Intrinsic value of Qualstar - QBAK

Previous Close

$5.20

  Intrinsic Value

$0.72

stock screener

  Rating & Target

str. sell

-86%

Previous close

$5.20

 
Intrinsic value

$0.72

 
Up/down potential

-86%

 
Rating

str. sell

We calculate the intrinsic value of QBAK 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, %
  42.50
  38.75
  35.38
  32.34
  29.60
  27.14
  24.93
  22.94
  21.14
  19.53
  18.08
  16.77
  15.59
  14.53
  13.58
  12.72
  11.95
  11.25
  10.63
  10.07
  9.56
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
Revenue, $m
  15
  21
  28
  38
  49
  62
  78
  95
  116
  138
  163
  190
  220
  252
  286
  323
  361
  402
  445
  490
  536
  585
  636
  689
  744
  801
  861
  922
  987
  1,053
Variable operating expenses, $m
  17
  23
  31
  41
  53
  68
  85
  104
  126
  151
  178
  208
  240
  275
  312
  352
  394
  439
  485
  534
  585
  638
  694
  752
  812
  874
  939
  1,006
  1,077
  1,149
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
  17
  23
  31
  41
  53
  68
  85
  104
  126
  151
  178
  208
  240
  275
  312
  352
  394
  439
  485
  534
  585
  638
  694
  752
  812
  874
  939
  1,006
  1,077
  1,149
Operating income, $m
  -1
  -2
  -3
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -20
  -23
  -26
  -29
  -33
  -37
  -40
  -45
  -49
  -53
  -58
  -63
  -68
  -73
  -78
  -84
  -90
  -96
EBITDA, $m
  -1
  -2
  -2
  -3
  -4
  -5
  -7
  -8
  -10
  -12
  -14
  -17
  -19
  -22
  -25
  -28
  -31
  -35
  -39
  -42
  -47
  -51
  -55
  -60
  -65
  -70
  -75
  -80
  -86
  -91
Interest expense (income), $m
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  2
  2
  2
  3
  3
  4
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  10
  11
  12
  13
Earnings before tax, $m
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -46
  -50
  -55
  -60
  -65
  -71
  -77
  -83
  -89
  -95
  -102
  -109
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
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -46
  -50
  -55
  -60
  -65
  -71
  -77
  -83
  -89
  -95
  -102
  -109

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
  9
  12
  16
  22
  28
  36
  44
  55
  66
  79
  93
  109
  126
  144
  164
  185
  207
  230
  255
  280
  307
  335
  364
  394
  426
  459
  493
  528
  565
  603
Adjusted assets (=assets-cash), $m
  9
  12
  16
  22
  28
  36
  44
  55
  66
  79
  93
  109
  126
  144
  164
  185
  207
  230
  255
  280
  307
  335
  364
  394
  426
  459
  493
  528
  565
  603
Revenue / Adjusted assets
  1.667
  1.750
  1.750
  1.727
  1.750
  1.722
  1.773
  1.727
  1.758
  1.747
  1.753
  1.743
  1.746
  1.750
  1.744
  1.746
  1.744
  1.748
  1.745
  1.750
  1.746
  1.746
  1.747
  1.749
  1.746
  1.745
  1.746
  1.746
  1.747
  1.746
Average production assets, $m
  0
  0
  1
  1
  1
  1
  2
  2
  2
  3
  3
  4
  5
  5
  6
  7
  8
  8
  9
  10
  11
  12
  13
  14
  16
  17
  18
  19
  21
  22
Working capital, $m
  1
  2
  3
  3
  4
  6
  7
  9
  11
  13
  15
  17
  20
  23
  26
  29
  33
  37
  40
  45
  49
  53
  58
  63
  68
  73
  78
  84
  90
  96
Total debt, $m
  1
  2
  4
  6
  9
  12
  16
  20
  25
  31
  37
  44
  51
  59
  67
  76
  85
  95
  105
  116
  127
  139
  152
  165
  178
  192
  206
  221
  237
  253
Total liabilities, $m
  4
  5
  7
  9
  12
  15
  19
  23
  28
  34
  40
  46
  53
  61
  69
  78
  88
  98
  108
  119
  130
  142
  154
  167
  181
  194
  209
  224
  239
  256
Total equity, $m
  5
  7
  9
  12
  16
  20
  26
  31
  38
  46
  54
  63
  73
  83
  94
  106
  119
  133
  147
  161
  177
  193
  210
  227
  245
  264
  284
  304
  325
  347
Total liabilities and equity, $m
  9
  12
  16
  21
  28
  35
  45
  54
  66
  80
  94
  109
  126
  144
  163
  184
  207
  231
  255
  280
  307
  335
  364
  394
  426
  458
  493
  528
  564
  603
Debt-to-equity ratio
  0.200
  0.350
  0.450
  0.520
  0.570
  0.610
  0.630
  0.650
  0.670
  0.680
  0.690
  0.690
  0.700
  0.700
  0.710
  0.710
  0.710
  0.720
  0.720
  0.720
  0.720
  0.720
  0.720
  0.720
  0.730
  0.730
  0.730
  0.730
  0.730
  0.730
Adjusted equity ratio
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576
  0.576

