Intrinsic value of UFP Technologies - UFPT

Previous Close

$34.89

  Intrinsic Value

$3.95

stock screener

  Rating & Target

str. sell

-89%

Previous close

$34.89

 
Intrinsic value

$3.95

 
Up/down potential

-89%

 
Rating

str. sell

We calculate the intrinsic value of UFPT 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, %
  29.40
  26.96
  24.76
  22.79
  21.01
  19.41
  17.97
  16.67
  15.50
  14.45
  13.51
  12.66
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
Revenue, $m
  191
  243
  303
  372
  450
  538
  634
  740
  855
  978
  1,110
  1,251
  1,400
  1,556
  1,721
  1,894
  2,074
  2,262
  2,458
  2,662
  2,874
  3,094
  3,323
  3,562
  3,809
  4,066
  4,334
  4,612
  4,901
  5,203
Variable operating expenses, $m
  176
  223
  278
  341
  412
  492
  580
  677
  782
  895
  1,015
  1,143
  1,279
  1,423
  1,573
  1,731
  1,896
  2,068
  2,247
  2,433
  2,627
  2,828
  3,038
  3,255
  3,482
  3,717
  3,961
  4,215
  4,480
  4,755
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
  176
  223
  278
  341
  412
  492
  580
  677
  782
  895
  1,015
  1,143
  1,279
  1,423
  1,573
  1,731
  1,896
  2,068
  2,247
  2,433
  2,627
  2,828
  3,038
  3,255
  3,482
  3,717
  3,961
  4,215
  4,480
  4,755
Operating income, $m
  16
  20
  25
  31
  38
  45
  54
  63
  73
  83
  95
  108
  120
  134
  148
  163
  178
  194
  211
  229
  247
  266
  286
  306
  327
  349
  372
  396
  421
  447
EBITDA, $m
  23
  30
  37
  45
  55
  65
  77
  90
  104
  119
  135
  152
  170
  189
  209
  230
  252
  275
  299
  324
  349
  376
  404
  433
  463
  494
  527
  560
  596
  632
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  2
  2
  3
  3
  4
  4
  5
  6
  7
  7
  8
  9
  10
  11
  12
  13
  14
  16
  17
  18
  19
  21
  22
  24
  25
Earnings before tax, $m
  16
  20
  25
  30
  37
  44
  52
  60
  70
  80
  91
  102
  114
  127
  140
  154
  169
  184
  200
  217
  234
  252
  270
  289
  309
  330
  352
  374
  398
  422
Tax expense, $m
  4
  5
  7
  8
  10
  12
  14
  16
  19
  21
  25
  28
  31
  34
  38
  42
  46
  50
  54
  58
  63
  68
  73
  78
  84
  89
  95
  101
  107
  114
Net income, $m
  11
  15
  18
  22
  27
  32
  38
  44
  51
  58
  66
  75
  84
  93
  103
  113
  123
  134
  146
  158
  171
  184
  197
  211
  226
  241
  257
  273
  290
  308

