Intrinsic value of Rocky Brands, Inc. - RCKY

Previous Close

$29.53

  Intrinsic Value

$4.91

stock screener

  Rating & Target

str. sell

-83%

Previous close

$29.53

 
Intrinsic value

$4.91

 
Up/down potential

-83%

 
Rating

str. sell

We calculate the intrinsic value of RCKY 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 0.2

 

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
  258
  264
  271
  278
  287
  296
  306
  317
  329
  341
  355
  369
  385
  401
  418
  437
  456
  477
  498
  521
  545
  571
  598
  626
  656
  687
  720
  755
  791
  830
Variable operating expenses, $m
  246
  251
  258
  265
  273
  282
  291
  301
  313
  324
  334
  348
  362
  377
  394
  411
  429
  449
  469
  490
  513
  537
  562
  589
  617
  647
  678
  710
  745
  781
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
  246
  251
  258
  265
  273
  282
  291
  301
  313
  324
  334
  348
  362
  377
  394
  411
  429
  449
  469
  490
  513
  537
  562
  589
  617
  647
  678
  710
  745
  781
Operating income, $m
  12
  13
  13
  13
  14
  14
  15
  16
  16
  17
  21
  22
  23
  24
  25
  26
  27
  28
  29
  31
  32
  34
  35
  37
  39
  40
  42
  44
  47
  49
EBITDA, $m
  19
  20
  20
  21
  21
  22
  23
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
  37
  39
  40
  42
  44
  46
  49
  51
  53
  56
  59
  61
Interest expense (income), $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
Earnings before tax, $m
  12
  13
  13
  13
  14
  14
  15
  15
  16
  17
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  34
  36
  38
  39
  41
  43
  45
Tax expense, $m
  3
  3
  3
  4
  4
  4
  4
  4
  4
  4
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
Net income, $m
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33

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
  188
  193
  198
  203
  209
  216
  223
  231
  240
  249
  259
  270
  281
  293
  305
  319
  333
  348
  364
  380
  398
  417
  436
  457
  479
  502
  526
  551
  578
  606
Adjusted assets (=assets-cash), $m
  188
  193
  198
  203
  209
  216
  223
  231
  240
  249
  259
  270
  281
  293
  305
  319
  333
  348
  364
  380
  398
  417
  436
  457
  479
  502
  526
  551
  578
  606
Revenue / Adjusted assets
  1.372
  1.368
  1.369
  1.369
  1.373
  1.370
  1.372
  1.372
  1.371
  1.369
  1.371
  1.367
  1.370
  1.369
  1.370
  1.370
  1.369
  1.371
  1.368
  1.371
  1.369
  1.369
  1.372
  1.370
  1.370
  1.369
  1.369
  1.370
  1.369
  1.370
Average production assets, $m
  39
  40
  41
  42
  44
  45
  47
  48
  50
  52
  54
  56
  58
  61
  64
  66
  69
  72
  76
  79
  83
  87
  91
  95
  100
  104
  109
  115
  120
  126
Working capital, $m
  98
  100
  103
  106
  109
  112
  116
  120
  125
  129
  135
  140
  146
  152
  159
  165
  173
  181
  189
  198
  207
  216
  227
  237
  249
  260
  273
  286
  300
  315
Total debt, $m
  1
  1
  2
  3
  4
  6
  7
  8
  10
  12
  13
  15
  17
  19
  22
  24
  27
  29
  32
  35
  38
  41
  45
  49
  53
  57
  61
  66
  70
  75
Total liabilities, $m
  34
  34
  35
  36
  37
  39
  40
  41
  43
  45
  46
  48
  50
  52
  55
  57
  60
  62
  65
  68
  71
  75
  78
  82
  86
  90
  94
  99
  103
  108
Total equity, $m
  155
  158
  162
  167
  172
  177
  183
  190
  197
  205
  213
  221
  231
  240
  251
  262
  273
  286
  299
  312
  327
  342
  358
  375
  393
  412
  432
  452
  474
  497
Total liabilities and equity, $m
  189
  192
  197
  203
  209
  216
  223
  231
  240
  250
  259
  269
  281
  292
  306
  319
  333
  348
  364
  380
  398
  417
  436
  457
  479
  502
  526
  551
  577
  605
Debt-to-equity ratio
  0.000
  0.010
  0.010
  0.020
  0.030
  0.030
  0.040
  0.040
  0.050
  0.060
  0.060
  0.070
  0.070
  0.080
  0.090
  0.090
  0.100
  0.100
  0.110
  0.110
  0.120
  0.120
  0.130
  0.130
  0.130
  0.140
  0.140
  0.140
  0.150
  0.150
Adjusted equity ratio
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821
  0.821

