Intrinsic value of Radiant Logistics - RLGT

Previous Close

$6.10

  Intrinsic Value

$3.72

stock screener

  Rating & Target

sell

-39%

Previous close

$6.10

 
Intrinsic value

$3.72

 
Up/down potential

-39%

 
Rating

sell

We calculate the intrinsic value of RLGT 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 0.3

 

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, %
  12.20
  11.48
  10.83
  10.25
  9.72
  9.25
  8.83
  8.44
  8.10
  7.79
  7.51
  7.26
  7.03
  6.83
  6.65
  6.48
  6.33
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.57
  5.52
  5.47
  5.42
  5.38
  5.34
Revenue, $m
  872
  973
  1,078
  1,188
  1,304
  1,425
  1,550
  1,681
  1,818
  1,959
  2,106
  2,259
  2,418
  2,583
  2,755
  2,933
  3,119
  3,313
  3,514
  3,724
  3,943
  4,171
  4,409
  4,658
  4,917
  5,189
  5,472
  5,769
  6,079
  6,404
Variable operating expenses, $m
  870
  968
  1,071
  1,180
  1,293
  1,411
  1,535
  1,663
  1,797
  1,936
  2,066
  2,216
  2,372
  2,534
  2,702
  2,877
  3,059
  3,249
  3,447
  3,653
  3,867
  4,091
  4,325
  4,568
  4,823
  5,089
  5,367
  5,658
  5,962
  6,281
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
  870
  968
  1,071
  1,180
  1,293
  1,411
  1,535
  1,663
  1,797
  1,936
  2,066
  2,216
  2,372
  2,534
  2,702
  2,877
  3,059
  3,249
  3,447
  3,653
  3,867
  4,091
  4,325
  4,568
  4,823
  5,089
  5,367
  5,658
  5,962
  6,281
Operating income, $m
  3
  5
  7
  9
  11
  13
  16
  18
  21
  23
  40
  43
  46
  50
  53
  56
  60
  64
  67
  71
  76
  80
  85
  89
  94
  100
  105
  111
  117
  123
EBITDA, $m
  24
  27
  30
  33
  36
  40
  43
  47
  51
  55
  59
  63
  67
  72
  77
  82
  87
  92
  98
  104
  110
  116
  123
  130
  137
  145
  153
  161
  170
  179
Interest expense (income), $m
  2
  3
  4
  6
  7
  9
  11
  13
  14
  16
  18
  20
  23
  25
  27
  30
  32
  35
  38
  41
  44
  47
  50
  54
  57
  61
  65
  69
  73
  77
  82
Earnings before tax, $m
  0
  0
  1
  1
  2
  2
  3
  4
  4
  5
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  39
  41
Tax expense, $m
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  5
  6
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
Net income, $m
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  15
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  24
  25
  26
  28
  29
  30

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
  325
  362
  401
  442
  485
  530
  577
  626
  676
  729
  784
  841
  900
  961
  1,025
  1,092
  1,161
  1,233
  1,308
  1,386
  1,467
  1,552
  1,641
  1,733
  1,830
  1,931
  2,037
  2,147
  2,262
  2,383
Adjusted assets (=assets-cash), $m
  325
  362
  401
  442
  485
  530
  577
  626
  676
  729
  784
  841
  900
  961
  1,025
  1,092
  1,161
  1,233
  1,308
  1,386
  1,467
  1,552
  1,641
  1,733
  1,830
  1,931
  2,037
  2,147
  2,262
  2,383
Revenue / Adjusted assets
  2.683
  2.688
  2.688
  2.688
  2.689
  2.689
  2.686
  2.685
  2.689
  2.687
  2.686
  2.686
  2.687
  2.688
  2.688
  2.686
  2.686
  2.687
  2.687
  2.687
  2.688
  2.688
  2.687
  2.688
  2.687
  2.687
  2.686
  2.687
  2.687
  2.687
Average production assets, $m
  93
  104
  115
  127
  140
  152
  166
  180
  194
  210
  225
  242
  259
  276
  295
  314
  334
  354
  376
  398
  422
  446
  472
  498
  526
  555
  586
  617
  650
  685
Working capital, $m
  19
  21
  24
  26
  29
  31
  34
  37
  40
  43
  46
  50
  53
  57
  61
  65
  69
  73
  77
  82
  87
  92
  97
  102
  108
  114
  120
  127
  134
  141
Total debt, $m
  61
  82
  105
  128
  153
  179
  206
  233
  263
  293
  324
  357
  391
  426
  463
  501
  541
  582
  625
  670
  717
  765
  816
  869
  925
  983
  1,043
  1,107
  1,173
  1,242
Total liabilities, $m
  186
  208
  230
  254
  279
  304
  331
  359
  388
  419
  450
  483
  517
  552
  589
  627
  666
  708
  751
  796
  842
  891
  942
  995
  1,050
  1,108
  1,169
  1,232
  1,299
  1,368
Total equity, $m
  138
  154
  171
  188
  207
  226
  246
  267
  288
  311
  334
  358
  383
  410
  437
  465
  495
  525
  557
  590
  625
  661
  699
  738
  780
  823
  868
  915
  964
  1,015
Total liabilities and equity, $m
  324
  362
  401
  442
  486
  530
  577
  626
  676
  730
  784
  841
  900
  962
  1,026
  1,092
  1,161
  1,233
  1,308
  1,386
  1,467
  1,552
  1,641
  1,733
  1,830
  1,931
  2,037
  2,147
  2,263
  2,383
Debt-to-equity ratio
  0.440
  0.530
  0.610
  0.680
  0.740
  0.790
  0.840
  0.880
  0.910
  0.940
  0.970
  1.000
  1.020
  1.040
  1.060
  1.080
  1.090
  1.110
  1.120
  1.130
  1.150
  1.160
  1.170
  1.180
  1.190
  1.190
  1.200
  1.210
  1.220
  1.220
Adjusted equity ratio
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426
  0.426

