Intrinsic value of Impinj, Inc. - PI

Previous Close

$17.61

  Intrinsic Value

$0.91

stock screener

  Rating & Target

str. sell

-95%

Previous close

$17.61

 
Intrinsic value

$0.91

 
Up/down potential

-95%

 
Rating

str. sell

We calculate the intrinsic value of PI 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 0.4

 

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, %
  28.90
  26.51
  24.36
  22.42
  20.68
  19.11
  17.70
  16.43
  15.29
  14.26
  13.33
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
Revenue, $m
  159
  201
  249
  305
  369
  439
  517
  602
  694
  792
  898
  1,010
  1,129
  1,254
  1,385
  1,523
  1,666
  1,816
  1,972
  2,134
  2,303
  2,478
  2,661
  2,850
  3,047
  3,252
  3,464
  3,686
  3,916
  4,156
Variable operating expenses, $m
  180
  227
  282
  345
  415
  494
  582
  677
  780
  891
  1,007
  1,133
  1,266
  1,407
  1,554
  1,708
  1,869
  2,037
  2,212
  2,394
  2,583
  2,780
  2,985
  3,197
  3,418
  3,647
  3,886
  4,134
  4,393
  4,662
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
  180
  227
  282
  345
  415
  494
  582
  677
  780
  891
  1,007
  1,133
  1,266
  1,407
  1,554
  1,708
  1,869
  2,037
  2,212
  2,394
  2,583
  2,780
  2,985
  3,197
  3,418
  3,647
  3,886
  4,134
  4,393
  4,662
Operating income, $m
  -21
  -26
  -32
  -39
  -47
  -55
  -65
  -75
  -86
  -98
  -109
  -123
  -137
  -153
  -169
  -185
  -203
  -221
  -240
  -260
  -280
  -302
  -324
  -347
  -371
  -396
  -422
  -449
  -477
  -506
EBITDA, $m
  -14
  -18
  -22
  -27
  -32
  -39
  -45
  -53
  -61
  -70
  -79
  -89
  -99
  -110
  -122
  -134
  -146
  -159
  -173
  -187
  -202
  -217
  -233
  -250
  -267
  -285
  -304
  -323
  -344
  -365
Interest expense (income), $m
  2
  2
  3
  4
  5
  7
  8
  10
  12
  14
  17
  19
  22
  25
  28
  32
  35
  39
  42
  46
  50
  55
  59
  64
  68
  73
  78
  84
  89
  95
  101
Earnings before tax, $m
  -23
  -29
  -36
  -44
  -54
  -64
  -75
  -87
  -101
  -115
  -129
  -145
  -163
  -181
  -200
  -220
  -241
  -263
  -286
  -310
  -335
  -361
  -387
  -415
  -444
  -474
  -506
  -538
  -572
  -607
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
  -23
  -29
  -36
  -44
  -54
  -64
  -75
  -87
  -101
  -115
  -129
  -145
  -163
  -181
  -200
  -220
  -241
  -263
  -286
  -310
  -335
  -361
  -387
  -415
  -444
  -474
  -506
  -538
  -572
  -607

