Intrinsic value of Peak Resorts, Inc. - SKIS

Previous Close

$4.68

  Intrinsic Value

$3.05

stock screener

  Rating & Target

sell

-35%

Previous close

$4.68

 
Intrinsic value

$3.05

 
Up/down potential

-35%

 
Rating

sell

We calculate the intrinsic value of SKIS 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 0.1

 

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, %
  41.70
  38.03
  34.73
  31.75
  29.08
  26.67
  24.50
  22.55
  20.80
  19.22
  17.80
  16.52
  15.37
  14.33
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.61
  8.25
  7.93
  7.63
  7.37
  7.13
  6.92
  6.73
Revenue, $m
  187
  258
  348
  458
  592
  749
  933
  1,143
  1,381
  1,647
  1,940
  2,260
  2,607
  2,981
  3,380
  3,805
  4,253
  4,726
  5,223
  5,743
  6,287
  6,853
  7,444
  8,058
  8,697
  9,361
  10,051
  10,768
  11,513
  12,288
Variable operating expenses, $m
  166
  228
  307
  405
  522
  662
  824
  1,009
  1,219
  1,453
  1,711
  1,994
  2,300
  2,630
  2,982
  3,356
  3,752
  4,170
  4,608
  5,067
  5,546
  6,046
  6,567
  7,109
  7,673
  8,258
  8,867
  9,500
  10,157
  10,841
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
  166
  228
  307
  405
  522
  662
  824
  1,009
  1,219
  1,453
  1,711
  1,994
  2,300
  2,630
  2,982
  3,356
  3,752
  4,170
  4,608
  5,067
  5,546
  6,046
  6,567
  7,109
  7,673
  8,258
  8,867
  9,500
  10,157
  10,841
Operating income, $m
  22
  30
  40
  53
  69
  88
  109
  134
  162
  193
  228
  266
  307
  351
  398
  448
  501
  557
  615
  676
  740
  807
  877
  949
  1,024
  1,103
  1,184
  1,268
  1,356
  1,447
EBITDA, $m
  41
  56
  75
  99
  128
  162
  202
  248
  299
  357
  420
  490
  565
  646
  733
  825
  922
  1,024
  1,132
  1,245
  1,363
  1,485
  1,613
  1,747
  1,885
  2,029
  2,178
  2,334
  2,495
  2,663
Interest expense (income), $m
  0
  13
  20
  29
  41
  55
  72
  92
  116
  143
  173
  207
  245
  286
  330
  378
  429
  483
  541
  601
  665
  731
  801
  874
  949
  1,028
  1,110
  1,195
  1,283
  1,375
  1,470
Earnings before tax, $m
  8
  10
  11
  13
  14
  16
  17
  18
  20
  20
  21
  22
  22
  21
  20
  19
  18
  16
  14
  12
  9
  6
  3
  0
  -3
  -7
  -11
  -14
  -18
  -23
Tax expense, $m
  2
  3
  3
  3
  4
  4
  5
  5
  5
  5
  6
  6
  6
  6
  5
  5
  5
  4
  4
  3
  2
  2
  1
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  6
  7
  8
  9
  10
  11
  13
  13
  14
  15
  16
  16
  16
  15
  15
  14
  13
  12
  10
  8
  7
  5
  2
  0
  -3
  -7
  -11
  -14
  -18
  -23

