Intrinsic value of Saia, Inc. - SAIA

Previous Close

$62.20

  Intrinsic Value

$78.32

stock screener

  Rating & Target

buy

+26%

Previous close

$62.20

 
Intrinsic value

$78.32

 
Up/down potential

+26%

 
Rating

buy

We calculate the intrinsic value of SAIA 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 1.6

 

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, %
  12.90
  12.11
  11.40
  10.76
  10.18
  9.66
  9.20
  8.78
  8.40
  8.06
  7.75
  7.48
  7.23
  7.01
  6.81
  6.63
  6.46
  6.32
  6.19
  6.07
  5.96
  5.86
  5.78
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
Revenue, $m
  1,867
  2,094
  2,332
  2,583
  2,846
  3,121
  3,408
  3,707
  4,019
  4,343
  4,680
  5,030
  5,393
  5,771
  6,164
  6,573
  6,997
  7,440
  7,900
  8,379
  8,878
  9,399
  9,942
  10,509
  11,101
  11,719
  12,364
  13,039
  13,745
  14,484
Variable operating expenses, $m
  1,518
  1,701
  1,895
  2,099
  2,312
  2,535
  2,768
  3,011
  3,264
  3,527
  3,798
  4,082
  4,377
  4,684
  5,003
  5,334
  5,679
  6,038
  6,412
  6,801
  7,206
  7,628
  8,069
  8,529
  9,009
  9,511
  10,035
  10,583
  11,156
  11,755
Fixed operating expenses, $m
  176
  180
  184
  188
  192
  196
  200
  205
  209
  214
  219
  223
  228
  233
  238
  244
  249
  254
  260
  266
  272
  278
  284
  290
  296
  303
  310
  316
  323
  330
Total operating expenses, $m
  1,694
  1,881
  2,079
  2,287
  2,504
  2,731
  2,968
  3,216
  3,473
  3,741
  4,017
  4,305
  4,605
  4,917
  5,241
  5,578
  5,928
  6,292
  6,672
  7,067
  7,478
  7,906
  8,353
  8,819
  9,305
  9,814
  10,345
  10,899
  11,479
  12,085
Operating income, $m
  174
  212
  253
  297
  342
  390
  439
  491
  546
  602
  663
  724
  788
  854
  923
  995
  1,069
  1,147
  1,228
  1,313
  1,401
  1,493
  1,589
  1,690
  1,795
  1,905
  2,020
  2,140
  2,266
  2,398
EBITDA, $m
  290
  342
  398
  456
  518
  582
  649
  719
  792
  869
  948
  1,030
  1,116
  1,205
  1,298
  1,395
  1,495
  1,600
  1,709
  1,823
  1,941
  2,065
  2,194
  2,329
  2,470
  2,618
  2,772
  2,934
  3,103
  3,280
Interest expense (income), $m
  2
  7
  10
  13
  16
  20
  24
  28
  32
  36
  40
  45
  50
  55
  60
  65
  71
  77
  83
  89
  96
  103
  110
  117
  125
  133
  142
  150
  160
  169
  179
Earnings before tax, $m
  167
  203
  241
  280
  322
  366
  412
  460
  510
  562
  618
  674
  733
  794
  857
  924
  992
  1,064
  1,139
  1,217
  1,298
  1,383
  1,472
  1,565
  1,662
  1,763
  1,869
  1,981
  2,097
  2,219
Tax expense, $m
  45
  55
  65
  76
  87
  99
  111
  124
  138
  152
  167
  182
  198
  214
  232
  249
  268
  287
  308
  329
  351
  373
  397
  422
  449
  476
  505
  535
  566
  599
Net income, $m
  122
  148
  176
  205
  235
  267
  301
  336
  372
  410
  451
  492
  535
  580
  626
  674
  724
  777
  831
  888
  948
  1,010
  1,075
  1,142
  1,213
  1,287
  1,365
  1,446
  1,531
  1,620

