Valuation price

Potential upside
Last traded price
Common Stock
Perpetual growth rate
WACC

Assuptions

$
$

50.89
16.72%
43.60
423.6
2%
10.0%
2012

Conventions
Assumptions or explanations

2013

2014 E

2015 E

2016 E

2017 E

2018 E

2019 E

2020 E

2021 E

2022 E

2023 E

Revenue
Revenue growth

15,650

16,150
3.19%

16,430
1.73%

16,864
2.64%

17,463
3.55%

18,083
4.46%

18,889
5.37%

19,903
6.28%

21,152
7.18%

22,671
8.09%

24,506
9.00%

26,711
9.00%

Operating costs
Operating margin

9,480
60.58%

9,855
61.02%

10,099
61.47%

10,441
61.91%

10,890
62.36%

11,357
62.81%

11,948
63.25%

12,678
63.70%

13,568
64.15%

14,644
64.59%

15,939
65.04%

17,492
65.49%

Operating profit

6,170

6,295

6,331

6,423

6,573

6,725

6,941

7,224

7,583

8,027

8,567

9,219

4144
-2.01%
536
-4.11%

4310
4.00%
517
-3.50%

4270
-0.93%
502
-2.97%

4190
-1.86%
489
-2.53%

4106
-2.01%
479
-2.15%

4024
-2.01%
470
-1.83%

3943
-2.01%
463
-1.55%

3864
-2.01%
457
-1.32%

3786
-2.01%
451
-1.12%

3710
-2.01%
447
-0.95%

3635
-2.01%
444
-0.81%

Total Operating Expenses

Operating expenses growth
Depreciation
Depreciation change

4229
559

EBIT
Operating margin
EBITDA

1,941
12.40%
2,500

2,151
13.32%
2,687

2021
12.30%
5,814

2153
12.77%
5,921

2382
13.64%
6,084

2619
14.48%
6,247

2917
15.44%
6,471

3282
16.49%
6,762

3720
17.59%
7,127

4241
18.71%
7,575

4857
19.82%
8,120

5583
20.90%
8,775

Net Interest Income

Taxes
Income tax rate

-81
726
37.40%

-56
813
37.80%

760
37.60%

809
37.60%

896
37.60%

985
37.60%

1,097
37.60%

1,234
37.60%

1,399
37.60%

1,595
37.60%

1,826
37.60%

2,099
37.60%

1,296

1,394

1,261

1,343

1,487

1,634

1,820

2,048

2,321

2,646

3,031

3,484

N/A

4.16%

4.16%

4.25%

4.25%

4.25%

4.25%

4.25%

4.25%

4.25%

4.25%

4,430
7.21%
2,445
4.31%
1,985
1,510
N/A
3,419
7,849

4,749
7.21%
2,550
4.31%
2,199
1,536
683
4,102
8,852

5,092
7.21%
2,660
4.31%
2,432
1,577
702
4,804
9,896

5,459
7.21%
2,775
4.31%
2,684
1,633
742
5,546
11,005

5,853
7.21%
2,894
4.31%
2,959
1,691
769
6,315
12,168

6,275
7.21%
3,019
4.31%
3,256
1,766
803
7,118
13,393

6,728
7.21%
3,149
4.31%
3,578
1,861
846
7,963
14,691

7,213
7.21%
3,285
4.31%
3,928
1,978
899
8,862
16,075

7,733
7.21%
3,426
4.31%
4,307
2,120
964
9,826
17,559

8,291
7.21%
3,574
4.31%
4,717
2,291
1041
10,867
19,158

8,889
7.21%
3,728
4.31%
5,161
2,497
1135
12,003
20,891

1,538
(804)
2,342
4,787

2,221
(832)
3,053
5,604

2,923
(861)
3,784
6,444

3,665
(891)
4,556
7,331

4,434
(922)
5,355
8,250

5,237
(954)
6,190
9,209

6,082
(987)
7,069
10,219

6,981
(1,021)
8,003
11,287

7,945
(1,057)
9,002
12,428

8,986
(1,093)
10,080
13,654

10,122
(1,131)
11,253
14,981

Net Income
CAPEX/Sales
Total current assets
current asset growth
Total current liabilities
current liabilities growth
Working capital
Cash
CAPEX
LT assets
Total Assets
Debt outstanding
Other LT liabilities
LT Liabilities
Total Liabilities

Free Cash Flow

NOPAT

N/A
4,132
2,344
1,788
1,460
N/A
3,338
7,470
1,455
(777)
2,232
4,576
2012

2013

2014 E

2015 E

2016 E

2017 E

2018 E

2019 E

2020 E

2021 E

2022 E

2023 E

1215

1338

1261

1343

1487

1634

1820

2048

2321

2646

3031

3484

559
16.75%
N/A
328

536
15.68%
N/A
475
147

517
12.61%
683
663
188

502
10.45%
702
855
192

489
8.82%
742
1,052
197

479
7.58%
769
1,268
216

470
6.60%
803
1,490
222

463
5.81%
846
1,718
228

457
5.15%
899
1,950
233

451
4.59%
964
2,187
237

447
4.11%
1,041
2,425
239

444
3.70%
1,135
2,663
238

1,283

1,336

1,430

1,561

1,710

1,892

2,112

2,371

2,675

3,030
37,893

Cash Flows
PV
Total

1,283
1,166
25,649

1,336
1,104

1,430
1,075

1,561
1,066

1,710
1,062

1,892
1,068

2,112
1,084

2,371
1,106

2,675
1,135

40,923
15,783

Non operating assets

LT Liabilities
Enterprise value

1,510
5,604
21,555

Free Cash Flow

Perpetuity value

Stock Price

Cost of capital

Rf Yield UST 10 YR
Beta
Equity risk premium
WACC

$ 50.89

2.02%
1.38
5.78%
10.00%

Sensitivity analysis
WACC

Depreciation
Depreciation/LT assets
CAPEX
Working capital (excl. Cash)
Change in Working capital

$ 50.89
10.5% $
10.0% $
9.5% $

Perpetual growth rate

1.50%
2.0%
2.50%
45.0 $ 46.7 $ 48.7
48.8 $ 50.9 $ 53.2
53.1 $ 55.5 $ 58.3

Tocompute GPSs stockpricethefollowingassumptionswereused:

Revenuegrowthisassumedtoreturntopositivegroundgraduallytoreachhighsingledigitgrowthfromsupplychainimprovements
Grossmarginisassumedtoremainincreseofcurrentlowcottonpricesandfrabicplatformingscalingleverage
TheYear-over-yeardepreciationchangeis assumednegativeas thecompany is closing facilities in theUSwhileopening internationally through franchises.
Simpledecaybecausestoreclosingis limited.
Taxrateiscomputedasthehistoricalaverage.
CAPEX/salesisassumedtogrowataconstantrateusingestimationsfrom4traders.comfor2015and2016.
Currentassetsgrowthisassumedconstantequalthelastyear'schange.
Current liabilitiesarenotdecreasingas it isassumedthat thecompanyneedsto raisecapital towork. It isassumedthat theygrowat thesamepaceasthey
didlastyear.
It isassumedthatCAPEXistheonlyaccountthatwillmodifylongtermassets.
Cashandshortterminvestmentsaretheonlyaccountstakenintoconsiderationasnon-operatingassets.
RiskfreeyieldtakenasJanuary8th,2015USTreasurynoteyield.
Equity risk premium taken from Damodarans website.