Hibbett Sports (HIBB:NAS) Fundamental Valuation Report


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Hibbett Sports $23.95 (USD) Close Price as of 29/03/2018

Based on the analysis conducted in this report, Hibbett Sports, (HIBB:NAS) is found to be  Undervalued.

Company Hibbett Sports
Symbol:Exchange HIBB:NAS
Industry Consumer Cyclical:Specialty Retail
Close Price/Date $23.95 (USD) 29/03/2018
Weighted Average Valuation $25.60 (USD)
Summary HIBB:NAS is found to be  Undervalued by 6.9% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $23.17 (USD)
(in order of importance) Discounted Cash Flow: $26.81 (USD)
Comparables: $30.45 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Undervalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Undervalued on an Asset Valuation basis

Valuation Details

Hibbett Sports 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 HIBB:NAS

Using a discounted cash flow model we generated an intrinsic value of $26.81 (USD) for HIBB:NAS

Sensitivity Analysis

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

HIBB:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $26.81 1% 5% 1% 5%
WACC (or Ke) 7.49 $33.38 $22.43
Terminal Growth Rate 2.50 $22.74 $32.91
Tax Rate 0.37 $29.96 $23.66
Cash Flow 63,345,000 $24.82 $28.80
Capital Expenditures 235,000 $26.82 $26.80
Long Term Debt 523,000 $26.81 $26.81

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $30.45 (USD) for HIBB:NAS. We also generated a valuation of $60.16 (USD) using other metrics and comparables.
The comparable companies were Conn’s (CONN:NAS), Finish Line (FINL:NAS), Overstock.com (OSTK:NAS), Winmark (WINA:NAS) and Zumiez (ZUMZ:NAS)

Company HIBB:NAS End Date Value
Earnings/Share $1.71 (USD)
Book Value/Share $16.68 (USD)
Sales/Share $44.71 (USD)
Cash Flow/Share $4.81 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$54.37 (USD) -53.9
$45.59 (USD) -3.2
$24.12 (USD) -18.0
$54.65 (USD) -40.0
$0.00 (USD) -28.3
HIBB:NAS Ratios Used Average Values CONN:NAS FINL:NAS OSTK:NAS WINA:NAS ZUMZ:NAS
13.69 PE Ratio 108.85 340.00 50.15 0.00 23.11 22.13
1.44 PB Ratio 2.73 2.01 1.28 5.94 0.00 1.70
0.54 PS Ratio 2.06 0.70 0.30 0.52 8.14 0.64
4.97 PCF Ratio 11.35 10.15 3.61 0.00 22.56 9.08
4.81 EV to EBITDA 10.95 16.51 6.78 0.00 14.16 6.33

Multiples

Using a multiples approach we generated a valuation of  $37.97 (USD) for HIBB:NAS

Company HIBB:NAS End Date Value
Earnings/Share $1.71 (USD)
Book Value/Share $16.68 (USD)
Sales/Share $44.71 (USD)
Cash Flow/Share $4.81 (USD)
EBITDA/Share $5.66 (USD)
Price Based on Comps Adjustment Factor
$20.92 (USD) 0
$41.35 (USD) 0
$38.53 (USD) 0
$56.79 (USD) 0
$32.25 (USD) 0
Ratios Ratio Average
PE Ratio 12.24
PB Ratio 2.48
PS Ratio 0.86
PCF Ratio 11.80
EV to EBITDA 5.69

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  HIBB:NAS for the last 10 years was  2.65

We ran the Adjusted Book Value for  HIBB:NAS and generated a book value of  $14.69 (USD)
By multiplying these we get an adjusted valuation of  $38.95 (USD)

Analyst Data

In the Stockcalc database there are 3 analysts that provide a valuation for HIBB:NAS. The 3 analysts have a concensus valuation for HIBB:NAS for 2019 of $23.17 (USD).

HIBB:NAS Hibbett Sports

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 1 3.0000 Hold 2018-3-29

Current Price: not available

Analyst Consensus
USD Millions 2018 2019 2020
Mean EPS 1.63 1.82 1.90
# EPS Analysts 2 2 2
Mean Revenue 968.20 960.00 971.10
# Revenue Analysts 2 2 2
Mean Target Price 23.17
Mean Cash Flow 3.50 3.63 3.39
Mean EBITDA 78.70 64.50 61.80
Mean Net Income 34.20 35.70 27.60
Mean Debt Outstanding -39.30 -34.90 -23.30
Mean Tax Rate 37.90 24.10 24.00
Mean Growth Rate
Mean Capital Expenditure 27.50 27.50 27.50

Company Overview (HIBB:NAS USD)

Price 23.95
Range 23.20 – 24.10
52 week 10.85 – 29.20
Open 23.60
Vol / Avg. 650770/352964
Mkt cap 468.97M
P/E 13.69
Div/yield 0.00/0.00
EPS 2.72
Shares 19.58M
Beta 1.00
Summary chart

Detailed Company Description

Hibbett Sports Inc is a United States-based operator of sporting goods retail stores in small to mid-sized markets mainly in the Southeast, Southwest, Mid-Atlantic and the Midwest.

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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