Intrinsic value of Plexus Corp. - PLXS

Previous Close

$61.05

  Intrinsic Value

$27.05

stock screener

  Rating & Target

str. sell

-56%

Previous close

$61.05

 
Intrinsic value

$27.05

 
Up/down potential

-56%

 
Rating

str. sell

We calculate the intrinsic value of PLXS 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 1.9

 

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, %
  13.00
  12.20
  11.48
  10.83
  10.25
  9.72
  9.25
  8.83
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
  5.52
  5.47
  5.42
  5.38
Revenue, $m
  3,248
  3,644
  4,062
  4,502
  4,964
  5,446
  5,950
  6,475
  7,022
  7,591
  8,182
  8,797
  9,435
  10,099
  10,788
  11,506
  12,251
  13,027
  13,835
  14,677
  15,553
  16,467
  17,420
  18,415
  19,453
  20,537
  21,670
  22,854
  24,093
  25,388
Variable operating expenses, $m
  3,082
  3,458
  3,855
  4,272
  4,710
  5,168
  5,646
  6,144
  6,663
  7,202
  7,762
  8,345
  8,951
  9,581
  10,235
  10,916
  11,623
  12,359
  13,126
  13,924
  14,756
  15,623
  16,527
  17,470
  18,455
  19,484
  20,559
  21,683
  22,857
  24,086
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
  3,082
  3,458
  3,855
  4,272
  4,710
  5,168
  5,646
  6,144
  6,663
  7,202
  7,762
  8,345
  8,951
  9,581
  10,235
  10,916
  11,623
  12,359
  13,126
  13,924
  14,756
  15,623
  16,527
  17,470
  18,455
  19,484
  20,559
  21,683
  22,857
  24,086
Operating income, $m
  166
  186
  207
  230
  254
  278
  304
  331
  359
  388
  420
  451
  484
  518
  553
  590
  628
  668
  709
  753
  798
  844
  893
  944
  998
  1,053
  1,111
  1,172
  1,235
  1,302
EBITDA, $m
  221
  248
  276
  306
  337
  370
  404
  440
  477
  516
  556
  598
  641
  686
  733
  782
  832
  885
  940
  997
  1,057
  1,119
  1,184
  1,251
  1,322
  1,395
  1,472
  1,553
  1,637
  1,725
Interest expense (income), $m
  14
  10
  17
  25
  33
  41
  50
  59
  69
  79
  89
  100
  111
  123
  135
  147
  160
  174
  188
  203
  218
  234
  251
  268
  286
  305
  325
  346
  367
  390
  413
Earnings before tax, $m
  156
  169
  183
  197
  213
  229
  245
  263
  281
  300
  320
  340
  361
  383
  406
  430
  454
  480
  506
  534
  563
  593
  625
  658
  692
  728
  766
  805
  846
  889
Tax expense, $m
  42
  46
  49
  53
  57
  62
  66
  71
  76
  81
  86
  92
  98
  103
  110
  116
  123
  130
  137
  144
  152
  160
  169
  178
  187
  197
  207
  217
  228
  240
Net income, $m
  114
  123
  133
  144
  155
  167
  179
  192
  205
  219
  233
  248
  264
  280
  296
  314
  332
  350
  370
  390
  411
  433
  456
  480
  505
  532
  559
  588
  617
  649