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
  136
  172
  214
  262
  316
  377
  443
  516
  595
  680
  771
  867
  969
  1,076
  1,189
  1,307
  1,430
  1,559
  1,693
  1,832
  1,977
  2,127
  2,284
  2,446
  2,615
  2,791
  2,974
  3,164
  3,361
  3,567
Adjusted assets (=assets-cash), $m
  136
  172
  214
  262
  316
  377
  443
  516
  595
  680
  771
  867
  969
  1,076
  1,189
  1,307
  1,430
  1,559
  1,693
  1,832
  1,977
  2,127
  2,284
  2,446
  2,615
  2,791
  2,974
  3,164
  3,361
  3,567
Revenue / Adjusted assets
  1.169
  1.169
  1.164
  1.164
  1.168
  1.164
  1.167
  1.167
  1.166
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
  1.165
Average production assets, $m
  27
  34
  42
  52
  63
  75
  88
  102
  118
  135
  153
  172
  192
  213
  236
  259
  283
  309
  335
  363
  392
  421
  452
  485
  518
  553
  589
  627
  666
  707
Working capital, $m
  63
  79
  99
  121
  146
  173
  204
  238
  274
  313
  355
  399
  446
  495
  547
  601
  658
  717
  779
  843
  910
  979
  1,051
  1,126
  1,204
  1,284
  1,368
  1,456
  1,547
  1,642
Total debt, $m
  36
  50
  66
  85
  106
  129
  155
  183
  213
  246
  281
  318
  358
  399
  443
  488
  536
  585
  637
  691
  747
  805
  865
  928
  993
  1,061
  1,131
  1,205
  1,281
  1,361
Total liabilities, $m
  53
  66
  83
  101
  122
  145
  171
  199
  230
  263
  298
  335
  374
  416
  459
  505
  552
  602
  653
  707
  763
  821
  882
  944
  1,010
  1,077
  1,148
  1,221
  1,298
  1,377
Total equity, $m
  84
  106
  131
  161
  194
  231
  272
  317
  366
  418
  473
  532
  595
  661
  730
  803
  878
  957
  1,039
  1,125
  1,214
  1,306
  1,402
  1,502
  1,606
  1,714
  1,826
  1,943
  2,064
  2,190
Total liabilities and equity, $m
  137
  172
  214
  262
  316
  376
  443
  516
  596
  681
  771
  867
  969
  1,077
  1,189
  1,308
  1,430
  1,559
  1,692
  1,832
  1,977
  2,127
  2,284
  2,446
  2,616
  2,791
  2,974
  3,164
  3,362
  3,567
Debt-to-equity ratio
  0.430
  0.470
  0.500
  0.530
  0.540
  0.560
  0.570
  0.580
  0.580
  0.590
  0.590
  0.600
  0.600
  0.600
  0.610
  0.610
  0.610
  0.610
  0.610
  0.610
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
  0.620
Adjusted equity ratio
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -23
  -29
  -36
  -44
  -54
  -64
  -75
  -87
  -101
  -115
  -129
  -145
  -163
  -181
  -200
  -220
  -241
  -263
  -286
  -310
  -335
  -361
  -387
  -415
  -444
  -474
  -506
  -538
  -572
  -607
Depreciation, amort., depletion, $m
  7
  9
  10
  12
  15
  17
  20
  22
  26
  29
  31
  34
  38
  43
  47
  52
  57
  62
  67
  73
  78
  84
  90
  97
  104
  111
  118
  125
  133
  141
Funds from operations, $m
  -16
  -20
  -26
  -32
  -39
  -47
  -56
  -65
  -75
  -86
  -98
  -111
  -124
  -138
  -153
  -169
  -185
  -202
  -219
  -238
  -257
  -276
  -297
  -318
  -341
  -364
  -388
  -413
  -439
  -466
Change in working capital, $m
  14
  17
  19
  22
  25
  28
  31
  34
  36
  39
  42
  44
  47
  49
  52
  54
  57
  59
  62
  64
  67
  69
  72
  75
  78
  81
  84
  87
  91
  95
Cash from operations, $m
  -30
  -37
  -45
  -54
  -64
  -75
  -86
  -99
  -112
  -125
  -140
  -155
  -171
  -188
  -205
  -223
  -241
  -261
  -281
  -302
  -323
  -346
  -369
  -393
  -418
  -445
  -472
  -500
  -530
  -561
Maintenance CAPEX, $m
  -4
  -5
  -7
  -8
  -10
  -13
  -15
  -18
  -20
  -24
  -27
  -31
  -34
  -38
  -43
  -47
  -52
  -57
  -62
  -67
  -73
  -78
  -84
  -90
  -97
  -104
  -111
  -118
  -125
  -133
New CAPEX, $m
  -6
  -7
  -8
  -10
  -11
  -12
  -13
  -14
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
Cash from investing activities, $m
  -10
  -12
  -15
  -18
  -21
  -25
  -28
  -32
  -36
  -41
  -45
  -50
  -54
  -59
  -65
  -70
  -76
  -82
  -89
  -95
  -102
  -108
  -115
  -122
  -130
  -139
  -147
  -156
  -164
  -174
Free cash flow, $m
  -40
  -50
  -60
  -72
  -85
  -99
  -114
  -131
  -148
  -166
  -185
  -205
  -226
  -247
  -270
  -293
  -318
  -343
  -369
  -396
  -425
  -454
  -484
  -516
  -549
  -583
  -619
  -656
  -694
  -735
Issuance/(repayment) of debt, $m
  12
  14
  16
  19
  21
  23
  26
  28
  30
  33
  35
  37
  39
  41
  43
  46
  48
  50
  52
  54
  56
  58
  60
  63
  65
  68
  71
  73
  76
  79
Issuance/(repurchase) of shares, $m
  42
  51
  62
  74
  87
  101
  116
  132
  149
  167
  184
  204
  225
  247
  269
  293
  317
  342
  369
  396
  424
  453
  484
  515
  548
  582
  618
  655
  693
  734
Cash from financing (excl. dividends), $m  
  54
  65
  78
  93
  108
  124
  142
  160
  179
  200
  219
  241
  264
  288
  312
  339
  365
  392
  421
  450
  480
  511
  544
  578
  613
  650
  689
  728
  769
  813
Total cash flow (excl. dividends), $m
  14
  16
  18
  20
  23
  25
  27
  30
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  51
  53
  55
  57
  60
  62
  64
  67
  70
  72
  75
  79
Retained Cash Flow (-), $m
  -42
  -51
  -62
  -74
  -87
  -101
  -116
  -132
  -149
  -167
  -184
  -204
  -225
  -247
  -269
  -293
  -317
  -342
  -369
  -396
  -424
  -453
  -484
  -515
  -548
  -582
  -618
  -655
  -693
  -734
Prev. year cash balance distribution, $m
  33
  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
  5
  -36
  -44
  -54
  -64
  -76
  -89
  -102
  -117
  -133
  -150
  -168
  -186
  -206
  -226
  -248
  -270
  -293
  -317
  -343
  -369
  -396
  -424
  -453
  -484
  -515
  -548
  -582
  -618
  -655
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
  5
  -33
  -38
  -44
  -50
  -55
  -60
  -64
  -67
  -70
  -71
  -72
  -71
  -69
  -66
  -63
  -59
  -54
  -49
  -44
  -38
  -33
  -28
  -23
  -19
  -15
  -12
  -9
  -7
  -5
Current shareholders' claim on cash, %
  85.7
  73.9
  64.2
  56.0
  49.2
  43.3
  38.4
  34.1
  30.4
  27.2
  24.4
  21.9
  19.8
  17.9
  16.2
  14.6
  13.3
  12.1
  11.0
  10.0
  9.1
  8.3
  7.6
  6.9
  6.3
  5.8
  5.3
  4.8
  4.4
  4.1

