Intrinsic value of Vuzix - VUZI

Previous Close

$5.86

  Intrinsic Value

$0.18

stock screener

  Rating & Target

str. sell

-97%

Previous close

$5.86

 
Intrinsic value

$0.18

 
Up/down potential

-97%

 
Rating

str. sell

We calculate the intrinsic value of VUZI 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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  9
  14
  20
  30
  42
  58
  77
  102
  131
  165
  205
  251
  302
  359
  423
  491
  566
  646
  732
  823
  919
  1,021
  1,127
  1,238
  1,354
  1,476
  1,602
  1,733
  1,870
  2,012
Variable operating expenses, $m
  18
  27
  41
  59
  83
  114
  153
  201
  259
  327
  405
  496
  597
  711
  836
  972
  1,120
  1,279
  1,448
  1,628
  1,818
  2,019
  2,229
  2,449
  2,679
  2,918
  3,168
  3,428
  3,698
  3,979
Fixed operating expenses, $m
  17
  18
  18
  19
  19
  19
  20
  20
  21
  21
  22
  22
  23
  23
  24
  24
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  31
  31
  32
  33
Total operating expenses, $m
  35
  45
  59
  78
  102
  133
  173
  221
  280
  348
  427
  518
  620
  734
  860
  996
  1,145
  1,304
  1,474
  1,654
  1,845
  2,046
  2,257
  2,478
  2,708
  2,948
  3,199
  3,459
  3,730
  4,012
Operating income, $m
  -26
  -31
  -38
  -48
  -60
  -76
  -96
  -120
  -149
  -183
  -222
  -267
  -318
  -374
  -437
  -505
  -578
  -657
  -742
  -831
  -926
  -1,025
  -1,130
  -1,239
  -1,354
  -1,473
  -1,597
  -1,726
  -1,860
  -2,000
EBITDA, $m
  -25
  -29
  -35
  -43
  -54
  -68
  -85
  -105
  -130
  -159
  -193
  -232
  -275
  -324
  -377
  -435
  -498
  -566
  -638
  -715
  -796
  -881
  -971
  -1,065
  -1,162
  -1,265
  -1,371
  -1,481
  -1,596
  -1,716
Interest expense (income), $m
  0
  0
  0
  1
  2
  3
  4
  6
  8
  11
  14
  18
  23
  28
  34
  40
  47
  55
  64
  73
  82
  93
  104
  115
  127
  140
  153
  167
  181
  196
  211
Earnings before tax, $m
  -26
  -32
  -39
  -49
  -63
  -80
  -101
  -128
  -159
  -197
  -240
  -290
  -346
  -408
  -477
  -552
  -633
  -721
  -814
  -914
  -1,018
  -1,129
  -1,245
  -1,367
  -1,493
  -1,626
  -1,764
  -1,907
  -2,056
  -2,211
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
  -26
  -32
  -39
  -49
  -63
  -80
  -101
  -128
  -159
  -197
  -240
  -290
  -346
  -408
  -477
  -552
  -633
  -721
  -814
  -914
  -1,018
  -1,129
  -1,245
  -1,367
  -1,493
  -1,626
  -1,764
  -1,907
  -2,056
  -2,211

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
  26
  40
  59
  86
  121
  167
  224
  294
  379
  478
  594
  726
  875
  1,042
  1,225
  1,425
  1,641
  1,874
  2,122
  2,386
  2,665
  2,958
  3,266
  3,589
  3,926
  4,277
  4,643
  5,023
  5,419
  5,830
Adjusted assets (=assets-cash), $m
  26
  40
  59
  86
  121
  167
  224
  294
  379
  478
  594
  726
  875
  1,042
  1,225
  1,425
  1,641
  1,874
  2,122
  2,386
  2,665
  2,958
  3,266
  3,589
  3,926
  4,277
  4,643
  5,023
  5,419
  5,830
Revenue / Adjusted assets
  0.346
  0.350
  0.339
  0.349
  0.347
  0.347
  0.344
  0.347
  0.346
  0.345
  0.345
  0.346
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
  0.345
Average production assets, $m
  6
  10
  14
  21
  30
  41
  55
  72
  92
  117
  145
  177
  213
  254
  298
  347
  400
  456
  517
  581
  649
  721
  796
  874
  956
  1,042
  1,131
  1,224
  1,320
  1,420
Working capital, $m
  1
  2
  3
  4
  6
  9
  12
  15
  20
  25
  31
  38
  45
  54
  63
  74
  85
  97
  110
  123
  138
  153
  169
  186
  203
  221
  240
  260
  280
  302
Total debt, $m
  3
  7
  13
  21
  33
  47
  65
  87
  113
  144
  180
  222
  269
  321
  378
  440
  508
  581
  659
  741
  829
  920
  1,017
  1,118
  1,223
  1,333
  1,448
  1,567
  1,691
  1,819
Total liabilities, $m
  8
  12
  19
  27
  38
  52
  70
  92
  119
  150
  186
  227
  274
  326
  383
  446
  514
  586
  664
  747
  834
  926
  1,022
  1,123
  1,229
  1,339
  1,453
  1,572
  1,696
  1,825
Total equity, $m
  18
  27
  41
  59
  83
  115
  154
  202
  260
  329
  408
  499
  601
  716
  841
  979
  1,127
  1,287
  1,458
  1,639
  1,831
  2,032
  2,244
  2,465
  2,697
  2,938
  3,190
  3,451
  3,723
  4,006
Total liabilities and equity, $m
  26
  39
  60
  86
  121
  167
  224
  294
  379
  479
  594
  726
  875
  1,042
  1,224
  1,425
  1,641
  1,873
  2,122
  2,386
  2,665
  2,958
  3,266
  3,588
  3,926
  4,277
  4,643
  5,023
  5,419
  5,831
Debt-to-equity ratio
  0.150
  0.260
  0.320
  0.360
  0.390
  0.410
  0.420
  0.430
  0.430
  0.440
  0.440
  0.440
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
  0.450
Adjusted equity ratio
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687
  0.687