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  15
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  24
  25
  26
  28
  29
  30
Depreciation, amort., depletion, $m
  22
  23
  24
  24
  25
  27
  28
  29
  30
  31
  18
  20
  21
  22
  24
  26
  27
  29
  31
  32
  34
  36
  38
  41
  43
  45
  48
  50
  53
  56
Funds from operations, $m
  22
  23
  24
  25
  27
  28
  30
  32
  33
  35
  33
  35
  37
  39
  41
  43
  45
  48
  50
  53
  55
  58
  61
  64
  67
  71
  74
  78
  82
  86
Change in working capital, $m
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
Cash from operations, $m
  19
  21
  22
  23
  24
  26
  27
  29
  30
  32
  30
  31
  33
  35
  37
  39
  41
  43
  46
  48
  51
  53
  56
  59
  62
  65
  68
  71
  75
  78
Maintenance CAPEX, $m
  -7
  -8
  -8
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -17
  -18
  -20
  -21
  -22
  -24
  -26
  -27
  -29
  -31
  -32
  -34
  -36
  -38
  -41
  -43
  -45
  -48
  -50
  -53
New CAPEX, $m
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -30
  -32
  -33
  -35
Cash from investing activities, $m
  -17
  -19
  -19
  -21
  -22
  -24
  -25
  -27
  -30
  -31
  -33
  -34
  -37
  -39
  -40
  -43
  -46
  -48
  -51
  -53
  -55
  -58
  -61
  -65
  -69
  -72
  -75
  -80
  -83
  -88
Free cash flow, $m
  2
  2
  2
  2
  2
  1
  1
  1
  1
  1
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
Issuance/(repayment) of debt, $m
  20
  21
  23
  24
  25
  26
  27
  28
  29
  30
  31
  33
  34
  35
  37
  38
  40
  41
  43
  45
  47
  49
  51
  53
  55
  58
  61
  63
  66
  69
Issuance/(repurchase) of shares, $m
  15
  16
  16
  17
  17
  17
  18
  18
  18
  19
  9
  9
  10
  10
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  18
  19
  21
  22
Cash from financing (excl. dividends), $m  
  35
  37
  39
  41
  42
  43
  45
  46
  47
  49
  40
  42
  44
  45
  47
  49
  51
  53
  55
  58
  61
  63
  66
  69
  72
  76
  79
  82
  87
  91
Total cash flow (excl. dividends), $m
  38
  39
  41
  42
  43
  45
  46
  47
  48
  50
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  55
  57
  60
  63
  65
  68
  71
  75
  78
  82
Retained Cash Flow (-), $m
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -33
  -35
  -36
  -38
  -39
  -41
  -43
  -45
  -47
  -49
  -51
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
  23
  23
  24
  24
  25
  25
  26
  26
  27
  27
  14
  14
  15
  15
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  26
  28
  29
  30
Discount rate, %
  4.50
  4.73
  4.96
  5.21
  5.47
  5.74
  6.03
  6.33
  6.65
  6.98
  7.33
  7.70
  8.08
  8.49
  8.91
  9.36
  9.82
  10.31
  10.83
  11.37
  11.94
  12.54
  13.16
  13.82
  14.51
  15.24
  16.00
  16.80
  17.64
  18.52
PV of cash for distribution, $m
  22
  21
  21
  20
  19
  18
  17
  16
  15
  14
  6
  6
  5
  5
  4
  4
  4
  3
  3
  2
  2
  2
  1
  1
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  95.2
  91.0
  87.2
  83.9
  80.9
  78.3
  75.8
  73.6
  71.6
  69.7
  68.9
  68.2
  67.4
  66.7
  66.0
  65.4
  64.7
  64.1
  63.5
  62.9
  62.3
  61.7
  61.1
  60.6
  60.0
  59.5
  58.9
  58.4
  57.9
  57.3

