The calculations below outline how an intrinsic value for SpartanNash is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (USD, Millions)||$90.89||$108.16||$127.63||$149.32||$173.22|
|Source||Extrapolated @ (20%, capped from 31.94%)||Extrapolated @ (19%, capped from 31.94%)||Extrapolated @ (18%, capped from 31.94%)||Extrapolated @ (17%, capped from 31.94%)||Extrapolated @ (16%, capped from 31.94%)|
Discounted (@ 9%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = $173 × (1 + 2.3%) ÷ (9.02% – 2.3%)
Terminal value based on the Perpetuity Method where growth (g) = 2.3%:
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
Value = Total value / Shares Outstanding ($2,211 / 38)
Value per share:
Current discount (share price of $26.81): 54%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 9.02% = 2.33% + (0.872 * 7.67%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.872 = 0.594 (1 + (1- 30%) (67.04%))
Levered Beta used in calculation = 0.872
Are SpartanNash's annual earnings growth expected to exceed 3.4% over the next 3 years?
Mr. David M. Staples, also known as Dave, has been Vice President and Treasurer of Nash Finch Co. since November 19, 2013. Mr. Staples has been President of SpartanNash Company (formerly, Spartan Stores Inc.) since August 2016 and also has been its Chief Operating Officer since March 1, 2015. He has been the Chief Executive Officer at SpartanNash Company since May 23, 2017. He serves as Vice President and Treasurer at U Save Foods, Inc. He served as an Executive Vice President of SpartanNash Company from November 2000 to August 2016. He served as Treasurer of Spartan Stores Inc. He served as an Interim Chief Financial Officer of SpartanNash Company from March 1, 2015 to April 11, 2016. He was the Chief Financial Officer of SpartanNash Company from January 2000 until March 01, 2015. He also served as Vice President of Finance at SpartanNash Company from January 2000 to November 2000 and its Principal Accounting Officer until November 19, 2013. He oversaw information technology, real estate and finance. He joined SpartanNash Company after four years at Kmart Corporation overseeing all corporate accounting and reporting functions, as well as working on various special projects in systems implementation, process improvement and divestitures. From December 1998 to January 2000, Mr. Staples served as Divisional Vice President for Strategic Planning and Reporting at Kmart Corporation, where he was responsible for Planning and Analysis, Budgeting, Reporting and Corporate Accounting. He served as Divisional Vice President Accounting Operations at Kmart Corporation from June 1997 to December 1998. He has been a Director of SpartanNash Company since March 2, 2017. He is a Certified Public Accountant.
Average tenure of the SpartanNash management team:
Average tenure of the SpartanNash board of directors:
SpartanNash Company distributes and retails grocery products. It operates in three segments: Food Distribution, Military, and Retail. The Food Distribution segment offers approximately 60,000 stock-keeping units, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, pharmacy, and health and beauty care products to independent retail locations, food service distributors, and corporate-owned retail stores. This segment also offers value-added services to independent food distribution customers. The Military segment sells and distributes grocery products to military commissaries and exchanges located in 45 states across the United States and the District of Columbia, Europe, Puerto Rico, Cuba, Bahrain, and Egypt. The Retail segment operates retail stores in the Midwest and Great Lakes regions primarily under the banners of Family Fare Supermarkets, VG’s Food and Pharmacy, D&W Fresh Markets, Sun Mart, and Family Fresh Market; and fuel centers primarily at its retail stores under the banners of Family Fare Quick Stop, D&W Quick Stop, VG’s Quick Stop, Forest Hills Quick Stop, and Sun Mart Express Fuel. Its retail stores offer branded perishable food products, such as dry groceries, produce, dairy products, meat, delicatessen items, bakery goods, frozen food, seafood, floral products, general merchandise, beverages, tobacco products, health and beauty care products, and pharmacy services, as well as approximately 7,100 private brand items primarily under the Spartan and Our Family, Open Acres, Top Care, Tippy Toes, Full Circle, B-leve, PAWS Premium, and Valu Time names. As of December 31, 2016, this segment operated 157 retail stores; and 30 fuel centers. The company was formerly known as Spartan Stores, Inc. and changed its name to SpartanNash Company in May 2014. SpartanNash Company was founded in 1917 and is headquartered in Grand Rapids, Michigan.
|Market Cap:||$1,008 million|
850 76th Street, SW, Grand Rapids, 49518, United States
|Sector:||Food and Staples Retailing|