Intrinsic value of WidePoint - WYY

Previous Close

$0.53

  Intrinsic Value

$0.01

stock screener

  Rating & Target

str. sell

-98%

Previous close

$0.53

 
Intrinsic value

$0.01

 
Up/down potential

-98%

 
Rating

str. sell

We calculate the intrinsic value of WYY 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, %
  7.90
  7.61
  7.35
  7.11
  6.90
  6.71
  6.54
  6.39
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.44
  5.39
  5.35
  5.32
  5.29
  5.26
  5.23
  5.21
  5.19
  5.17
  5.15
  5.14
Revenue, $m
  82
  88
  95
  101
  108
  116
  123
  131
  139
  148
  157
  166
  175
  186
  196
  207
  219
  230
  243
  256
  270
  284
  299
  315
  331
  349
  367
  386
  406
  426
Variable operating expenses, $m
  86
  92
  99
  106
  113
  121
  128
  136
  145
  153
  160
  170
  180
  190
  201
  212
  224
  236
  249
  262
  276
  291
  306
  322
  339
  357
  375
  395
  415
  437
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
  86
  92
  99
  106
  113
  121
  128
  136
  145
  153
  160
  170
  180
  190
  201
  212
  224
  236
  249
  262
  276
  291
  306
  322
  339
  357
  375
  395
  415
  437
Operating income, $m
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -5
  -6
  -6
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
EBITDA, $m
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
Interest expense (income), $m
  0
  0
  0
  0
  0
  1
  1
  1
  1
  1
  1
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  5
  5
  5
  6
  6
  6
  7
Earnings before tax, $m
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
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
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17

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
  49
  53
  57
  61
  65
  70
  74
  79
  84
  89
  95
  100
  106
  112
  118
  125
  132
  139
  147
  155
  163
  172
  181
  190
  200
  211
  221
  233
  245
  257
Adjusted assets (=assets-cash), $m
  49
  53
  57
  61
  65
  70
  74
  79
  84
  89
  95
  100
  106
  112
  118
  125
  132
  139
  147
  155
  163
  172
  181
  190
  200
  211
  221
  233
  245
  257
Revenue / Adjusted assets
  1.673
  1.660
  1.667
  1.656
  1.662
  1.657
  1.662
  1.658
  1.655
  1.663
  1.653
  1.660
  1.651
  1.661
  1.661
  1.656
  1.659
  1.655
  1.653
  1.652
  1.656
  1.651
  1.652
  1.658
  1.655
  1.654
  1.661
  1.657
  1.657
  1.658
Average production assets, $m
  14
  15
  16
  17
  18
  19
  20
  22
  23
  25
  26
  28
  29
  31
  33
  34
  36
  38
  40
  43
  45
  47
  50
  52
  55
  58
  61
  64
  67
  71
Working capital, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -13
Total debt, $m
  2
  4
  6
  8
  9
  11
  13
  16
  18
  20
  23
  25
  28
  30
  33
  36
  39
  43
  46
  50
  53
  57
  61
  66
  70
  75
  80
  85
  90
  96
Total liabilities, $m
  22
  24
  26
  28
  29
  31
  34
  36
  38
  40
  43
  45
  48
  51
  53
  56
  60
  63
  66
  70
  73
  77
  81
  86
  90
  95
  100
  105
  110
  116
Total equity, $m
  27
  29
  31
  34
  36
  38
  41
  43
  46
  49
  52
  55
  58
  62
  65
  69
  72
  76
  81
  85
  89
  94
  99
  104
  110
  116
  122
  128
  134
  141
Total liabilities and equity, $m
  49
  53
  57
  62
  65
  69
  75
  79
  84
  89
  95
  100
  106
  113
  118
  125
  132
  139
  147
  155
  162
  171
  180
  190
  200
  211
  222
  233
  244
  257
Debt-to-equity ratio
  0.080
  0.130
  0.180
  0.220
  0.260
  0.300
  0.330
  0.360
  0.390
  0.410
  0.430
  0.460
  0.480
  0.500
  0.510
  0.530
  0.540
  0.560
  0.570
  0.590
  0.600
  0.610
  0.620
  0.630
  0.640
  0.650
  0.660
  0.660
  0.670
  0.680
Adjusted equity ratio
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549
  0.549

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -10
  -10
  -11
  -11
  -12
  -13
  -14
  -14
  -15
  -16
  -17
Depreciation, amort., depletion, $m
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
Funds from operations, $m
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -12
Change in working capital, $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
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
Maintenance CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
New CAPEX, $m
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -3
Cash from investing activities, $m
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -7
  -7
Free cash flow, $m
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
  -17
  -17
  -18
  -19
Issuance/(repayment) of debt, $m
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  2
  3
  3
  3
  3
  3
  3
  3
  3
  4
  4
  4
  4
  4
  4
  5
  5
  5
  5
  6
Issuance/(repurchase) of shares, $m
  6
  7
  7
  7
  8
  8
  9
  9
  9
  10
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  16
  17
  18
  19
  20
  21
  23
  24
Cash from financing (excl. dividends), $m  
  8
  9
  9
  9
  10
  10
  11
  11
  11
  12
  10
  12
  12
  13
  13
  14
  15
  15
  16
  18
  19
  20
  20
  21
  22
  24
  25
  26
  28
  30
Total cash flow (excl. dividends), $m
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  4
  4
  5
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
Retained Cash Flow (-), $m
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -9
  -10
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -23
  -24
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
  -1
  -1
  -2
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
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
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  87.9
  77.3
  68.2
  60.3
  53.4
  47.4
  42.1
  37.4
  33.3
  29.7
  27.2
  24.8
  22.7
  20.7
  18.9
  17.2
  15.7
  14.3
  13.1
  11.9
  10.8
  9.9
  9.0
  8.2
  7.4
  6.8
  6.2
  5.6
  5.1
  4.6

