Mimecast (MIME:NAS) Fundamental Valuation Report


Fundamental Valuation Report

Mimecast(MIME:NAS)

Technology:Software-Infrastructure

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

Close Price/Date
$34.73 (USD) 09/01/2019

Weighted Valuation
$43.42 (USD)

Overall Rating
Undervalued by 25.0%

Valuation Models Analyst Consensus: $46.50 (USD)
(in order of importance) Adjusted Book Value: $42.91 (USD)
Multiples: $35.19 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (MIME:NAS USD)

Price 34.73
Range 34.48 – 35.30
52 week 30.18 – 45.94
Open 34.76
Vol / Avg. 343068/366214
Mkt cap 2.09B
P/E 0.00
Div/yield 0.00/0.00
EPS -0.22
Shares 60.06M
Beta 0.00

Company Description

Mimecast Ltd operates in the technology sector based in the United States. Its core product is cloud-based software to address internet security threats that mainly cause e-mail failure or downtime. Mimecast’s chief product is an operating system, known as the Mime. The Mime protects inbound and outbound e-mail from malware, spam, threats. In addition, its archiving services secure, store and manage critical corporate communications and information, thereby aiding organizations in their corporate governance and employee productivity. The company derives revenue principally from the United States through the subscription fees and the sales to customers purchasing additional support.

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 MIME:NAS

Using a discounted cash flow model we generated an intrinsic value of $17.21 (USD) for MIME:NAS

Sensitivity Analysis

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

MIME:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $17.21 1% 5% 1% 5%
WACC (or Ke) 13.27 $19.21 $15.56
Terminal Growth Rate 3.00 $15.81 $18.90
Tax Rate -0.28 $17.88 $16.53
Cash Flow 106,490,629 $16.29 $18.12
Capital Expenditures -19,538,800 $17.08 $17.33
Long Term Debt 3,932,000 $17.21 $17.20

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $33.79 (USD) for MIME:NAS. We also generated a valuation of $48.44 (USD) using other metrics and comparables.
The comparable companies were Box (BOX:NYS), CyberArk Software (CYBR:NAS), Evertec (EVTC:NYS) and Q2 Holdings (QTWO:NYS).

Company MIME:NAS End Date Value
Earnings/Share ($0.25) (USD)
Book Value/Share $2.41 (USD)
Sales/Share $5.13 (USD)
Cash Flow/Share $0.96 (USD)
EBITDA/Share $0.17 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$74.62 (USD) 0.0
$34.49 (USD) 0.0
$20.20 (USD) 0.0
$5.84 (USD) 0.0
MIME:NAS Ratios Used Average Values BOX:NYS CYBR:NAS EVTC:NYS QTWO:NYS
0.00 PE Ratio 66.13 0.00 102.97 29.29 0.00
13.95 PB Ratio 30.96 94.39 6.13 9.90 13.43
6.55 PS Ratio 6.72 4.05 8.66 4.86 9.31
34.90 PCF Ratio 139.71 32.30 21.73 12.75 492.06
123.63 EV to EBITDA 34.67 0.00 55.10 14.24 0.00

Multiples

Using a multiples approach we generated a valuation of  $35.19 (USD) for MIME:NAS

Company MIME:NAS End Date Value
Earnings/Share ($0.25) (USD)
Book Value/Share $2.41 (USD)
Sales/Share $5.13 (USD)
Cash Flow/Share $0.96 (USD)
EBITDA/Share $0.17 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$42.20 (USD) 0
$36.22 (USD) 0
$38.85 (USD) 0
$23.47 (USD) 0
Ratios Ratio Average
PE Ratio 641.83
PB Ratio 17.51
PS Ratio 7.06
PCF Ratio 40.32
EV to EBITDA 139.43

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  MIME:NAS for the last 3 years was  17.47

We ran the Adjusted Book Value for  MIME:NAS and generated a book value of  $2.46 (USD)
By multiplying these we get an adjusted valuation of  $42.91 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for MIME:NAS. The 2 analysts have a concensus valuation for MIME:NAS for 2020 of $46.50 (USD).

MIME:NAS Mimecast

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 0 0 5.0000 Buy 2019-1-8

Current Price: 34.73 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 0.25 0.41 0.71
# EPS Analysts 2 2 2
Mean Revenue 352.20 426.00 487.00
# Revenue Analysts 3 3 2
Mean Target Price 46.50
Mean Cash Flow 0.75 0.95 1.07
Mean EBITDA
Mean Net Income 15.40 33.10 69.20
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate 25.00
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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