Intrinsic value of Perceptron, Inc. - PRCP

Previous Close

$7.58

  Intrinsic Value

$12.26

stock screener

  Rating & Target

str. buy

+62%

Previous close

$7.58

 
Intrinsic value

$12.26

 
Up/down potential

+62%

 
Rating

str. buy

We calculate the intrinsic value of PRCP 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 0.1

 

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, %
  5.50
  5.45
  5.40
  5.36
  5.33
  5.30
  5.27
  5.24
  5.22
  5.19
  5.17
  5.16
  5.14
  5.13
  5.11
  5.10
  5.09
  5.08
  5.08
  5.07
  5.06
  5.05
  5.05
  5.04
  5.04
  5.04
  5.03
  5.03
  5.03
  5.02
Revenue, $m
  90
  95
  100
  105
  111
  116
  123
  129
  136
  143
  150
  158
  166
  175
  184
  193
  203
  213
  224
  235
  247
  260
  273
  286
  301
  316
  332
  349
  366
  384
Variable operating expenses, $m
  46
  49
  51
  54
  57
  60
  63
  66
  70
  73
  76
  80
  84
  88
  92
  97
  102
  107
  113
  118
  124
  131
  137
  144
  152
  159
  167
  176
  184
  194
Fixed operating expenses, $m
  38
  39
  39
  40
  41
  42
  43
  44
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  70
  71
Total operating expenses, $m
  84
  88
  90
  94
  98
  102
  106
  110
  115
  119
  123
  128
  133
  138
  143
  149
  156
  162
  169
  175
  182
  191
  198
  206
  216
  224
  234
  244
  254
  265
Operating income, $m
  5
  7
  9
  11
  12
  14
  17
  19
  21
  24
  28
  30
  33
  36
  40
  43
  47
  51
  55
  59
  64
  69
  74
  80
  85
  92
  98
  105
  112
  120
EBITDA, $m
  8
  10
  12
  14
  16
  18
  20
  22
  25
  27
  30
  33
  36
  40
  43
  47
  51
  55
  59
  64
  69
  74
  79
  85
  91
  97
  104
  111
  119
  127
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  11
  11
  12
  13
  14
  15
  16
  17
  18
Earnings before tax, $m
  5
  7
  8
  10
  11
  13
  14
  16
  18
  20
  24
  26
  29
  31
  34
  37
  40
  43
  47
  50
  54
  58
  63
  67
  72
  78
  83
  89
  95
  101
Tax expense, $m
  1
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  15
  16
  17
  18
  20
  21
  22
  24
  26
  27
Net income, $m
  4
  5
  6
  7
  8
  9
  11
  12
  13
  15
  17
  19
  21
  23
  25
  27
  29
  32
  34
  37
  40
  43
  46
  49
  53
  57
  61
  65
  69
  74

