NIC (EGOV.DL:NAS) Fundamental Valuation Report

NIC (EGOV.DL:NAS) Fundamental Valuation Report

Fundamental Valuation Report

NIC(EGOV.DL:NAS)

Technology:Software – Application

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

Close Price/Date
$34.00 (USD) 04/20/2021

Weighted Valuation
$32.93 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 3.2%

Valuation Models Discounted Cash Flow: $31.38 (USD)
Adjusted Book Value: $32.65 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Fairly valued on an Asset Valuation
According to Analyst consensus at $32.00 this stock is Overvalued

Company Overview (EGOV.DL:NAS USD)

Price 34.00
Range 33.98 – 34.02
52 week 19.42 – 35.14
Open 34.01
Vol / Avg. 1.41M/1.26M
Mkt cap 2.31B
P/E 33.66
Div/yield 0.36/0.01
EPS 1.01
Shares 67.91M
Beta 0.28

Company Description

NIC Inc is a leading provider of digital government services that help governments use technology to provide a higher level of service to businesses and citizens and increase efficiencies. The company has two operating channels: state enterprise businesses and software and services businesses. In State enterprise businesses, the company enters into long-term contracts with state and local governments to design, build and operate Internet-based, enterprise-wide portals on their behalf, the software and services businesses provide software development and payment processing services, other than outsourced portal services, to state and local governments as well as federal agencies. It generates a majority of its revenue from the State Enterprise.

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 EGOV.DL:NAS

Using a discounted cash flow model we generated an intrinsic value of $31.38 (USD) for EGOV.DL:NAS

Sensitivity Analysis

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

EGOV.DL:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $31.38 1% 5% 1% 5%
WACC (or Ke) 3.59 $43.52 $24.54
Terminal Growth Rate 0.00 $24.99 $42.72
Tax Rate 0.22 $33.54 $29.23
Cash Flow 108,946,263 $29.64 $33.13
Capital Expenditures -4,683,927 $31.31 $31.46
Long Term Debt 0 $31.38 $31.38

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $46.00 (USD) for EGOV.DL:NAS. We also generated a valuation of $31.19 (USD) using other metrics and comparables.
The comparable companies were Upland Software (UPLD:NAS), Cornerstone OnDemand (CSOD:NAS), CommVault Systems (CVLT:NAS), Riot Blockchain (RIOT:NAS) and Agilysys (AGYS:NAS).

Company EGOV.DL:NAS End Date Value
Earnings/Share $1.01 (USD)
Book Value/Share $4.32 (USD)
Sales/Share $6.86 (USD)
Cash Flow/Share $0.94 (USD)
EBITDA/Share $1.51 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -52.8
$43.45 (USD) 52.5
$37.29 (USD) -0.5
$37.75 (USD) -44.2
$95.57 (USD) -37.7
EGOV.DL:NAS Ratios Used Average Values UPLD:NAS CSOD:NAS CVLT:NAS RIOT:NAS AGYS:NAS
33.66 PE Ratio 0.00 0.00 0.00 0.00 0.00 0.00
7.88 PB Ratio 10.06 4.91 10.96 8.02 11.68 14.74
4.96 PS Ratio 31.09 4.59 3.82 4.72 133.70 8.62
36.32 PCF Ratio 40.51 37.56 29.21 35.88 0.00 59.37
20.49 EV to EBITDA 63.09 77.02 43.50 68.74 0.00 0.00

Multiples

Using a multiples approach we generated a valuation of  $23.42 (USD) for EGOV.DL:NAS

Company EGOV.DL:NAS End Date Value
Earnings/Share $1.01 (USD)
Book Value/Share $4.32 (USD)
Sales/Share $6.86 (USD)
Cash Flow/Share $0.94 (USD)
EBITDA/Share $1.51 (USD)
Price Based on Comps Adjustment Factor
$24.86 (USD) 0
$27.04 (USD) 0
$26.28 (USD) 0
$17.31 (USD) 0
$21.61 (USD) 0
Ratios Ratio Average
PE Ratio 24.62
PB Ratio 6.26
PS Ratio 3.83
PCF Ratio 18.49
EV to EBITDA 14.27

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  EGOV.DL:NAS for the last 10 years was  7.47

We ran the Adjusted Book Value for  EGOV.DL:NAS and generated a book value of  $4.37 (USD)
By multiplying these we get an adjusted valuation of  $32.65 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for EGOV.DL:NAS. The 2 analysts have a concensus valuation for EGOV.DL:NAS for 2021 of $32.00 (USD).

EGOV.DL:NAS NIC

No analyst recommendation
Current Price: not available

No analyst consensus

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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