Intrinsic value of UFP Technologies, Inc. - UFPT

Previous Close

$41.99

  Intrinsic Value

$3.96

stock screener

  Rating & Target

str. sell

-91%

Previous close

$41.99

 
Intrinsic value

$3.96

 
Up/down potential

-91%

 
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, %
  34.00
  31.10
  28.49
  26.14
  24.03
  22.12
  20.41
  18.87
  17.48
  16.24
  15.11
  14.10
  13.19
  12.37
  11.63
  10.97
  10.37
  9.84
  9.35
  8.92
  8.53
  8.17
  7.86
  7.57
  7.31
  7.08
  6.87
  6.69
  6.52
  6.37
Revenue, $m
  198
  260
  334
  421
  523
  638
  769
  914
  1,073
  1,248
  1,436
  1,639
  1,855
  2,084
  2,327
  2,582
  2,850
  3,130
  3,423
  3,728
  4,046
  4,377
  4,720
  5,078
  5,449
  5,835
  6,236
  6,653
  7,087
  7,538
Variable operating expenses, $m
  182
  238
  306
  386
  479
  584
  703
  836
  982
  1,141
  1,313
  1,498
  1,696
  1,906
  2,127
  2,361
  2,605
  2,862
  3,129
  3,409
  3,699
  4,001
  4,316
  4,642
  4,982
  5,335
  5,702
  6,083
  6,479
  6,892
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
  182
  238
  306
  386
  479
  584
  703
  836
  982
  1,141
  1,313
  1,498
  1,696
  1,906
  2,127
  2,361
  2,605
  2,862
  3,129
  3,409
  3,699
  4,001
  4,316
  4,642
  4,982
  5,335
  5,702
  6,083
  6,479
  6,892
Operating income, $m
  16
  22
  28
  35
  44
  54
  65
  78
  91
  106
  123
  140
  159
  179
  199
  221
  244
  268
  293
  320
  347
  375
  405
  435
  467
  500
  535
  570
  608
  646
EBITDA, $m
  24
  32
  41
  51
  63
  77
  93
  111
  130
  151
  174
  199
  225
  253
  282
  313
  346
  380
  415
  452
  491
  531
  573
  616
  661
  708
  756
  807
  860
  914
Interest expense (income), $m
  0
  0
  0
  1
  1
  1
  2
  3
  3
  4
  5
  6
  7
  8
  9
  10
  12
  13
  14
  16
  17
  19
  21
  22
  24
  26
  28
  30
  32
  35
  37
Earnings before tax, $m
  16
  21
  27
  34
  43
  52
  63
  74
  87
  101
  117
  134
  151
  170
  189
  210
  231
  254
  278
  302
  328
  355
  382
  411
  441
  472
  504
  538
  573
  609
Tax expense, $m
  4
  6
  7
  9
  12
  14
  17
  20
  24
  27
  32
  36
  41
  46
  51
  57
  62
  69
  75
  82
  89
  96
  103
  111
  119
  127
  136
  145
  155
  165
Net income, $m
  12
  16
  20
  25
  31
  38
  46
  54
  64
  74
  86
  98
  110
  124
  138
  153
  169
  185
  203
  221
  239
  259
  279
  300
  322
  345
  368
  393
  418
  445

