Intrinsic value of Tribune Publishing Company - TPCO

Previous Close

$7.30

  Intrinsic Value

$28.38

stock screener

  Rating & Target

str. buy

+289%

Previous close

$7.30

 
Intrinsic value

$28.38

 
Up/down potential

+289%

 
Rating

str. buy

We calculate the intrinsic value of TPCO 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, %
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
  5.84
  5.75
  5.68
  5.61
  5.55
  5.50
  5.45
  5.40
  5.36
  5.32
  5.29
  5.26
  5.24
  5.21
  5.19
  5.17
  5.16
Revenue, $m
  1,650
  1,782
  1,919
  2,061
  2,209
  2,362
  2,522
  2,687
  2,860
  3,040
  3,226
  3,421
  3,624
  3,836
  4,056
  4,287
  4,527
  4,779
  5,041
  5,316
  5,603
  5,903
  6,218
  6,547
  6,891
  7,252
  7,630
  8,026
  8,442
  8,877
Variable operating expenses, $m
  1,595
  1,721
  1,851
  1,987
  2,129
  2,276
  2,428
  2,587
  2,752
  2,924
  3,087
  3,274
  3,468
  3,670
  3,882
  4,102
  4,332
  4,573
  4,824
  5,087
  5,361
  5,649
  5,950
  6,265
  6,594
  6,940
  7,301
  7,680
  8,078
  8,494
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
  1,595
  1,721
  1,851
  1,987
  2,129
  2,276
  2,428
  2,587
  2,752
  2,924
  3,087
  3,274
  3,468
  3,670
  3,882
  4,102
  4,332
  4,573
  4,824
  5,087
  5,361
  5,649
  5,950
  6,265
  6,594
  6,940
  7,301
  7,680
  8,078
  8,494
Operating income, $m
  56
  61
  67
  73
  80
  86
  93
  100
  108
  116
  139
  147
  156
  165
  175
  185
  195
  206
  217
  229
  242
  254
  268
  282
  297
  313
  329
  346
  364
  383
EBITDA, $m
  110
  119
  128
  137
  147
  157
  168
  179
  190
  202
  215
  228
  241
  255
  270
  285
  301
  318
  336
  354
  373
  393
  414
  436
  459
  483
  508
  534
  562
  591
Interest expense (income), $m
  0
  26
  29
  34
  39
  44
  50
  56
  62
  68
  74
  81
  88
  95
  103
  111
  119
  127
  136
  146
  156
  166
  177
  188
  199
  212
  225
  238
  252
  267
  282
Earnings before tax, $m
  30
  32
  33
  34
  35
  36
  38
  39
  40
  41
  58
  60
  61
  63
  64
  66
  68
  70
  71
  74
  76
  78
  80
  83
  85
  88
  91
  94
  97
  100
Tax expense, $m
  8
  9
  9
  9
  10
  10
  10
  10
  11
  11
  16
  16
  16
  17
  17
  18
  18
  19
  19
  20
  20
  21
  22
  22
  23
  24
  25
  25
  26
  27
Net income, $m
  22
  24
  24
  25
  26
  27
  27
  28
  29
  30
  42
  43
  45
  46
  47
  48
  49
  51
  52
  54
  55
  57
  59
  60
  62
  64
  66
  69
  71
  73