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
  427
  589
  794
  1,046
  1,351
  1,711
  2,130
  2,610
  3,153
  3,759
  4,428
  5,160
  5,953
  6,805
  7,717
  8,686
  9,711
  10,791
  11,925
  13,112
  14,353
  15,647
  16,995
  18,398
  19,856
  21,372
  22,947
  24,584
  26,286
  28,054
Adjusted assets (=assets-cash), $m
  427
  589
  794
  1,046
  1,351
  1,711
  2,130
  2,610
  3,153
  3,759
  4,428
  5,160
  5,953
  6,805
  7,717
  8,686
  9,711
  10,791
  11,925
  13,112
  14,353
  15,647
  16,995
  18,398
  19,856
  21,372
  22,947
  24,584
  26,286
  28,054
Revenue / Adjusted assets
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
  0.438
Average production assets, $m
  335
  462
  623
  821
  1,059
  1,342
  1,671
  2,048
  2,474
  2,949
  3,474
  4,048
  4,670
  5,339
  6,054
  6,814
  7,618
  8,465
  9,355
  10,286
  11,259
  12,275
  13,332
  14,432
  15,576
  16,765
  18,001
  19,285
  20,620
  22,008
Working capital, $m
  -26
  -36
  -48
  -64
  -82
  -104
  -130
  -159
  -192
  -229
  -270
  -314
  -362
  -414
  -470
  -529
  -591
  -657
  -726
  -798
  -874
  -953
  -1,035
  -1,120
  -1,209
  -1,301
  -1,397
  -1,497
  -1,600
  -1,708
Total debt, $m
  277
  402
  559
  753
  987
  1,263
  1,585
  1,954
  2,371
  2,837
  3,350
  3,912
  4,521
  5,176
  5,876
  6,620
  7,407
  8,237
  9,108
  10,020
  10,973
  11,966
  13,002
  14,079
  15,199
  16,363
  17,573
  18,830
  20,137
  21,495
Total liabilities, $m
  328
  453
  610
  804
  1,037
  1,314
  1,636
  2,005
  2,422
  2,887
  3,401
  3,963
  4,572
  5,227
  5,927
  6,671
  7,458
  8,288
  9,158
  10,070
  11,023
  12,017
  13,052
  14,129
  15,249
  16,414
  17,624
  18,881
  20,188
  21,546
Total equity, $m
  99
  137
  184
  243
  313
  397
  494
  606
  732
  872
  1,027
  1,197
  1,381
  1,579
  1,790
  2,015
  2,253
  2,504
  2,767
  3,042
  3,330
  3,630
  3,943
  4,268
  4,607
  4,958
  5,324
  5,704
  6,098
  6,509
Total liabilities and equity, $m
  427
  590
  794
  1,047
  1,350
  1,711
  2,130
  2,611
  3,154
  3,759
  4,428
  5,160
  5,953
  6,806
  7,717
  8,686
  9,711
  10,792
  11,925
  13,112
  14,353
  15,647
  16,995
  18,397
  19,856
  21,372
  22,948
  24,585
  26,286
  28,055
Debt-to-equity ratio
  2.800
  2.940
  3.040
  3.100
  3.150
  3.180
  3.210
  3.230
  3.240
  3.250
  3.260
  3.270
  3.270
  3.280
  3.280
  3.290
  3.290
  3.290
  3.290
  3.290
  3.300
  3.300
  3.300
  3.300
  3.300
  3.300
  3.300
  3.300
  3.300
  3.300
Adjusted equity ratio
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232
  0.232

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  6
  7
  8
  9
  10
  11
  13
  13
  14
  15
  16
  16
  16
  15
  15
  14
  13
  12
  10
  8
  7
  5
  2
  0
  -3
  -7
  -11
  -14
  -18
  -23
Depreciation, amort., depletion, $m
  19
  26
  35
  46
  59
  75
  93
  114
  137
  163
  192
  224
  258
  295
  334
  376
  421
  468
  517
  568
  622
  678
  737
  797
  861
  926
  995
  1,065
  1,139
  1,216
Funds from operations, $m
  25
  33
  43
  55
  69
  86
  105
  127
  151
  178
  208
  239
  274
  310
  349
  390
  434
  479
  527
  577
  629
  683
  739
  797
  857
  919
  984
  1,051
  1,121
  1,193
Change in working capital, $m
  -8
  -10
  -12
  -15
  -19
  -22
  -26
  -29
  -33
  -37
  -41
  -45
  -48
  -52
  -56
  -59
  -62
  -66
  -69
  -72
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
Cash from operations, $m
  33
  43
  55
  70
  88
  108
  131
  156
  184
  215
  248
  284
  322
  362
  405
  449
  496
  545
  596
  649
  704
  762
  821
  883
  946
  1,012
  1,080
  1,151
  1,224
  1,301
Maintenance CAPEX, $m
  -13
  -19
  -26
  -34
  -45
  -59
  -74
  -92
  -113
  -137
  -163
  -192
  -224
  -258
  -295
  -334
  -376
  -421
  -468
  -517
  -568
  -622
  -678
  -737
  -797
  -861
  -926
  -995
  -1,065
  -1,139
New CAPEX, $m
  -99
  -127
  -161
  -198
  -239
  -283
  -329
  -377
  -426
  -475
  -525
  -574
  -622
  -669
  -715
  -760
  -804
  -847
  -890
  -932
  -973
  -1,015
  -1,057
  -1,100
  -1,144
  -1,189
  -1,236
  -1,284
  -1,335
  -1,387
Cash from investing activities, $m
  -112
  -146
  -187
  -232
  -284
  -342
  -403
  -469
  -539
  -612
  -688
  -766
  -846
  -927
  -1,010
  -1,094
  -1,180
  -1,268
  -1,358
  -1,449
  -1,541
  -1,637
  -1,735
  -1,837
  -1,941
  -2,050
  -2,162
  -2,279
  -2,400
  -2,526
Free cash flow, $m
  -79
  -103
  -131
  -162
  -196
  -233
  -272
  -313
  -355
  -397
  -439
  -482
  -524
  -565
  -605
  -645
  -684
  -723
  -761
  -799
  -837
  -876
  -914
  -954
  -995
  -1,038
  -1,082
  -1,128
  -1,176
  -1,226
Issuance/(repayment) of debt, $m
  96
  125
  157
  194
  234
  277
  322
  369
  417
  465
  514
  562
  609
  655
  700
  744
  787
  829
  871
  912
  953
  994
  1,035
  1,077
  1,120
  1,164
  1,210
  1,257
  1,307
  1,358
Issuance/(repurchase) of shares, $m
  23
  31
  39
  49
  60
  72
  85
  98
  112
  126
  140
  154
  168
  182
  197
  211
  225
  239
  253
  267
  281
  296
  310
  325
  342
  359
  376
  394
  413
  433
Cash from financing (excl. dividends), $m  
  119
  156
  196
  243
  294
  349
  407
  467
  529
  591
  654
  716
  777
  837
  897
  955
  1,012
  1,068
  1,124
  1,179
  1,234
  1,290
  1,345
  1,402
  1,462
  1,523
  1,586
  1,651
  1,720
  1,791
Total cash flow (excl. dividends), $m
  41
  52
  66
  81
  98
  116
  135
  154
  174
  194
  214
  234
  254
  273
  292
  310
  328
  345
  363
  380
  397
  414
  431
  448
  466
  485
  504
  523
  544
  566
Retained Cash Flow (-), $m
  -29
  -38
  -47
  -59
  -71
  -84
  -97
  -111
  -126
  -141
  -155
  -170
  -184
  -198
  -212
  -225
  -238
  -251
  -263
  -275
  -288
  -300
  -313
  -325
  -342
  -359
  -376
  -394
  -413
  -433
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
  11
  15
  18
  23
  27
  32
  37
  43
  48
  54
  59
  64
  70
  75
  80
  85
  90
  95
  100
  104
  109
  114
  118
  123
  125
  126
  128
  129
  131
  133
Discount rate, %
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
  10
  12
  13
  14
  15
  15
  15
  14
  13
  12
  11
  9
  8
  6
  5
  4
  3
  2
  1
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  75.4
  57.8
  45.1
  35.7
  28.7
  23.4
  19.3
  16.2
  13.7
  11.7
  10.1
  8.8
  7.7
  6.9
  6.1
  5.5
  4.9
  4.5
  4.1
  3.7
  3.4
  3.1
  2.9
  2.7
  2.5
  2.3
  2.1
  2.0
  1.9
  1.7

