Intrinsic value of Xperi - XPER

Previous Close

$14.29

  Intrinsic Value

$36.04

stock screener

  Rating & Target

str. buy

+152%

Previous close

$14.29

 
Intrinsic value

$36.04

 
Up/down potential

+152%

 
Rating

str. buy

We calculate the intrinsic value of XPER 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 0.7

 

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
  381
  390
  400
  411
  424
  437
  452
  468
  486
  504
  524
  546
  568
  592
  618
  645
  674
  704
  736
  770
  806
  843
  883
  925
  969
  1,015
  1,064
  1,115
  1,169
  1,226
Variable operating expenses, $m
  248
  252
  256
  261
  267
  273
  279
  286
  294
  302
  229
  238
  248
  258
  270
  281
  294
  307
  321
  336
  351
  368
  385
  403
  423
  443
  464
  487
  510
  535
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
  248
  252
  256
  261
  267
  273
  279
  286
  294
  302
  229
  238
  248
  258
  270
  281
  294
  307
  321
  336
  351
  368
  385
  403
  423
  443
  464
  487
  510
  535
Operating income, $m
  133
  138
  144
  150
  157
  165
  173
  182
  192
  203
  296
  308
  320
  334
  348
  364
  380
  397
  415
  434
  454
  475
  498
  521
  546
  572
  600
  629
  659
  691
EBITDA, $m
  278
  285
  292
  300
  309
  319
  330
  342
  355
  368
  383
  398
  415
  432
  451
  471
  492
  514
  537
  562
  588
  615
  644
  675
  707
  741
  776
  814
  853
  895
Interest expense (income), $m
  0
  31
  32
  33
  34
  35
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  75
  78
  82
  86
  91
  95
  100
  105
Earnings before tax, $m
  102
  106
  111
  116
  122
  129
  136
  144
  152
  161
  252
  262
  273
  285
  297
  310
  323
  338
  353
  369
  386
  404
  423
  443
  464
  486
  509
  534
  559
  586
Tax expense, $m
  27
  29
  30
  31
  33
  35
  37
  39
  41
  43
  68
  71
  74
  77
  80
  84
  87
  91
  95
  100
  104
  109
  114
  120
  125
  131
  137
  144
  151
  158
Net income, $m
  74
  77
  81
  85
  89
  94
  99
  105
  111
  118
  184
  192
  199
  208
  217
  226
  236
  247
  258
  270
  282
  295
  309
  323
  339
  355
  372
  389
  408
  428

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
  990
  1,013
  1,039
  1,068
  1,101
  1,136
  1,175
  1,217
  1,262
  1,310
  1,362
  1,417
  1,476
  1,539
  1,605
  1,675
  1,750
  1,829
  1,912
  2,000
  2,092
  2,190
  2,293
  2,402
  2,516
  2,636
  2,763
  2,896
  3,037
  3,184
Adjusted assets (=assets-cash), $m
  990
  1,013
  1,039
  1,068
  1,101
  1,136
  1,175
  1,217
  1,262
  1,310
  1,362
  1,417
  1,476
  1,539
  1,605
  1,675
  1,750
  1,829
  1,912
  2,000
  2,092
  2,190
  2,293
  2,402
  2,516
  2,636
  2,763
  2,896
  3,037
  3,184
Revenue / Adjusted assets
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
  0.385
Average production assets, $m
  481
  493
  505
  519
  535
  552
  571
  592
  614
  637
  662
  689
  718
  748
  780
  815
  851
  889
  930
  972
  1,017
  1,065
  1,115
  1,168
  1,223
  1,282
  1,344
  1,408
  1,477
  1,548
Working capital, $m
  -18
  -18
  -19
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
  -41
  -43
  -46
  -48
  -50
  -52
  -55
  -58
Total debt, $m
  592
  607
  624
  644
  665
  688
  714
  741
  771
  803
  837
  874
  912
  954
  997
  1,044
  1,093
  1,145
  1,200
  1,257
  1,319
  1,383
  1,451
  1,522
  1,598
  1,677
  1,761
  1,848
  1,941
  2,038
Total liabilities, $m
  653
  668
  685
  704
  725
  749
  774
  802
  832
  863
  898
  934
  973
  1,014
  1,058
  1,104
  1,153
  1,205
  1,260
  1,318
  1,379
  1,443
  1,511
  1,583
  1,658
  1,737
  1,821
  1,909
  2,001
  2,098
Total equity, $m
  338
  345
  354
  364
  375
  387
  401
  415
  430
  447
  464
  483
  503
  525
  547
  571
  597
  624
  652
  682
  713
  747
  782
  819
  858
  899
  942
  988
  1,036
  1,086
Total liabilities and equity, $m
  991
  1,013
  1,039
  1,068
  1,100
  1,136
  1,175
  1,217
  1,262
  1,310
  1,362
  1,417
  1,476
  1,539
  1,605
  1,675
  1,750
  1,829
  1,912
  2,000
  2,092
  2,190
  2,293
  2,402
  2,516
  2,636
  2,763
  2,897
  3,037
  3,184
Debt-to-equity ratio
  1.750
  1.760
  1.760
  1.770
  1.770
  1.780
  1.780
  1.790
  1.790
  1.800
  1.800
  1.810
  1.810
  1.820
  1.820
  1.830
  1.830
  1.840
  1.840
  1.840
  1.850
  1.850
  1.860
  1.860
  1.860
  1.870
  1.870
  1.870
  1.870
  1.880
Adjusted equity ratio
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341
  0.341