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
  937
  1,011
  1,089
  1,170
  1,253
  1,341
  1,431
  1,525
  1,623
  1,725
  1,831
  1,942
  2,057
  2,177
  2,302
  2,433
  2,569
  2,712
  2,861
  3,017
  3,180
  3,350
  3,529
  3,716
  3,911
  4,116
  4,330
  4,555
  4,791
  5,038
Adjusted assets (=assets-cash), $m
  937
  1,011
  1,089
  1,170
  1,253
  1,341
  1,431
  1,525
  1,623
  1,725
  1,831
  1,942
  2,057
  2,177
  2,302
  2,433
  2,569
  2,712
  2,861
  3,017
  3,180
  3,350
  3,529
  3,716
  3,911
  4,116
  4,330
  4,555
  4,791
  5,038
Revenue / Adjusted assets
  1.761
  1.763
  1.762
  1.762
  1.763
  1.761
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
  1.762
Average production assets, $m
  213
  230
  248
  266
  285
  305
  325
  347
  369
  392
  416
  441
  468
  495
  523
  553
  584
  616
  650
  686
  723
  762
  802
  845
  889
  936
  984
  1,035
  1,089
  1,145
Working capital, $m
  -20
  -21
  -23
  -25
  -27
  -28
  -30
  -32
  -34
  -36
  -39
  -41
  -43
  -46
  -49
  -51
  -54
  -57
  -60
  -64
  -67
  -71
  -75
  -79
  -83
  -87
  -92
  -96
  -101
  -107
Total debt, $m
  400
  467
  537
  609
  685
  763
  845
  929
  1,017
  1,109
  1,205
  1,304
  1,408
  1,516
  1,629
  1,746
  1,869
  1,997
  2,132
  2,272
  2,418
  2,572
  2,732
  2,901
  3,077
  3,261
  3,454
  3,656
  3,868
  4,091
Total liabilities, $m
  843
  910
  980
  1,053
  1,128
  1,206
  1,288
  1,373
  1,461
  1,553
  1,648
  1,747
  1,851
  1,959
  2,072
  2,190
  2,313
  2,441
  2,575
  2,715
  2,862
  3,015
  3,176
  3,344
  3,520
  3,704
  3,897
  4,100
  4,312
  4,534
Total equity, $m
  94
  101
  109
  117
  125
  134
  143
  153
  162
  173
  183
  194
  206
  218
  230
  243
  257
  271
  286
  302
  318
  335
  353
  372
  391
  412
  433
  456
  479
  504
Total liabilities and equity, $m
  937
  1,011
  1,089
  1,170
  1,253
  1,340
  1,431
  1,526
  1,623
  1,726
  1,831
  1,941
  2,057
  2,177
  2,302
  2,433
  2,570
  2,712
  2,861
  3,017
  3,180
  3,350
  3,529
  3,716
  3,911
  4,116
  4,330
  4,556
  4,791
  5,038
Debt-to-equity ratio
  4.270
  4.620
  4.930
  5.210
  5.460
  5.690
  5.900
  6.090
  6.270
  6.430
  6.580
  6.720
  6.840
  6.960
  7.070
  7.180
  7.270
  7.370
  7.450
  7.530
  7.610
  7.680
  7.740
  7.810
  7.870
  7.920
  7.980
  8.030
  8.070
  8.120
Adjusted equity ratio
  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
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  22
  24
  24
  25
  26
  27
  27
  28
  29
  30
  42
  43
  45
  46
  47
  48
  49
  51
  52
  54
  55
  57
  59
  60
  62
  64
  66
  69
  71
  73
Depreciation, amort., depletion, $m
  54
  57
  60
  64
  67
  71
  75
  78
  82
  87
  76
  80
  85
  90
  95
  101
  106
  112
  118
  125
  131
  138
  146
  154
  162
  170
  179
  188
  198
  208
Funds from operations, $m
  76
  81
  85
  89
  93
  97
  102
  107
  112
  117
  118
  124
  130
  136
  142
  149
  156
  163
  170
  178
  187
  195
  204
  214
  224
  234
  245
  257
  269
  281
Change in working capital, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
Cash from operations, $m
  78
  82
  86
  90
  95
  99
  104
  109
  114
  119
  120
  126
  132
  138
  145
  151
  158
  166
  174
  182
  190
  199
  208
  218
  228
  239
  250
  262
  274
  287
Maintenance CAPEX, $m
  -36
  -39
  -42
  -45
  -48
  -52
  -55
  -59
  -63
  -67
  -71
  -76
  -80
  -85
  -90
  -95
  -101
  -106
  -112
  -118
  -125
  -131
  -138
  -146
  -154
  -162
  -170
  -179
  -188
  -198
New CAPEX, $m
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -44
  -47
  -49
  -51
  -54
  -56
Cash from investing activities, $m
  -52
  -56
  -60
  -63
  -67
  -72
  -76
  -80
  -85
  -90
  -95
  -101
  -106
  -112
  -118
  -125
