Intrinsic value of Park City Group - PCYG

Previous Close

$8.88

  Intrinsic Value

$5.91

stock screener

  Rating & Target

sell

-33%

Previous close

$8.88

 
Intrinsic value

$5.91

 
Up/down potential

-33%

 
Rating

sell

We calculate the intrinsic value of PCYG 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 0.2

 

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, %
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.49
  5.45
  5.40
  5.36
  5.32
  5.29
Revenue, $m
  21
  23
  26
  28
  31
  33
  36
  39
  42
  45
  48
  52
  55
  59
  62
  66
  70
  75
  79
  84
  88
  94
  99
  104
  110
  116
  122
  129
  136
  143
Variable operating expenses, $m
  8
  8
  9
  9
  10
  11
  11
  12
  13
  14
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
  31
  32
  34
  36
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
  16
  16
  18
  18
  19
  20
  20
  22
  23
  24
  22
  23
  25
  26
  27
  28
  30
  31
  32
  33
  35
  37
  38
  39
  42
  43
  45
  47
  49
  51
Operating income, $m
  5
  7
  8
  10
  12
  14
  15
  17
  19
  22
  26
  28
  31
  33
  36
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  82
  86
  92
EBITDA, $m
  8
  10
  11
  13
  15
  17
  18
  20
  23
  25
  27
  29
  32
  34
  37
  40
  43
  46
  49
  52
  56
  59
  63
  67
  71
  75
  80
  84
  89
  95
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
Earnings before tax, $m
  5
  7
  8
  10
  11
  13
  15
  17
  19
  21
  25
  27
  30
  32
  35
  37
  40
  43
  46
  49
  52
  55
  59
  63
  67
  71
  75
  79
  84
  89
Tax expense, $m
  1
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  9
  9
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  23
  24
Net income, $m
  4
  5
  6
  7
  8
  10
  11
  12
  14
  15
  18
  20
  22
  23
  25
  27
  29
  31
  33
  36
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65

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
  41
  45
  50
  54
  59
  65
  70
  76
  81
  87
  94
  100
  107
  114
  121
  129
  137
  145
  154
  162
  172
  182
  192
  202
  214
  225
  237
  250
  263
  277
Adjusted assets (=assets-cash), $m
  41
  45
  50
  54
  59
  65
  70
  76
  81
  87
  94
  100
  107
  114
  121
  129
  137
  145
  154
  162
  172
  182
  192
  202
  214
  225
  237
  250
  263
  277
Revenue / Adjusted assets
  0.512
  0.511
  0.520
  0.519
  0.525
  0.508
  0.514
  0.513
  0.519
  0.517
  0.511
  0.520
  0.514
  0.518
  0.512
  0.512
  0.511
  0.517
  0.513
  0.519
  0.512
  0.516
  0.516
  0.515
  0.514
  0.516
  0.515
  0.516
  0.517
  0.516
Average production assets, $m
  14
  15
  17
  18
  20
  22
  23
  25
  27
  29
  31
  34
  36
  38
  41
  43
  46
  49
  51
  54
  58
  61
  64
  68
  72
  75
  80
  84
  88
  93
Working capital, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
Total debt, $m
  6
  7
  8
  9
  9
  10
  11
  13
  14
  15
  16
  17
  19
  20
  21
  23
  24
  26
  27
  29
  31
  33
  35
  37
  39
  41
  43
  46
  48
  51
Total liabilities, $m
  8
  9
  10
  10
  11
  12
  13
  14
  16
  17
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  35
  37
  39
  41
  43
  45
  48
  50
  53
Total equity, $m
  33
  37
  40
  44
  48
  52
  57
  61
  66
  71
  76
  81
  86
  92
  98
  104
  111
  117
  124
  131
  139
  147
  155
  164
  173
  182
  192
  202
  213
  224
Total liabilities and equity, $m
  41
  46
  50
  54
  59
  64
  70
  75
  82
  88
  94
  100
  106
  114
  121
  129
  137
  145
  153
  162
  172
  182
  192
  203
  214
  225
  237
  250
  263
  277
Debt-to-equity ratio
  0.180
  0.180
  0.190
  0.190
  0.200
  0.200
  0.200
  0.210
  0.210
  0.210
  0.210
  0.210
  0.210
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.220
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
Adjusted equity ratio
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809
  0.809