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  74
  77
  81
  85
  89
  94
  99
  105
  111
  118
  184
  192
  199
  208
  217
  226
  236
  247
  258
  270
  282
  295
  309
  323
  339
  355
  372
  389
  408
  428
Depreciation, amort., depletion, $m
  145
  147
  148
  150
  152
  154
  157
  160
  162
  166
  87
  91
  94
  98
  103
  107
  112
  117
  122
  128
  134
  140
  147
  154
  161
  169
  177
  185
  194
  204
Funds from operations, $m
  219
  224
  229
  235
  241
  249
  256
  265
  273
  283
  271
  282
  294
  306
  319
  333
  348
  364
  380
  397
  416
  435
  455
  477
  500
  523
  548
  575
  603
  632
Change in working capital, $m
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -2
  -3
  -3
Cash from operations, $m
  220
  224
  230
  236
  242
  249
  257
  265
  274
  284
  272
  283
  295
  307
  321
  335
  349
  365
  382
  399
  417
  437
  457
  479
  502
  526
  551
  577
  605
  634
Maintenance CAPEX, $m
  -62
  -63
  -65
  -66
  -68
  -70
  -73
  -75
  -78
  -81
  -84
  -87
  -91
  -94
  -98
  -103
  -107
  -112
  -117
  -122
  -128
  -134
  -140
  -147
  -154
  -161
  -169
  -177
  -185
  -194
New CAPEX, $m
  -9
  -11
  -13
  -14
  -16
  -17
  -19
  -20
  -22
  -24
  -25
  -27
  -29
  -30
  -32
  -34
  -36
  -38
  -40
  -43
  -45
  -48
  -50
  -53
  -56
  -59
  -62
  -65
  -68
  -72
Cash from investing activities, $m
  -71
  -74
  -78
  -80
  -84
  -87
  -92
  -95
  -100
  -105
  -109
  -114
  -120
  -124
  -130
  -137
  -143
  -150
  -157
  -165
  -173
  -182
  -190
  -200
  -210
  -220
  -231
  -242
  -253
  -266
Free cash flow, $m
  148
  150
  152
  155
  158
  161
  165
  170
  175
  180
  163
  169
  176
  183
  190
  198
  206
  215
  224
  234
  244
  255
  267
  279
  292
  306
  320
  336
  352
  368
Issuance/(repayment) of debt, $m
  13
  15
  17
  19
  21
  23
  25
  28
  30
  32
  34
  36
  39
  41
  44
  46
  49
  52
  55
  58
  61
  64
  68
  72
  75
  79
  84
  88
  92
  97
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  
  13
  15
  17
  19
  21
  23
  25
  28
  30
  32
  34
  36
  39
  41
  44
  46
  49
  52
  55
  58
  61
  64
  68
  72
  75
  79
  84
  88
  92
  97
Total cash flow (excl. dividends), $m
  161
  165
  169
  174
  179
  185
  191
  197
  204
  212
  197
  206
  214
  224
  234
  244
  255
  267
  279
  292
  306
  320
  335
  351
  368
  385
  404
  423
  444
  466
Retained Cash Flow (-), $m
  -6
  -8
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -17
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -43
  -45
  -48
  -50
Prev. year cash balance distribution, $m
  104
  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
  259
  157
  160
  164
  168
  173
  178
  183
  189
  195
  180
  187
  194
  202
  211
  220
  230
  240
  251
  262
  274
  287
  300
  314
  329
  344
  361
  378
  396
  415
Discount rate, %
  5.50
  5.78
  6.06
  6.37
  6.69
  7.02
  7.37
  7.74
  8.13
  8.53
  8.96
  9.41
  9.88
  10.37
  10.89
  11.43
  12.01
  12.61
  13.24
  13.90
  14.59
  15.32
  16.09
  16.89
  17.74
  18.62
  19.56
  20.53
  21.56
  22.64
PV of cash for distribution, $m
  245
  141
  135
  128
  122
  115
  108
  101
  93
  86
  70
  64
  57
  51
  45
  39
  33
  28
  24
  19
  16
  12
  10
  7
  6
  4
  3
  2
  1
  1
Current shareholders' claim on cash, %
  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
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  100.0
  100.0
  100.0
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  100.0
  100.0