Radiant Logistics, Inc. operates as a third-party logistics company, providing multi-modal transportation and logistics services. The Company is organized in two geographic operating segments: United States and Canada. Its transportation services for both the United States and Canada segments are placed into categories of freight forwarding and freight brokerage services. The Company services an account base consisting of consumer goods, food and beverage, manufacturing and retail customers, which the Company supports from a network of operating locations, as well as an integrated international service partner network. As of June 30, 2016, it provided these services through a multi-brand network, including 18 Company-owned offices. As of June 30, 2016, it had approximately 10,000 asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in its carrier network. Its brands include Radiant, Wheels, Airgroup, Adcom, DBA and Service By Air.

FINANCIAL RATIOS  of  Radiant Logistics (RLGT)

Valuation Ratios
P/E Ratio 59.9
Price to Sales 0.4
Price to Book 2.4
Price to Tangible Book
Price to Cash Flow 20
Price to Free Cash Flow 29.9
Growth Rates
Sales Growth Rate -0.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 25%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 2
Current Ratio 0
LT Debt to Equity 30.1%
Total Debt to Equity 32.5%
Interest Coverage 6
Management Effectiveness
Return On Assets 2.2%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 3.2%
Ret/ On T. Cap. - 3 Yr. Avg. 2.1%
Return On Equity 4.1%
Return On Equity - 3 Yr. Avg. 3.3%
Asset Turnover 2.8
Profitability Ratios
Gross Margin 25.1%
Gross Margin - 3 Yr. Avg. 24.5%
EBITDA Margin 3.1%
EBITDA Margin - 3 Yr. Avg. 2.6%
Operating Margin 1.4%
Oper. Margin - 3 Yr. Avg. 1.2%
Pre-Tax Margin 1.2%
Pre-Tax Margin - 3 Yr. Avg. 0.7%
Net Profit Margin 0.6%
Net Profit Margin - 3 Yr. Avg. 0.4%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 36.5%
Payout Ratio 40%

RLGT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RLGT stock intrinsic value calculation we used $777.613 million for the last fiscal year's total revenue generated by Radiant Logistics. The default revenue input number comes from 0001 income statement of Radiant Logistics. 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 RLGT stock valuation model: a) initial revenue growth rate of 12.2% 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 4.5%, whose default value for RLGT is calculated based on our internal credit rating of Radiant Logistics, 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 Radiant Logistics.
    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 RLGT stock the variable cost ratio is equal to 99.9%.

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 RLGT 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 7% for Radiant Logistics.

Corporate tax rate of 27% is the nominal tax rate for Radiant Logistics. 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 RLGT 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 RLGT are equal to 10.7%.

Life of production assets of 12.3 years is the average useful life of capital assets used in Radiant Logistics 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 RLGT is equal to 2.2%. 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 - $123.412 million for Radiant Logistics - 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 49.359 million for Radiant Logistics 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 Radiant Logistics at the current share price and the inputted number of shares is $0.3 billion.

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COMPANY NEWS

▶ Why Shares of Radiant Logistics Jumped Today   [Sep-14-18 12:47PM  Motley Fool]
▶ Radiant Logistics: Fiscal 4Q Earnings Snapshot   [04:23PM  Associated Press]
▶ Radiant Logistics: Fiscal 3Q Earnings Snapshot   [May-09-18 04:51PM  Associated Press]
▶ Radiant Logistics Announces Stock Buy Back Program   [Mar-13-18 04:01PM  PR Newswire]
▶ Radiant Logistics reports 4Q loss   [Sep-12-17 11:28PM  Associated Press]
▶ Radiant Logistics Expands Credit Capacity   [Jun-14-17 04:01PM  PR Newswire]
▶ Shorts Attack NVDA, TSLA and RLGT   [Jun-09-17 03:01PM  Zacks]
▶ Why Radiant Logistics Stock Crashed 20% on Thursday   [Jun-08-17 03:37PM  Motley Fool]
▶ Radiant Logistics posts 3Q profit   [May-10-17 04:32PM  Associated Press]
▶ Bull Of The Day: Radiant Logistics (RLGT)   [Apr-10-17 05:36AM  Zacks]
▶ Radiant Logistics posts 2Q profit   [Feb-08-17 04:58PM  Associated Press]

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