Intrinsic value of Vince Holding - VNCE

Previous Close

$13.34

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$13.34

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of VNCE 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 0.2

 

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
  278
  284
  292
  300
  309
  319
  330
  342
  354
  368
  382
  398
  415
  432
  451
  470
  491
  513
  537
  562
  588
  615
  644
  674
  707
  740
  776
  813
  853
  894
Variable operating expenses, $m
  345
  353
  362
  371
  382
  394
  407
  421
  437
  453
  458
  477
  497
  518
  540
  564
  589
  615
  643
  673
  704
  737
  772
  808
  847
  887
  930
  975
  1,022
  1,072
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
  345
  353
  362
  371
  382
  394
  407
  421
  437
  453
  458
  477
  497
  518
  540
  564
  589
  615
  643
  673
  704
  737
  772
  808
  847
  887
  930
  975
  1,022
  1,072
Operating income, $m
  -67
  -68
  -70
  -71
  -73
  -75
  -77
  -80
  -82
  -85
  -76
  -79
  -82
  -86
  -89
  -93
  -98
  -102
  -107
  -111
  -117
  -122
  -128
  -134
  -140
  -147
  -154
  -161
  -169
  -178
EBITDA, $m
  -49
  -50
  -51
  -53
  -54
  -56
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -94
  -99
  -103
  -108
  -113
  -118
  -124
  -130
  -136
  -143
  -150
  -157
Interest expense (income), $m
  3
  6
  6
  6
  7
  7
  8
  9
  9
  10
  11
  12
  13
  14
  15
  16
  17
  19
  20
  22
  23
  25
  27
  28
  30
  32
  34
  37
  39
  42
  44
Earnings before tax, $m
  -73
  -74
  -76
  -78
  -81
  -83
  -86
  -89
  -92
  -96
  -88
  -92
  -96
  -101
  -106
  -111
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -164
  -173
  -181
  -191
  -201
  -211
  -222
Tax expense, $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
Net income, $m
  -73
  -74
  -76
  -78
  -81
  -83
  -86
  -89
  -92
  -96
  -88
  -92
  -96
  -101
  -106
  -111
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -164
  -173
  -181
  -191
  -201
  -211
  -222

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
  239
  244
  251
  258
  265
  274
  283
  294
  304
  316
  329
  342
  356
  371
  387
  404
  422
  441
  461
  482
  505
  528
  553
  579
  607
  636
  667
  699
  733
  768
Adjusted assets (=assets-cash), $m
  239
  244
  251
  258
  265
  274
  283
  294
  304
  316
  329
  342
  356
  371
  387
  404
  422
  441
  461
  482
  505
  528
  553
  579
  607
  636
  667
  699
  733
  768
Revenue / Adjusted assets
  1.163
  1.164
  1.163
  1.163
  1.166
  1.164
  1.166
  1.163
  1.164
  1.165
  1.161
  1.164
  1.166
  1.164
  1.165
  1.163
  1.164
  1.163
  1.165
  1.166
  1.164
  1.165
  1.165
  1.164
  1.165
  1.164
  1.163
  1.163
  1.164
  1.164
Average production assets, $m
  98
  101
  103
  106
  109
  113
  117
  121
  125
  130
  135
  141
  147
  153
  160
  167
  174
  182
  190
  199
  208
  218
  228
  239
  250
  262
  275
  288
  302
  317
Working capital, $m
  40
  41
  42
  43
  44
  46
  47
  49
  51
  53
  55
  57
  59
  62
  64
  67
  70
  73
  77
  80
  84
  88
  92
  96
  101
  106
  111
  116
  122
  128
Total debt, $m
  52
  55
  60
  64
  70
  76
  82
  89
  96
  104
  113
  122
  131
  142
  153
  164
  176
  189
  203
  217
  233
  249
  266
  283
  302
  322
  343
  365
  388
  412
Total liabilities, $m
  163
  166
  171
  175
  181
  187
  193
  200
  207
  215
  224
  233
  243
  253
  264
  275
  287
  300
  314
  329
  344
  360
  377
  395
  413
  433
  454
  476
  499
  523
Total equity, $m
  76
  78
  80
  82
  85
  87
  90
  94
  97
  101
  105
  109
  114
  118
  124
  129
  135
  141
  147
  154
  161
  169
  176
  185
  194
  203
  213
  223
  234
  245
Total liabilities and equity, $m
  239
  244
  251
  257
  266
  274
  283
  294
  304
  316
  329
  342
  357
  371
  388
  404
  422
  441
  461
  483
  505
  529
  553
  580
  607
  636
  667
  699
  733
  768
Debt-to-equity ratio
  0.680
  0.710
  0.750
  0.780
  0.820
  0.860
  0.910
  0.950
  0.990
  1.030
  1.070
  1.120
  1.160
  1.200
  1.240
  1.270
  1.310
  1.350
  1.380
  1.410
  1.440
  1.480
  1.510
  1.530
  1.560
  1.590
  1.610
  1.640
  1.660
  1.680
Adjusted equity ratio
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319
  0.319

