  295
  334
  376
  420
  466
  515
  566
  619
  674
  732
  792
  854
  919
Working capital, $m
  5
  7
  11
  16
  23
  31
  42
  55
  71
  89
  111
  135
  163
  194
  228
  266
  306
  349
  396
  445
  497
  551
  609
  669
  732
  797
  865
  936
  1,010
  1,087
Total debt, $m
  14
  26
  43
  67
  98
  138
  188
  249
  323
  411
  512
  628
  759
  905
  1,066
  1,241
  1,431
  1,636
  1,854
  2,085
  2,330
  2,588
  2,858
  3,141
  3,437
  3,745
  4,066
  4,400
  4,748
  5,109
Total liabilities, $m
  23
  35
  52
  76
  107
  147
  197
  258
  332
  420
  521
  638
  768
  914
  1,075
  1,251
  1,440
  1,645
  1,863
  2,094
  2,339
  2,597
  2,867
  3,150
  3,446
  3,754
  4,075
  4,409
  4,757
  5,118
Total equity, $m
  10
  16
  24
  35
  49
  68
  91
  119
  154
  194
  241
  295
  355
  422
  497
  578
  665
  760
  861
  967
  1,081
  1,200
  1,325
  1,455
  1,592
  1,734
  1,883
  2,037
  2,198
  2,364
Total liabilities and equity, $m
  33
  51
  76
  111
  156
  215
  288
  377
  486
  614
  762
  933
  1,123
  1,336
  1,572
  1,829
  2,105
  2,405
  2,724
  3,061
  3,420
  3,797
  4,192
  4,605
  5,038
  5,488
  5,958
  6,446
  6,955
  7,482
Debt-to-equity ratio
  1.300
  1.600
  1.790
  1.910
  1.980
  2.030
  2.070
  2.090
  2.110
  2.120
  2.130
  2.130
  2.140
  2.140
  2.150
  2.150
  2.150
  2.150
  2.150
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
  2.160
Adjusted equity ratio
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316
  0.316

