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Forward Industries Intrinsic Value: DCF (FCF Based)

: $-0.86 (As of Today)
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As of today (2022-01-19), Forward Industries's intrinsic value calculated from the Discounted Cash Flow model is $-0.86.

Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.

Forward Industries's Predictability Rank is 1-Star. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety (FCF Based) using Discounted Cash Flow model for Forward Industries is N/A.


Forward Industries Intrinsic Value: DCF (FCF Based) Historical Data

The historical data trend for Forward Industries's Intrinsic Value: DCF (FCF Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Forward Industries Annual Data
Trend Sep12 Sep13 Sep14 Sep15 Sep16 Sep17 Sep18 Sep19 Sep20 Sep21
Intrinsic Value: DCF (FCF Based)
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - -

Forward Industries Quarterly Data
Dec16 Mar17 Jun17 Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21
Intrinsic Value: DCF (FCF Based) Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only - - - - -

Forward Industries Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DCF calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 8%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. We used the 10-Year Treasury Constant Maturity Rate as the risk free rate and rounded up to the nearest integer, then added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Growth Rate in the growth stage: g1 = 5%
Growth Rate in the growth stage = average free cash flow growth rate in the past 10 years. If it is higher than 20%, we use 20%. If it is less than 5%, we use 5% instead. => For companies with Average Free Cash Flow Growth Rate in the past 10 years less than 5%, GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Years of Terminal Growth: y2 = 10

6. Free Cash Flow per Share: fcf = $-0.058.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.

All of the default settings can be changed and the results are calculated automatically.

Forward Industries's Intrinsic Value: DCF (FCF Based) for today is calculated as

Intrinsic Value: DCF (FCF Based)=Free Cash Flow per Share*{[(1+g1)/(1+d)+(1+g1)^2/(1+d)^2+...+(1+g1)^10/(1+d)^10]
+(1+g1)^10/(1+d)^10*[(1+g2)/(1+d)+(1+g2)^2/(1+d)^2+...+(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.08) = 0.97222222222222
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.08) = 0.96296296296296

Intrinsic Value: DCF (FCF Based)=Free Cash Flow per Share*{[x+x^2+...+x^10]+x^10*[y+y^2+...+y^10]}
=Free Cash Flow per Share*[x*(1-x^10)/(1-x)+x^10*y*(1-y^10)/(1-y)]
=-0.058*14.7595
=-0.86

Margin of Safety (FCF Based)=(Intrinsic Value: DCF (FCF Based)-Current Price)/Intrinsic Value: DCF (FCF Based)
=(-0.86-1.53)/-0.86
=N/A

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Forward Industries  (NAS:FORD) Intrinsic Value: DCF (FCF Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.


Be Aware

What you need to know about the DCF model:

1. The DCF model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.


Forward Industries Intrinsic Value: DCF (FCF Based) Related Terms

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Forward Industries Business Description

Forward Industries logo
Traded in Other Exchanges
N/A
Address
700 Veterans Memorial Highway, Suite 100, Hauppauge, New York, NY, USA, 11788
Forward Industries Inc is a provider of carrying and protective solutions. It designs and distributes product protection for handheld electronic devices. Forward Industries sells soft-sided carrying cases for blood glucose diagnostic kits and portable consumer electronic devices such as smartphones, tablets, personal computers, notebooks, and Global Positioning System devices. It also offers bags, clips, hand straps, protective plates, and other accessories made of leather, nylon, vinyl, plastic, PVC, and other synthetic materials. It operates in two segments: distribution and design. The company sells its products globally and generates its revenue from the sale of protective solutions for diabetic products. It generates the majority of its revenue from the United States.
Executives
Maiman Mitchell officer: President of Subsidiary 700 VETERANS MEMORIAL HIGHWAY SUITE 100 HAUPPAUGE NY 11788
Terence Bernard Wise director, 10 percent owner, officer: Chief Executive Officer 700 VETERANS MEMORIAL HWY, #100 HAUPPAUGE NY 11788
Severino Paul Jean officer: COO of Subsidiary 700 VETERANS MEMORIAL HIGHWAY SUITE 100 HAUPPAUGE NY 11788
Camarda Anthony officer: Chief Financial Officer 700 VETERANS HWY SUITE 100 HAUPPAUGE NY 11788
Shah Sangita director C/O FORWARD INDUSTRIES, INC. 477 ROSEMARY AVE., STE. 219 WEST PALM BEACH FL 33401
Morgan Howard J director C/O FORWARD INDUSTRIES, INC. 3110 MAIN STREET, SUITE 400 SANTA MONICA CA 90405
Ziglar James W director PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: ZIGLAR JAMES W a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Matthews Douglas David officer: Sr VP/Chief Operating Officer 477 S. ROSEMARY AVE. SUITE 219 WEST PALM BEACH FL 33401
Yu Jenny P. 10 percent owner 9255 DOHENY ROAD APT. 2905 WEST HOLLYWOOD CA 90069
Frost James M director 477 S. ROSEMARY AVE., SUITE 219 WEST PALM BEACH FL 33401
Fine N Scott director 600 3RD AVE NEW YORK NY 10016
Hrynkow Sharon director C/O FORWARD INDUSTRIES, INC. 477 ROSEMARY AVE., STE. 219 WEST PALM BEACH FL 33401
Luetkemeyer Michael L. director 411 LANDMARK DRIVE WILMINGTON NC 28412
Matte Michael D officer: Chief Financial Officer PUBLIC "-//W3C//DTD HTML 4.0 Transitional//EN"> Ownership Information: MATTE MICHAEL D a.header:link {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:visited {color: #3b4fae; font-weight: bold; text-decoration: underline;} a.header:hover {color: #191970;}
Freitag Eric director 477 ROSEMARY AVE. STE. 219 WEST PALM BEACH FL 33401
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