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
  2,184
  2,450
  2,732
  3,028
  3,338
  3,663
  4,001
  4,355
  4,722
  5,105
  5,502
  5,916
  6,345
  6,791
  7,255
  7,737
  8,239
  8,761
  9,304
  9,870
  10,459
  11,074
  11,715
  12,384
  13,082
  13,811
  14,573
  15,370
  16,202
  17,074
Adjusted assets (=assets-cash), $m
  2,184
  2,450
  2,732
  3,028
  3,338
  3,663
  4,001
  4,355
  4,722
  5,105
  5,502
  5,916
  6,345
  6,791
  7,255
  7,737
  8,239
  8,761
  9,304
  9,870
  10,459
  11,074
  11,715
  12,384
  13,082
  13,811
  14,573
  15,370
  16,202
  17,074
Revenue / Adjusted assets
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
  1.487
Average production assets, $m
  373
  419
  467
  518
  571
  626
  684
  745
  808
  873
  941
  1,012
  1,085
  1,161
  1,241
  1,323
  1,409
  1,498
  1,591
  1,688
  1,789
  1,894
  2,003
  2,118
  2,237
  2,362
  2,492
  2,628
  2,771
  2,920
Working capital, $m
  552
  619
  691
  765
  844
  926
  1,012
  1,101
  1,194
  1,290
  1,391
  1,495
  1,604
  1,717
  1,834
  1,956
  2,083
  2,215
  2,352
  2,495
  2,644
  2,799
  2,961
  3,130
  3,307
  3,491
  3,684
  3,885
  4,096
  4,316
Total debt, $m
  319
  459
  606
  761
  923
  1,093
  1,270
  1,455
  1,647
  1,847
  2,055
  2,271
  2,496
  2,729
  2,972
  3,224
  3,486
  3,759
  4,043
  4,339
  4,647
  4,969
  5,304
  5,654
  6,019
  6,400
  6,799
  7,215
  7,651
  8,107
Total liabilities, $m
  1,142
  1,282
  1,429
  1,583
  1,746
  1,916
  2,093
  2,277
  2,470
  2,670
  2,878
  3,094
  3,318
  3,552
  3,794
  4,047
  4,309
  4,582
  4,866
  5,162
  5,470
  5,792
  6,127
  6,477
  6,842
  7,223
  7,622
  8,038
  8,474
  8,929
Total equity, $m
  1,042
  1,169
  1,303
  1,444
  1,592
  1,747
  1,909
  2,077
  2,253
  2,435
  2,625
  2,822
  3,027
  3,239
  3,461
  3,691
  3,930
  4,179
  4,438
  4,708
  4,989
  5,282
  5,588
  5,907
  6,240
  6,588
  6,951
  7,331
  7,729
  8,144
Total liabilities and equity, $m
  2,184
  2,451
  2,732
  3,027
  3,338
  3,663
  4,002
  4,354
  4,723
  5,105
  5,503
  5,916
  6,345
  6,791
  7,255
  7,738
  8,239
  8,761
  9,304
  9,870
  10,459
  11,074
  11,715
  12,384
  13,082
  13,811
  14,573
  15,369
  16,203
  17,073
Debt-to-equity ratio
  0.310
  0.390
  0.460
  0.530
  0.580
  0.630
  0.670
  0.700
  0.730
  0.760
  0.780
  0.800
  0.820
  0.840
  0.860
  0.870
  0.890
  0.900
  0.910
  0.920
  0.930
  0.940
  0.950
  0.960
  0.960
  0.970
  0.980
  0.980
  0.990
  1.000
Adjusted equity ratio
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477
  0.477

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  114
  123
  133
  144
  155
  167
  179
  192
  205
  219
  233
  248
  264
  280
  296
  314
  332
  350
  370
  390
  411
  433
  456
  480
  505
  532
  559
  588
  617
  649
Depreciation, amort., depletion, $m
  55
  62
  69
  76
  84
  92
  100
  109
  118
  127
  136
  147
  157
  168
  180
  192
  204
  217
  231
  245
  259
  274
  290
  307
  324
  342
  361
  381
  402
  423
Funds from operations, $m
  168
  185
  202
  220
  239
  258
  279
  300
  323
  346
  370
  395
  421
  448
  476
  505
  536
  567
  600
  635
  670
  708
  747
  787
  830
  874
  920
  968
  1,019
  1,072
Change in working capital, $m
  64
  67
  71
  75
  78
  82
  86
  89
  93
  97
  101
  104
  109
  113
  117
  122
  127
  132
  137
  143
  149
  155
  162
  169
  177
  184
  193
  201
  211
  220
Cash from operations, $m
  105
  117
  131
  145
  160
  176
  193
  211
  230
  249
  269
  290
  312
  335
  359
  383
  409
  435
  463
  492
  521
  552
  585
  618
  653
  689
  727
  767
  808
  852
Maintenance CAPEX, $m
  -48
  -54
  -61
  -68
  -75
  -83
  -91
  -99
  -108
  -117
  -127
  -136
  -147
  -157
  -168
  -180
  -192
  -204
  -217
  -231
  -245
  -259
  -274
  -290
  -307
  -324
  -342
  -361
  -381
  -402
New CAPEX, $m
  -43
  -46
  -48
  -51
  -53
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -73
  -76
  -79
  -82
  -86
  -89
  -93
  -97
  -101
  -105
  -110
  -114
  -119
  -125
  -130
  -136
  -142
  -149
Cash from investing activities, $m
  -91
  -100
  -109
  -119
  -128
  -139
  -149
  -159
  -171
  -182
  -195
  -207
  -220
  -233
  -247
  -262
  -278
  -293
  -310
  -328
  -346
  -364
  -384
  -404
  -426
  -449
  -472
  -497
  -523
  -551
Free cash flow, $m
  14
  18
  22
  27
  32
  38
  45
  52
  59
  67
  75
  83
  92
  102
  111
  121
  131
  142
  153
  164
  176
  188
  200
  213
  227
  241
  255
  270
  285
  301
Issuance/(repayment) of debt, $m
  131
  139
  147
  155
  162
  170
  177
  185
  192
  200
  208
  216
  225
  233
  243
  252
  262
  273
  284
  296
  308
  321
  335
  350
  365
  381
  398
  417
  436
  456
Issuance/(repurchase) of shares, $m
  7
  4
  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
Cash from financing (excl. dividends), $m  
  138
  143
  148
  155
  162
  170
  177
  185
  192
  200
  208
  216
  225
  233
  243
  252
  262
  273
  284
  296
  308
  321
  335
  350
  365
  381
  398
  417
  436
  456
Total cash flow (excl. dividends), $m
  152
  161
  170
  182
  195
  208
  222
  236
  251
  267
  283
  300
  317
  335
  354
  373
  394
  415
  437
  460
  484
  509
  536
  563
  592
  622
  653
  686
  721
  757
Retained Cash Flow (-), $m
  -121
  -127
  -134
  -141
  -148
  -155
  -162
  -168
  -175
  -182
  -190
  -197
  -205
  -213
  -221
  -230
  -239
  -249
  -259
  -270
  -281
  -293
  -306
  -319
  -333
  -348
  -363
  -380
  -397
  -416
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
  31
  34
  36
  40
  46
  53
  60
  68
  76
  84
  93
  102
  112
  122
  133
  143
  154
  166
  178
  190
  203
  216
  230
  244
  259
  274
  290
  306
  323
  341
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
  30
  31
  31
  33
  36
  39
  41
  42
  44
  44
  44
  44
  43
  41
  39
  36
  34
  31
  27
  24
  21
  18
  15
  12
  10
  8
  6
  5
  4
  3
Current shareholders' claim on cash, %
  99.6
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4
  99.4

