Intrinsic value of Urban One Cl A - UONE

Previous Close

$2.60

  Intrinsic Value

$96.01

stock screener

  Rating & Target

str. buy

+999%

Previous close

$2.60

 
Intrinsic value

$96.01

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of UONE 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 0.0

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  449
  459
  471
  484
  499
  515
  533
  552
  572
  594
  617
  642
  669
  698
  728
  759
  793
  829
  867
  906
  948
  993
  1,039
  1,089
  1,141
  1,195
  1,253
  1,313
  1,377
  1,443
Variable operating expenses, $m
  360
  366
  372
  380
  388
  397
  407
  418
  429
  441
  346
  360
  375
  391
  408
  426
  445
  465
  486
  508
  532
  557
  583
  611
  640
  670
  702
  736
  772
  809
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
  360
  366
  372
  380
  388
  397
  407
  418
  429
  441
  346
  360
  375
  391
  408
  426
  445
  465
  486
  508
  532
  557
  583
  611
  640
  670
  702
  736
  772
  809
Operating income, $m
  89
  93
  99
  104
  111
  118
  126
  134
  143
  153
  271
  282
  294
  306
  320
  334
  348
  364
  381
  398
  417
  436
  457
  478
  501
  525
  550
  577
  605
  634
EBITDA, $m
  217
  222
  227
  234
  241
  249
  257
  266
  276
  287
  298
  310
  323
  337
  351
  367
  383
  400
  418
  438
  458
  479
  502
  526
  551
  577
  605
  634
  665
  697
Interest expense (income), $m
  77
  78
  72
  75
  77
  80
  83
  87
  91
  95
  99
  104
  109
  114
  120
  126
  133
  139
  147
  154
  163
  171
  180
  190
  200
  210
  222
  233
  246
  259
  272
Earnings before tax, $m
  11
  21
  24
  27
  31
  35
  39
  43
  48
  53
  167
  173
  180
  186
  194
  201
  209
  217
  226
  236
  245
  256
  267
  278
  291
  303
  317
  331
  346
  362
Tax expense, $m
  3
  6
  6
  7
  8
  9
  10
  12
  13
  14
  45
  47
  49
  50
  52
  54
  56
  59
  61
  64
  66
  69
  72
  75
  78
  82
  86
  89
  93
  98
Net income, $m
  8
  15
  17
  20
  22
  25
  28
  32
  35
  39
  122
  127
  131
  136
  141
  147
  153
  159
  165
  172
  179
  187
  195
  203
  212
  221
  231
  242
  252
  264