Peak Resorts, Inc. is a holding company. The Company, through its subsidiaries, owns or leases, and operates day ski and overnight drive ski resorts. The Company's ski resort operations consist of snow skiing, snowboarding and snow sports areas in Wildwood and Weston, Missouri; Bellefontaine and Cleveland, Ohio; Paoli, Indiana; Blakeslee and Lake Harmony, Pennsylvania; Bartlett, Bennington and Pinkham Notch, New Hampshire; West Dover, Vermont, and Hunter, New York, and an 18 hole golf course in West Dover, Vermont. It also manages hotels in Bartlett, New Hampshire; West Dover, Vermont, and Hunter, New York. As of April 30, 2016, the Company operates 14 ski resorts, which consist of six overnight drive ski resorts and eight day ski resorts located across seven states, ranging from Missouri to New Hampshire, and appeal to a range of visitors. As of April 30, 2016, the Company's resorts comprises approximately 1,860 acres of skiable terrain that appeal to a range of ages and abilities.

FINANCIAL RATIOS  of  Peak Resorts, Inc. (SKIS)

Valuation Ratios
P/E Ratio 65.4
Price to Sales 0.5
Price to Book 0.7
Price to Tangible Book
Price to Cash Flow 5
Price to Free Cash Flow 32.7
Growth Rates
Sales Growth Rate 28.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -21.4%
Cap. Spend. - 3 Yr. Gr. Rate 12.9%
Financial Strength
Quick Ratio 4
Current Ratio 0.3
LT Debt to Equity 194.5%
Total Debt to Equity 204.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 0.3%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 0.4%
Ret/ On T. Cap. - 3 Yr. Avg. -0.7%
Return On Equity 1.2%
Return On Equity - 3 Yr. Avg. -2.5%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 12.2%
EBITDA Margin - 3 Yr. Avg. 17%
Operating Margin 11.4%
Oper. Margin - 3 Yr. Avg. 9.7%
Pre-Tax Margin 1.6%
Pre-Tax Margin - 3 Yr. Avg. -2.1%
Net Profit Margin 0.8%
Net Profit Margin - 3 Yr. Avg. -1.4%
Effective Tax Rate 50%
Eff/ Tax Rate - 3 Yr. Avg. 41.1%
Payout Ratio 100%

SKIS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SKIS stock intrinsic value calculation we used $132 million for the last fiscal year's total revenue generated by Peak Resorts, Inc.. The default revenue input number comes from 0001 income statement of Peak Resorts, 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 SKIS stock valuation model: a) initial revenue growth rate of 41.7% 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 10.3%, whose default value for SKIS is calculated based on our internal credit rating of Peak Resorts, 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 Peak Resorts, 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 SKIS stock the variable cost ratio is equal to 88.6%.

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 SKIS 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 7.3% for Peak Resorts, Inc..

Corporate tax rate of 27% is the nominal tax rate for Peak Resorts, 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 SKIS 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 SKIS are equal to 179.1%.

Life of production assets of 18.1 years is the average useful life of capital assets used in Peak Resorts, 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 SKIS is equal to -13.9%. 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 - $69.82 million for Peak Resorts, 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 15.166 million for Peak Resorts, 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 Peak Resorts, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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