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  0
  -1
  -2
  -4
  -5
  -7
  -9
  -11
  -14
  -16
  -19
  -22
  -25
  -28
  -31
  -35
  -39
Depreciation, amort., depletion, $m
  1
  2
  2
  3
  4
  5
  6
  8
  10
  12
  14
  17
  20
  24
  28
  33
  38
  43
  49
  55
  62
  69
  76
  83
  91
  99
  108
  116
  126
  135
Funds from operations, $m
  2
  2
  3
  3
  4
  5
  7
  9
  11
  13
  15
  18
  21
  24
  27
  31
  34
  38
  42
  46
  51
  55
  60
  64
  69
  74
  80
  85
  91
  96
Change in working capital, $m
  2
  3
  4
  5
  7
  8
  11
  13
  16
  19
  22
  25
  28
  31
  34
  37
  40
  43
  46
  49
  52
  55
  57
  60
  63
  65
  68
  71
  74
  77
Cash from operations, $m
  0
  -1
  -1
  -2
  -2
  -3
  -4
  -5
  -5
  -6
  -7
  -7
  -7
  -7
  -7
  -6
  -6
  -5
  -4
  -3
  -1
  0
  2
  4
  6
  9
  11
  14
  17
  20
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -3
  -4
  -5
  -7
  -9
  -11
  -14
  -17
  -20
  -24
  -28
  -33
  -38
  -43
  -49
  -55
  -62
  -69
  -76
  -83
  -91
  -99
  -108
  -116
  -126
New CAPEX, $m
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -16
  -18
  -21
  -24
  -26
  -29
  -32
  -34
  -37
  -39
  -42
  -44
  -46
  -49
  -51
  -53
  -55
  -58
  -60
  -62
  -65
Cash from investing activities, $m
  -2
  -3
  -4
  -5
  -8
  -10
  -13
  -16
  -20
  -25
  -29
  -35
  -41
  -46
  -53
  -60
  -67
  -75
  -82
  -91
  -99
  -108
  -118
  -127
  -136
  -146
  -157
  -168
  -178
  -191
Free cash flow, $m
  -2
  -3
  -5
  -7
  -10
  -13
  -17
  -21
  -25
  -30
  -36
  -42
  -47
  -53
  -60
  -66
  -73
  -80
  -87
  -94
  -101
  -108
  -115
  -122
  -130
  -138
  -145
  -154
  -162
  -171
Issuance/(repayment) of debt, $m
  8
  12
  17
  23
  31
  40
  50
  62
  74
  87
  102
  116
  131
  146
  161
  175
  190
  204
  218
  232
  245
  258
  270
  283
  296
  308
  321
  334
  347
  361
Issuance/(repurchase) of shares, $m
  4
  5
  8
  10
  14
  18
  22
  28
  33
  40
  46
  53
  60
  67
  75
  83
  91
  99
  108
  116
  124
  133
  141
  150
  158
  167
  176
  186
  195
  205
Cash from financing (excl. dividends), $m  
  12
  17
  25
  33
  45
  58
  72
  90
  107
  127
  148
  169
  191
  213
  236
  258
  281
  303
  326
  348
  369
  391
  411
  433
  454
  475
  497
  520
  542
  566
Total cash flow (excl. dividends), $m
  10
  14
  20
  27
  35
  45
  56
  68
  82
  97
  111
  127
  144
  160
  176
  192
  208
  224
  239
  254
  268
  283
  297
  310
  324
  338
  352
  366
  381
  396
Retained Cash Flow (-), $m
  -4
  -6
  -8
  -11
  -14
  -18
  -23
  -28
  -34
  -40
  -47
  -54
  -60
  -67
  -75
  -83
  -91
  -99
  -108
  -116
  -124
  -133
  -141
  -150
  -158
  -167
  -176
  -186
  -195
  -205
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
  6
  9
  12
  16
  21
  26
  33
  40
  48
  56
  64
  74
  83
  92
  101
  109
  117
  124
  131
  138
  144
  150
  156
  161
  166
  171
  176
  181
  185
  190
Discount rate, %
  6.50
  6.83
  7.17
  7.52
  7.90
  8.30
  8.71
  9.15
  9.60
  10.08
  10.59
  11.12
  11.67
  12.26
  12.87
  13.51
  14.19
  14.90
  15.64
  16.43
  17.25
  18.11
  19.01
  19.96
  20.96
  22.01
  23.11
  24.27
  25.48
  26.75
PV of cash for distribution, $m
  6
  8
  10
  12
  14
  16
  18
  20
  21
  22
  21
  21
  20
  18
  16
  14
  12
  10
  8
  7
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
Current shareholders' claim on cash, %
  77.3
  61.1
  49.2
  40.4
  33.7
  28.5
  24.4
  21.2
  18.6
  16.4
  14.7
  13.2
  12.0
  10.9
  10.0
  9.2
  8.6
  8.0
  7.4
  7.0
  6.5
  6.1
  5.8
  5.5
  5.2
  4.9
  4.7
  4.5
  4.3
  4.1

FINANCIAL RATIOS  of  Novume Solutions, Inc. (NVMM)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

NVMM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NVMM stock intrinsic value calculation we used $22 million for the last fiscal year's total revenue generated by Novume Solutions, Inc.. The default revenue input number comes from 0001 income statement of Novume Solutions, 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 NVMM stock valuation model: a) initial revenue growth rate of 60% 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 6.5%, whose default value for NVMM is calculated based on our internal credit rating of Novume Solutions, 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 Novume Solutions, 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 NVMM stock the variable cost ratio is equal to 100%.

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 NVMM 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 7.7% for Novume Solutions, Inc..

Corporate tax rate of 27% is the nominal tax rate for Novume Solutions, 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 NVMM 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 NVMM are equal to 11.5%.

Life of production assets of 6.8 years is the average useful life of capital assets used in Novume Solutions, 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 NVMM is equal to 13.6%. 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 - $6.510338 million for Novume Solutions, 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 18.764 million for Novume Solutions, 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 Novume Solutions, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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