Intrinsic value of Pixelworks - PXLW

Previous Close

$4.10

  Intrinsic Value

$10.94

stock screener

  Rating & Target

str. buy

+167%

Previous close

$4.10

 
Intrinsic value

$10.94

 
Up/down potential

+167%

 
Rating

str. buy

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of PXLW 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.

Please visit our new site that uses elements of artificial intelligence for stock valuation: artificial intelligence value of Pixelworks (PXLW) stock.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -11.67
  35.70
  32.63
  29.87
  27.38
  25.14
  23.13
  21.32
  19.68
  18.22
  16.89
  15.70
  14.63
  13.67
  12.80
  12.02
  11.32
  10.69
  10.12
  9.61
  9.15
  8.73
  8.36
  8.02
  7.72
  7.45
  7.20
  6.98
  6.79
  6.61
  6.45
Revenue, $m
  53
  72
  95
  124
  158
  197
  243
  295
  353
  417
  488
  564
  647
  736
  830
  929
  1,035
  1,145
  1,261
  1,382
  1,509
  1,641
  1,778
  1,920
  2,069
  2,223
  2,383
  2,549
  2,722
  2,902
  3,089
Variable operating expenses, $m
 
  52
  68
  89
  113
  142
  174
  211
  253
  299
  350
  405
  464
  527
  595
  666
  742
  821
  904
  991
  1,082
  1,176
  1,275
  1,377
  1,483
  1,594
  1,708
  1,828
  1,952
  2,081
  2,215
Fixed operating expenses, $m
 
  28
  28
  29
  30
  31
  31
  32
  33
  34
  35
  35
  36
  37
  38
  39
  40
  41
  42
  43
  44
  45
  46
  48
  49
  50
  51
  53
  54
  55
  57
Total operating expenses, $m
  64
  80
  96
  118
  143
  173
  205
  243
  286
  333
  385
  440
  500
  564
  633
  705
  782
  862
  946
  1,034
  1,126
  1,221
  1,321
  1,425
  1,532
  1,644
  1,759
  1,881
  2,006
  2,136
  2,272
Operating income, $m
  -10
  -7
  -1
  6
  15
  25
  37
  51
  67
  84
  103
  124
  147
  171
  197
  224
  253
  283
  315
  348
  383
  419
  457
  496
  537
  579
  623
  669
  716
  766
  818
EBITDA, $m
  -7
  -6
  0
  8
  18
  29
  42
  56
  73
  91
  112
  134
  158
  183
  211
  240
  270
  302
  336
  372
  408
  447
  487
  528
  572
  617
  664
  712
  763
  815
  870
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  6
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
Earnings before tax, $m
  -11
  -7
  -1
  6
  14
  25
  37
  50
  66
  82
  101
  122
  144
  167
  192
  219
  247
  277
  308
  340
  374
  409
  446
  485
  524
  566
  609
  654
  700
  749
  799
Tax expense, $m
  0
  0
  0
  2
  4
  7
  10
  14
  18
  22
  27
  33
  39
  45
  52
  59
  67
  75
  83
  92
  101
  111
  120
  131
  142
  153
  164
  176
  189
  202
  216
Net income, $m
  -11
  -7
  -1
  4
  11
  18
  27
  37
  48
  60
  74
  89
  105
  122
  140
  160
  180
  202
  225
  248
  273
  299
  326
  354
  383
  413
  444
  477
  511
  546
  583