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9
  9
  9
  10
  10
  10
  11
  11
  12
  12
  15
  15
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  33
Depreciation, amort., depletion, $m
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  11
  12
  13
Funds from operations, $m
  16
  16
  17
  17
  17
  18
  18
  19
  20
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  32
  33
  35
  36
  38
  40
  42
  43
  46
Change in working capital, $m
  2
  2
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
  11
  12
  13
  13
  14
  15
Cash from operations, $m
  14
  14
  14
  14
  14
  14
  15
  15
  15
  15
  15
  16
  16
  16
  17
  18
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
Maintenance CAPEX, $m
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -11
  -12
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
Cash from investing activities, $m
  -5
  -5
  -5
  -5
  -5
  -5
  -7
  -7
  -7
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -15
  -15
  -15
  -16
  -17
  -18
Free cash flow, $m
  9
  9
  9
  9
  9
  9
  9
  9
  9
  9
  8
  8
  8
  8
  8
  8
  9
  9
  9
  9
  10
  10
  10
  11
  11
  11
  12
  12
  13
  13
Issuance/(repayment) of debt, $m
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
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  
  1
  1
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
Total cash flow (excl. dividends), $m
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  10
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  17
  17
  18
Retained Cash Flow (-), $m
  -3
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
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
  7
  6
  6
  5
  5
  4
  4
  3
  3
  3
  2
  1
  1
  1
  0
  0
  0
  -1
  -1
  -1
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -5
  -5
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
  7
  6
  5
  4
  4
  3
  3
  2
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  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

Rocky Brands, Inc. is a designer, manufacturer and marketer of footwear and apparel marketed under a portfolio of brand names, including Rocky, Georgia Boot, Durango, Lehigh and the licensed brand Michelin. The Company operates its business through three segments: wholesale, retail and military. In its wholesale segment, the Company distributes its products through a range of distribution channels representing over 10,000 retail store locations in the United States and Canada, as well as in other international markets. Its wholesale channels vary by product line and include sporting goods stores, outdoor retailers, independent shoe retailers, hardware stores, catalogs, mass merchants and uniform stores. In its retail segment, the Company sells its products directly to consumers through its consumer and business direct Websites and its Rocky outlet store. In its military segment, the Company sells footwear under the Rocky label to the United States military.

FINANCIAL RATIOS  of  Rocky Brands, Inc. (RCKY)

Valuation Ratios
P/E Ratio -109.6
Price to Sales 0.8
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 10.4
Price to Free Cash Flow 14.6
Growth Rates
Sales Growth Rate -3.3%
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 -5.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 11.1%
Total Debt to Equity 11.1%
Interest Coverage -3
Management Effectiveness
Return On Assets -0.8%
Ret/ On Assets - 3 Yr. Avg. 2.7%
Return On Total Capital -1.3%
Ret/ On T. Cap. - 3 Yr. Avg. 2.9%
Return On Equity -1.4%
Return On Equity - 3 Yr. Avg. 3.7%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 29.6%
Gross Margin - 3 Yr. Avg. 32.1%
EBITDA Margin 1.9%
EBITDA Margin - 3 Yr. Avg. 5.6%
Operating Margin -1.2%
Oper. Margin - 3 Yr. Avg. 2.7%
Pre-Tax Margin -1.5%
Pre-Tax Margin - 3 Yr. Avg. 2.5%
Net Profit Margin -0.8%
Net Profit Margin - 3 Yr. Avg. 1.8%
Effective Tax Rate 50%
Eff/ Tax Rate - 3 Yr. Avg. 37.8%
Payout Ratio -150%

RCKY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RCKY stock intrinsic value calculation we used $253 million for the last fiscal year's total revenue generated by Rocky Brands, Inc.. The default revenue input number comes from 0001 income statement of Rocky Brands, 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 RCKY 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 RCKY is calculated based on our internal credit rating of Rocky Brands, 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 Rocky Brands, 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 RCKY stock the variable cost ratio is equal to 95.3%.

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 RCKY 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 Rocky Brands, Inc..

Corporate tax rate of 27% is the nominal tax rate for Rocky Brands, 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 RCKY 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 RCKY are equal to 15.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Rocky Brands, 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 RCKY is equal to 37.9%. 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 - $151.575 million for Rocky Brands, 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 7.368 million for Rocky Brands, 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 Rocky Brands, Inc. at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
DECK Deckers Outdoo 174.24 7.46  str.sell
SHOO Steven Madden, 33.51 24.96  sell

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

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