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1
  -2
  -3
  -4
  -5
  -6
  -8
  -10
  -12
  -14
  -17
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -46
  -50
  -55
  -60
  -65
  -71
  -77
  -83
  -89
  -95
  -102
  -109
Depreciation, amort., depletion, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
Funds from operations, $m
  -1
  -2
  -3
  -4
  -5
  -6
  -7
  -9
  -11
  -13
  -16
  -19
  -21
  -25
  -28
  -32
  -35
  -39
  -44
  -48
  -53
  -58
  -63
  -68
  -73
  -79
  -85
  -91
  -98
  -104
Change in working capital, $m
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
Cash from operations, $m
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -18
  -21
  -24
  -28
  -31
  -35
  -39
  -43
  -48
  -52
  -57
  -62
  -67
  -73
  -78
  -84
  -90
  -97
  -103
  -110
Maintenance CAPEX, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
New CAPEX, $m
  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
  -1
Cash from investing activities, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
Free cash flow, $m
  -2
  -3
  -4
  -5
  -6
  -8
  -9
  -11
  -14
  -16
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -46
  -50
  -55
  -60
  -65
  -71
  -77
  -83
  -89
  -95
  -102
  -109
  -116
Issuance/(repayment) of debt, $m
  1
  1
  2
  2
  3
  3
  4
  4
  5
  5
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  14
  15
  16
  16
Issuance/(repurchase) of shares, $m
  3
  4
  5
  7
  8
  11
  13
  15
  18
  21
  25
  28
  32
  36
  41
  45
  50
  55
  60
  65
  71
  76
  82
  88
  95
  101
  108
  115
  123
  131
Cash from financing (excl. dividends), $m  
  4
  5
  7
  9
  11
  14
  17
  19
  23
  26
  31
  35
  39
  44
  49
  54
  59
  65
  70
  76
  82
  88
  94
  101
  108
  115
  122
  130
  139
  147
Total cash flow (excl. dividends), $m
  2
  3
  3
  4
  5
  6
  7
  8
  9
  10
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
Retained Cash Flow (-), $m
  -3
  -4
  -5
  -7
  -8
  -11
  -13
  -15
  -18
  -21
  -25
  -28
  -32
  -36
  -41
  -45
  -50
  -55
  -60
  -65
  -71
  -76
  -82
  -88
  -95
  -101
  -108
  -115
  -123
  -131
Prev. year cash balance distribution, $m
  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
  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
  1
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -16
  -18
  -21
  -25
  -28
  -32
  -36
  -40
  -44
  -49
  -54
  -59
  -64
  -69
  -75
  -81
  -87
  -93
  -100
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
  1
  -1
  -1
  -2
  -3
  -3
  -4
  -4
  -5
  -6
  -6
  -7
  -7
  -7
  -7
  -7
  -7
  -7
  -6
  -6
  -5
  -4
  -4
  -3
  -3
  -2
  -2
  -1
  -1
  -1
Current shareholders' claim on cash, %
  70.4
  49.1
  34.8
  24.9
  18.1
  13.3
  9.9
  7.4
  5.6
  4.3
  3.3
  2.5
  2.0
  1.6
  1.2
  1.0
  0.8
  0.6
  0.5
  0.4
  0.3
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.1
  0.0

Qualstar Corporation is a provider of data storage systems marketed under the Qualstar brand and of power solutions marketed under the N2Power brand. The Company's segments include Power Supplies and Data Storage. Under the Power Supplies segment, it designs, manufactures and sells open frame switching power supplies. Under the Data Storage segment, it designs, manufactures and sells automated magnetic tape libraries used to store, retrieve and manage electronic data primarily in network computing environments. The Company offers switching power supplies that provide power solutions to original equipment manufacturers for a range of markets, including communications networking, industrial, gaming, test equipment, light emitting diode (LED)/lighting, and medical, as well as other market applications. Its storage products provide data protection and archive storage systems, which are used to record, retrieve and manage electronic data, primarily in networked computing environments.