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
  142
  181
  226
  277
  335
  400
  472
  551
  636
  728
  827
  931
  1,042
  1,159
  1,282
  1,410
  1,544
  1,684
  1,830
  1,982
  2,140
  2,304
  2,475
  2,652
  2,836
  3,028
  3,227
  3,434
  3,649
  3,874
Adjusted assets (=assets-cash), $m
  142
  181
  226
  277
  335
  400
  472
  551
  636
  728
  827
  931
  1,042
  1,159
  1,282
  1,410
  1,544
  1,684
  1,830
  1,982
  2,140
  2,304
  2,475
  2,652
  2,836
  3,028
  3,227
  3,434
  3,649
  3,874
Revenue / Adjusted assets
  1.345
  1.343
  1.341
  1.343
  1.343
  1.345
  1.343
  1.343
  1.344
  1.343
  1.342
  1.344
  1.344
  1.343
  1.342
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
Average production assets, $m
  71
  90
  112
  138
  167
  199
  235
  274
  316
  362
  411
  463
  518
  576
  637
  701
  767
  837
  909
  985
  1,063
  1,145
  1,230
  1,318
  1,409
  1,504
  1,603
  1,706
  1,813
  1,925
Working capital, $m
  35
  44
  55
  68
  82
  98
  116
  135
  156
  179
  203
  229
  256
  285
  315
  347
  380
  414
  450
  487
  526
  566
  608
  652
  697
  744
  793
  844
  897
  952
Total debt, $m
  4
  9
  15
  22
  30
  38
  48
  58
  70
  82
  95
  108
  123
  138
  155
  172
  189
  208
  227
  247
  268
  290
  312
  336
  360
  385
  411
  439
  467
  497
Total liabilities, $m
  19
  24
  30
  37
  44
  53
  62
  73
  84
  96
  109
  123
  138
  153
  169
  186
  204
  222
  242
  262
  282
  304
  327
  350
  374
  400
  426
  453
  482
  511
Total equity, $m
  124
  157
  196
  240
  291
  347
  410
  478
  552
  632
  718
  808
  905
  1,006
  1,112
  1,224
  1,340
  1,462
  1,589
  1,720
  1,858
  2,000
  2,148
  2,302
  2,462
  2,628
  2,801
  2,981
  3,168
  3,362
Total liabilities and equity, $m
  143
  181
  226
  277
  335
  400
  472
  551
  636
  728
  827
  931
  1,043
  1,159
  1,281
  1,410
  1,544
  1,684
  1,831
  1,982
  2,140
  2,304
  2,475
  2,652
  2,836
  3,028
  3,227
  3,434
  3,650
  3,873
Debt-to-equity ratio
  0.030
  0.060
  0.080
  0.090
  0.100
  0.110
  0.120
  0.120
  0.130
  0.130
  0.130
  0.130
  0.140
  0.140
  0.140
  0.140
  0.140
  0.140
  0.140
  0.140
  0.140
  0.140
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
  0.150
Adjusted equity ratio
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868
  0.868