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  4
  5
  6
  7
  8
  10
  11
  12
  14
  15
  18
  20
  22
  23
  25
  27
  29
  31
  33
  36
  38
  40
  43
  46
  49
  52
  55
  58
  61
  65
Depreciation, amort., depletion, $m
  3
  3
  3
  3
  3
  3
  3
  3
  3
  3
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
Funds from operations, $m
  6
  7
  9
  10
  11
  12
  14
  15
  17
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
  64
  68
Change in working capital, $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 operations, $m
  6
  8
  9
  10
  11
  13
  14
  15
  17
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  38
  40
  43
  45
  48
  51
  54
  57
  61
  64
  68
Maintenance CAPEX, $m
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
New CAPEX, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
Cash from investing activities, $m
  -1
  -1
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
Free cash flow, $m
  5
  6
  7
  8
  9
  10
  11
  13
  14
  15
  16
  18
  20
  21
  23
  25
  27
  29
  31
  33
  35
  37
  40
  42
  45
  48
  51
  54
  57
  61
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
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  
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
Total cash flow (excl. dividends), $m
  5
  6
  8
  9
  10
  11
  12
  14
  15
  17
  18
  19
  21
  23
  24
  26
  28
  30
  32
  35
  37
  39
  42
  44
  47
  50
  53
  56
  60
  63
Retained Cash Flow (-), $m
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
Prev. year cash balance distribution, $m
  6
  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
  3
  4
  5
  6
  7
  8
  9
  10
  12
  12
  14
  15
  17
  18
  20
  22
  23
  25
  27
  29
  31
  34
  36
  38
  41
  43
  46
  49
  52
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
  3
  3
  4
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  5
  5
  5
  4
  4
  3
  3
  3
  2
  2
  1
  1
  1
  1
  1
  0
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

Park City Group, Inc. is a software-as-a-service (SaaS) provider. The Company delivers its services through software products designed, developed, marketed and supported by the Company. The Company also has a Professional Services business, which conducts customization, implementation and training. The Company has approximately two services groups, such as The Business Analytics Group and The Professional Services Group. The Business Analytics Group offers business-consulting services to suppliers and retailers in the grocery, convenience store and specialty retail industries. The Professional Services Group provides consulting services. The Company's solutions include Advanced Commerce and Supply-Chain Solutions, and Food Safety Solutions. The Company's primary advanced commerce and supply-chain solutions include Scan Based Trading, ScoreTracker, Vendor Managed Inventory, Store Level Replenishment, Enterprise Supply Chain Planning, Fresh Market Manager and ActionManager.

FINANCIAL RATIOS  of  Park City Group (PCYG)

Valuation Ratios
P/E Ratio 43.1
Price to Sales 9.1
Price to Book 4.8
Price to Tangible Book
Price to Cash Flow 86.2
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate 35.7%
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 5
Current Ratio 0
LT Debt to Equity 5.6%
Total Debt to Equity 13.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 9.4%
Ret/ On Assets - 3 Yr. Avg. -1%
Return On Total Capital 10.7%
Ret/ On T. Cap. - 3 Yr. Avg. -1.5%
Return On Equity 11.9%
Return On Equity - 3 Yr. Avg. -1.7%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 73.7%
Gross Margin - 3 Yr. Avg. 67.4%
EBITDA Margin 21.1%
EBITDA Margin - 3 Yr. Avg. 4.6%
Operating Margin 21.1%
Oper. Margin - 3 Yr. Avg. -0.1%
Pre-Tax Margin 21.1%
Pre-Tax Margin - 3 Yr. Avg. -0.1%
Net Profit Margin 21.1%
Net Profit Margin - 3 Yr. Avg. -0.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

PCYG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PCYG stock intrinsic value calculation we used $18.939263 million for the last fiscal year's total revenue generated by Park City Group. The default revenue input number comes from 0001 income statement of Park City 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 PCYG stock valuation model: a) initial revenue growth rate of 11.2% 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 PCYG is calculated based on our internal credit rating of Park City 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 Park City 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 PCYG stock the variable cost ratio is equal to 36.8%.

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 PCYG 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 Park City Group.

Corporate tax rate of 27% is the nominal tax rate for Park City 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 PCYG 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 PCYG are equal to 65.1%.

Life of production assets of 48.3 years is the average useful life of capital assets used in Park City 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 PCYG is equal to -1.8%. 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 - $35.708851 million for Park City 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 19.766 million for Park City 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 Park City Group at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Park City Group: Fiscal 1Q Earnings Snapshot   [06:25PM  Associated Press]
▶ ReposiTrak Exhibiting at 2018 Food Safety Consortium   [Nov-07-18 08:00AM  Business Wire]
▶ ReposiTrak Exhibiting at QCS 2018 Leadership Conference   [Nov-01-18 08:00AM  Business Wire]
▶ Park City Group: Fiscal 4Q Earnings Snapshot   [04:34PM  Associated Press]
▶ Park City Group: Fiscal 3Q Earnings Snapshot   [May-10-18 04:46PM  Associated Press]
▶ Park City Group And Other Top Growth Stocks   [Feb-21-18 11:02AM  Simply Wall St.]
▶ Park City Group posts 2Q profit   [Feb-08-18 05:29PM  Associated Press]
▶ Best Growth Stocks To Buy Now   [Jan-21-18 11:02AM  Simply Wall St.]
▶ Flavor Of The Month: ACM Research And More   [Dec-15-17 11:02AM  Simply Wall St.]
▶ Best-In-Class NasdaqCM Growth Stocks   [Nov-14-17 11:02AM  Simply Wall St.]
▶ Park City Group posts 1Q profit   [Nov-09-17 05:37PM  Associated Press]
▶ Park City Group posts 4Q profit   [Sep-13-17 11:31PM  Associated Press]
▶ 5 E-Commerce Stocks To Watch   [Sep-07-17 10:49AM  Benzinga]

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