FINANCIAL RATIOS  of  Qualstar (QBAK)

Valuation Ratios
P/E Ratio -10.6
Price to Sales 1.2
Price to Book 2.1
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate 80%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
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 -12.5%
Ret/ On Assets - 3 Yr. Avg. -13.6%
Return On Total Capital -18.2%
Ret/ On T. Cap. - 3 Yr. Avg. -19.5%
Return On Equity -18.2%
Return On Equity - 3 Yr. Avg. -19.5%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 33.3%
Gross Margin - 3 Yr. Avg. 28%
EBITDA Margin -11.1%
EBITDA Margin - 3 Yr. Avg. -19.6%
Operating Margin -22.2%
Oper. Margin - 3 Yr. Avg. -23.3%
Pre-Tax Margin -11.1%
Pre-Tax Margin - 3 Yr. Avg. -19.6%
Net Profit Margin -11.1%
Net Profit Margin - 3 Yr. Avg. -19.6%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

QBAK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QBAK stock intrinsic value calculation we used $10.641 million for the last fiscal year's total revenue generated by Qualstar. The default revenue input number comes from 0001 income statement of Qualstar. 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 QBAK stock valuation model: a) initial revenue growth rate of 42.5% 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 QBAK is calculated based on our internal credit rating of Qualstar, 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 Qualstar.
    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 QBAK stock the variable cost ratio is equal to 109.1%.

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 QBAK 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 Qualstar.

Corporate tax rate of 27% is the nominal tax rate for Qualstar. 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 QBAK 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 QBAK are equal to 2.1%.

Life of production assets of 1.5 years is the average useful life of capital assets used in Qualstar 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 QBAK is equal to 9.1%. 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 - $5.896 million for Qualstar - 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 2.048 million for Qualstar 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 Qualstar at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
DVMT Dell Technolog 105.06 439.84  str.buy
IBM International 121.44 191.80  buy
HPQ HP 24.17 36.87  str.buy
ORCL Oracle 50.63 34.20  sell
VICR Vicor 35.28 11.56  str.sell

COMPANY NEWS

▶ Qualstar Reports Fiscal 2018 Third Quarter Results   [Nov-08-18 09:00AM  Business Wire]
▶ Qualstar Reports Fiscal 2018 Second Quarter Results   [Aug-08-18 09:15AM  Business Wire]
▶ Qualstar Reports Results for the First Quarter of 2018   [May-08-18 04:20PM  Business Wire]
▶ Qualstar Reports Fiscal 2017 Third Quarter Results   [Nov-08-17 04:30PM  Business Wire]
▶ Qualstar Reports Fiscal 2017 Second Quarter Results   [Aug-08-17 04:15PM  Business Wire]
▶ Qualstar Reports Results for the First Quarter 2017   [May-10-17 04:10PM  Business Wire]
▶ Company News for March 20, 2017   [Mar-20-17 10:10AM  Zacks]
▶ Qualstar Corporation to Initiate Stock Repurchase Program   [Nov-22-16 11:10AM  Business Wire]
▶ Qualstar Reports Third Quarter and YTD 2016 Results   [Nov-09-16 04:15PM  Business Wire]
▶ Qualstar Reports Fiscal 2016 Second Quarter Results   [Aug-11-16 04:15PM  Business Wire]
▶ Qualstar Announces the Change in the Fiscal Year-end   [Jan-04-16 04:46PM  Business Wire]
▶ 10-Q for Qualstar Corp.   [May-17  08:11PM  at Company Spotlight]
▶ Qualstar Reports Fiscal 2015 Third Quarter Results   [May-13  05:05PM  Business Wire]
▶ 10-Q for Qualstar Corp.   [Feb-14  07:07PM  at Company Spotlight]
▶ QUALSTAR CORP Files SEC form 8-K, Other Events   [Dec-22  05:18PM  EDGAR Online]
▶ 10-Q for Qualstar Corp.   [Nov-13  07:08PM  Company Spotlight]

CONTACT US       ASSET ALLOCATION

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

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