Intrinsic value of One Horizon Group - OHGI

Previous Close

$0.18

  Intrinsic Value

$0.01

stock screener

  Rating & Target

str. sell

-95%

Previous close

$0.18

 
Intrinsic value

$0.01

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of OHGI 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
  1
  2
  3
  4
  5
  7
  10
  13
  17
  21
  26
  32
  39
  46
  54
  63
  73
  83
  94
  106
  119
  132
  145
  160
  175
  190
  207
  223
  241
  259
Variable operating expenses, $m
  11
  17
  25
  36
  51
  69
  93
  122
  156
  197
  244
  299
  360
  429
  504
  586
  675
  771
  873
  982
  1,097
  1,217
  1,344
  1,477
  1,616
  1,760
  1,911
  2,067
  2,230
  2,400
Fixed operating expenses, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Total operating expenses, $m
  13
  19
  27
  38
  53
  71
  95
  124
  158
  199
  247
  302
  363
  432
  507
  589
  678
  774
  876
  985
  1,100
  1,220
  1,347
  1,480
  1,619
  1,764
  1,915
  2,071
  2,234
  2,404
Operating income, $m
  -12
  -17
  -24
  -34
  -47
  -64
  -85
  -111
  -142
  -179
  -221
  -269
  -324
  -385
  -452
  -526
  -605
  -691
  -782
  -879
  -981
  -1,089
  -1,202
  -1,321
  -1,444
  -1,573
  -1,708
  -1,848
  -1,993
  -2,144
EBITDA, $m
  -11
  -16
  -23
  -32
  -44
  -60
  -80
  -105
  -134
  -169
  -209
  -255
  -307
  -365
  -428
  -498
  -573
  -654
  -741
  -832
  -929
  -1,031
  -1,139
  -1,251
  -1,368
  -1,490
  -1,617
  -1,750
  -1,887
  -2,030
Interest expense (income), $m
  0
  0
  0
  1
  1
  2
  2
  3
  5
  6
  8
  10
  13
  16
  19
  22
  26
  31
  35
  40
  46
  52
  58
  64
  71
  78
  85
  93
  101
  109
  117
Earnings before tax, $m
  -12
  -18
  -25
  -35
  -49
  -67
  -89
  -116
  -148
  -187
  -231
  -282
  -340
  -404
  -475
  -552
  -636
  -726
  -822
  -925
  -1,033
  -1,147
  -1,266
  -1,391
  -1,522
  -1,658
  -1,800
  -1,948
  -2,102
  -2,261
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
  -12
  -18
  -25
  -35
  -49
  -67
  -89
  -116
  -148
  -187
  -231
  -282
  -340
  -404
  -475
  -552
  -636
  -726
  -822
  -925
  -1,033
  -1,147
  -1,266
  -1,391
  -1,522
  -1,658
  -1,800
  -1,948
  -2,102
  -2,261

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
  10
  15
  23
  33
  46
  63
  85
  112
  144
  182
  226
  276
  333
  396
  466
  542
  624
  712
  807
  907
  1,013
  1,125
  1,242
  1,364
  1,492
  1,626
  1,765
  1,910
  2,060
  2,217
Adjusted assets (=assets-cash), $m
  10
  15
  23
  33
  46
  63
  85
  112
  144
  182
  226
  276
  333
  396
  466
  542
  624
  712
  807
  907
  1,013
  1,125
  1,242
  1,364
  1,492
  1,626
  1,765
  1,910
  2,060
  2,217
Revenue / Adjusted assets
  0.100
  0.133
  0.130
  0.121
  0.109
  0.111
  0.118
  0.116
  0.118
  0.115
  0.115
  0.116
  0.117
  0.116
  0.116
  0.116
  0.117
  0.117
  0.116
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
  0.117
Average production assets, $m
  3
  5
  8
  11
  16
  21
  29
  38
  49
  62
  76
  93
  113
  134
  158
  183
  211
  241
  273
  307
  343
  381
  420
  462
  505
  550
  597
  646
  697
  750
Working capital, $m
  0
  0
  0
  1
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  10
  11
  13
  15
  17
  19
  21
  23
  25
  28
  31
  33
  36
  39
  42
  45
Total debt, $m
  1
  2
  4
  5
  8
  11
  15
  19
  25
  32
  39
  48
  58
  69
  81
  95
  109
  125
  142
  159
  178
  197
  218
  240
  262
  286
  310
  336
  362
  390
Total liabilities, $m
  2
  3
  4
  6
  8
  11
  15
  20
  25
  32
  40
  49
  59
  70
  82
  95
  110
  125
  142
  160
  178
  198
  219
  240
  263
  286
  311
  336
  363
  390
Total equity, $m
  8
  12
  19
  27
  38
  52
  70
  92
  119
  150
  186
  228
  274
  326
  384
  446
  514
  587
  665
  747
  835
  927
  1,023
  1,124
  1,230
  1,340
  1,454
  1,574
  1,698
  1,827
Total liabilities and equity, $m
  10
  15
  23
  33
  46
  63
  85
  112
  144
  182
  226
  277
  333
  396
  466
  541
  624
  712
  807
  907
  1,013
  1,125
  1,242
  1,364
  1,493
  1,626
  1,765
  1,910
  2,061
  2,217
Debt-to-equity ratio
  0.160
  0.180
  0.190
  0.200
  0.200
  0.200
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
Adjusted equity ratio
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824
  0.824