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  20
  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
  31
  15
  20
  26
  33
  41
  50
  61
  73
  87
  101
  117
  134
  153
  172
  193
  215
  238
  262
  287
  313
  340
  369
  399
  429
  461
  495
  529
  565
  602
  641
Adjusted assets (=assets-cash), $m
  11
  15
  20
  26
  33
  41
  50
  61
  73
  87
  101
  117
  134
  153
  172
  193
  215
  238
  262
  287
  313
  340
  369
  399
  429
  461
  495
  529
  565
  602
  641
Revenue / Adjusted assets
  4.818
  4.800
  4.750
  4.769
  4.788
  4.805
  4.860
  4.836
  4.836
  4.793
  4.832
  4.821
  4.828
  4.810
  4.826
  4.813
  4.814
  4.811
  4.813
  4.815
  4.821
  4.826
  4.818
  4.812
  4.823
  4.822
  4.814
  4.819
  4.818
  4.821
  4.819
Average production assets, $m
  5
  6
  8
  11
  13
  17
  21
  25
  30
  35
  41
  48
  55
  63
  71
  79
  88
  97
  107
  117
  128
  139
  151
  163
  176
  189
  203
  217
  231
  247
  263
Working capital, $m
  16
  -5
  -7
  -9
  -12
  -15
  -18
  -22
  -26
  -31
  -37
  -42
  -49
  -55
  -62
  -70
  -78
  -86
  -95
  -104
  -113
  -123
  -133
  -144
  -155
  -167
  -179
  -191
  -204
  -218
  -232
Total debt, $m
  0
  1
  6
  11
  17
  25
  33
  43
  54
  66
  79
  93
  109
  125
  143
  162
  181
  202
  224
  246
  270
  294
  320
  347
  374
  403
  433
  464
  496
  530
  565
Total liabilities, $m
  12
  13
  18
  23
  29
  37
  45
  55
  66
  78
  91
  105
  121
  137
  155
  174
  193
  214
  236
  258
  282
  306
  332
  359
  386
  415
  445
  476
  508
  542
  577
Total equity, $m
  19
  1
  2
  3
  3
  4
  5
  6
  7
  9
  10
  12
  13
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  40
  43
  46
  49
  53
  56
  60
  64
Total liabilities and equity, $m
  31
  14
  20
  26
  32
  41
  50
  61
  73
  87
  101
  117
  134
  152
  172
  193
  214
  238
  262
  287
  313
  340
  369
  399
  429
  461
  494
  529
  564
  602
  641
Debt-to-equity ratio
  0.000
  0.960
  2.940
  4.330
  5.340
  6.070
  6.620
  7.040
  7.360
  7.610
  7.810
  7.980
  8.110
  8.210
  8.300
  8.380
  8.440
  8.500
  8.540
  8.580
  8.620
  8.650
  8.670
  8.700
  8.720
  8.740
  8.760
  8.770
  8.790
  8.800
  8.810
Adjusted equity ratio
  -0.091
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -11
  -7
  -1
  4
  11
  18
  27
  37
  48
  60
  74
  89
  105
  122
  140
  160
  180
  202
  225
  248
  273
  299
  326
  354
  383
  413
  444
  477
  511
  546
  583
Depreciation, amort., depletion, $m
  3
  1
  2
  2
  3
  3
  4
  5
  6
  7
  8
  10
  11
  13
  14
  16
  18
  19
  21
  23
  26
  28
  30
  33
  35
  38
  41
  43
  46
  49
  53
Funds from operations, $m
  0
  -6
  0
  6
  13
  21
  31
  42
  54
  67
  82
  98
  116
  134
  154
  176
  198
  221
  246
  272
  299
  327
  356
  386
  418
  451
  485
  520
  557
  596
  636
Change in working capital, $m
  2
  -1
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -12
  -13
  -13
  -14
Cash from operations, $m
  -2
  -5
  2
  8
  16
  24
  34
  46
  58
  72
  87
  104
  122
  141
  162
  183
  206
  230
  255
  281
  308
  337
  366
  397
  429
  462
  497
  533
  570
  609
  650
Maintenance CAPEX, $m
  0
  -1
  -1
  -2
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -10
  -11
  -13
  -14
  -16
  -18
  -19
  -21
  -23
  -26
  -28
  -30
  -33
  -35
  -38
  -41
  -43
  -46
  -49
New CAPEX, $m
  -2
  -2
  -2
  -2
  -3
  -3
  -4
  -4
  -5
  -5
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -15
  -16
Cash from investing activities, $m
  -2
  -3
  -3
  -4
  -5
  -6
  -7
  -8
  -10
  -11
  -13
  -15
  -17
  -19
  -21
  -22
  -25
  -27
  -29
  -31
  -34
  -37
  -40
  -42
  -46
  -48
  -52
  -55
  -58
  -61
  -65
Free cash flow, $m
  -4
  -7
  -1
  4
  11
  18
  27
  37
  48
  61
  74
  89
  105
  123
  141
  161
  181
  203
  225
  249
  274
  300
  327
  355
  384
  414
  446
  478
  512
  548
  585
Issuance/(repayment) of debt, $m
  -3
  1
  4
  5
  6
  7
  9
  10
  11
  12
  13
  14
  15
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
Issuance/(repurchase) of shares, $m
  1
  10
  2
  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  
  -3
  11
  6
  5
  6
  7
  9
  10
  11
  12
  13
  14
  15
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
Total cash flow (excl. dividends), $m
  -7
  4
  5
  10
  17
  26
  36
  47
  59
  73
  88
  104
  121
  139
  159
  179
  201
  223
  247
  272
  298
  324
  352
  381
  412
  443
  476
  509
  545
  581
  620
Retained Cash Flow (-), $m
  7
  -10
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
Prev. year cash balance distribution, $m
 
  20
  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
 
  14
  3
  9
  16
  25
  35
  46
  58
  71
  86
  102
  119
  137
  157
  177
  199
  221
  245
  269
  295
  322
  350
  378
  408
  440
  472
  506
  541
  578
  616
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
 
  14
  3
  8
  14
  19
  25
  31
  36
  41
  45
  48
  51
  52
  53
  52
  50
  48
  45
  41
  37
  33
  29
  25
  21
  17
  14
  11
  8
  6
  5
Current shareholders' claim on cash, %
  100
  50.0
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8
  42.8

Pixelworks, Inc. designs, develops and markets video and pixel processing semiconductors, intellectual property cores, software and custom application specific integrated circuit (ASIC) solutions for digital video applications. The Company is engaged in the design and development of integrated circuits (ICs) for use in electronic display devices. It provides its customers with software development tools and with software that provides basic functionality for its ICs and enables connectivity of its customers' products. Its primary target markets include digital projection systems, Ultrabook devices, tablets and smartphones. Its video display processing technologies include Halo Free Motion Estimation and Motion Compensation (MEMC), Advanced Scaling, Mobile Video Display Processing, and Vuemagic and Networked Displays. Its primary video display processor product categories include ImageProcessor ICs, Video Co-Processor ICs and Networked Display ICs.

