Intrinsic value of USA Truck, Inc. - USAK

Previous Close

$15.97

  Intrinsic Value

$76.90

stock screener

  Rating & Target

str. buy

+382%

Previous close

$15.97

 
Intrinsic value

$76.90

 
Up/down potential

+382%

 
Rating

str. buy

We calculate the intrinsic value of USAK 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 0.1

 

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, %
  14.50
  13.55
  12.70
  11.93
  11.23
  10.61
  10.05
  9.54
  9.09
  8.68
  8.31
  7.98
  7.68
  7.41
  7.17
  6.96
  6.76
  6.58
  6.43
  6.28
  6.15
  6.04
  5.94
  5.84
  5.76
  5.68
  5.61
  5.55
  5.50
  5.45
Revenue, $m
  611
  694
  782
  876
  974
  1,077
  1,186
  1,299
  1,417
  1,540
  1,668
  1,801
  1,939
  2,083
  2,233
  2,388
  2,549
  2,717
  2,892
  3,074
  3,263
  3,460
  3,665
  3,879
  4,103
  4,336
  4,579
  4,833
  5,099
  5,377
Variable operating expenses, $m
  448
  509
  573
  641
  713
  789
  868
  950
  1,036
  1,126
  1,217
  1,314
  1,415
  1,520
  1,629
  1,742
  1,860
  1,983
  2,110
  2,243
  2,381
  2,525
  2,674
  2,831
  2,994
  3,164
  3,341
  3,527
  3,721
  3,923
Fixed operating expenses, $m
  127
  130
  132
  135
  138
  141
  144
  148
  151
  154
  158
  161
  165
  168
  172
  176
  180
  183
  187
  192
  196
  200
  205
  209
  214
  218
  223
  228
  233
  238
Total operating expenses, $m
  575
  639
  705
  776
  851
  930
  1,012
  1,098
  1,187
  1,280
  1,375
  1,475
  1,580
  1,688
  1,801
  1,918
  2,040
  2,166
  2,297
  2,435
  2,577
  2,725
  2,879
  3,040
  3,208
  3,382
  3,564
  3,755
  3,954
  4,161
Operating income, $m
  36
  56
  77
  99
  123
  148
  174
  201
  230
  260
  293
  326
  360
  395
  432
  470
  510
  551
  594
  639
  686
  735
  786
  840
  895
  954
  1,015
  1,078
  1,145
  1,215
EBITDA, $m
  70
  94
  120
  147
  175
  206
  237
  271
  305
  342
  380
  419
  460
  503
  547
  593
  641
  691
  744
  798
  855
  914
  976
  1,040
  1,107
  1,178
  1,251
  1,328
  1,409
  1,493
Interest expense (income), $m
  3
  9
  11
  13
  15
  17
  19
  22
  25
  27
  30
  33
  36
  40
  43
  46
  50
  54
  58
  62
  66
  71
  75
  80
  85
  90
  96
  101
  107
  114
  120
Earnings before tax, $m
  28
  45
  64
  84
  106
  128
  152
  177
  203
  230
  260
  289
  320
  352
  385
  420
  456
  493
  532
  573
  615
  660
  706
  754
  805
  858
  913
  971
  1,032
  1,095
Tax expense, $m
  7
  12
  17
  23
  29
  35
  41
  48
  55
  62
  70
  78
  86
  95
  104
  113
  123
  133
  144
  155
  166
  178
  191
  204
  217
  232
  247
  262
  279
  296
Net income, $m
  20
  33
  47
  62
  77
  94
  111
  129
  148
  168
  190
  211
  234
  257
  281
  306
  333
  360
  389
  418
  449
  482
  515
  551
  588
  626
  667
  709
  753
  799