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
  1,344
  1,375
  1,410
  1,450
  1,494
  1,542
  1,594
  1,651
  1,713
  1,778
  1,849
  1,924
  2,003
  2,088
  2,178
  2,274
  2,375
  2,482
  2,595
  2,714
  2,840
  2,972
  3,112
  3,260
  3,415
  3,578
  3,750
  3,931
  4,121
  4,322
Adjusted assets (=assets-cash), $m
  1,344
  1,375
  1,410
  1,450
  1,494
  1,542
  1,594
  1,651
  1,713
  1,778
  1,849
  1,924
  2,003
  2,088
  2,178
  2,274
  2,375
  2,482
  2,595
  2,714
  2,840
  2,972
  3,112
  3,260
  3,415
  3,578
  3,750
  3,931
  4,121
  4,322
Revenue / Adjusted assets
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
  0.334
Average production assets, $m
  588
  601
  616
  634
  653
  674
  697
  722
  749
  777
  808
  841
  876
  913
  952
  994
  1,038
  1,085
  1,134
  1,187
  1,242
  1,300
  1,361
  1,425
  1,493
  1,564
  1,640
  1,719
  1,802
  1,889
Working capital, $m
  86
  88
  90
  93
  96
  99
  102
  106
  110
  114
  119
  123
  128
  134
  140
  146
  152
  159
  166
  174
  182
  191
  200
  209
  219
  229
  240
  252
  264
  277
Total debt, $m
  906
  934
  966
  1,001
  1,041
  1,084
  1,132
  1,183
  1,238
  1,297
  1,360
  1,428
  1,500
  1,576
  1,657
  1,743
  1,834
  1,930
  2,032
  2,139
  2,252
  2,372
  2,498
  2,630
  2,770
  2,917
  3,072
  3,235
  3,406
  3,586
Total liabilities, $m
  1,209
  1,237
  1,269
  1,305
  1,344
  1,388
  1,435
  1,486
  1,541
  1,600
  1,664
  1,731
  1,803
  1,880
  1,961
  2,047
  2,137
  2,234
  2,335
  2,443
  2,556
  2,675
  2,801
  2,934
  3,073
  3,220
  3,375
  3,538
  3,709
  3,890
Total equity, $m
  134
  137
  141
  145
  149
  154
  159
  165
  171
  178
  185
  192
  200
  209
  218
  227
  237
  248
  259
  271
  284
  297
  311
  326
  341
  358
  375
  393
  412
  432
Total liabilities and equity, $m
  1,343
  1,374
  1,410
  1,450
  1,493
  1,542
  1,594
  1,651
  1,712
  1,778
  1,849
  1,923
  2,003
  2,089
  2,179
  2,274
  2,374
  2,482
  2,594
  2,714
  2,840
  2,972
  3,112
  3,260
  3,414
  3,578
  3,750
  3,931
  4,121
  4,322
Debt-to-equity ratio
  6.740
  6.790
  6.850
  6.910
  6.970
  7.030
  7.100
  7.160
  7.230
  7.290
  7.360
  7.420
  7.490
  7.550
  7.610
  7.670
  7.720
  7.780
  7.830
  7.880
  7.930
  7.980
  8.030
  8.070
  8.110
  8.150
  8.190
  8.230
  8.260
  8.300
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
  8
  15
  17
  20
  22
  25
  28
  32
  35
  39
  122
  127
  131
  136
  141
  147
  153
  159
  165
  172
  179
  187
  195
  203
  212
  221
  231
  242
  252
  264
Depreciation, amort., depletion, $m
  128
  128
  129
  129
  130
  131
  132
  132
  133
  134
  27
  28
  29
  30
  32
  33
  35
  36
  38
  40
  41
  43
  45
  48
  50
  52
  55
  57
  60
  63
Funds from operations, $m
  136
  144
  146
  149
  153
  156
  160
  164
  169
  173
  149
  155
  160
  167
  173
  180
  187
  195
  203
  212
  221
  230
  240
  251
  262
  274
  286
  299
  313
  327
Change in working capital, $m
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  10
  11
  12
  12
  13
Cash from operations, $m
  134
  142
  144
  147
  150
  153
  157
  160
  165
  169
  145
  150
  155
  161
  167
  174
  181
  188
  196
  204
  213
  222
  231
  241
  252
  263
  275
  287
  300
  314
Maintenance CAPEX, $m
  -19
  -20
  -20
  -21
  -21
  -22
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -41
  -43
  -45
  -48
  -50
  -52
  -55
  -57
  -60
New CAPEX, $m
  -11
  -14
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -64
  -68
  -71
  -75
  -79
  -83
  -88
Cash from investing activities, $m
  -30
  -34
  -35
  -38
  -40
  -43
  -45
  -48
  -51
  -54
  -57
  -60
  -63
  -66
  -69
  -74
  -77
  -82
  -85
  -90
  -95
  -99
  -104
  -109
  -116
  -121
  -127
  -134
  -140
  -148
Free cash flow, $m
  104
  109
  109
  109
  109
  110
  111
  112
  114
  115
  88
  90
  92
  95
  97
  100
  103
  107
  110
  114
  118
  122
  127
  132
  137
  142
  148
  154
  160
  166
Issuance/(repayment) of debt, $m
  -65
  28
  32
  36
  40
  43
  47
  51
  55
  59
  63
  68
  72
  76
  81
  86
  91
  96
  102
  107
  113
  119
  126
  133
  140
  147
  155
  163
  171
  180
Issuance/(repurchase) of shares, $m
  84
  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  
  19
  28
  32
  36
  40
  43
  47
  51
  55
  59
  63
  68
  72
  76
  81
  86
  91
  96
  102
  107
  113
  119
  126
  133
  140
  147
  155
  163
  171
  180
Total cash flow (excl. dividends), $m
  123
  136
  140
  145
  149
  154
  158
  164
  169
  175
  151
  158
  164
  171
  178
  186
  194
  203
  212
  221
  231
  242
  253
  264
  276
  289
  302
  316
  331
  347
Retained Cash Flow (-), $m
  -92
  -3
  -4
  -4
  -4
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
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
  31
  133
  137
  141
  145
  149
  153
  158
  163
  168
  144
  150
  156
  163
  169
  177
  184
  192
  201
  209
  219
  228
  239
  249
  261
  273
  285
  298
  312
  327
Discount rate, %
  14.20
  14.91
  15.66
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
  25.50
  26.78
  28.12
  29.52
  31.00
  32.55
  34.17
  35.88
  37.68
  39.56
  41.54
  43.62
  45.80
  48.09
  50.49
  53.02
  55.67
  58.45
PV of cash for distribution, $m
  27
  101
  88
  76
  65
  55
  45
  37
  29
  23
  15
  11
  8
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  26.3
  26.3
  26.3
  26.3
  26.3
  26.3
  26.3
  26.3
  26.3
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Urban One, Inc., formerly Radio One, Inc., together with its subsidiaries, is an urban-oriented, multi-media company. The Company's radio broadcasting franchise business primarily targets African-American and urban listeners. It operates through four segments: radio broadcasting; Reach Media, Inc. (Reach Media); Internet, and cable television. The radio broadcasting segment consists of its radio broadcast operations. The Reach Media segment consists of the results of operations for the Tom Joyner Morning Show, and related activities and operations of other syndicated radio shows, including the Rickey Smiley Morning Show, the Russ Parr Morning Show and the DL Hughley Show. The Internet segment includes the results of its online business, which includes Websites from all of its business divisions. The cable television segment consists of the operations of TV One, LLC. It owns and/or operates approximately 60 broadcast stations located in over 20 urban markets in the United States.

