Discounted Cash Flow Calculation for AIM:CBOX using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
Cake Box Holdings
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
AIM:CBOX DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
Cake Box Holdings
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
Cake Box Holdings
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Cake Box Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
Cake Box Holdings's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
Cake Box Holdings's
is considered below, and whether this is a fair price.
Price based on past earnings
Cake Box Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Cake Box Holdings's earnings are expected to grow significantly at over 20% yearly.
Cake Box Holdings's revenue is expected to grow by 15.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Cake Box Holdings's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
Cake Box Holdings
has a total score of
4/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Cake Box Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Cake Box Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Cake Box Holdings's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Cake Box Holdings's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is covered by short term assets, assets are 3.6x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Cake Box Holdings (LON:CBOX) Seems To Use Debt Quite Sensibly
AIM:CBOX Historical Debt, August 16th 2019 How Healthy Is Cake Box Holdings's Balance Sheet? … Despite its noteworthy liabilities, Cake Box Holdings boasts net cash, so it's fair to say it does not have a heavy debt load! … While Cake Box Holdings has net cash on its balance sheet, it's still worth taking a look at its ability to convert earnings before interest and tax (EBIT) to free cash flow, to help us understand how quickly it is building (or eroding) that cash balance.
If You Like EPS Growth Then Check Out Cake Box Holdings (LON:CBOX) Before It's Too Late
We haven't seen any insiders selling Cake Box Holdings shares, in the last year. … And the insider buying isn't the only sign of alignment between shareholders and the board, since Cake Box Holdings insiders own more than a third of the company. … The good news is that Cake Box Holdings is not the only growth stock with insider buying.
Are You An Income Investor? Don't Miss Out On Cake Box Holdings plc (LON:CBOX)
It's positive to see that Cake Box Holdings's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut. … However we're conscious that the company hasn't got an overly long track record of dividend payments yet, which makes us wary of relying on its dividend income. … Cake Box Holdings's dividend payout ratios are within normal bounds, although we note its cash flow is not as strong as the income statement would suggest.
Estimating The Fair Value Of Cake Box Holdings plc (LON:CBOX)
How far off is Cake Box Holdings plc (LON:CBOX) from its intrinsic value? … Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model? … See our latest analysis for Cake Box Holdings
Should You Buy Cake Box Holdings plc (LON:CBOX) For Its 1.5% Dividend?
Cake Box Holdings plc (LON:CBOX) has started paying a dividend to shareholders. … Does Cake Box Holdings tick all the boxes of a great dividend stock? … Check out our latest analysis for Cake Box Holdings
Why We Like Cake Box Holdings plc’s (LON:CBOX) 57% Return On Capital Employed
Specifically, we'll consider its Return On Capital Employed (ROCE), since that will give us an insight into how efficiently the business can generate profits from the capital it requires. … Understanding Return On Capital Employed (ROCE). … ROCE measures the amount of pre-tax profits a company can generate from the capital employed in its business.
Boasting A 50% Return On Equity, Is Cake Box Holdings plc (LON:CBOX) A Top Quality Stock?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … That means that for every £1 worth of shareholders' equity, it generated £0.50 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Something To Consider Before Buying Cake Box Holdings plc (LON:CBOX) For The 1.3% Dividend
Does Cake Box Holdings tick all the boxes of a great dividend stock? … 5 checks you should use to assess a dividend stock … When researching a dividend stock, I always follow the following screening criteria:
Is Cake Box Holdings plc's (LON:CBOX) Balance Sheet A Threat To Its Future?
Cake Box Holdings plc (LON:CBOX) is a small-cap stock with a market capitalization of UK£63m. … While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … Evaluating financial health as part of your investment thesis is
What You Must Know About Cake Box Holdings plc's (LON:CBOX) ROE
and want to start learning about core concepts of fundamental analysis on practical examples from today's market. … With an ROE of 59.38%, Cake Box Holdings plc (LON:CBOX) outpaced its own industry which delivered a less exciting 8.53% over the past year. … See our latest analysis for Cake Box Holdings
Cake Box Holdings Plc, through its subsidiaries, engages in the retail of fresh cream cakes in the United Kingdom. As of March 31, 2019, the company operated 113 franchise stores. It also engages in property rental activities. Cake Box Holdings Plc was incorporated in 2013 and is headquartered in Enfield, the United Kingdom.
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