Sportsman’s Warehouse (SPWH:NAS) Fundamental Valuation Report


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Sportsman’s Warehouse $5.64 (USD) Close Price as of 20/06/2018

Based on the analysis conducted in this report, Sportsman’s Warehouse, (SPWH:NAS) is found to be  Undervalued.

Company Sportsman’s Warehouse
Symbol:Exchange SPWH:NAS
Industry Consumer Cyclical:Leisure
Close Price/Date $5.64 (USD) 20/06/2018
Weighted Average Valuation $6.50 (USD)
Summary SPWH:NAS is found to be  Undervalued by 15.3% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $6.50 (USD)
(in order of importance) Comparables: $6.16 (USD)
Adjusted Book Value: $7.21 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued 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

Sportsman’s Warehouse 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 SPWH:NAS

Using a discounted cash flow model we generated an intrinsic value of $0.87 (USD) for SPWH:NAS

Sensitivity Analysis

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

SPWH:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $0.87 1% 5% 1% 5%
WACC (or Ke) 8.07 $2.57 ($0.26)
Terminal Growth Rate 3.00 ($0.24) $2.54
Tax Rate 0.27 $2.26 ($0.51)
Cash Flow 90,640,000 ($0.50) $2.25
Capital Expenditures
Long Term Debt 212,365,000 $1.12 $0.63

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $6.16 (USD) for SPWH:NAS. We also generated a valuation of $7.04 (USD) using other metrics and comparables.
The comparable companies were Town Sports Intl Hldgs (CLUB:NAS), Johnson Outdoors (JOUT:NAS), Lindblad Expeditions (LIND:NAS), Nautilus (NLS:NYS) and Speedway Motorsports (TRK:NYS).

Company SPWH:NAS End Date Value
Earnings/Share $0.39 (USD)
Book Value/Share $1.11 (USD)
Sales/Share $19.53 (USD)
Cash Flow/Share $0.72 (USD)
EBITDA/Share $1.51 (USD)
Price Based on Comps Adjustment Factor (%)
$7.90 (USD) -48.0
$3.27 (USD) 0.0
$27.92 (USD) -76.4
$8.21 (USD) -0.8
$11.04 (USD) -21.4
SPWH:NAS Ratios Used Average Values CLUB:NAS JOUT:NAS LIND:NAS NLS:NYS TRK:NYS
14.10 PE Ratio 81.35 37.42 20.56 325.75 18.11 4.88
4.96 PB Ratio 2.95 0.00 3.06 5.28 2.68 0.79
0.28 PS Ratio 1.43 0.78 1.51 2.04 1.23 1.59
7.67 PCF Ratio 11.45 7.83 17.64 9.60 14.98 7.22
6.93 EV to EBITDA 10.49 8.91 9.65 16.27 10.10 7.52

Multiples

Using a multiples approach we generated a valuation of  $8.56 (USD) for SPWH:NAS

Company SPWH:NAS End Date Value
Earnings/Share $0.39 (USD)
Book Value/Share $1.11 (USD)
Sales/Share $19.53 (USD)
Cash Flow/Share $0.72 (USD)
EBITDA/Share $1.51 (USD)
Price Based on Comps Adjustment Factor
$5.51 (USD) 0
$7.18 (USD) 0
$9.07 (USD) 0
$8.97 (USD) 0
$12.08 (USD) 0
Ratios Ratio Average
PE Ratio 14.12
PB Ratio 6.47
PS Ratio 0.46
PCF Ratio 12.50
EV to EBITDA 8.01

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  SPWH:NAS for the last 4 years was  6.47

We ran the Adjusted Book Value for  SPWH:NAS and generated a book value of  $1.11 (USD)
By multiplying these we get an adjusted valuation of  $7.21 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for SPWH:NAS. The 2 analysts have a concensus valuation for SPWH:NAS for 2019 of $6.50 (USD).

SPWH:NAS Sportsman’s Warehouse

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
2 0 0 5.0000 Buy 2018-6-20

Current Price: not available

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 0.61 0.73 0.92
# EPS Analysts 2 2 1
Mean Revenue 852.50 907.00 1,028.40
# Revenue Analysts 2 2 1
Mean Target Price 6.50
Mean Cash Flow 1.00 1.07 1.29
Mean EBITDA 64.10 77.10 88.00
Mean Net Income 26.00 31.60 40.40
Mean Debt Outstanding 155.80 142.70 105.10
Mean Tax Rate 25.60 25.60
Mean Growth Rate 10.00
Mean Capital Expenditure 23.00 26.50 26.50

Company Overview (SPWH:NAS USD)

Price 5.64
Range 5.42 – 5.71
52 week 3.46 – 6.74
Open 5.52
Vol / Avg. 390079/468545
Mkt cap 241.58M
P/E 14.10
Div/yield 0.00/0.00
EPS 0.42
Shares 42.83M
Beta -0.90

Summary chart

Detailed Company Description

Sportsman’s Warehouse Holdings Inc is an outdoor sporting goods retailer. It provides a one-stop shopping experience that equips customers with right quality, brand name hunting, shooting, fishing and camping gear to maximize enjoyment of the outdoors.

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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