Delta Apparel (DLA:ASE) Fundamental Valuation Report


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Delta Apparel $21.34 (USD) Close Price as of 08/01/2018

Based on the analysis conducted in this report, Delta Apparel, (DLA:ASE) is found to be  Overvalued.

Company Delta Apparel
Symbol:Exchange DLA:ASE
Industry Consumer Cyclical:Apparel Manufacturing
Close Price/Date $21.34 (USD) 08/01/2018
Weighted Average Valuation $19.43 (USD)
Summary DLA:ASE is found to be  Overvalued by 9.0% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $24.00 (USD)
(in order of importance) Comparables: $12.69 (USD)
Adjusted Book Value: $19.18 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Undervalued on a Cash Flow Valuation basis
Comparable Company Basis: Overvalued on a Comparable Valuation basis
Asset Basis: Overvalued on an Asset Valuation basis

Valuation Details

Delta Apparel Valuations

Summary chart

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for DLA:ASE

Using a discounted cash flow model we generated an intrinsic value of $29.85 (USD) for DLA:ASE

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

DLA:ASE Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $29.85 1% 5% 1% 5%
WACC (or Ke) 9.24 $38.80 $23.38
Terminal Growth Rate 3.00 $24.06 $37.86
Tax Rate 0.06 $32.34 $27.37
Cash Flow 28,442,292 $27.16 $32.54
Capital Expenditures -5,414,200 $29.42 $30.29
Long Term Debt 122,302,000 $30.69 $29.01

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $12.69 (USD) for DLA:ASE. We also generated a valuation of $17.36 (USD) using other metrics and comparables.
The comparable companies were Crown Crafts (CRWS:NAS), Iconix Brand Group (ICON:NAS), Superior Uniform Group (SGC:NAS), Sequential Brands Group (SQBG:NAS) and Vince Holding (VNCE:NYS)

Company DLA:ASE End Date Value
Earnings/Share $1.33 (USD)
Book Value/Share $21.43 (USD)
Sales/Share $48.86 (USD)
Cash Flow/Share $1.77 (USD)
EBITDA/Share $3.27 (USD)
Price Based on Comps Adjustment Factor (%)
$24.79 (USD) -40.6
$36.49 (USD) -75.3
$35.21 (USD) -84.2
$12.89 (USD) -29.6
$25.84 (USD) -3.1
DLA:ASE Ratios Used Average Values CRWS:NAS ICON:NAS SGC:NAS SQBG:NAS VNCE:NYS
16.05 PE Ratio 18.64 15.76 0.00 21.52 0.00 0.00
1.00 PB Ratio 284.06 1.88 0.00 2.97 0.25 1131.12
0.44 PS Ratio 0.72 1.13 0.22 1.45 0.67 0.14
12.07 PCF Ratio 7.29 7.18 1.89 16.49 3.61 0.00
9.60 EV to EBITDA 11.50 7.99 0.00 13.22 13.28 0.00

Multiples

Using a multiples approach we generated a valuation of  $22.28 (USD) for DLA:ASE

Company DLA:ASE End Date Value
Earnings/Share $1.33 (USD)
Book Value/Share $21.43 (USD)
Sales/Share $48.86 (USD)
Cash Flow/Share $1.77 (USD)
EBITDA/Share $3.27 (USD)
Price Based on Comps Adjustment Factor
$20.13 (USD) 0
$19.24 (USD) 0
$15.31 (USD) 0
$19.63 (USD) 0
$37.09 (USD) 0
Ratios Ratio Average
PE Ratio 15.14
PB Ratio 0.90
PS Ratio 0.31
PCF Ratio 11.10
EV to EBITDA 11.34

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  DLA:ASE for the last 10 years was  0.90

We ran the Adjusted Book Value for  DLA:ASE and generated a book value of  $21.35 (USD)
By multiplying these we get an adjusted valuation of  $19.18 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for DLA:ASE. The 1 analysts have a concensus valuation for DLA:ASE for 2018 of $24.00 (USD).

DLA:ASE Delta Apparel

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 0 0 5.0000 Buy 2018-1-5

Current Price: not available

Analyst Consensus
USD Millions 2018
Mean EPS 1.25
# EPS Analysts 1
Mean Revenue 377.80
# Revenue Analysts 1
Mean Target Price 24.00
Mean Cash Flow 3.95
Mean EBITDA
Mean Net Income 9.60
Mean Debt Outstanding
Mean Tax Rate 21.00
Mean Growth Rate 15.00
Mean Capital Expenditure

Company Overview (DLA:ASE USD)

Price 22.18
Range 22.09 – 23.47
52 week 15.55 – 23.24
Open 22.52
Vol / Avg. 14913/15917
Mkt cap 166.25M
P/E 20.16
Div/yield 0.00/0.00
EPS 0.57
Shares 7.5M
Beta 0.51
Summary chart

Detailed Company Description

Delta Apparel Inc is an international apparel design, marketing, manufacturing and sourcing company that offers a diverse portfolio of lifestyle basics and branded activewear apparel, headwear and related accessory products.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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