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  11
  15
  18
  22
  27
  32
  38
  44
  51
  58
  66
  75
  84
  93
  103
  113
  123
  134
  146
  158
  171
  184
  197
  211
  226
  241
  257
  273
  290
  308
Depreciation, amort., depletion, $m
  8
  9
  12
  14
  17
  20
  23
  27
  31
  36
  40
  45
  50
  55
  61
  67
  74
  80
  87
  95
  102
  110
  118
  127
  136
  145
  154
  164
  174
  185
Funds from operations, $m
  19
  24
  30
  36
  44
  52
  61
  71
  82
  94
  106
  119
  133
  148
  164
  180
  197
  215
  233
  253
  273
  294
  315
  338
  361
  386
  411
  437
  465
  493
Change in working capital, $m
  8
  9
  11
  13
  14
  16
  18
  19
  21
  23
  24
  26
  27
  29
  30
  32
  33
  34
  36
  37
  39
  40
  42
  44
  45
  47
  49
  51
  53
  55
Cash from operations, $m
  11
  14
  19
  24
  29
  36
  43
  52
  61
  71
  82
  94
  106
  119
  134
  149
  164
  181
  198
  215
  234
  253
  273
  294
  316
  339
  362
  386
  412
  438
Maintenance CAPEX, $m
  -5
  -7
  -9
  -11
  -13
  -16
  -19
  -23
  -26
  -30
  -35
  -40
  -45
  -50
  -55
  -61
  -67
  -74
  -80
  -87
  -95
  -102
  -110
  -118
  -127
  -136
  -145
  -154
  -164
  -174
New CAPEX, $m
  -16
  -19
  -22
  -26
  -29
  -32
  -36
  -39
  -42
  -46
  -49
  -52
  -55
  -58
  -61
  -64
  -67
  -70
  -73
  -75
  -78
  -82
  -85
  -88
  -92
  -95
  -99
  -103
  -107
  -112
Cash from investing activities, $m
  -21
  -26
  -31
  -37
  -42
  -48
  -55
  -62
  -68
  -76
  -84
  -92
  -100
  -108
  -116
  -125
  -134
  -144
  -153
  -162
  -173
  -184
  -195
  -206
  -219
  -231
  -244
  -257
  -271
  -286
Free cash flow, $m
  -10
  -11
  -12
  -13
  -13
  -12
  -12
  -10
  -8
  -5
  -2
  2
  7
  12
  17
  23
  30
  37
  45
  53
  61
  70
  79
  88
  98
  108
  118
  129
  140
  152
Issuance/(repayment) of debt, $m
  4
  5
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  15
  16
  17
  18
  18
  19
  20
  21
  22
  23
  23
  24
  25
  26
  27
  28
  30
Issuance/(repurchase) of shares, $m
  16
  19
  21
  22
  24
  24
  25
  24
  23
  22
  19
  16
  13
  9
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  20
  24
  27
  29
  32
  33
  34
  34
  34
  34
  32
  30
  28
  24
  20
  17
  18
  18
  19
  20
  21
  22
  23
  23
  24
  25
  26
  27
  28
  30
Total cash flow (excl. dividends), $m
  11
  12
  14
  16
  18
  21
  23
  25
  27
  29
  30
  32
  34
  36
  37
  40
  48
  56
  64
  73
  82
  91
  101
  111
  122
  133
  145
  157
  169
  182
Retained Cash Flow (-), $m
  -28
  -33
  -39
  -45
  -51
  -56
  -62
  -68
  -74
  -80
  -85
  -91
  -96
  -101
  -106
  -112
  -117
  -122
  -127
  -132
  -137
  -142
  -148
  -154
  -160
  -166
  -173
  -180
  -187
  -195
Prev. year cash balance distribution, $m
  28
  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
  -21
  -24
  -28
  -32
  -36
  -40
  -44
  -47
  -51
  -55
  -59
  -62
  -66
  -69
  -71
  -69
  -66
  -63
  -59
  -55
  -51
  -47
  -42
  -38
  -33
  -28
  -23
  -18
  -13
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
  10
  -19
  -21
  -23
  -25
  -26
  -27
  -27
  -27
  -27
  -26
  -25
  -24
  -22
  -20
  -18
  -15
  -12
  -10
  -8
  -6
  -4
  -3
  -2
  -1
  -1
  -1
  0
  0
  0
Current shareholders' claim on cash, %
  92.3
  86.0
  80.9
  76.6
  73.2
  70.3
  68.0
  66.1
  64.6
  63.4
  62.5
  61.8
  61.4
  61.1
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0
  61.0

UFP Technologies, Inc. is a designer and custom converter of foams, plastics, composites and natural fiber materials. The Company is engaged in providing solutions to customers primarily within the medical, automotive, consumer, electronics, industrial, and aerospace and defense markets. It converts these materials using laminating, molding, and fabricating manufacturing technologies. The Company's raw materials consist of polyethylene and polyurethane foams, sheet plastics, pulp fiber, cross-linked polyethylene and reticulated polyurethane foams, fabric and foam laminates, and natural fiber materials. The Company converts these materials to provide customers various solutions, including automotive interior trim, medical device components, disposable wound care components, military uniform and gear components, athletic padding, air filtration, high-temperature insulation, abrasive nail files and other beauty aids, and cushion packaging for their products.

FINANCIAL RATIOS  of  UFP Technologies (UFPT)