Impinj, Inc. is a provider of RAIN radio frequency identification (RFID) solutions. The Company sells a platform that includes endpoint integrated circuits (ICs), reader ICs, readers and gateways that enable wireless connectivity to everyday items, and software that delivers Item Intelligence from endpoint reads. The Impinj Platform connects billions of everyday items, such as apparel, medical supplies, automobile parts, drivers' licenses, food and luggage to applications, such as inventory management, patient safety, asset tracking and item authentication, delivering real-time information to businesses about items they create, manage, transport and sell. The Impinj Platform wirelessly delivers information about these items' identity, location and authenticity, or Item Intelligence, to the digital world.

FINANCIAL RATIOS  of  Impinj, Inc. (PI)

Valuation Ratios
P/E Ratio -179.1
Price to Sales 3.2
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow -35.8
Price to Free Cash Flow -25.6
Growth Rates
Sales Growth Rate 43.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -42.9%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 25
Current Ratio 0
LT Debt to Equity 8.9%
Total Debt to Equity 12.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital -2.3%
Ret/ On T. Cap. - 3 Yr. Avg. 0.5%
Return On Equity -2.9%
Return On Equity - 3 Yr. Avg. 1.9%
Asset Turnover 1
Profitability Ratios
Gross Margin 52.7%
Gross Margin - 3 Yr. Avg. 52.8%
EBITDA Margin 2.7%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin -0.9%
Oper. Margin - 3 Yr. Avg. 0.7%
Pre-Tax Margin -1.8%
Pre-Tax Margin - 3 Yr. Avg. -0.2%
Net Profit Margin -1.8%
Net Profit Margin - 3 Yr. Avg. -0.2%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

PI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PI stock intrinsic value calculation we used $123 million for the last fiscal year's total revenue generated by Impinj, Inc.. The default revenue input number comes from 0001 income statement of Impinj, 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 PI stock valuation model: a) initial revenue growth rate of 28.9% 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 PI is calculated based on our internal credit rating of Impinj, 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 Impinj, 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 PI stock the variable cost ratio is equal to 113.8%.

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 PI 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 7.9% for Impinj, Inc..

Corporate tax rate of 27% is the nominal tax rate for Impinj, 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 PI 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 PI are equal to 17%.

Life of production assets of 5 years is the average useful life of capital assets used in Impinj, 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 PI is equal to 39.5%. 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 - $97.883 million for Impinj, 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 21.494 million for Impinj, 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 Impinj, Inc. at the current share price and the inputted number of shares is $0.4 billion.

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