FINANCIAL RATIOS  of  Xperi (XPER)

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%

XPER stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the XPER stock intrinsic value calculation we used $373.732 million for the last fiscal year's total revenue generated by Xperi. The default revenue input number comes from 0001 income statement of Xperi. 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 XPER 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 5.5%, whose default value for XPER is calculated based on our internal credit rating of Xperi, 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 Xperi.
    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 XPER stock the variable cost ratio is equal to 65.5%.

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 XPER 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 Xperi.

Corporate tax rate of 27% is the nominal tax rate for Xperi. 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 XPER 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 XPER are equal to 126.3%.

Life of production assets of 7.6 years is the average useful life of capital assets used in Xperi 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 XPER is equal to -4.7%. 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 - $435.576 million for Xperi - 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 49.031 million for Xperi 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 Xperi at the current share price and the inputted number of shares is $0.7 billion.

COMPANY NEWS

▶ Xperi (XPER) Q3 Earnings Miss Estimates   [Nov-07-18 07:25PM  Zacks]
▶ Xperi to Report Third Quarter Fiscal 2018 Financial Results   [Oct-24-18 09:00AM  Business Wire]
▶ DTS Announces DTS:X Ultra Audio Support in ASUS ROG Phone   [Oct-02-18 09:00AM  Business Wire]
▶ DTS Play-Fi Products to Integrate Alexa Cast   [Aug-29-18 09:00AM  Business Wire]
▶ International Audio Group Joins DTS Play-Fi Ecosystem   [Aug-23-18 09:00AM  Business Wire]
▶ Xperi Corporation Announces Second Quarter 2018 Results   [Aug-08-18 04:05PM  Business Wire]
▶ Xperi Corp to Host Earnings Call   [03:00PM  ACCESSWIRE]
▶ DTS Play-Fi Expands Works With Alexa Certified Lineup   [Jul-26-18 09:00AM  Business Wire]
▶ The Top 5 Semiconductor Stocks to Buy   [Jun-25-18 02:26PM  InvestorPlace]
▶ XPERI to Participate in Upcoming Conferences   [May-17-18 04:40PM  Business Wire]
▶ 3 Small Stocks to Buy That Offer High Yields   [May-11-18 01:03PM  InvestorPlace]
▶ Xperi Corporation Announces First Quarter 2018 Results   [May-03-18 04:05PM  Business Wire]
▶ XPERI to Report First Quarter Fiscal 2018 Financial Results   [Apr-19-18 04:10PM  Business Wire]
▶ Xperi Corp to Host Earnings Call   [01:00PM  ACCESSWIRE]
▶ DTS Play-Fi Launches Whole-Home TV Audio Streaming   [Jan-30-18 09:00AM  Business Wire]
▶ ETFs with exposure to Xperi Corp. : December 18, 2017   [Dec-18-17 04:49PM  Capital Cube]
▶ Xperi Corp.: Strong price momentum but will it sustain?   [Dec-14-17 12:28PM  Capital Cube]
▶ ETFs with exposure to Xperi Corp. : December 8, 2017   [Dec-08-17 01:40PM  Capital Cube]
▶ Xperi Corporation Announces Third Quarter 2017 Results   [Nov-02-17 04:05PM  Business Wire]
▶ Xperi Corp to Host Earnings Call   [01:10PM  ACCESSWIRE]
▶ Xperi to Report Third Quarter Fiscal 2017 Financial Results   [Oct-20-17 09:00AM  Business Wire]
▶ ETFs with exposure to Xperi Corp. : October 6, 2017   [Oct-06-17 11:12AM  Capital Cube]
▶ Century Club: 100 Films Exhibited In DTS:X Immersive Audio   [Sep-13-17 10:00AM  Business Wire]
▶ ETFs with exposure to Xperi Corp. : September 2, 2017   [Sep-01-17 09:10PM  Capital Cube]

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