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
  1,280
  1,435
  1,598
  1,770
  1,951
  2,139
  2,336
  2,541
  2,755
  2,977
  3,207
  3,447
  3,697
  3,956
  4,225
  4,505
  4,796
  5,099
  5,414
  5,743
  6,085
  6,442
  6,814
  7,203
  7,608
  8,032
  8,475
  8,937
  9,421
  9,927
Adjusted assets (=assets-cash), $m
  1,280
  1,435
  1,598
  1,770
  1,951
  2,139
  2,336
  2,541
  2,755
  2,977
  3,207
  3,447
  3,697
  3,956
  4,225
  4,505
  4,796
  5,099
  5,414
  5,743
  6,085
  6,442
  6,814
  7,203
  7,608
  8,032
  8,475
  8,937
  9,421
  9,927
Revenue / Adjusted assets
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
  1.459
Average production assets, $m
  932
  1,045
  1,164
  1,289
  1,420
  1,557
  1,701
  1,850
  2,005
  2,167
  2,335
  2,510
  2,691
  2,880
  3,076
  3,280
  3,492
  3,712
  3,942
  4,181
  4,430
  4,690
  4,961
  5,244
  5,539
  5,848
  6,170
  6,507
  6,859
  7,227
Working capital, $m
  22
  25
  28
  31
  34
  37
  41
  44
  48
  52
  56
  60
  65
  69
  74
  79
  84
  89
  95
  101
  107
  113
  119
  126
  133
  141
  148
  156
  165
  174
Total debt, $m
  179
  239
  302
  368
  438
  511
  587
  666
  748
  834
  923
  1,016
  1,112
  1,212
  1,316
  1,424
  1,536
  1,653
  1,775
  1,902
  2,034
  2,172
  2,315
  2,465
  2,622
  2,785
  2,956
  3,135
  3,321
  3,517
Total liabilities, $m
  494
  554
  617
  683
  753
  826
  902
  981
  1,063
  1,149
  1,238
  1,331
  1,427
  1,527
  1,631
  1,739
  1,851
  1,968
  2,090
  2,217
  2,349
  2,487
  2,630
  2,780
  2,937
  3,100
  3,271
  3,450
  3,637
  3,832
Total equity, $m
  786
  881
  981
  1,087
  1,198
  1,314
  1,434
  1,560
  1,691
  1,828
  1,969
  2,117
  2,270
  2,429
  2,594
  2,766
  2,945
  3,131
  3,324
  3,526
  3,736
  3,955
  4,184
  4,423
  4,672
  4,932
  5,203
  5,487
  5,784
  6,095
Total liabilities and equity, $m
  1,280
  1,435
  1,598
  1,770
  1,951
  2,140
  2,336
  2,541
  2,754
  2,977
  3,207
  3,448
  3,697
  3,956
  4,225
  4,505
  4,796
  5,099
  5,414
  5,743
  6,085
  6,442
  6,814
  7,203
  7,609
  8,032
  8,474
  8,937
  9,421
  9,927
Debt-to-equity ratio
  0.230
  0.270
  0.310
  0.340
  0.370
  0.390
  0.410
  0.430
  0.440
  0.460
  0.470
  0.480
  0.490
  0.500
  0.510
  0.510
  0.520
  0.530
  0.530
  0.540
  0.540
  0.550
  0.550
  0.560
  0.560
  0.560
  0.570
  0.570
  0.570
  0.580
Adjusted equity ratio
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614
  0.614

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  122
  148
  176
  205
  235
  267
  301
  336
  372
  410
  451
  492
  535
  580
  626
  674
  724
  777
  831
  888
  948
  1,010
  1,075
  1,142
  1,213
  1,287
  1,365
  1,446
  1,531
  1,620
Depreciation, amort., depletion, $m
  116
  130
  144
  159
  175
  192
  210
  228
  247
  267
  285
  306
  328
  351
  375
  400
  426
  453
  481
  510
  540
  572
  605
  640
  676
  713
  752
  793
  836
  881
Funds from operations, $m
  238
  278
  320
  364
  411
  459
  510
  564
  619
  677
  736
  798
  863
  931
  1,001
  1,074
  1,150
  1,230
  1,312
  1,398
  1,488
  1,582
  1,680
  1,782
  1,889
  2,000
  2,117
  2,239
  2,367
  2,501
Change in working capital, $m
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
Cash from operations, $m
  235
  275
  317
  361
  408
  456
  507
  560
  615
  673
  732
  794
  859
  926
  996
  1,069
  1,145
  1,224
  1,307
  1,392
  1,482
  1,576
  1,673
  1,775
  1,882
  1,993
  2,109
  2,231
  2,359
  2,492
Maintenance CAPEX, $m
  -101
  -114
  -127
  -142
  -157
  -173
  -190
  -207
  -226
  -245
  -264
  -285
  -306
  -328
  -351
  -375
  -400
  -426
  -453
  -481
  -510
  -540
  -572
  -605
  -640
  -676
  -713
  -752
  -793
  -836
New CAPEX, $m
  -106
  -113
  -119
  -125
  -131
  -137
  -143
  -149
  -155
  -162
  -168
  -175
  -181
  -189
  -196
  -204
  -212
  -221
  -230
  -239
  -249
  -260
  -271
  -283
  -295
  -308
  -322
  -337
  -352
  -368
Cash from investing activities, $m
  -207
  -227
  -246
  -267
  -288
  -310
  -333
  -356
  -381
  -407
  -432
  -460
  -487
  -517
  -547
  -579
  -612
  -647
  -683
  -720
  -759
  -800
  -843
  -888
  -935
  -984
  -1,035
  -1,089
  -1,145
  -1,204
Free cash flow, $m
  29
  49
  70
  94
  119
  146
  174
  203
  234
  266
  300
  335
  371
  409
  449
  490
  533
  578
  624
  673
  723
  775
  830
  887
  947
  1,009
  1,074
  1,142
  1,213
  1,287
Issuance/(repayment) of debt, $m
  56
  60
  63
  66
  70
  73
  76
  79
  82
  86
  89
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  150
  157
  163
  171
  179
  187
  195
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  
  56
  60
  63
  66
  70
  73
  76
  79
  82
  86
  89
  93
  96
  100
  104
  108
  112
  117
  122
  127
  132
  138
  144
  150
  157
  163
  171
  179
  187
  195
Total cash flow (excl. dividends), $m
  85
  108
  134
  160
  189
  218
  250
  282
  317
  352
  389
  427
  468
  509
  553
  598
  646
  695
  746
  799
  855
  913
  974
  1,037
  1,103
  1,172
  1,245
  1,321
  1,400
  1,483
Retained Cash Flow (-), $m
  -90
  -95
  -100
  -106
  -111
  -116
  -121
  -126
  -131
  -136
  -142
  -147
  -153
  -159
  -165
  -172
  -179
  -186
  -194
  -202
  -210
  -219
  -229
  -238
  -249
  -260
  -272
  -284
  -297
  -311
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
  -5
  13
  33
  55
  78
  103
  129
  156
  185
  216
  247
  280
  315
  350
  388
  426
  467
  509
  552
  598
  645
  694
  745
  799
  854
  912
  973
  1,036
  1,103
  1,172
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
  -5
  12
  29
  45
  60
  75
  87
  98
  107
  113
  117
  120
  120
  118
  114
  108
  102
  94
  85
  76
  67
  58
  49
  41
  33
  27
  21
  16
  12
  9
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