FINANCIAL RATIOS  of  Urban One Cl A (UONE)

Valuation Ratios
P/E Ratio 0
Price to Sales 0.3
Price to Book -1.8
Price to Tangible Book
Price to Cash Flow 2.6
Price to Free Cash Flow 2.9
Growth Rates
Sales Growth Rate 1.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.6%
Cap. Spend. - 3 Yr. Gr. Rate -11.1%
Financial Strength
Quick Ratio 2
Current Ratio 0.5
LT Debt to Equity -1435.2%
Total Debt to Equity -1471.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 0.6%
Ret/ On Assets - 3 Yr. Avg. 7.9%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. -5%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 49.8%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 70.6%
Gross Margin - 3 Yr. Avg. 69.6%
EBITDA Margin 38.2%
EBITDA Margin - 3 Yr. Avg. 32.4%
Operating Margin 20%
Oper. Margin - 3 Yr. Avg. 14.2%
Pre-Tax Margin 2.2%
Pre-Tax Margin - 3 Yr. Avg. -3.6%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. -10.2%
Effective Tax Rate 90%
Eff/ Tax Rate - 3 Yr. Avg. -125.6%
Payout Ratio 0%

UONE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the UONE stock intrinsic value calculation we used $440.041 million for the last fiscal year's total revenue generated by Urban One Cl A. The default revenue input number comes from 0001 income statement of Urban One Cl A. 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 UONE stock valuation model: a) initial revenue growth rate of 2% 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 14.2%, whose default value for UONE is calculated based on our internal credit rating of Urban One Cl A, 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 Urban One Cl A.
    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 UONE stock the variable cost ratio is equal to 80.7%.

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 UONE 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 8% for Urban One Cl A.

Corporate tax rate of 27% is the nominal tax rate for Urban One Cl A. 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 UONE 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 UONE are equal to 130.9%.

Life of production assets of 33.1 years is the average useful life of capital assets used in Urban One Cl A 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 UONE is equal to 19.2%. 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 - $42.655 million for Urban One Cl A - 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 1.641 million for Urban One Cl A 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 Urban One Cl A at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ Urban One, Inc. Reports Third Quarter Results   [Nov-01-18 07:06AM  PR Newswire]
▶ Urban One Inc Class A to Host Earnings Call   [Aug-08-18 08:00AM  ACCESSWIRE]
▶ Urban One, Inc. Reports First Quarter Results   [May-02-18 06:45AM  PR Newswire]
▶ Urban One, Inc. Reports Fourth Quarter Results   [Mar-06-18 06:45AM  PR Newswire]
▶ Urban One, Inc. 2017 Year End Results Conference Call   [Jan-30-18 03:00PM  PR Newswire]
▶ ETFs with exposure to Urban One, Inc. : November 29, 2017   [Nov-29-17 12:37PM  Capital Cube]
▶ Urban One, Inc. Reports Third Quarter Results   [Nov-02-17 06:45AM  PR Newswire]
▶ Urban One, Inc. Reports Second Quarter Results   [Aug-02-17 06:45AM  PR Newswire]

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