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
  369
  418
  472
  528
  587
  649
  715
  783
  854
  928
  1,005
  1,086
  1,169
  1,256
  1,346
  1,439
  1,537
  1,638
  1,743
  1,853
  1,967
  2,085
  2,209
  2,338
  2,473
  2,613
  2,760
  2,913
  3,074
  3,241
Adjusted assets (=assets-cash), $m
  369
  418
  472
  528
  587
  649
  715
  783
  854
  928
  1,005
  1,086
  1,169
  1,256
  1,346
  1,439
  1,537
  1,638
  1,743
  1,853
  1,967
  2,085
  2,209
  2,338
  2,473
  2,613
  2,760
  2,913
  3,074
  3,241
Revenue / Adjusted assets
  1.656
  1.660
  1.657
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.660
  1.658
  1.659
  1.658
  1.659
  1.659
  1.658
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
  1.659
Average production assets, $m
  243
  276
  311
  349
  388
  429
  472
  517
  564
  613
  664
  717
  772
  829
  889
  950
  1,015
  1,081
  1,151
  1,223
  1,299
  1,377
  1,459
  1,544
  1,633
  1,726
  1,823
  1,924
  2,029
  2,140
Working capital, $m
  28
  32
  36
  40
  45
  50
  55
  60
  65
  71
  77
  83
  89
  96
  103
  110
  117
  125
  133
  141
  150
  159
  169
  178
  189
  199
  211
  222
  235
  247
Total debt, $m
  196
  233
  273
  315
  360
  406
  455
  506
  560
  615
  673
  733
  796
  861
  929
  999
  1,072
  1,148
  1,227
  1,309
  1,394
  1,483
  1,576
  1,673
  1,774
  1,879
  1,989
  2,104
  2,224
  2,350
Total liabilities, $m
  276
  314
  354
  396
  440
  487
  536
  587
  641
  696
  754
  814
  877
  942
  1,009
  1,080
  1,153
  1,228
  1,307
  1,390
  1,475
  1,564
  1,657
  1,754
  1,855
  1,960
  2,070
  2,185
  2,305
  2,431
Total equity, $m
  92
  105
  118
  132
  147
  162
  179
  196
  214
  232
  251
  271
  292
  314
  336
  360
  384
  409
  436
  463
  492
  521
  552
  585
  618
  653
  690
  728
  768
  810
Total liabilities and equity, $m
  368
  419
  472
  528
  587
  649
  715
  783
  855
  928
  1,005
  1,085
  1,169
  1,256
  1,345
  1,440
  1,537
  1,637
  1,743
  1,853
  1,967
  2,085
  2,209
  2,339
  2,473
  2,613
  2,760
  2,913
  3,073
  3,241
Debt-to-equity ratio
  2.120
  2.230
  2.310
  2.390
  2.450
  2.500
  2.550
  2.590
  2.620
  2.650
  2.680
  2.700
  2.720
  2.740
  2.760
  2.780
  2.790
  2.800
  2.810
  2.830
  2.840
  2.840
  2.850
  2.860
  2.870
  2.880
  2.880
  2.890
  2.890
  2.900
Adjusted equity ratio
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250
  0.250

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  20
  33
  47
  62
  77
  94
  111
  129
  148
  168
  190
  211
  234
  257
  281
  306
  333
  360
  389
  418
  449
  482
  515
  551
  588
  626
  667
  709
  753
  799
Depreciation, amort., depletion, $m
  34
  38
  43
  48
  53
  58
  64
  69
  76
  82
  86
  93
  100
  108
  115
  123
  132
  140
  149
  159
  169
  179
  189
  201
  212
  224
  237
  250
  264
  278
Funds from operations, $m
  54
  71
  90
  109
  130
  152
  174
  198
  223
  249
  276
  304
  334
  365
  397
  430
  464
  500
  538
  577
  618
  660
  705
  751
  800
  850
  903
  959
  1,017
  1,077
Change in working capital, $m
  4
  4
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  7
  8
  8
  8
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
Cash from operations, $m
  50
  67
  86
  105
  125
  147
  169
  193
  218
  244
  270
  298
  328
  358
  390
  423
  457
  493
  530
  569
  609
  651
  695
  741
  789
  840
  892
  947
  1,004
  1,065
Maintenance CAPEX, $m
  -28
  -32
  -36
  -40
  -45
  -50
  -56
  -61
  -67
  -73
  -80
  -86
  -93
  -100
  -108
  -115
  -123
  -132
  -140
  -149
  -159
  -169
  -179
  -189
  -201
  -212
  -224
  -237
  -250
  -264
New CAPEX, $m
  -31
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -47
  -49
  -51
  -53
  -55
  -57
  -59
  -62
  -64
  -67
  -69
  -72
  -75
  -78
  -82
  -85
  -89
  -93
  -97
  -101
  -106
  -111
Cash from investing activities, $m
  -59
  -65
  -71
  -77
  -84
  -91
  -99
  -106
  -114
  -122
  -131
  -139
  -148
  -157
  -167
  -177
  -187
  -199
  -209
  -221
  -234
  -247
  -261
  -274
  -290
  -305
  -321
  -338
  -356
  -375
Free cash flow, $m
  -8
  3
  15
  27
  41
  55
  71
  87
  104
  122
  140
  159
  179
  201
  223
  245
  269
  294
  320
  347
  375
  404
  435
  467
  500
  535
  571
  609
  649
  690
Issuance/(repayment) of debt, $m
  35
  37
  40
  42
  44
  47
  49
  51
  53
  56
  58
  60
  63
  65
  68
  70
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  110
  115
  120
  126
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  
  35
  37
  40
  42
  44
  47
  49
  51
  53
  56
  58
  60
  63
  65
  68
  70
  73
  76
  79
  82
  86
  89
  93
  97
  101
  105
  110
  115
  120
  126
Total cash flow (excl. dividends), $m
  27
  40
  54
  69
  85
  102
  120
  138
  157
  177
  198
  219
  242
  266
  290
  316
  342
  370
  399
  429
  461
  493
  528
  564
  601
  640
  681
  724
  769
  816
Retained Cash Flow (-), $m
  -12
  -12
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -19
  -20
  -21
  -22
  -23
  -23
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -38
  -40
  -42
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
  15
  28
  41
  55
  71
  87
  103
  121
  139
  159
  178
  199
  221
  244
  268
  292
  318
  345
  373
  402
  432
  464
  497
  531
  567
  605
  644
  686
  729
  774
Discount rate, %
  8.60
  9.03
  9.48
  9.96
  10.45
  10.98
  11.52
  12.10
  12.71
  13.34
  14.01
  14.71
  15.44
  16.22
  17.03
  17.88
  18.77
  19.71
  20.70
  21.73
  22.82
  23.96
  25.16
  26.42
  27.74
  29.12
  30.58
  32.11
  33.71
  35.40
PV of cash for distribution, $m
  14
  23
  31
  38
  43
  46
  48
  48
  48
  45
  42
  38
  34
  30
  25
  21
  17
  14
  10
  8
  6
  4
  3
  2
  1
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
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USA Truck, Inc. is a truckload carrier providing transportation of general commodities throughout the continental United States and into and out of portions of Mexico and Canada. The Company operates through two segments: Trucking and Strategic Capacity Solutions (SCS). The Trucking segment consists of truckload and dedicated freight services. The SCS segment consists of freight brokerage and rail intermodal services. The Company transports full dry van trailer loads of freight from origin to destination without intermediate stops or handling. The Company offers a range of truckload and logistics services to a customer base that spans a range of industries. The Company's fleet of approximately 1,832 tractors consists of 1,568 company tractors and 264 independent contractor tractors. The Company owns approximately 6,200 trailers. The Company also transports general commodities into and out of Mexico by allowing through-trailer service from its terminal in Laredo, Texas.

