Jack In The Box (JACK:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Jack In The Box(JACK:NAS)

Consumer Cyclical:Restaurants

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

Close Price/Date
$85.77 (USD) 21/11/2018

Weighted Valuation
$88.81 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 3.5%

Valuation Models Analyst Consensus: $92.00 (USD)
(in order of importance) Comparables: $81.13 (USD)
Multiples: $94.58 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (JACK:NAS USD)

Price 85.77
Range 83.72 – 88.33
52 week 75.18 – 106.61
Open 84.21
Vol / Avg. 880292/624370
Mkt cap 2.21B
P/E 19.95
Div/yield 1.60/0.02
EPS 4.21
Shares 25.74M
Beta 0.51

Company Description

Jack In The Box Inc operates quick-service restaurants and fast-casual restaurants in California, the USA under the brands Jack in the Box. The company menu offers burgers, tacos, regular and curly fries, specialty sandwiches, salads and ice cream shakes. These foods are available with the option of customization as per customer requirements. The company also offer catering services to its customers. Revenues are generated from sales that take place at their restaurants.

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 JACK:NAS

Using a discounted cash flow model we generated an intrinsic value of $45.44 (USD) for JACK:NAS

Sensitivity Analysis

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

JACK:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $45.44 1% 5% 1% 5%
WACC (or Ke) 6.16 $66.50 $31.48
Terminal Growth Rate 1.20 $32.51 $64.90
Tax Rate 0.28 $54.36 $36.52
Cash Flow 288,521,200 $37.67 $53.21
Capital Expenditures -66,581,000 $43.73 $47.15
Long Term Debt 896,268,000 $47.18 $43.70

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $81.13 (USD) for JACK:NAS. We also generated a valuation of $55.83 (USD) using other metrics and comparables.
The comparable companies were El Pollo Loco Holdings (LOCO:NAS), Papa John’s International (PZZA:NAS), Ruth’s Hospitality Group (RUTH:NAS), Sonic (SONC:NAS) and Wendy’s (WEN:NAS).

Company JACK:NAS End Date Value
Earnings/Share $4.21 (USD)
Book Value/Share ($19.06) (USD)
Sales/Share $46.89 (USD)
Cash Flow/Share $2.97 (USD)
EBITDA/Share $10.18 (USD)
Price Based on Comps Adjustment Factor (%)
$193.03 (USD) -41.6
$0.00 (USD) 0.0
$104.00 (USD) -50.9
$4.10 (USD) 7.2
$176.99 (USD) -16.7
JACK:NAS Ratios Used Average Values LOCO:NAS PZZA:NAS RUTH:NAS SONC:NAS WEN:NAS
18.36 PE Ratio 45.85 139.00 24.03 23.71 23.14 19.37
0.00 PB Ratio 6.90 1.74 0.00 9.49 0.00 9.48
1.68 PS Ratio 2.22 1.18 1.08 1.89 3.89 3.05
26.56 PCF Ratio 13.87 10.06 14.25 12.47 18.01 14.59
8.34 EV to EBITDA 17.39 27.51 13.42 12.98 15.31 17.74

Multiples

Using a multiples approach we generated a valuation of  $94.58 (USD) for JACK:NAS

Company JACK:NAS End Date Value
Earnings/Share $4.21 (USD)
Book Value/Share ($19.06) (USD)
Sales/Share $46.89 (USD)
Cash Flow/Share $2.97 (USD)
EBITDA/Share $10.18 (USD)
Price Based on Comps Adjustment Factor
$110.58 (USD) 0
$0.00 (USD) 0
$94.27 (USD) 0
$48.74 (USD) 0
$124.74 (USD) 0
Ratios Ratio Average
PE Ratio 26.27
PB Ratio 17.67
PS Ratio 2.01
PCF Ratio 16.40
EV to EBITDA 12.26

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  JACK:NAS for the last 8 years was  15.15

We ran the Adjusted Book Value for  JACK:NAS and generated a book value of  ($22.99) (USD)
By multiplying these we get an adjusted valuation of  ($348.40) (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for JACK:NAS. The 2 analysts have a concensus valuation for JACK:NAS for 2019 of $92.00 (USD).

JACK:NAS Jack In The Box

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 3 0 3.5000 Hold 2018-11-21

Current Price: 85.77 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 4.43 5.05 5.67
# EPS Analysts 2 2 2
Mean Revenue 848.90 869.10 908.00
# Revenue Analysts 2 2 2
Mean Target Price 92.00
Mean Cash Flow 6.83 7.64 8.40
Mean EBITDA 260.80 269.20 285.10
Mean Net Income 107.70 109.90 118.00
Mean Debt Outstanding 1,371.20 1,373.60
Mean Tax Rate 26.30 26.30 26.30
Mean Growth Rate 17.00
Mean Capital Expenditure 33.00 35.10 35.70

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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