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
  78
  83
  87
  92
  97
  102
  107
  113
  119
  125
  131
  138
  145
  152
  160
  168
  177
  186
  195
  205
  216
  227
  238
  250
  263
  276
  290
  304
  320
  336
Adjusted assets (=assets-cash), $m
  78
  83
  87
  92
  97
  102
  107
  113
  119
  125
  131
  138
  145
  152
  160
  168
  177
  186
  195
  205
  216
  227
  238
  250
  263
  276
  290
  304
  320
  336
Revenue / Adjusted assets
  1.154
  1.145
  1.149
  1.141
  1.144
  1.137
  1.150
  1.142
  1.143
  1.144
  1.145
  1.145
  1.145
  1.151
  1.150
  1.149
  1.147
  1.145
  1.149
  1.146
  1.144
  1.145
  1.147
  1.144
  1.144
  1.145
  1.145
  1.148
  1.144
  1.143
Average production assets, $m
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  36
  38
  39
  41
  44
  46
  48
  50
  53
  56
  58
Working capital, $m
  23
  24
  25
  27
  28
  30
  31
  33
  35
  36
  38
  40
  42
  45
  47
  49
  52
  54
  57
  60
  63
  66
  70
  73
  77
  81
  85
  89
  93
  98
Total debt, $m
  2
  3
  5
  7
  9
  11
  13
  15
  17
  20
  22
  25
  28
  30
  33
  37
  40
  43
  47
  51
  55
  59
  63
  68
  73
  78
  83
  89
  95
  101
Total liabilities, $m
  30
  32
  34
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
  75
  79
  83
  87
  92
  97
  101
  107
  112
  118
  123
  130
Total equity, $m
  48
  51
  53
  56
  59
  62
  66
  69
  73
  77
  81
  85
  89
  94
  98
  103
  109
  114
  120
  126
  132
  139
  146
  154
  161
  169
  178
  187
  196
  206
Total liabilities and equity, $m
  78
  83
  87
  91
  96
  101
  107
  112
  119
  125
  132
  138
  145
  153
  160
  168
  177
  186
  195
  205
  215
  226
  238
  251
  262
  276
  290
  305
  319
  336
Debt-to-equity ratio
  0.040
  0.070
  0.100
  0.120
  0.150
  0.170
  0.200
  0.220
  0.240
  0.260
  0.280
  0.290
  0.310
  0.320
  0.340
  0.350
  0.370
  0.380
  0.390
  0.400
  0.410
  0.420
  0.430
  0.440
  0.450
  0.460
  0.470
  0.480
  0.480
  0.490
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
  4
  5
  6
  7
  8
  9
  11
  12
  13
  15
  17
  19
  21
  23
  25
  27
  29
  32
  34
  37
  40
  43
  46
  49
  53
  57
  61
  65
  69
  74
Depreciation, amort., depletion, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
Funds from operations, $m
  7
  8
  9
  10
  11
  13
  14
  15
  17
  19
  20
  22
  24
  26
  28
  30
  33
  35
  38
  41
  44
  47
  51
  54
  58
  62
  67
  71
  76
  81
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
Cash from operations, $m
  6
  7
  8
  9
  10
  11
  12
  14
  15
  17
  18
  20
  22
  24
  26
  28
  30
  33
  35
  38
  41
  44
  48
  51
  55
  59
  63
  67
  72
  76
Maintenance CAPEX, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
New CAPEX, $m
  -1
  -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
  -3
  -3
Cash from investing activities, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
Free cash flow, $m
  3
  4
  5
  6
  7
  8
  9
  11
  12
  13
  14
  16
  18
  19
  21
  23
  25
  28
  30
  32
  35
  38
  41
  44
  47
  51
  54
  58
  62
  67
Issuance/(repayment) of debt, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
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  
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
Total cash flow (excl. dividends), $m
  5
  6
  7
  8
  9
  10
  11
  13
  14
  16
  17
  19
  20
  22
  24
  26
  29
  31
  34
  36
  39
  42
  45
  49
  52
  56
  60
  64
  68
  73
Retained Cash Flow (-), $m
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
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
  2
  3
  4
  5
  6
  7
  8
  9
  11
  12
  13
  14
  16
  18
  19
  21
  23
  26
  28
  30
  33
  35
  38
  41
  44
  48
  51
  55
  59
  63
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
  2
  3
  4
  4
  5
  5
  6
  6
  6
  6
  6
  6
  6
  6
  6
  5
  5
  5
  4
  4
  3
  3
  3
  2
  2
  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

Perceptron, Inc. develops, produces and sells a range of automated industrial metrology products and solutions to manufacturing organizations for dimensional gauging, dimensional inspection and three-dimensional (3D) scanning. The Company's products include 3D machine vision solutions, robot guidance, coordinate measuring machines (CMMs), laser scanning and advanced analysis software. The Company's products are categorized as In-Line, Near-Line and Off-Line Measurement Solutions (Measurement Solutions); 3D Scanning Solutions, and Value Added Services. Its In-Line and Near-Line measurement solutions include AutoGauge, AutoFit, AutoScan, AutoGuide and Helix. Its Off-Line measurement solutions include Coord3 and TouchDMIS. Its 3D Scanning Solutions include ScanWorks, ScanR and WheelWorks. Its Value Added Services include training, field service, calibration, launch support services, maintenance agreements and repairs. The Company operates in the Americas, Europe and Asia.

FINANCIAL RATIOS  of  Perceptron, Inc. (PRCP)

Valuation Ratios
P/E Ratio 0
Price to Sales 0.9
Price to Book 1.8
Price to Tangible Book
Price to Cash Flow -17.9
Price to Free Cash Flow -14.3
Growth Rates
Sales Growth Rate 13%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -50%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio 3
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 5%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. -9%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. -14.7%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. -14.7%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 35.9%
Gross Margin - 3 Yr. Avg. 34.7%
EBITDA Margin 3.8%
EBITDA Margin - 3 Yr. Avg. -2.1%
Operating Margin 2.6%
Oper. Margin - 3 Yr. Avg. -4%
Pre-Tax Margin 1.3%
Pre-Tax Margin - 3 Yr. Avg. -4.4%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. -10.6%
Effective Tax Rate 100%
Eff/ Tax Rate - 3 Yr. Avg. 18.5%
Payout Ratio 0%

PRCP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PRCP stock intrinsic value calculation we used $85 million for the last fiscal year's total revenue generated by Perceptron, Inc.. The default revenue input number comes from 0001 income statement of Perceptron, 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 PRCP stock valuation model: a) initial revenue growth rate of 5.5% 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 PRCP is calculated based on our internal credit rating of Perceptron, 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 Perceptron, 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 PRCP stock the variable cost ratio is equal to 51.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $37 million in the base year in the intrinsic value calculation for PRCP 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 19.3% for Perceptron, Inc..

Corporate tax rate of 27% is the nominal tax rate for Perceptron, 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 PRCP 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 PRCP are equal to 15.2%.

Life of production assets of 8.3 years is the average useful life of capital assets used in Perceptron, 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 PRCP is equal to 25.5%. 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 - $45.598 million for Perceptron, 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 9.618 million for Perceptron, 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 Perceptron, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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