Intrinsic value of Universal Logistics Holdings - ULH

Previous Close

$26.43

  Intrinsic Value

$24.40

stock screener

  Rating & Target

hold

-8%

Previous close

$26.43

 
Intrinsic value

$24.40

 
Up/down potential

-8%

 
Rating

hold

We calculate the intrinsic value of ULH 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 0.8

 

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, %
  19.90
  18.41
  17.07
  15.86
  14.78
  13.80
  12.92
  12.13
  11.41
  10.77
  10.20
  9.68
  9.21
  8.79
  8.41
  8.07
  7.76
  7.48
  7.24
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
  5.96
  5.87
  5.78
  5.70
Revenue, $m
  1,459
  1,727
  2,022
  2,343
  2,689
  3,060
  3,456
  3,875
  4,317
  4,782
  5,269
  5,779
  6,311
  6,866
  7,443
  8,044
  8,668
  9,317
  9,991
  10,692
  11,420
  12,177
  12,965
  13,784
  14,637
  15,526
  16,451
  17,417
  18,423
  19,474
Variable operating expenses, $m
  1,392
  1,647
  1,926
  2,230
  2,558
  2,910
  3,284
  3,681
  4,100
  4,540
  4,992
  5,475
  5,979
  6,504
  7,051
  7,620
  8,211
  8,826
  9,465
  10,128
  10,818
  11,536
  12,282
  13,058
  13,866
  14,708
  15,585
  16,499
  17,452
  18,448
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
  1,392
  1,647
  1,926
  2,230
  2,558
  2,910
  3,284
  3,681
  4,100
  4,540
  4,992
  5,475
  5,979
  6,504
  7,051
  7,620
  8,211
  8,826
  9,465
  10,128
  10,818
  11,536
  12,282
  13,058
  13,866
  14,708
  15,585
  16,499
  17,452
  18,448
Operating income, $m
  66
  80
  96
  113
  131
  151
  172
  194
  217
  241
  278
  305
  333
  362
  392
  424
  457
  491
  526
  563
  602
  642
  683
  726
  771
  818
  867
  918
  971
  1,026
EBITDA, $m
  125
  148
  173
  200
  230
  262
  295
  331
  369
  409
  451
  494
  540
  587
  636
  688
  741
  797
  854
  914
  977
  1,041
  1,109
  1,179
  1,252
  1,328
  1,407
  1,489
  1,575
  1,665
Interest expense (income), $m
  8
  13
  18
  23
  29
  35
  42
  50
  57
  66
  74
  83
  93
  103
  113
  124
  136
  147
  160
  172
  186
  199
  214
  228
  244
  260
  277
  294
  312
  331
  351
Earnings before tax, $m
  53
  62
  73
  84
  96
  108
  122
  136
  151
  167
  194
  212
  230
  248
  268
  288
  309
  331
  354
  378
  402
  428
  455
  482
  511
  541
  573
  605
  640
  675
Tax expense, $m
  14
  17
  20
  23
  26
  29
  33
  37
  41
  45
  52
  57
  62
  67
  72
  78
  84
  89
  96
  102
  109
  116
  123
  130
  138
  146
  155
  163
  173
  182
Net income, $m
  39
  45
  53
  61
  70
  79
  89
  99
  110
  122
  142
  154
  168
  181
  196
  210
  226
  242
  259
  276
  294
  312
  332
  352
  373
  395
  418
  442
  467
  493