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -26
  -32
  -39
  -49
  -63
  -80
  -101
  -128
  -159
  -197
  -240
  -290
  -346
  -408
  -477
  -552
  -633
  -721
  -814
  -914
  -1,018
  -1,129
  -1,245
  -1,367
  -1,493
  -1,626
  -1,764
  -1,907
  -2,056
  -2,211
Depreciation, amort., depletion, $m
  1
  2
  3
  4
  6
  8
  11
  14
  19
  23
  29
  35
  43
  51
  60
  69
  80
  91
  103
  116
  130
  144
  159
  175
  191
  208
  226
  245
  264
  284
Funds from operations, $m
  -25
  -30
  -36
  -45
  -57
  -72
  -90
  -113
  -141
  -173
  -211
  -254
  -303
  -357
  -417
  -483
  -553
  -630
  -711
  -797
  -889
  -985
  -1,086
  -1,192
  -1,302
  -1,417
  -1,537
  -1,662
  -1,792
  -1,927
Change in working capital, $m
  0
  1
  1
  1
  2
  2
  3
  4
  4
  5
  6
  7
  8
  9
  9
  10
  11
  12
  13
  14
  14
  15
  16
  17
  17
  18
  19
  20
  20
  21
Cash from operations, $m
  -25
  -30
  -37
  -46
  -59
  -74
  -93
  -117
  -145
  -179
  -217
  -261
  -311
  -366
  -427
  -493
  -565
  -642
  -724
  -811
  -903
  -1,000
  -1,102
  -1,208
  -1,320
  -1,436
  -1,556
  -1,682
  -1,813
  -1,948
Maintenance CAPEX, $m
  -1
  -1
  -2
  -3
  -4
  -6
  -8
  -11
  -14
  -18
  -23
  -29
  -35
  -43
  -51
  -60
  -69
  -80
  -91
  -103
  -116
  -130
  -144
  -159
  -175
  -191
  -208
  -226
  -245
  -264
New CAPEX, $m
  -2
  -3
  -5
  -7
  -9
  -11
  -14
  -17
  -21
  -24
  -28
  -32
  -36
  -40
  -45
  -49
  -53
  -57
  -60
  -64
  -68
  -72
  -75
  -79
  -82
  -86
  -89
  -93
  -96
  -100
Cash from investing activities, $m
  -3
  -4
  -7
  -10
  -13
  -17
  -22
  -28
  -35
  -42
  -51
  -61
  -71
  -83
  -96
  -109
  -122
  -137
  -151
  -167
  -184
  -202
  -219
  -238
  -257
  -277
  -297
  -319
  -341
  -364
Free cash flow, $m
  -28
  -35
  -44
  -56
  -71
  -91
  -115
  -145
  -180
  -221
  -269
  -322
  -382
  -449
  -522
  -601
  -687
  -778
  -875
  -979
  -1,087
  -1,201
  -1,321
  -1,446
  -1,577
  -1,712
  -1,854
  -2,001
  -2,154
  -2,313
Issuance/(repayment) of debt, $m
  3
  4
  6
  8
  11
  14
  18
  22
  26
  31
  36
  41
  47
  52
  57
  63
  68
  73
  78
  83
  87
  92
  96
  101
  105
  110
  115
  119
  124
  129
Issuance/(repurchase) of shares, $m
  32
  41
  53
  68
  87
  111
  141
  176
  217
  265
  320
  381
  448
  522
  603
  689
  782
  881
  985
  1,095
  1,210
  1,331
  1,457
  1,588
  1,725
  1,867
  2,015
  2,169
  2,328
  2,494
Cash from financing (excl. dividends), $m  
  35
  45
  59
  76
  98
  125
  159
  198
  243
  296
  356
  422
  495
  574
  660
  752
  850
  954
  1,063
  1,178
  1,297
  1,423
  1,553
  1,689
  1,830
  1,977
  2,130
  2,288
  2,452
  2,623
Total cash flow (excl. dividends), $m
  7
  11
  15
  20
  27
  34
  43
  53
  64
  75
  87
  100
  112
  125
  138
  151
  163
  175
  187
  199
  210
  221
  232
  243
  254
  265
  276
  287
  298
  310
Retained Cash Flow (-), $m
  -32
  -41
  -53
  -68
  -87
  -111
  -141
  -176
  -217
  -265
  -320
  -381
  -448
  -522
  -603
  -689
  -782
  -881
  -985
  -1,095
  -1,210
  -1,331
  -1,457
  -1,588
  -1,725
  -1,867
  -2,015
  -2,169
  -2,328
  -2,494
Prev. year cash balance distribution, $m
  9
  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
  -16
  -31
  -38
  -47
  -60
  -77
  -97
  -123
  -154
  -190
  -232
  -281
  -336
  -397
  -465
  -539
  -619
  -705
  -798
  -896
  -1,000
  -1,110
  -1,225
  -1,345
  -1,471
  -1,602
  -1,739
  -1,882
  -2,030
  -2,184
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  -15
  -28
  -33
  -39
  -47
  -56
  -66
  -77
  -88
  -100
  -110
  -120
  -128
  -133
  -136
  -137
  -135
  -130
  -123
  -114
  -103
  -92
  -80
  -69
  -57
  -47
  -37
  -29
  -22
  -16
Current shareholders' claim on cash, %
  73.8
  56.3
  44.8
  36.7
  30.7
  26.1
  22.4
  19.5
  17.0
  15.0
  13.3
  11.8
  10.5
  9.5
  8.5
  7.7
  6.9
  6.3
  5.7
  5.2
  4.7
  4.3
  3.9
  3.6
  3.3
  3.0
  2.8
  2.5
  2.3
  2.1

