Intrinsic value of U.S. Auto Parts Network, Inc. - PRTS

Previous Close

$1.03

  Intrinsic Value

$0.28

stock screener

  Rating & Target

str. sell

-73%

Previous close

$1.03

 
Intrinsic value

$0.28

 
Up/down potential

-73%

 
Rating

str. sell

We calculate the intrinsic value of PRTS 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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  295
  302
  309
  318
  328
  338
  350
  362
  376
  390
  405
  422
  439
  458
  478
  499
  521
  544
  569
  595
  623
  652
  683
  715
  749
  785
  823
  862
  904
  948
Variable operating expenses, $m
  88
  90
  92
  95
  98
  101
  104
  108
  112
  116
  121
  126
  131
  137
  142
  149
  155
  162
  170
  177
  186
  194
  203
  213
  223
  234
  245
  257
  269
  283
Fixed operating expenses, $m
  219
  224
  228
  233
  239
  244
  249
  255
  260
  266
  272
  278
  284
  290
  297
  303
  310
  317
  324
  331
  338
  345
  353
  361
  369
  377
  385
  394
  402
  411
Total operating expenses, $m
  307
  314
  320
  328
  337
  345
  353
  363
  372
  382
  393
  404
  415
  427
  439
  452
  465
  479
  494
  508
  524
  539
  556
  574
  592
  611
  630
  651
  671
  694
Operating income, $m
  -12
  -12
  -11
  -10
  -9
  -6
  -4
  0
  3
  8
  13
  18
  25
  31
  39
  47
  56
  66
  76
  87
  99
  112
  126
  141
  157
  174
  192
  212
  232
  254
EBITDA, $m
  -9
  -9
  -8
  -7
  -5
  -3
  0
  3
  7
  12
  17
  23
  29
  36
  44
  52
  61
  71
  82
  93
  106
  119
  133
  149
  165
  182
  201
  221
  242
  264
Interest expense (income), $m
  1
  2
  2
  2
  2
  3
  3
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  10
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  21
  23
Earnings before tax, $m
  -13
  -14
  -13
  -12
  -11
  -9
  -7
  -4
  -1
  3
  8
  13
  18
  25
  31
  39
  47
  56
  66
  76
  87
  99
  112
  126
  141
  157
  174
  192
  211
  232
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  2
  3
  5
  7
  8
  11
  13
  15
  18
  21
  24
  27
  30
  34
  38
  42
  47
  52
  57
  63
Net income, $m
  -13
  -14
  -13
  -12
  -11
  -9
  -7
  -4
  -1
  2
  6
  9
  13
  18
  23
  28
  34
  41
  48
  55
  64
  72
  82
  92
  103
  114
  127
  140
  154
  169

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
  100
  102
  105
  108
  111
  115
  119
  123
  127
  132
  137
  143
  149
  155
  162
  169
  177
  185
  193
  202
  211
  221
  231
  242
  254
  266
  279
  292
  306
  321
Adjusted assets (=assets-cash), $m
  100
  102
  105
  108
  111
  115
  119
  123
  127
  132
  137
  143
  149
  155
  162
  169
  177
  185
  193
  202
  211
  221
  231
  242
  254
  266
  279
  292
  306
  321
Revenue / Adjusted assets
  2.950
  2.961
  2.943
  2.944
  2.955
  2.939
  2.941
  2.943
  2.961
  2.955
  2.956
  2.951
  2.946
  2.955
  2.951
  2.953
  2.944
  2.941
  2.948
  2.946
  2.953
  2.950
  2.957
  2.955
  2.949
  2.951
  2.950
  2.952
  2.954
  2.953
Average production assets, $m
  15
  16
  16
  17
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  36
  37
  39
  41
  43
  45
  47
  49
Working capital, $m
  9
  9
  10
  10
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
  24
  26
  27
  28
  29
Total debt, $m
  10
  12
  13
  15
  17
  19
  22
  24
  27
  30
  33
  36
  40
  44
  48
  52
  57
  61
  67
  72
  78
  84
  90
  96
  103
  111
  118
  127
  135
  144
Total liabilities, $m
  60
  62
  63
  65
  67
  69
  72
  74
  77
  80
  83
  86
  90
  94
  98
  102
  107
  111
  117
  122
  128
  133
  140
  146
  153
  161
  168
  177
  185
  194
Total equity, $m
  40
  40
  42
  43
  44
  45
  47
  49
  50
  52
  54
  57
  59
  61
  64
  67
  70
  73
  76
  80
  84
  88
  92
  96
  101
  105
  110
  116
  121
  127
Total liabilities and equity, $m
  100
  102
  105
  108
  111
  114
  119
  123
  127
  132
  137
  143
  149
  155
  162
  169
  177
  184
  193
  202
  212
  221
  232
  242
  254
  266
  278
  293
  306
  321
Debt-to-equity ratio
  0.260
  0.290
  0.320
  0.350
  0.390
  0.420
  0.460
  0.500
  0.530
  0.570
  0.610
  0.640
  0.680
  0.710
  0.750
  0.780
  0.810
  0.840
  0.870
  0.900
  0.930
  0.950
  0.980
  1.000
  1.030
  1.050
  1.070
  1.090
  1.110
  1.130
Adjusted equity ratio
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396
  0.396