FINANCIAL RATIOS  of  USA Truck, Inc. (USAK)

Valuation Ratios
P/E Ratio -16.6
Price to Sales 0.3
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 6
Price to Free Cash Flow -3.5
Growth Rates
Sales Growth Rate -15.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -9.1%
Cap. Spend. - 3 Yr. Gr. Rate 35.8%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 225.9%
Total Debt to Equity 255.2%
Interest Coverage -3
Management Effectiveness
Return On Assets -2%
Ret/ On Assets - 3 Yr. Avg. 1.5%
Return On Total Capital -4%
Ret/ On T. Cap. - 3 Yr. Avg. 1.3%
Return On Equity -10.5%
Return On Equity - 3 Yr. Avg. 2.3%
Asset Turnover 1.5
Profitability Ratios
Gross Margin 55.2%
Gross Margin - 3 Yr. Avg. 54.7%
EBITDA Margin 5.1%
EBITDA Margin - 3 Yr. Avg. 8.8%
Operating Margin -1.9%
Oper. Margin - 3 Yr. Avg. 1.8%
Pre-Tax Margin -2.6%
Pre-Tax Margin - 3 Yr. Avg. 1.1%
Net Profit Margin -1.9%
Net Profit Margin - 3 Yr. Avg. 0.4%
Effective Tax Rate 27.3%
Eff/ Tax Rate - 3 Yr. Avg. 39.8%
Payout Ratio 0%

USAK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the USAK stock intrinsic value calculation we used $534 million for the last fiscal year's total revenue generated by USA Truck, Inc.. The default revenue input number comes from 0001 income statement of USA Truck, 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 USAK stock valuation model: a) initial revenue growth rate of 14.5% 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 8.6%, whose default value for USAK is calculated based on our internal credit rating of USA Truck, 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 USA Truck, 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 USAK stock the variable cost ratio is equal to 73.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $124 million in the base year in the intrinsic value calculation for USAK 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 USA Truck, Inc..

Corporate tax rate of 27% is the nominal tax rate for USA Truck, 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 USAK 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 USAK are equal to 39.8%.

Life of production assets of 7.7 years is the average useful life of capital assets used in USA Truck, 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 USAK is equal to 4.6%. 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 - $80.47 million for USA Truck, 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 8.361 million for USA Truck, 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 USA Truck, Inc. at the current share price and the inputted number of shares is $0.1 billion.

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