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
  732
  867
  1,015
  1,176
  1,349
  1,535
  1,734
  1,944
  2,166
  2,399
  2,644
  2,900
  3,167
  3,445
  3,735
  4,036
  4,349
  4,675
  5,013
  5,365
  5,730
  6,110
  6,505
  6,916
  7,344
  7,790
  8,255
  8,739
  9,244
  9,771
Adjusted assets (=assets-cash), $m
  732
  867
  1,015
  1,176
  1,349
  1,535
  1,734
  1,944
  2,166
  2,399
  2,644
  2,900
  3,167
  3,445
  3,735
  4,036
  4,349
  4,675
  5,013
  5,365
  5,730
  6,110
  6,505
  6,916
  7,344
  7,790
  8,255
  8,739
  9,244
  9,771
Revenue / Adjusted assets
  1.993
  1.992
  1.992
  1.992
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
  1.993
Average production assets, $m
  373
  442
  518
  600
  688
  783
  885
  992
  1,105
  1,224
  1,349
  1,479
  1,616
  1,758
  1,905
  2,059
  2,219
  2,385
  2,558
  2,737
  2,924
  3,117
  3,319
  3,529
  3,747
  3,975
  4,212
  4,459
  4,716
  4,985
Working capital, $m
  64
  76
  89
  103
  118
  135
  152
  170
  190
  210
  232
  254
  278
  302
  328
  354
  381
  410
  440
  470
  502
  536
  570
  607
  644
  683
  724
  766
  811
  857
Total debt, $m
  336
  434
  541
  657
  783
  918
  1,061
  1,214
  1,374
  1,543
  1,720
  1,906
  2,099
  2,300
  2,510
  2,728
  2,955
  3,191
  3,436
  3,690
  3,955
  4,230
  4,516
  4,814
  5,123
  5,446
  5,782
  6,133
  6,499
  6,880
Total liabilities, $m
  530
  627
  735
  851
  977
  1,112
  1,255
  1,408
  1,568
  1,737
  1,914
  2,099
  2,293
  2,494
  2,704
  2,922
  3,149
  3,385
  3,629
  3,884
  4,149
  4,424
  4,710
  5,007
  5,317
  5,640
  5,976
  6,327
  6,693
  7,074
Total equity, $m
  202
  239
  280
  324
  372
  424
  479
  537
  598
  662
  730
  800
  874
  951
  1,031
  1,114
  1,200
  1,290
  1,384
  1,481
  1,581
  1,686
  1,795
  1,909
  2,027
  2,150
  2,278
  2,412
  2,551
  2,697
Total liabilities and equity, $m
  732
  866
  1,015
  1,175
  1,349
  1,536
  1,734
  1,945
  2,166
  2,399
  2,644
  2,899
  3,167
  3,445
  3,735
  4,036
  4,349
  4,675
  5,013
  5,365
  5,730
  6,110
  6,505
  6,916
  7,344
  7,790
  8,254
  8,739
  9,244
  9,771
Debt-to-equity ratio
  1.660
  1.810
  1.930
  2.030
  2.100
  2.170
  2.220
  2.260
  2.300
  2.330
  2.360
  2.380
  2.400
  2.420
  2.440
  2.450
  2.460
  2.470
  2.480
  2.490
  2.500
  2.510
  2.520
  2.520
  2.530
  2.530
  2.540
  2.540
  2.550
  2.550
Adjusted equity ratio
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276
  0.276

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  39
  45
  53
  61
  70
  79
  89
  99
  110
  122
  142
  154
  168
  181
  196
  210
  226
  242
  259
  276
  294
  312
  332
  352
  373
  395
  418
  442
  467
  493
Depreciation, amort., depletion, $m
  58
  67
  77
  87
  99
  111
  124
  138
  152
  168
  173
  190
  207
  225
  244
  264
  284
  306
  328
  351
  375
  400
  426
  452
  480
  510
  540
  572
  605
  639
Funds from operations, $m
  97
  113
  130
  149
  169
  190
  213
  237
  263
  290
  315
  344
  375
  407
  440
  474
  510
  548
  586
  627
  669
  712
  757
  805
  854
  905
  958
  1,014
  1,072
  1,132
Change in working capital, $m
  11
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  29
  30
  31
  32
  33
  35
  36
  38
  39
  41
  42
  44
  46
Cash from operations, $m
  86
  101
  117
  134
  153
  174
  196
  219
  243
  269
  293
  322
  351
  382
  415
  448
  483
  519
  557
  596
  637
  679
  723
  769
  816
  866
  917
  971
  1,027
  1,086
Maintenance CAPEX, $m
  -40
  -48
  -57
  -66
  -77
  -88
  -100
  -113
  -127
  -142
  -157
  -173
  -190
  -207
  -225
  -244
  -264
  -284
  -306
  -328
  -351
  -375
  -400
  -426
  -452
  -480
  -510
  -540
  -572
  -605
New CAPEX, $m
  -62
  -69
  -75
  -82
  -89
  -95
  -101
  -107
  -113
  -119
  -125
  -131
  -136
  -142
  -148
  -154
  -160
  -166
  -173
  -179
  -186
  -194
  -202
  -210
  -218
  -227
  -237
  -247
  -258
  -269
Cash from investing activities, $m
  -102
  -117
  -132
  -148
  -166
  -183
  -201
  -220
  -240
  -261
  -282
  -304
  -326
  -349
  -373
  -398
  -424
  -450
  -479
  -507
  -537
  -569
  -602
  -636
  -670
  -707
  -747
  -787
  -830
  -874
Free cash flow, $m
  -16
  -16
  -15
  -14
  -12
  -9
  -6
  -2
  3
  8
  12
  18
  25
  33
  41
  50
  59
  69
  78
  89
  99
  110
  122
  133
  145
  158
  171
  184
  198
  212
Issuance/(repayment) of debt, $m
  88
  98
  107
  117
  126
  135
  144
  152
  161
  169
  177
  185
  193
  201
  210
  218
  227
  236
  245
  255
  265
  275
  286
  298
  310
  323
  336
  351
  366
  382
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  
  88
  98
  107
  117
  126
  135
  144
  152
  161
  169
  177
  185
  193
  201
  210
  218
  227
  236
  245
  255
  265
  275
  286
  298
  310
  323
  336
  351
  366
  382
Total cash flow (excl. dividends), $m
  72
  82
  92
  102
  114
  125
  138
  150
  164
  177
  189
  203
  219
  235
  251
  268
  286
  304
  323
  343
  364
  385
  408
  431
  455
  481
  507
  535
  564
  594
Retained Cash Flow (-), $m
  -33
  -37
  -41
  -44
  -48
  -51
  -55
  -58
  -61
  -64
  -68
  -71
  -74
  -77
  -80
  -83
  -86
  -90
  -93
  -97
  -101
  -105
  -109
  -113
  -118
  -123
  -128
  -134
  -139
  -145
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
  39
  45
  51
  58
  66
  74
  83
  92
  102
  113
  121
  133
  145
  158
  171
  185
  199
  214
  230
  246
  263
  280
  299
  317
  337
  358
  379
  401
  424
  448
Discount rate, %
  6.80
  7.14
  7.50
  7.87
  8.27
  8.68
  9.11
  9.57
  10.05
  10.55
  11.08
  11.63
  12.21
  12.82
  13.46
  14.14
  14.84
  15.59
  16.37
  17.18
  18.04
  18.94
  19.89
  20.89
  21.93
  23.03
  24.18
  25.39
  26.66
  27.99
PV of cash for distribution, $m
  37
  39
  41
  43
  44
  45
  45
  44
  43
  41
  38
  35
  32
  29
  26
  22
  19
  16
  13
  10
  8
  6
  5
  3
  2
  2
  1
  1
  0
  0
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