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -13
  -14
  -13
  -12
  -11
  -9
  -7
  -4
  -1
  2
  6
  9
  13
  18
  23
  28
  34
  41
  48
  55
  64
  72
  82
  92
  103
  114
  127
  140
  154
  169
Depreciation, amort., depletion, $m
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
Funds from operations, $m
  -10
  -10
  -10
  -9
  -8
  -6
  -3
  0
  3
  6
  10
  14
  18
  23
  28
  34
  40
  47
  54
  62
  70
  79
  89
  99
  111
  123
  135
  149
  163
  179
Change in working capital, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
  1
Cash from operations, $m
  -10
  -11
  -10
  -9
  -8
  -6
  -4
  -1
  3
  6
  9
  13
  17
  22
  27
  33
  39
  46
  53
  61
  69
  78
  88
  98
  110
  121
  134
  148
  162
  178
Maintenance CAPEX, $m
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
New CAPEX, $m
  0
  0
  0
  0
  -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
Cash from investing activities, $m
  -3
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -11
Free cash flow, $m
  -14
  -14
  -14
  -13
  -12
  -10
  -8
  -5
  -2
  1
  5
  8
  12
  17
  22
  27
  33
  39
  46
  54
  62
  70
  80
  90
  100
  112
  124
  137
  151
  166
Issuance/(repayment) of debt, $m
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
Issuance/(repurchase) of shares, $m
  14
  14
  14
  14
  12
  11
  8
  6
  2
  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  
  15
  15
  16
  16
  14
  13
  10
  9
  5
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
Total cash flow (excl. dividends), $m
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  8
  11
  16
  20
  26
  31
  37
  44
  51
  59
  67
  76
  86
  96
  107
  119
  132
  145
  160
  175
Retained Cash Flow (-), $m
  -14
  -14
  -14
  -14
  -12
  -11
  -8
  -6
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
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
  -13
  -12
  -11
  -10
  -8
  -5
  -2
  1
  2
  6
  9
  13
  18
  23
  28
  34
  41
  48
  55
  64
  72
  82
  92
  103
  114
  127
  140
  154
  169
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
  -12
  -12
  -11
  -9
  -8
  -6
  -4
  -2
  1
  1
  3
  4
  5
  6
  7
  7
  7
  8
  7
  7
  7
  6
  5
  5
  4
  3
  3
  2
  2
  1
Current shareholders' claim on cash, %
  71.9
  51.6
  37.3
  27.6
  21.0
  16.6
  13.8
  12.2
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6
  11.6

U.S. Auto Parts Network, Inc. is an online provider of automotive aftermarket parts and repair information. The Company is an online provider of aftermarket auto parts, including collision parts, engine parts, and performance parts and accessories. The Company operates through two segments: Base USAP, which is an auto parts business, and AutoMD, an online automotive repair source. The Company's Websites provide customers with a range of stock keeping units (SKUs) with detailed product descriptions, attributes and photographs. The Company's product database maps its SKUs to product applications based on vehicle makes, models and years. The Company primarily sells its products to individual consumers through its network of Websites and online marketplaces. The Company classifies its products into various categories, including collision parts serving the body repair segment, engine parts to serve the replacement/wear parts market, and performance parts and accessories.

FINANCIAL RATIOS  of  U.S. Auto Parts Network, Inc. (PRTS)

Valuation Ratios
P/E Ratio 35.7
Price to Sales 0.1
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 1.6
Price to Free Cash Flow 2.2
Growth Rates
Sales Growth Rate 4.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -25%
Cap. Spend. - 3 Yr. Gr. Rate -5.6%
Financial Strength
Quick Ratio 7
Current Ratio 0.1
LT Debt to Equity 39.1%
Total Debt to Equity 43.5%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.4%
Ret/ On Assets - 3 Yr. Avg. -2%
Return On Total Capital 2.7%
Ret/ On T. Cap. - 3 Yr. Avg. -5.9%
Return On Equity 4.7%
Return On Equity - 3 Yr. Avg. -11.8%
Asset Turnover 3.7
Profitability Ratios
Gross Margin 30.3%
Gross Margin - 3 Yr. Avg. 28.8%
EBITDA Margin 2.6%
EBITDA Margin - 3 Yr. Avg. 1.9%
Operating Margin 0.3%
Oper. Margin - 3 Yr. Avg. -0.7%
Pre-Tax Margin -0.3%
Pre-Tax Margin - 3 Yr. Avg. -1.3%
Net Profit Margin 0.3%
Net Profit Margin - 3 Yr. Avg. -0.8%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 11.1%
Payout Ratio 0%

PRTS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PRTS stock intrinsic value calculation we used $289 million for the last fiscal year's total revenue generated by U.S. Auto Parts Network, Inc.. The default revenue input number comes from 0001 income statement of U.S. Auto Parts Network, 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 PRTS stock valuation model: a) initial revenue growth rate of 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 PRTS is calculated based on our internal credit rating of U.S. Auto Parts Network, 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 U.S. Auto Parts Network, 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 PRTS stock the variable cost ratio is equal to 29.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $214 million in the base year in the intrinsic value calculation for PRTS 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 16.9% for U.S. Auto Parts Network, Inc..

Corporate tax rate of 27% is the nominal tax rate for U.S. Auto Parts Network, 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 PRTS 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 PRTS are equal to 5.2%.

Life of production assets of 2.5 years is the average useful life of capital assets used in U.S. Auto Parts Network, 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 PRTS is equal to 3.1%. 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 - $38.822 million for U.S. Auto Parts Network, 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 34.990 million for U.S. Auto Parts Network, 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 U.S. Auto Parts Network, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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