FINANCIAL RATIOS  of  Pixelworks (PXLW)

Valuation Ratios
P/E Ratio -10.8
Price to Sales 2.2
Price to Book 6.2
Price to Tangible Book
Price to Cash Flow -59.2
Price to Free Cash Flow -29.6
Growth Rates
Sales Growth Rate -11.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -33.3%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets -29.3%
Ret/ On Assets - 3 Yr. Avg. -28.6%
Return On Total Capital -45.8%
Ret/ On T. Cap. - 3 Yr. Avg. -46.8%
Return On Equity -48.9%
Return On Equity - 3 Yr. Avg. -52.8%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 50.9%
Gross Margin - 3 Yr. Avg. 50.6%
EBITDA Margin -15.1%
EBITDA Margin - 3 Yr. Avg. -10.6%
Operating Margin -20.8%
Oper. Margin - 3 Yr. Avg. -16.8%
Pre-Tax Margin -20.8%
Pre-Tax Margin - 3 Yr. Avg. -17.4%
Net Profit Margin -20.8%
Net Profit Margin - 3 Yr. Avg. -18.5%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -7%
Payout Ratio 0%

PXLW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PXLW stock intrinsic value calculation we used $53 million for the last fiscal year's total revenue generated by Pixelworks. The default revenue input number comes from 2016 income statement of Pixelworks. 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 PXLW stock valuation model: a) initial revenue growth rate of 35.7% 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 PXLW is calculated based on our internal credit rating of Pixelworks, 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 Pixelworks.
    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 PXLW stock the variable cost ratio is equal to 71.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $27 million in the base year in the intrinsic value calculation for PXLW 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 3.5% for Pixelworks.

Corporate tax rate of 27% is the nominal tax rate for Pixelworks. 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 PXLW 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 PXLW are equal to 8.5%.

Life of production assets of 1.5 years is the average useful life of capital assets used in Pixelworks 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 PXLW is equal to -7.5%. 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 - $19 million for Pixelworks - 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 35.009 million for Pixelworks 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 Pixelworks at the current share price and the inputted number of shares is $0.1 billion.

RELATED COMPANIES Price Int.Val. Rating
SIGM Sigma Designs 5.85 1.52  str.sell
NVDA NVIDIA 241.51 368.13  str.buy
TXN Texas Instrume 103.66 74.55  sell
ON ON Semiconduct 23.23 68.44  str.buy
MVIS MicroVision 1.23 0.02  str.sell
QCOM Qualcomm 63.40 32.78  sell

COMPANY NEWS

▶ Pixelworks reports 4Q loss   [Feb-15-18 06:03PM  Associated Press]
▶ Pixelworks, Inc. to Host Earnings Call   [12:40PM  ACCESSWIRE]
▶ ETFs with exposure to Pixelworks, Inc. : December 8, 2017   [Dec-08-17 01:22PM  Capital Cube]
▶ 3 Tech Stocks Under $10 to Buy Now   [Dec-06-17 04:44PM  Zacks]
▶ Pixelworks reports 3Q loss   [Nov-07-17 05:05PM  Associated Press]
▶ Pixelworks, Inc. to Host Earnings Call   [02:10PM  ACCESSWIRE]
▶ Value Technology - An Oxymoron?   [01:19PM  Forbes]
▶ Pixelworks beats Street 2Q forecasts   [Aug-08-17 05:56PM  Associated Press]
▶ Pixelworks Completes Acquisition of ViXS Systems   [Aug-02-17 12:15PM  PR Newswire]
▶ ViXS Obtains Final Order   [Jul-31-17 06:58PM  Marketwired]
▶ ETFs with exposure to Pixelworks, Inc. : June 19, 2017   [Jun-19-17 04:00PM  Capital Cube]
▶ ETFs with exposure to Pixelworks, Inc. : June 9, 2017   [Jun-09-17 01:53PM  Capital Cube]
▶ ETFs with exposure to Pixelworks, Inc. : May 30, 2017   [May-30-17 12:40PM  Capital Cube]
▶ Pixelworks to Acquire ViXS Systems   [May-18-17 04:36PM  Business Wire]
▶ Pixelworks posts 1Q profit   [Apr-27-17 05:52PM  Associated Press]
▶ ETFs with exposure to Pixelworks, Inc. : April 17, 2017   [Apr-17-17 01:04PM  Capital Cube]
▶ Pixelworks tops Street 4Q forecasts   [Feb-02-17 05:24PM  Associated Press]
▶ Pixelworks reports 3Q loss   [Oct-27-16 07:01PM  AP]
Financial statements of PXLW
Follow us on:   twitter   twitter   twitter   twitter

ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2018. All rigths reserved.