WidePoint Corporation is a provider of information technology (IT)-based products, services and solutions. The Company offers secure, cloud-based, enterprise-wide IT-based solutions that enable commercial markets, and federal and state government organizations, to deploy fully compliant IT services in accordance with government-mandated regulations and advanced system requirements. The Company offers telecom management services, which include life cycle management of fixed and mobile assets; mobile security management services, which include life cycle fixed and mobile device access and application control management; identity management services, which include life cycle fixed and mobile, including cloud-based services authentication and information assurance services, and identity services, which include fixed and mobile digital certificates required for secure access to a customer's technology infrastructure.

FINANCIAL RATIOS  of  WidePoint (WYY)

Valuation Ratios
P/E Ratio -11
Price to Sales 0.6
Price to Book 1.6
Price to Tangible Book
Price to Cash Flow 14.6
Price to Free Cash Flow 21.9
Growth Rates
Sales Growth Rate 9.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 3.6%
Total Debt to Equity 3.6%
Interest Coverage 0
Management Effectiveness
Return On Assets -8.2%
Ret/ On Assets - 3 Yr. Avg. -11.8%
Return On Total Capital -12.7%
Ret/ On T. Cap. - 3 Yr. Avg. -16.4%
Return On Equity -13.3%
Return On Equity - 3 Yr. Avg. -18.2%
Asset Turnover 1.6
Profitability Ratios
Gross Margin 17.9%
Gross Margin - 3 Yr. Avg. 20.9%
EBITDA Margin -3.8%
EBITDA Margin - 3 Yr. Avg. -5.5%
Operating Margin -6.4%
Oper. Margin - 3 Yr. Avg. -7.6%
Pre-Tax Margin -5.1%
Pre-Tax Margin - 3 Yr. Avg. -7.7%
Net Profit Margin -5.1%
Net Profit Margin - 3 Yr. Avg. -9.1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -14.4%
Payout Ratio 0%

WYY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WYY stock intrinsic value calculation we used $75.884246 million for the last fiscal year's total revenue generated by WidePoint. The default revenue input number comes from 0001 income statement of WidePoint. 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 WYY stock valuation model: a) initial revenue growth rate of 7.9% 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 WYY is calculated based on our internal credit rating of WidePoint, 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 WidePoint.
    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 WYY stock the variable cost ratio is equal to 105.3%.

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 WYY 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 7.5% for WidePoint.

Corporate tax rate of 27% is the nominal tax rate for WidePoint. 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 WYY 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 WYY are equal to 16.6%.

Life of production assets of 16 years is the average useful life of capital assets used in WidePoint 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 WYY is equal to -3.1%. 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 - $25.210066 million for WidePoint - 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 84.062 million for WidePoint 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 WidePoint at the current share price and the inputted number of shares is $0.0 billion.

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COMPANY NEWS

▶ WidePoint: 3Q Earnings Snapshot   [Nov-14-18 05:08PM  Associated Press]
▶ WidePoint Partners with CDW   [Aug-06-18 06:45AM  PR Newswire]
▶ WidePoint Corporation Reports First Quarter 2018 Results   [May-14-18 04:05PM  PR Newswire]
▶ WidePoint Awarded Task Order by DHS Component   [Jan-12-18 06:45AM  PR Newswire]
▶ Wildfire Forces Cancellation of LD Micro Conference   [Dec-06-17 12:20PM  ACCESSWIRE]
▶ WidePoint Announces Completion of CEO Transition   [Oct-16-17 06:45AM  PR Newswire]
▶ WidePoint Launches Customizable TM2 PIV-I Offering   [Oct-10-17 06:45AM  PR Newswire]
▶ WidePoint Highlights Year-to-Date Contract Awards   [Oct-02-17 06:45AM  PR Newswire]
▶ WidePoint Corporation Reports 2Q17 Financial Results   [Aug-14-17 04:30PM  PR Newswire]
▶ ETFs with exposure to WidePoint Corp. : August 1, 2017   [Aug-01-17 05:32PM  Capital Cube]
▶ ETFs with exposure to WidePoint Corp. : June 27, 2017   [Jun-27-17 04:00PM  Capital Cube]
▶ ETFs with exposure to WidePoint Corp. : June 13, 2017   [Jun-13-17 01:05PM  Capital Cube]
▶ ETFs with exposure to WidePoint Corp. : May 30, 2017   [May-30-17 12:52PM  Capital Cube]
▶ WidePoint Corporation Reports 1Q17 Financial Results   [May-15-17 04:05PM  PR Newswire]
▶ ETFs with exposure to WidePoint Corp. : April 17, 2017   [Apr-17-17 01:12PM  Capital Cube]
▶ ETFs with exposure to WidePoint Corp. : April 5, 2017   [Apr-05-17 05:46PM  Capital Cube]
▶ Can Wynn Keep Winning?   [Jan-30-17 10:33AM  TheStreet.com]
▶ ETFs with exposure to WidePoint Corp. : January 4, 2017   [Jan-04-17 11:44AM  Capital Cube]

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