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -73
  -74
  -76
  -78
  -81
  -83
  -86
  -89
  -92
  -96
  -88
  -92
  -96
  -101
  -106
  -111
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -164
  -173
  -181
  -191
  -201
  -211
  -222
Depreciation, amort., depletion, $m
  18
  18
  19
  19
  19
  19
  19
  20
  20
  20
  9
  9
  9
  10
  10
  11
  11
  12
  12
  13
  13
  14
  15
  15
  16
  17
  18
  19
  19
  20
Funds from operations, $m
  -54
  -56
  -58
  -59
  -62
  -64
  -67
  -69
  -72
  -76
  -79
  -83
  -87
  -91
  -95
  -100
  -105
  -110
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -165
  -173
  -182
  -191
  -201
Change in working capital, $m
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
Cash from operations, $m
  -55
  -57
  -59
  -61
  -63
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -93
  -98
  -103
  -108
  -113
  -119
  -125
  -132
  -138
  -146
  -153
  -161
  -169
  -178
  -187
  -197
  -207
Maintenance CAPEX, $m
  -6
  -6
  -6
  -7
  -7
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -18
  -19
  -19
New CAPEX, $m
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
Cash from investing activities, $m
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -15
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -26
  -28
  -30
  -31
  -33
  -34
Free cash flow, $m
  -63
  -65
  -68
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -95
  -99
  -104
  -109
  -114
  -120
  -126
  -133
  -139
  -146
  -154
  -162
  -170
  -179
  -188
  -197
  -208
  -218
  -230
  -241
Issuance/(repayment) of debt, $m
  3
  4
  4
  5
  5
  6
  6
  7
  7
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
Issuance/(repurchase) of shares, $m
  74
  76
  78
  80
  83
  86
  89
  92
  96
  100
  92
  96
  101
  106
  111
  116
  122
  128
  135
  141
  149
  156
  164
  173
  181
  191
  200
  211
  222
  233
Cash from financing (excl. dividends), $m  
  77
  80
  82
  85
  88
  92
  95
  99
  103
  108
  101
  105
  111
  116
  122
  128
  134
  141
  149
  155
  164
  172
  181
  191
  200
  211
  221
  233
  245
  257
Total cash flow (excl. dividends), $m
  14
  14
  15
  15
  15
  16
  16
  16
  17
  17
  6
  6
  6
  7
  7
  8
  8
  9
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
Retained Cash Flow (-), $m
  -74
  -76
  -78
  -80
  -83
  -86
  -89
  -92
  -96
  -100
  -92
  -96
  -101
  -106
  -111
  -116
  -122
  -128
  -135
  -141
  -149
  -156
  -164
  -173
  -181
  -191
  -200
  -211
  -222
  -233
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
  -60
  -62
  -63
  -65
  -68
  -70
  -73
  -76
  -79
  -82
  -86
  -90
  -94
  -99
  -104
  -109
  -114
  -120
  -126
  -132
  -139
  -146
  -153
  -161
  -169
  -178
  -187
  -196
  -206
  -217
Discount rate, %
  8.10
  8.51
  8.93
  9.38
  9.85
  10.34
  10.85
  11.40
  11.97
  12.57
  13.19
  13.85
  14.55
  15.27
  16.04
  16.84
  17.68
  18.57
  19.49
  20.47
  21.49
  22.57
  23.69
  24.88
  26.12
  27.43
  28.80
  30.24
  31.75
  33.34
PV of cash for distribution, $m
  -56
  -52
  -49
  -46
  -42
  -39
  -35
  -32
  -29
  -25
  -22
  -19
  -16
  -14
  -11
  -9
  -7
  -6
  -4
  -3
  -2
  -2
  -1
  -1
  -1
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  67.7
  45.7
  30.8
  20.7
  13.9
  9.4
  6.3
  4.2
  2.8
  1.9
  1.3
  0.9
  0.6
  0.4
  0.3
  0.2
  0.1
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Vince Holding Corp. (Vince) is a United States-based company, which offers a range of women's and men's apparel, women's and men's footwear, and handbags. The Company operates as a fashion brand. The Company operates in two segments: Wholesale and Direct-to-consumer. The Company's Wholesale segment consists of its operations to distribute products to various department stores and specialty stores in the United States and select international markets. The Company's Direct-to-consumer segment consists of its operations to distribute products directly to the consumer through its branded specialty retail stores, outlet stores and e-commerce platform. The Company utilizes luxe fabrications and various techniques to create its product assortment. The Company serves its customers through various channels, including wholesale department stores and specialty stores in the United States, as well as through its branded retail locations and its Website.