  -132
  -138
  -146
  -153
  -162
  -170
  -179
  -188
  -198
  -209
  -219
  -230
  -242
  -254
Free cash flow, $m
  26
  27
  27
  27
  27
  28
  28
  28
  28
  29
  25
  25
  26
  26
  26
  27
  27
  27
  28
  28
  28
  29
  29
  30
  30
  30
  31
  31
  32
  32
Issuance/(repayment) of debt, $m
  47
  67
  70
  73
  75
  78
  81
  85
  88
  92
  95
  99
  104
  108
  113
  118
  123
  128
  134
  140
  147
  153
  161
  168
  176
  184
  193
  202
  212
  222
Issuance/(repurchase) of shares, $m
  3
  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  
  50
  67
  70
  73
  75
  78
  81
  85
  88
  92
  95
  99
  104
  108
  113
  118
  123
  128
  134
  140
  147
  153
  161
  168
  176
  184
  193
  202
  212
  222
Total cash flow (excl. dividends), $m
  76
  94
  97
  100
  103
  106
  109
  113
  117
  121
  120
  125
  129
  134
  139
  144
  150
  156
  162
  168
  175
  182
  190
  198
  206
  215
  224
  234
  244
  255
Retained Cash Flow (-), $m
  -25
  -7
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -24
  -25
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
  51
  86
  89
  92
  94
  97
  100
  104
  107
  110
  110
  114
  118
  122
  126
  131
  136
  141
  147
  153
  159
  165
  172
  179
  186
  194
  203
  211
  220
  230
Discount rate, %
  4.80
  5.04
  5.29
  5.56
  5.83
  6.13
  6.43
  6.75
  7.09
  7.45
  7.82
  8.21
  8.62
  9.05
  9.50
  9.98
  10.48
  11.00
  11.55
  12.13
  12.74
  13.37
  14.04
  14.74
  15.48
  16.25
  17.07
  17.92
  18.82
  19.76
PV of cash for distribution, $m
  49
  78
  76
  74
  71
  68
  65
  61
  58
  54
  48
  44
  40
  36
  32
  29
  25
  22
  18
  15
  13
  10
  8
  7
  5
  4
  3
  2
  1
  1
Current shareholders' claim on cash, %
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0
  99.0

FINANCIAL RATIOS  of  Tribune Publishing Company (TPCO)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
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 NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

TPCO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TPCO stock intrinsic value calculation we used $1524 million for the last fiscal year's total revenue generated by Tribune Publishing Company. The default revenue input number comes from 0001 income statement of Tribune Publishing Company. 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 TPCO stock valuation model: a) initial revenue growth rate of 8.3% 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 4.8%, whose default value for TPCO is calculated based on our internal credit rating of Tribune Publishing Company, 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 Tribune Publishing Company.
    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 TPCO stock the variable cost ratio is equal to 96.7%.

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 TPCO 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 Tribune Publishing Company.

Corporate tax rate of 27% is the nominal tax rate for Tribune Publishing Company. 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 TPCO 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 TPCO are equal to 12.9%.

Life of production assets of 5.5 years is the average useful life of capital assets used in Tribune Publishing Company 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 TPCO 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 - $69.162 million for Tribune Publishing Company - 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 35.601 million for Tribune Publishing Company 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 Tribune Publishing Company at the current share price and the inputted number of shares is $0.3 billion.

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