Vuzix Corporation designs, manufactures, markets, and sells wearable display devices in the United States and internationally. The company’s products are worn like eyeglasses that enable the user to view video and digital content, such as movies, computer data, the Internet, or video games through various mobile electronic devices, such as cell phones, laptop computers, tablets, portable media players, and gaming systems. Its products include binocular video eyewear devices that contain two micro displays mounted in a frame attached to eyeglass-style temples or stereo headphones; monocular smart glasses products for the enterprise, industrial, and commercial markets; virtual reality video eyewear products that provide a user with 3D computer simulated environments, as well as video headphones; and augmented reality products, which provide a user a live, direct or indirect, view of a physical, and real-world environment. The company sells its products under the Vuzix brand name. Vuzix Corporation offers its products directly to consumers, as well as through specialty retailers, online retailers, distributors, resellers, and Web stores. The company was formerly known as Icuiti Corporation and changed its name to Vuzix Corporation in 2007. Vuzix Corporation was founded in 1997 and is based in West Henrietta, New York.

FINANCIAL RATIOS  of  Vuzix (VUZI)

Valuation Ratios
P/E Ratio 0
Price to Sales 0
Price to Book 0
Price to Tangible Book
Price to Cash Flow 0
Price to Free Cash Flow 0
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 0%
Ret/ On Assets - 3 Yr. Avg. 0%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 0%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 0%
Payout Ratio 0%

VUZI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VUZI stock intrinsic value calculation we used $5.537753 million for the last fiscal year's total revenue generated by Vuzix. The default revenue input number comes from 0001 income statement of Vuzix. 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 VUZI stock valuation model: a) initial revenue growth rate of 60% 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 4.3%, whose default value for VUZI is calculated based on our internal credit rating of Vuzix, 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 Vuzix.
    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 VUZI stock the variable cost ratio is equal to 200%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $17 million in the base year in the intrinsic value calculation for VUZI 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 12.5% for Vuzix.

Corporate tax rate of 27% is the nominal tax rate for Vuzix. 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 VUZI 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 VUZI are equal to 70.6%.

Life of production assets of 4.7 years is the average useful life of capital assets used in Vuzix 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 VUZI is equal to 15%. 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 - $21.379713 million for Vuzix - 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 27.426 million for Vuzix 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 Vuzix at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Vuzix: 3Q Earnings Snapshot   [Nov-08-18 05:36PM  Associated Press]
▶ Vuzix: 2Q Earnings Snapshot   [Aug-09-18 04:23PM  Associated Press]

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