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
  148
  194
  249
  314
  389
  475
  572
  680
  799
  929
  1,069
  1,220
  1,381
  1,552
  1,732
  1,923
  2,122
  2,331
  2,549
  2,776
  3,013
  3,259
  3,515
  3,781
  4,057
  4,345
  4,643
  4,954
  5,277
  5,613
Adjusted assets (=assets-cash), $m
  148
  194
  249
  314
  389
  475
  572
  680
  799
  929
  1,069
  1,220
  1,381
  1,552
  1,732
  1,923
  2,122
  2,331
  2,549
  2,776
  3,013
  3,259
  3,515
  3,781
  4,057
  4,345
  4,643
  4,954
  5,277
  5,613
Revenue / Adjusted assets
  1.338
  1.340
  1.341
  1.341
  1.344
  1.343
  1.344
  1.344
  1.343
  1.343
  1.343
  1.343
  1.343
  1.343
  1.344
  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
  73
  96
  124
  156
  193
  236
  284
  338
  397
  462
  531
  606
  686
  771
  861
  955
  1,054
  1,158
  1,266
  1,379
  1,497
  1,619
  1,747
  1,879
  2,016
  2,159
  2,307
  2,462
  2,622
  2,789
Working capital, $m
  36
  48
  61
  77
  96
  117
  141
  167
  196
  228
  263
  300
  339
  381
  426
  472
  522
  573
  626
  682
  740
  801
  864
  929
  997
  1,068
  1,141
  1,218
  1,297
  1,379
Total debt, $m
  5
  11
  18
  27
  37
  48
  61
  75
  91
  108
  127
  147
  168
  190
  214
  239
  266
  293
  322
  352
  383
  416
  449
  485
  521
  559
  598
  639
  682
  726
Total liabilities, $m
  19
  26
  33
  41
  51
  63
  76
  90
  105
  123
  141
  161
  182
  205
  229
  254
  280
  308
  336
  366
  398
  430
  464
  499
  536
  574
  613
  654
  697
  741
Total equity, $m
  128
  168
  216
  272
  338
  413
  497
  590
  694
  806
  928
  1,059
  1,199
  1,347
  1,504
  1,669
  1,842
  2,023
  2,212
  2,410
  2,615
  2,829
  3,051
  3,282
  3,522
  3,771
  4,031
  4,300
  4,580
  4,872
Total liabilities and equity, $m
  147
  194
  249
  313
  389
  476
  573
  680
  799
  929
  1,069
  1,220
  1,381
  1,552
  1,733
  1,923
  2,122
  2,331
  2,548
  2,776
  3,013
  3,259
  3,515
  3,781
  4,058
  4,345
  4,644
  4,954
  5,277
  5,613
Debt-to-equity ratio
  0.040
  0.070
  0.080
  0.100
  0.110
  0.120
  0.120
  0.130
  0.130
  0.130
  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
  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
  12
  16
  20
  25
  31
  38
  46
  54
  64
  74
  86
  98
  110
  124
  138
  153
  169
  185
  203
  221
  239
  259
  279
  300
  322
  345
  368
  393
  418
  445
Depreciation, amort., depletion, $m
  8
  10
  13
  16
  19
  23
  28
  33
  39
  45
  51
  58
  66
  74
  83
  92
  101
  111
  122
  133
  144
  156
  168
  181
  194
  208
  222
  237
  252
  268
Funds from operations, $m
  20
  26
  33
  41
  50
  61
  74
  87
  103
  119
  137
  156
  176
  198
  221
  245
  270
  297
  324
  353
  383
  415
  447
  481
  516
  552
  590
  629
  670
  713
Change in working capital, $m
  9
  11
  14
  16
  19
  21
  24
  27
  29
  32
  35
  37
  40
  42
  44
  47
  49
  51
  54
  56
  58
  61
  63
  65
  68
  71
  73
  76
  79
  83
Cash from operations, $m
  10
  14
  19
  25
  32
  40
  50
  61
  73
  87
  102
  119
  137
  156
  177
  198
  221
  245
  271
  297
  325
  354
  384
  415
  448
  482
  517
  553
  591
  630
Maintenance CAPEX, $m
  -5
  -7
  -9
  -12
  -15
  -19
  -23
  -27
  -33
  -38
  -44
  -51
  -58
  -66
  -74
  -83
  -92
  -101
  -111
  -122
  -133
  -144
  -156
  -168
  -181
  -194
  -208
  -222
  -237
  -252
New CAPEX, $m
  -19
  -23
  -27
  -32
  -37
  -43
  -48
  -54
  -59
  -64
  -70
  -75
  -80
  -85
  -90
  -94
  -99
  -104
  -108
  -113
  -118
  -122
  -127
  -132
  -137
  -143
  -148
  -154
  -160
  -167
Cash from investing activities, $m
  -24
  -30
  -36
  -44
  -52
  -62
  -71
  -81
  -92
  -102
  -114
  -126
  -138
  -151
  -164
  -177
  -191
  -205
  -219
  -235
  -251
  -266
  -283
  -300
  -318
  -337
  -356
  -376
  -397
  -419
Free cash flow, $m
  -13
  -16
  -18
  -19
  -21
  -21
  -21
  -20
  -18
  -15
  -12
  -7
  -2
  5
  13
  21
  30
  40
  51
  63
  75
  88
  101
  115
  130
  145
  161
  177
  194
  211
Issuance/(repayment) of debt, $m
  5
  6
  7
  9
  10
  11
  13
  14
  16
  17
  19
  20
  21
  23
  24
  25
  26
  28
  29
  30
  31
  33
  34
  35
  36
  38
  39
  41
  43
  44
Issuance/(repurchase) of shares, $m
  21
  24
  28
  31
  34
  37
  39
  39
  40
  39
  36
  33
  29
  24
  19
  12
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  26
  30
  35
  40
  44
  48
  52
  53
  56
  56
  55
  53
  50
  47
  43
  37
  30
  28
  29
  30
  31
  33
  34
  35
  36
  38
  39
  41
  43
  44
Total cash flow (excl. dividends), $m
  12
  15
  18
  21
  24
  27
  30
  34
  37
  40
  43
  46
  49
  52
  55
  58
  61
  68
  80
  93
  106
  120
  135
  150
  166
  183
  200
  218
  237
  256
Retained Cash Flow (-), $m
  -33
  -40
  -48
  -56
  -65
  -75
  -84
  -94
  -103
  -113
  -122
  -131
  -140
  -148
  -157
  -165
  -173
  -181
  -189
  -197
  -205
  -214
  -222
  -231
  -240
  -249
  -259
  -269
  -280
  -292
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
  8
  -25
  -30
  -36
  -42
  -48
  -54
  -60
  -66
  -72
  -79
  -85
  -91
  -96
  -102
  -107
  -112
  -113
  -109
  -105
  -99
  -94
  -87
  -81
  -74
  -67
  -59
  -51
  -44
  -36
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
  7
  -23
  -26
  -30
  -32
  -35
  -36
  -38
  -38
  -38
  -38
  -36
  -34
  -32
  -30
  -27
  -24
  -21
  -17
  -13
  -10
  -8
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
Current shareholders' claim on cash, %
  92.1
  85.6
  80.3
  75.9
  72.2
  69.2
  66.7
  64.7
  63.0
  61.6
  60.5
  59.7
  59.0
  58.5
  58.2
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0
  58.0

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, Inc. (UFPT)

Valuation Ratios
P/E Ratio 37.8
Price to Sales 2.1
Price to Book 2.7
Price to Tangible Book
Price to Cash Flow 33.6
Price to Free Cash Flow 151.4
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 $148 million for the last fiscal year's total revenue generated by UFP Technologies, Inc.. The default revenue input number comes from 0001 income statement of UFP Technologies, 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 UFPT stock valuation model: a) initial revenue growth rate of 34% 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, 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 UFP Technologies, 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 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for UFP Technologies, 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 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, 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 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, 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 7.373 million for UFP Technologies, 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 UFP Technologies, Inc. at the current share price and the inputted number of shares is $0.3 billion.

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