Plexus Corp. (Plexus) and its subsidiaries are engaged in the electronic manufacturing services (EMS) industry. The Company delivers end-to-end solutions for customers in the Americas (AMER), Europe, Middle East, and Africa (EMEA) and Asia-Pacific (APAC) regions. The Company's segments are AMER, APAC and EMEA. The Company's customer-focused solutions model integrates product conceptualization, design, commercialization, manufacturing, fulfillment and sustaining solutions. The Company delivers solutions to its customers through its product realization value stream. The Company provides a range of aftermarket services, including complex repair, refurbishment and product support for products it manufactures. The Company provides customer service to approximately 140 branded product companies in the healthcare/life sciences, industrial/commercial, networking/communications and defense/security/aerospace market sectors.

FINANCIAL RATIOS  of  Plexus Corp. (PLXS)

Valuation Ratios
P/E Ratio 18.2
Price to Sales 0.8
Price to Book 2
Price to Tangible Book
Price to Cash Flow 11.9
Price to Free Cash Flow 15.4
Growth Rates
Sales Growth Rate -1.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 25.8%
Cap. Spend. - 3 Yr. Gr. Rate -9.7%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 2.5%
Total Debt to Equity 30.5%
Interest Coverage 10
Management Effectiveness
Return On Assets 6.7%
Ret/ On Assets - 3 Yr. Avg. 6.1%
Return On Total Capital 8.9%
Ret/ On T. Cap. - 3 Yr. Avg. 8.1%
Return On Equity 11.5%
Return On Equity - 3 Yr. Avg. 10.6%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 10.1%
Gross Margin - 3 Yr. Avg. 9.4%
EBITDA Margin 7.2%
EBITDA Margin - 3 Yr. Avg. 6.4%
Operating Margin 5.1%
Oper. Margin - 3 Yr. Avg. 4.4%
Pre-Tax Margin 4.8%
Pre-Tax Margin - 3 Yr. Avg. 4.1%
Net Profit Margin 4.4%
Net Profit Margin - 3 Yr. Avg. 3.6%
Effective Tax Rate 8.2%
Eff/ Tax Rate - 3 Yr. Avg. 10.7%
Payout Ratio 0%

PLXS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PLXS stock intrinsic value calculation we used $2874 million for the last fiscal year's total revenue generated by Plexus Corp.. The default revenue input number comes from 0001 income statement of Plexus Corp.. 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 PLXS stock valuation model: a) initial revenue growth rate of 13% 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 PLXS is calculated based on our internal credit rating of Plexus Corp., 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 Plexus Corp..
    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 PLXS stock the variable cost ratio is equal to 94.9%.

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 PLXS 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 Plexus Corp..

Corporate tax rate of 27% is the nominal tax rate for Plexus Corp.. 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 PLXS 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 PLXS are equal to 11.5%.

Life of production assets of 6.9 years is the average useful life of capital assets used in Plexus Corp. 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 PLXS is equal to 17%. 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 - $921.143 million for Plexus Corp. - 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 30.872 million for Plexus Corp. 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 Plexus Corp. at the current share price and the inputted number of shares is $1.9 billion.

RELATED COMPANIES Price Int.Val. Rating
SANM Sanmina Corpor 32.18 66.66  str.buy
JBL Jabil Inc. 31.14 177.49  str.buy
BHE Benchmark Elec 29.55 11.47  str.sell
CLS Celestica, Inc 8.75 13.43  str.buy
FLEX Flex Ltd. 11.21 17.19  str.buy
SMTX SMTC Corporati 3.48 100.40  str.buy
SGMA SigmaTron Inte 2.75 3.29  hold
KE Kimball Electr 16.04 5.81  str.sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.