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -12
  -18
  -25
  -35
  -49
  -67
  -89
  -116
  -148
  -187
  -231
  -282
  -340
  -404
  -475
  -552
  -636
  -726
  -822
  -925
  -1,033
  -1,147
  -1,266
  -1,391
  -1,522
  -1,658
  -1,800
  -1,948
  -2,102
  -2,261
Depreciation, amort., depletion, $m
  1
  1
  2
  2
  3
  4
  5
  6
  8
  10
  12
  14
  17
  20
  24
  28
  32
  37
  41
  47
  52
  58
  64
  70
  77
  83
  90
  98
  106
  114
Funds from operations, $m
  -11
  -16
  -23
  -33
  -46
  -63
  -84
  -109
  -140
  -177
  -219
  -268
  -323
  -384
  -451
  -524
  -604
  -690
  -781
  -878
  -981
  -1,089
  -1,203
  -1,321
  -1,446
  -1,575
  -1,710
  -1,850
  -1,996
  -2,148
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
Cash from operations, $m
  -11
  -16
  -24
  -33
  -46
  -63
  -84
  -110
  -141
  -178
  -220
  -269
  -324
  -385
  -452
  -526
  -606
  -691
  -783
  -880
  -983
  -1,091
  -1,205
  -1,324
  -1,448
  -1,578
  -1,713
  -1,853
  -1,999
  -2,151
Maintenance CAPEX, $m
  0
  -1
  -1
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -12
  -14
  -17
  -20
  -24
  -28
  -32
  -37
  -41
  -47
  -52
  -58
  -64
  -70
  -77
  -83
  -90
  -98
  -106
New CAPEX, $m
  0
  -2
  -3
  -3
  -5
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -24
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -41
  -43
  -45
  -47
  -49
  -51
  -53
Cash from investing activities, $m
  0
  -3
  -4
  -4
  -7
  -8
  -10
  -13
  -17
  -20
  -24
  -29
  -33
  -38
  -44
  -50
  -56
  -62
  -69
  -75
  -83
  -90
  -98
  -105
  -113
  -122
  -130
  -139
  -149
  -159
Free cash flow, $m
  -12
  -19
  -27
  -38
  -53
  -71
  -95
  -123
  -158
  -198
  -244
  -297
  -357
  -423
  -496
  -576
  -661
  -753
  -851
  -956
  -1,065
  -1,181
  -1,302
  -1,429
  -1,561
  -1,699
  -1,843
  -1,993
  -2,148
  -2,309
Issuance/(repayment) of debt, $m
  0
  1
  1
  2
  2
  3
  4
  5
  6
  7
  8
  9
  10
  11
  12
  13
  14
  16
  17
  18
  19
  20
  21
  22
  23
  24
  24
  25
  26
  28
Issuance/(repurchase) of shares, $m
  13
  22
  31
  44
  60
  81
  107
  138
  175
  218
  267
  323
  386
  456
  532
  615
  704
  799
  900
  1,007
  1,120
  1,239
  1,363
  1,492
  1,628
  1,768
  1,915
  2,067
  2,226
  2,390
Cash from financing (excl. dividends), $m  
  13
  23
  32
  46
  62
  84
  111
  143
  181
  225
  275
  332
  396
  467
  544
  628
  718
  815
  917
  1,025
  1,139
  1,259
  1,384
  1,514
  1,651
  1,792
  1,939
  2,092
  2,252
  2,418
Total cash flow (excl. dividends), $m
  2
  4
  6
  8
  10
  13
  16
  19
  23
  27
  30
  35
  39
  44
  48
  53
  57
  61
  65
  69
  73
  77
  81
  85
  89
  92
  96
  100
  104
  108
Retained Cash Flow (-), $m
  -13
  -22
  -31
  -44
  -60
  -81
  -107
  -138
  -175
  -218
  -267
  -323
  -386
  -456
  -532
  -615
  -704
  -799
  -900
  -1,007
  -1,120
  -1,239
  -1,363
  -1,492
  -1,628
  -1,768
  -1,915
  -2,067
  -2,226
  -2,390
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
  -12
  -18
  -26
  -36
  -50
  -68
  -91
  -119
  -152
  -191
  -237
  -289
  -347
  -412
  -484
  -562
  -647
  -738
  -835
  -938
  -1,047
  -1,161
  -1,282
  -1,407
  -1,539
  -1,676
  -1,819
  -1,967
  -2,121
  -2,282
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  -11
  -16
  -21
  -28
  -36
  -45
  -54
  -63
  -72
  -81
  -88
  -93
  -96
  -96
  -95
  -91
  -85
  -78
  -70
  -61
  -52
  -43
  -35
  -28
  -21
  -16
  -12
  -8
  -6
  -4
Current shareholders' claim on cash, %
  40.2
  12.8
  4.3
  1.5
  0.5
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