Saia, Inc. is a transportation company. The Company provides regional and interregional less-than-truckload (LTL) services. The Company also offers a range of other value-added services, including non-asset truckload, expedited and logistics services across the United States. The Company's subsidiary Saia Motor Freight Line, LLC (Saia LTL Freight) is a LTL carrier. As of December 31, 2016, Saia LTL Freight had served 34 states in the South, Southwest, Midwest, Pacific Northwest and West. Saia LTL Freight specializes in offering its customers a range of regional and interregional LTL services, including time-definite and expedited options. As of December 31, 2016, Saia LTL Freight operated a network consisting of 151 owned and leased locations. The Company's other subsidiaries include Saia TL Plus, LLC, Saia Logistics Services, LLC, Saia Sales, LLC, Saia Metrogo, LLC, LinkEx, Inc. and Saia Motor Freight Mexico, S. DE R.L. DE C.V.

FINANCIAL RATIOS  of  Saia, Inc. (SAIA)

Valuation Ratios
P/E Ratio 32.8
Price to Sales 1.3
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 10.8
Price to Free Cash Flow 58.3
Growth Rates
Sales Growth Rate -0.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 36.8%
Cap. Spend. - 3 Yr. Gr. Rate -1.1%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 11.8%
Total Debt to Equity 15.3%
Interest Coverage 39
Management Effectiveness
Return On Assets 6.4%
Ret/ On Assets - 3 Yr. Avg. 7.7%
Return On Total Capital 9.1%
Ret/ On T. Cap. - 3 Yr. Avg. 11.1%
Return On Equity 10.5%
Return On Equity - 3 Yr. Avg. 13.3%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 81.1%
Gross Margin - 3 Yr. Avg. 78.4%
EBITDA Margin 12.6%
EBITDA Margin - 3 Yr. Avg. 12.2%
Operating Margin 6.5%
Oper. Margin - 3 Yr. Avg. 6.8%
Pre-Tax Margin 6.2%
Pre-Tax Margin - 3 Yr. Avg. 6.5%
Net Profit Margin 3.9%
Net Profit Margin - 3 Yr. Avg. 4.2%
Effective Tax Rate 36%
Eff/ Tax Rate - 3 Yr. Avg. 35.9%
Payout Ratio 0%

SAIA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SAIA stock intrinsic value calculation we used $1654 million for the last fiscal year's total revenue generated by Saia, Inc.. The default revenue input number comes from 0001 income statement of Saia, 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 SAIA stock valuation model: a) initial revenue growth rate of 12.9% 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 SAIA is calculated based on our internal credit rating of Saia, 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 Saia, 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 SAIA stock the variable cost ratio is equal to 81.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $172 million in the base year in the intrinsic value calculation for SAIA 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 Saia, Inc..

Corporate tax rate of 27% is the nominal tax rate for Saia, 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 SAIA 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 SAIA are equal to 49.9%.

Life of production assets of 8.2 years is the average useful life of capital assets used in Saia, 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 SAIA is equal to 1.2%. 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 - $695.864 million for Saia, 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 25.837 million for Saia, 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 Saia, Inc. at the current share price and the inputted number of shares is $1.6 billion.

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