FINANCIAL RATIOS  of  Vince Holding (VNCE)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 0.2
Price to Book -4.7
Price to Tangible Book
Price to Cash Flow -2.2
Price to Free Cash Flow -1.5
Growth Rates
Sales Growth Rate -11.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -22.2%
Cap. Spend. - 3 Yr. Gr. Rate 7%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity -342.9%
Total Debt to Equity -342.9%
Interest Coverage -22
Management Effectiveness
Return On Assets -51.7%
Ret/ On Assets - 3 Yr. Avg. -13.5%
Return On Total Capital -190.6%
Ret/ On T. Cap. - 3 Yr. Avg. -55.7%
Return On Equity -501.5%
Return On Equity - 3 Yr. Avg. -142.3%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 45.9%
Gross Margin - 3 Yr. Avg. 46.4%
EBITDA Margin -21.3%
EBITDA Margin - 3 Yr. Avg. 1.7%
Operating Margin -24.3%
Oper. Margin - 3 Yr. Avg. 0.4%
Pre-Tax Margin -25.7%
Pre-Tax Margin - 3 Yr. Avg. -1.8%
Net Profit Margin -60.8%
Net Profit Margin - 3 Yr. Avg. -16.2%
Effective Tax Rate -136.2%
Eff/ Tax Rate - 3 Yr. Avg. -19.6%
Payout Ratio 0%

VNCE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VNCE stock intrinsic value calculation we used $272.582 million for the last fiscal year's total revenue generated by Vince Holding. The default revenue input number comes from 0001 income statement of Vince Holding. 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 VNCE 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 8.1%, whose default value for VNCE is calculated based on our internal credit rating of Vince Holding, 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 Vince Holding.
    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 VNCE stock the variable cost ratio is equal to 124.2%.

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 VNCE 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 11.4% for Vince Holding.

Corporate tax rate of 27% is the nominal tax rate for Vince Holding. 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 VNCE 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 VNCE are equal to 35.4%.

Life of production assets of 15.5 years is the average useful life of capital assets used in Vince Holding 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 VNCE is equal to 14.3%. 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 - $74.769 million for Vince Holding - 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 11.617 million for Vince Holding 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 Vince Holding at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Is Vince Holding Corp (NYSE:VNCE) Overpaying Its CEO?   [Aug-22-18 11:27AM  Simply Wall St.]
▶ 3 Apparel Stocks That Have Tripled Over the Past Year   [Aug-03-18 08:16AM  Motley Fool]
▶ Vince Holding Corp. Reports First Quarter 2018 Results   [Jun-14-18 04:15PM  Business Wire]
▶ How Financially Strong Is Vince Holding Corp (NYSE:VNCE)?   [Apr-03-18 07:03PM  Simply Wall St.]
▶ Are Vince Holding Corps (NYSE:VNCE) Interest Costs Too High?   [Dec-29-17 07:25PM  Simply Wall St.]
▶ Vince Holding posts 3Q profit   [07:49AM  Associated Press]
▶ How Should You Think About Vince Holding Corps (VNCE) Risks?   [Oct-20-17 10:56AM  Simply Wall St.]
▶ Vince Holding reports 2Q loss   [Sep-07-17 10:24PM  Associated Press]
▶ Vince Holding reports 1Q loss   [07:34AM  Associated Press]

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