One Horizon Group, Inc. is engaged in the development and licensing of software for mobile voice over Internet protocol (VoIP). The Company's operations include the licensing of software to telecommunications operators and the development of software application platforms that optimize mobile voice, instant messaging and advertising communications over the Internet. It has two business segments, one for business to business line and one for business to consumer line. It designs, develops and sells white label SmartPacket software and services to telecommunications operators. Its licensees deliver an operator-branded mobile Internet communication solution to smartphones, including VoIP, multi-media messaging, video and mobile advertising. It sells its software, branding, hosting and operator services to telecommunications operators, enterprises, operators in fixed line telephony, cable television operators and to the satellite communications sector, and the VoIP as a Service business.

FINANCIAL RATIOS  of  One Horizon Group (OHGI)

Valuation Ratios
P/E Ratio -0.2
Price to Sales 0.6
Price to Book 0.3
Price to Tangible Book
Price to Cash Flow -1.1
Price to Free Cash Flow -1.1
Growth Rates
Sales Growth Rate 0%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -100%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio 0
Current Ratio 0.5
LT Debt to Equity 0%
Total Debt to Equity 75%
Interest Coverage 0
Management Effectiveness
Return On Assets -50%
Ret/ On Assets - 3 Yr. Avg. -30%
Return On Total Capital -66.7%
Ret/ On T. Cap. - 3 Yr. Avg. -38.8%
Return On Equity -100%
Return On Equity - 3 Yr. Avg. -53.4%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 3.3%
EBITDA Margin -200%
EBITDA Margin - 3 Yr. Avg. -133.3%
Operating Margin -200%
Oper. Margin - 3 Yr. Avg. -163.3%
Pre-Tax Margin -300%
Pre-Tax Margin - 3 Yr. Avg. -213.3%
Net Profit Margin -300%
Net Profit Margin - 3 Yr. Avg. -213.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

OHGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the OHGI stock intrinsic value calculation we used $0.714 million for the last fiscal year's total revenue generated by One Horizon Group. The default revenue input number comes from 0001 income statement of One Horizon Group. 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 OHGI 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 5.8%, whose default value for OHGI is calculated based on our internal credit rating of One Horizon Group, 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 One Horizon Group.
    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 OHGI stock the variable cost ratio is equal to 1000%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2 million in the base year in the intrinsic value calculation for OHGI 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 32.4% for One Horizon Group.

Corporate tax rate of 27% is the nominal tax rate for One Horizon Group. 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 OHGI 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 OHGI are equal to 289.2%.

Life of production assets of 6.6 years is the average useful life of capital assets used in One Horizon Group 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 OHGI is equal to 17.5%. 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 - $7.252 million for One Horizon Group - 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 51.347 million for One Horizon Group 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 One Horizon Group at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ One Horizon Group Acquires Intellectual Property Rights   [Oct-09-18 09:09AM  GlobeNewswire]
▶ One Horizon Group to Resolve Litigation with Zhanming Wu   [Sep-28-18 08:19AM  GlobeNewswire]
▶ One Horizon: 2Q Earnings Snapshot   [Aug-17-18 04:15PM  Associated Press]
▶ One Horizon Provides Update on Love Media House   [Jun-28-18 08:30AM  GlobeNewswire]
▶ One Horizon Group Assessing Request for New Directors   [May-22-18 08:30AM  GlobeNewswire]
▶ One Horizon: 1Q Earnings Snapshot   [May-17-18 05:22AM  Associated Press]
▶ One Horizon Group Announces Receipt of NASDAQ Notice   [May-15-18 08:42AM  GlobeNewswire]
▶ One Horizon Subsidiary 123Wish Featured in Forbes Magazine   [Apr-26-18 01:17PM  GlobeNewswire]
▶ One Horizon Group Reports Full Year 2017 Financial Results   [Apr-03-18 11:27AM  GlobeNewswire]
▶ One Horizon Completes Acquisition of C-Rod Companies   [Mar-21-18 08:54AM  GlobeNewswire]
▶ One Horizon Group Announces Acquisition of 123Wish   [Jan-24-18 08:30AM  GlobeNewswire]
▶ One Horizon Group Executes Term Sheet to Acquire 123Wish   [Dec-14-17 09:38AM  GlobeNewswire]
▶ One Horizon reports 1Q loss   [May-15-17 08:04AM  Associated Press]
▶ Three Appealing Micro-Cap Stocks   [Dec-19-16 02:00PM  TheStreet.com]

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