Intrinsic value of Universal Logistics Holdings, Inc. - ULH

Previous Close

$21.31

  Intrinsic Value

$24.15

stock screener

  Rating & Target

hold

+13%

Previous close

$21.31

 
Intrinsic value

$24.15

 
Up/down potential

+13%

 
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 0.6

 

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, %
  19.60
  18.14
  16.83
  15.64
  14.58
  13.62
  12.76
  11.98
  11.28
  10.66
  10.09
  9.58
  9.12
  8.71
  8.34
  8.01
  7.71
  7.43
  7.19
  6.97
  6.78
  6.60
  6.44
  6.29
  6.16
  6.05
  5.94
  5.85
  5.76
  5.69
Revenue, $m
  1,456
  1,720
  2,009
  2,323
  2,662
  3,024
  3,410
  3,819
  4,250
  4,703
  5,177
  5,673
  6,191
  6,730
  7,292
  7,875
  8,482
  9,113
  9,768
  10,449
  11,157
  11,893
  12,659
  13,456
  14,285
  15,149
  16,050
  16,989
  17,968
  18,990
Variable operating expenses, $m
  1,389
  1,640
  1,914
  2,211
  2,532
  2,876
  3,241
  3,628
  4,037
  4,466
  4,904
  5,374
  5,865
  6,376
  6,907
  7,460
  8,035
  8,633
  9,253
  9,899
  10,569
  11,267
  11,992
  12,747
  13,532
  14,351
  15,204
  16,093
  17,021
  17,989
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
  1,389
  1,640
  1,914
  2,211
  2,532
  2,876
  3,241
  3,628
  4,037
  4,466
  4,904
  5,374
  5,865
  6,376
  6,907
  7,460
  8,035
  8,633
  9,253
  9,899
  10,569
  11,267
  11,992
  12,747
  13,532
  14,351
  15,204
  16,093
  17,021
  17,989
Operating income, $m
  66
  80
  95
  112
  130
  149
  169
  191
  213
  237
  273
  299
  326
  355
  384
  415
  447
  480
  515
  551
  588
  627
  667
  709
  753
  799
  846
  895
  947
  1,001
EBITDA, $m
  124
  147
  172
  199
  228
  259
  292
  327
  363
  402
  443
  485
  530
  576
  624
  674
  725
  779
  835
  894
  954
  1,017
  1,083
  1,151
  1,222
  1,296
  1,373
  1,453
  1,537
  1,624
Interest expense (income), $m
  8
  13
  18
  23
  29
  35
  42
  49
  56
  64
  73
  82
  91
  101
  111
  122
  133
  144
  156
  168
  181
  195
  208
  223
  238
  253
  270
  287
  304
  323
  342
Earnings before tax, $m
  53
  62
  72
  83
  95
  107
  120
  134
  149
  164
  191
  208
  226
  244
  263
  283
  303
  324
  347
  370
  394
  419
  444
  471
  499
  529
  559
  591
  624
  659
Tax expense, $m
  14
  17
  19
  22
  26
  29
  32
  36
  40
  44
  52
  56
  61
  66
  71
  76
  82
  88
  94
  100
  106
  113
  120
  127
  135
  143
  151
  160
  169
  178
Net income, $m
  38
  45
  53
  61
  69
  78
  88
  98
  109
  120
  140
  152
  165
  178
  192
  206
  221
  237
  253
  270
  287
  306
  324
  344
  365
  386
  408
  431
  456
  481