Valuation Ratios
P/E Ratio 31.4
Price to Sales 1.7
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 28
Price to Free Cash Flow 125.8
Growth Rates
Sales Growth Rate 5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -56.3%
Cap. Spend. - 3 Yr. Gr. Rate 3.1%
Financial Strength
Quick Ratio 31
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 0.9%
Interest Coverage 0
Management Effectiveness
Return On Assets 6.5%
Ret/ On Assets - 3 Yr. Avg. 6.9%
Return On Total Capital 7.3%
Ret/ On T. Cap. - 3 Yr. Avg. 7.9%
Return On Equity 7.4%
Return On Equity - 3 Yr. Avg. 8.1%
Asset Turnover 1.2
Profitability Ratios
Gross Margin 25.3%
Gross Margin - 3 Yr. Avg. 26.2%
EBITDA Margin 12.3%
EBITDA Margin - 3 Yr. Avg. 12%
Operating Margin 8.2%
Oper. Margin - 3 Yr. Avg. 8.3%
Pre-Tax Margin 8.2%
Pre-Tax Margin - 3 Yr. Avg. 8.5%
Net Profit Margin 5.5%
Net Profit Margin - 3 Yr. Avg. 5.7%
Effective Tax Rate 33.3%
Eff/ Tax Rate - 3 Yr. Avg. 33.3%
Payout Ratio 0%

UFPT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UFPT stock intrinsic value calculation we used $147.843 million for the last fiscal year's total revenue generated by UFP Technologies. The default revenue input number comes from 0001 income statement of UFP Technologies. 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 UFPT stock valuation model: a) initial revenue growth rate of 29.4% 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 UFPT is calculated based on our internal credit rating of UFP Technologies, 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 UFP Technologies.
    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 UFPT stock the variable cost ratio is equal to 91.9%.

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 UFPT 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 UFP Technologies.

Corporate tax rate of 27% is the nominal tax rate for UFP Technologies. 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 UFPT 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 UFPT are equal to 37%.

Life of production assets of 10.4 years is the average useful life of capital assets used in UFP Technologies 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 UFPT is equal to 18.3%. 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 - $123.712 million for UFP Technologies - 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 7.36 million for UFP Technologies 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 UFP Technologies at the current share price and the inputted number of shares is $0.3 billion.

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COMPANY NEWS

▶ UFP: 3Q Earnings Snapshot   [09:17AM  Associated Press]
▶ UFP Technologies Announces Record Q3 Results   [09:00AM  GlobeNewswire]
▶ 5 Top Stocks to Break the 'October Effect' Jinx   [Oct-01-18 09:21AM  Zacks]
▶ Who Owns UFP Technologies Inc (NASDAQ:UFPT)?   [Sep-03-18 02:12PM  Simply Wall St.]
▶ UFP: 2Q Earnings Snapshot   [11:06AM  Associated Press]
▶ UFP Technologies Announces Record Q2 Results   [09:08AM  GlobeNewswire]
▶ UFP: 1Q Earnings Snapshot   [May-04-18 09:25AM  Associated Press]
▶ UFP Technologies Announces Q1 2018 Results   [09:15AM  GlobeNewswire]
▶ UFP posts 4Q profit   [Mar-01-18 09:38AM  Associated Press]
▶ UFP Technologies Announces 2017 Results   [09:23AM  GlobeNewswire]
▶ Wired News UFP Technologies Acquires Dielectrics   [Feb-06-18 07:20AM  ACCESSWIRE]
▶ UFP Technologies Acquires Dielectrics, Inc.   [Feb-02-18 09:00AM  GlobeNewswire]
▶ UFP posts 3Q profit   [Nov-02-17 09:30AM  Associated Press]
▶ UFP posts 2Q profit   [Aug-02-17 07:40PM  Associated Press]
▶ UFP Technologies Announces Q2 Results   [09:00AM  GlobeNewswire]
▶ UFP Technologies Elects Cynthia Feldmann to its Board   [Jun-09-17 11:29AM  GlobeNewswire]
▶ UFP posts 1Q profit   [May-03-17 09:19AM  Associated Press]
▶ UFP posts 4Q profit   [Mar-02-17 09:18AM  Associated Press]
▶ UFP Technologies Announces 2016 Results   [09:01AM  GlobeNewswire]
▶ UFP Technologies Announces Q3 Results   [09:19AM  GlobeNewswire]
▶ UFP Technologies Announces Q2 Results   [09:00AM  GlobeNewswire]
▶ UFP Technologies Announces Q1 Results   [09:00AM  Business Wire]
▶ UFP Technologies Announces 2015 Results   [08:54AM  Business Wire]

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