Universal Logistics Holdings, Inc., formerly Universal Truckload Services, Inc., is an asset-light provider of customized transportation and logistics solutions across the United States, Mexico, Canada and Colombia. The Company operates through two segments: the transportation segment and the logistics segment. The Company's operations aggregated in the transportation segment are associated with individual freight shipments coordinated by its agents, company-managed terminals and specialized services operations. The Company's operations aggregated in the logistics segment deliver value-added services and transportation services to specific customers. Its other operating segments consist of the Company's subsidiaries that provide support services to other subsidiaries and to owner-operators, including shop maintenance and equipment leasing. The Company groups its services into three service categories: transportation, value-added and intermodal support.

FINANCIAL RATIOS  of  Universal Logistics Holdings (ULH)

Valuation Ratios
P/E Ratio 31.3
Price to Sales 0.7
Price to Book 5.1
Price to Tangible Book
Price to Cash Flow 10.9
Price to Free Cash Flow -26.8
Growth Rates
Sales Growth Rate -5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 273.1%
Cap. Spend. - 3 Yr. Gr. Rate 41.7%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 152.7%
Total Debt to Equity 176.4%
Interest Coverage 6
Management Effectiveness
Return On Assets 5.4%
Ret/ On Assets - 3 Yr. Avg. 7.9%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 9.8%
Return On Equity 17.2%
Return On Equity - 3 Yr. Avg. 28%
Asset Turnover 2
Profitability Ratios
Gross Margin 28%
Gross Margin - 3 Yr. Avg. 29.7%
EBITDA Margin 7.8%
EBITDA Margin - 3 Yr. Avg. 9%
Operating Margin 4.4%
Oper. Margin - 3 Yr. Avg. 5.9%
Pre-Tax Margin 3.6%
Pre-Tax Margin - 3 Yr. Avg. 5.2%
Net Profit Margin 2.2%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 38.5%
Eff/ Tax Rate - 3 Yr. Avg. 38.4%
Payout Ratio 33.3%

ULH stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ULH stock intrinsic value calculation we used $1216.665 million for the last fiscal year's total revenue generated by Universal Logistics Holdings. The default revenue input number comes from 0001 income statement of Universal Logistics Holdings. 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 ULH stock valuation model: a) initial revenue growth rate of 19.9% 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 6.8%, whose default value for ULH is calculated based on our internal credit rating of Universal Logistics Holdings, 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 Universal Logistics Holdings.
    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 ULH stock the variable cost ratio is equal to 95.6%.

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 ULH 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 Universal Logistics Holdings.

Corporate tax rate of 27% is the nominal tax rate for Universal Logistics Holdings. 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 ULH 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 ULH are equal to 25.6%.

Life of production assets of 7.8 years is the average useful life of capital assets used in Universal Logistics Holdings 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 ULH is equal to 4.4%. 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 - $168.765 million for Universal Logistics Holdings - 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 28.395 million for Universal Logistics Holdings 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 Universal Logistics Holdings at the current share price and the inputted number of shares is $0.8 billion.

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COMPANY NEWS

▶ Cavalry Logistics Expands to the Salt Lake City, UT Area   [Nov-07-18 01:46PM  PR Newswire]
▶ Universal Truckload reports 3Q loss   [Oct-26-17 07:04PM  Associated Press]
▶ Universal Truckload posts 4Q profit   [Feb-23-17 07:01PM  Associated Press]

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