Delta Apparel (DLA:ASE) Fundamental Valuation Report

Fundamental Valuation Report

Delta Apparel(DLA:ASE)

Consumer Cyclical:Apparel Manufacturing

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$18.84 (USD) 20/11/2018

Weighted Valuation
$22.40 (USD)

Overall Rating
Undervalued by 18.9%

Valuation Models Analyst Consensus: $24.00 (USD)
(in order of importance) Comparables: $21.43 (USD)
Adjusted Book Value: $19.51 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation

Company Overview (DLA:ASE USD)

Price 18.84
Range 18.34 – 18.84
52 week 16.42 – 21.97
Open 18.56
Vol / Avg. 20910/9619
Mkt cap 129.22M
P/E 104.67
Div/yield 0.00/0.00
EPS 0.18
Shares 6.86M
Beta -0.64

Company Description

Delta Apparel Inc together with its subsidiaries is an international apparel design, marketing, manufacturing, and sourcing company. It offers a diverse portfolio of lifestyle basics and branded activewear apparel, headwear and related accessory products. The company specializes in selling casual and athletic products through distribution channels and distribution tiers, including specialty stores, boutiques, department stores, mid and mass channels, e-retailers, and the U.S. military. It also offers its products direct-to-consumer on its websites and in its retail stores. The company derives maximum revenue from the sales of goods in the United States.

Valuation Details

 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 $33.15 (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: $33.15 1% 5% 1% 5%
WACC (or Ke) 8.13 $45.61 $24.76
Terminal Growth Rate 3.00 $25.53 $44.47
Tax Rate 0.27 $36.90 $29.40
Cash Flow 31,653,135 $30.15 $36.15
Capital Expenditures -3,842,200 $32.80 $33.50
Long Term Debt 122,302,000 $34.04 $32.26

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $21.43 (USD) for DLA:ASE. We also generated a valuation of $32.76 (USD) using other metrics and comparables.
The comparable companies were Superior Group (SGC:NAS) and Vince Holding (VNCE:NYS).

Company DLA:ASE End Date Value
Earnings/Share $0.18 (USD)
Book Value/Share $21.67 (USD)
Sales/Share $53.40 (USD)
Cash Flow/Share $2.55 (USD)
EBITDA/Share $3.69 (USD)
Price Based on Comps Adjustment Factor (%)
$1.82 (USD) -46.0
$45.51 (USD) -75.9
$37.05 (USD) -83.4
$26.22 (USD) -27.0
$85.42 (USD) -16.2
DLA:ASE Ratios Used Average Values SGC:NAS VNCE:NYS
1907.00 PE Ratio 10.09 18.90 1.28
0.88 PB Ratio 2.10 1.76 2.44
0.36 PS Ratio 0.69 0.83 0.56
7.48 PCF Ratio 16.18 16.18 0.00
9.59 EV to EBITDA 23.15 11.91 34.40

Multiples

Using a multiples approach we generated a valuation of  $22.64 (USD) for DLA:ASE

Company DLA:ASE End Date Value
Earnings/Share $0.18 (USD)
Book Value/Share $21.67 (USD)
Sales/Share $53.40 (USD)
Cash Flow/Share $2.55 (USD)
EBITDA/Share $3.69 (USD)
Price Based on Comps Adjustment Factor
$5.15 (USD) 0
$19.49 (USD) 0
$17.62 (USD) 0
$30.78 (USD) 0
$40.15 (USD) 0
Ratios Ratio Average
PE Ratio 28.64
PB Ratio 0.90
PS Ratio 0.33
PCF Ratio 12.07
EV to EBITDA 10.88

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  $21.71 (USD)
By multiplying these we get an adjusted valuation of  $19.51 (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 2019 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 2018-11-19

Current Price: 18.84 USD

Analyst Consensus
USD Millions 2019
Mean EPS 1.60
# EPS Analysts 1
Mean Revenue 411.50
# Revenue Analysts 1
Mean Target Price 24.00
Mean Cash Flow 1.96
Mean EBITDA
Mean Net Income 11.80
Mean Debt Outstanding
Mean Tax Rate 16.00
Mean Growth Rate 15.00
Mean Capital Expenditure

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.

Notice to User


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