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
  730
  863
  1,008
  1,166
  1,336
  1,518
  1,711
  1,916
  2,132
  2,360
  2,598
  2,847
  3,106
  3,377
  3,659
  3,952
  4,256
  4,572
  4,901
  5,243
  5,598
  5,968
  6,352
  6,752
  7,168
  7,601
  8,053
  8,524
  9,015
  9,528
Adjusted assets (=assets-cash), $m
  730
  863
  1,008
  1,166
  1,336
  1,518
  1,711
  1,916
  2,132
  2,360
  2,598
  2,847
  3,106
  3,377
  3,659
  3,952
  4,256
  4,572
  4,901
  5,243
  5,598
  5,968
  6,352
  6,752
  7,168
  7,601
  8,053
  8,524
  9,015
  9,528
Revenue / Adjusted assets
  1.995
  1.993
  1.993
  1.992
  1.993
  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
Average production assets, $m
  373
  440
  514
  595
  681
  774
  873
  978
  1,088
  1,204
  1,325
  1,452
  1,585
  1,723
  1,867
  2,016
  2,171
  2,333
  2,501
  2,675
  2,856
  3,045
  3,241
  3,445
  3,657
  3,878
  4,109
  4,349
  4,600
  4,861
Working capital, $m
  64
  76
  88
  102
  117
  133
  150
  168
  187
  207
  228
  250
  272
  296
  321
  347
  373
  401
  430
  460
  491
  523
  557
  592
  629
  667
  706
  747
  791
  836
Total debt, $m
  335
  431
  536
  650
  773
  905
  1,045
  1,193
  1,350
  1,515
  1,687
  1,867
  2,055
  2,251
  2,455
  2,667
  2,888
  3,117
  3,355
  3,602
  3,859
  4,127
  4,405
  4,694
  4,996
  5,309
  5,637
  5,978
  6,333
  6,705
Total liabilities, $m
  529
  625
  730
  844
  967
  1,099
  1,239
  1,387
  1,544
  1,708
  1,881
  2,061
  2,249
  2,445
  2,649
  2,861
  3,081
  3,310
  3,549
  3,796
  4,053
  4,321
  4,599
  4,888
  5,189
  5,503
  5,830
  6,171
  6,527
  6,898
Total equity, $m
  202
  238
  278
  322
  369
  419
  472
  529
  589
  651
  717
  786
  857
  932
  1,010
  1,091
  1,175
  1,262
  1,353
  1,447
  1,545
  1,647
  1,753
  1,863
  1,978
  2,098
  2,223
  2,353
  2,488
  2,630
Total liabilities and equity, $m
  731
  863
  1,008
  1,166
  1,336
  1,518
  1,711
  1,916
  2,133
  2,359
  2,598
  2,847
  3,106
  3,377
  3,659
  3,952
  4,256
  4,572
  4,902
  5,243
  5,598
  5,968
  6,352
  6,751
  7,167
  7,601
  8,053
  8,524
  9,015
  9,528
Debt-to-equity ratio
  1.660
  1.810
  1.930
  2.020
  2.100
  2.160
  2.210
  2.260
  2.290
  2.330
  2.350
  2.380
  2.400
  2.420
  2.430
  2.450
  2.460
  2.470
  2.480
  2.490
  2.500
  2.510
  2.510
  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
  38
  45
  53
  61
  69
  78
  88
  98
  109
  120
  140
  152
  165
  178
  192
  206
  221
  237
  253
  270
  287
  306
  324
  344
  365
  386
  408
  431
  456
  481
Depreciation, amort., depletion, $m
  58
  67
  77
  87
  98
  110
  123
  136
  150
  165
  170
  186
  203
  221
  239
  258
  278
  299
  321
  343
  366
  390
  415
  442
  469
  497
  527
  558
  590
  623
Funds from operations, $m
  97
  112
  129
  147
  167
  188
  210
  234
  259
  285
  309
  338
  368
  399
  431
  465
  500
  536
  574
  613
  654
  696
  740
  786
  833
  883
  935
  989
  1,045
  1,104
Change in working capital, $m
  10
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  26
  27
  28
  29
  30
  31
  32
  34
  35
  36
  38
  40
  41
  43
  45
Cash from operations, $m
  86
  101
  116
  134
  152
  172
  193
  216
  240
  265
  289
  316
  345
  375
  406
  439
  473
  508
  545
  583
  622
  663
  706
  751
  797
  845
  895
  948
  1,002
  1,059
Maintenance CAPEX, $m
  -40
  -48
  -56
  -66
  -76
  -87
  -99
  -112
  -125
  -139
  -154
  -170
  -186
  -203
  -221
  -239
  -258
  -278
  -299
  -321
  -343
  -366
  -390
  -415
  -442
  -469
  -497
  -527
  -558
  -590
New CAPEX, $m
  -62
  -68
  -74
  -80
  -87
  -93
  -99
  -105
  -110
  -116
  -121
  -127
  -133
  -138
  -144
  -149
  -155
  -161
  -168
  -174
  -181
  -188
  -196
  -204
  -212
  -221
  -230
  -240
  -251
  -262
Cash from investing activities, $m
  -102
  -116
  -130
  -146
  -163
  -180
  -198
  -217
  -235
  -255
  -275
  -297
  -319
  -341
  -365
  -388
  -413
  -439
  -467
  -495
  -524
  -554
  -586
  -619
  -654
  -690
  -727
  -767
  -809
  -852
Free cash flow, $m
  -15
  -15
  -14
  -13
  -11
  -8
  -5
  -1
  4
  10
  13
  19
  26
  34
  42
  50
  59
  68
  78
  88
  98
  109
  120
  131
  143
  155
  168
  181
  194
  208
Issuance/(repayment) of debt, $m
  87
  96
  105
  114
  123
  132
  140
  148
  157
  165
  172
  180
  188
  196
  204
  212
  220
  229
  238
  247
  257
  267
  278
  289
  301
  314
  327
  341
  356
  371
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  
  87
  96
  105
  114
  123
  132
  140
  148
  157
  165
  172
  180
  188
  196
  204
  212
  220
  229
  238
  247
  257
  267
  278
  289
  301
  314
  327
  341
  356
  371
Total cash flow (excl. dividends), $m
  72
  81
  91
  101
  112
  124
  135
  148
  161
  174
  185
  199
  214
  230
  246
  262
  280
  297
  316
  335
  355
  376
  398
  421
  444
  469
  495
  522
  550
  579
Retained Cash Flow (-), $m
  -33
  -37
  -40
  -44
  -47
  -50
  -53
  -57
  -60
  -63
  -66
  -69
  -72
  -75
  -78
  -81
  -84
  -87
  -91
  -94
  -98
  -102
  -106
  -110
  -115
  -120
  -125
  -130
  -136
  -142
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
  65
  73
  82
  91
  101
  111
  119
  131
  143
  155
  168
  182
  196
  210
  225
  241
  257
  274
  292
  310
  329
  349
  370
  392
  414
  438
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
  25
  22
  19
  15
  13
  10
  8
  6
  4
  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, Inc. (ULH)

Valuation Ratios
P/E Ratio 25.2
Price to Sales 0.6
Price to Book 4.1
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow -21.6
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 $1217 million for the last fiscal year's total revenue generated by Universal Logistics Holdings, Inc.. The default revenue input number comes from 0001 income statement of Universal Logistics Holdings, 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 ULH stock valuation model: a) initial revenue growth rate of 19.6% 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, 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 Universal Logistics Holdings, 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 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, Inc..

Corporate tax rate of 27% is the nominal tax rate for Universal Logistics Holdings, 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 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, 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 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, 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 28.371 million for Universal Logistics Holdings, 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 Universal Logistics Holdings, Inc. at the current share price and the inputted number of shares is $0.6 billion.

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