Snap (SNAP:NYS) Fundamental Valuation Report


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Snap $17.45 (USD) Close Price as of 23/02/2018

Based on the analysis conducted in this report, Snap, (SNAP:NYS) is found to be  Overvalued.

Company Snap
Symbol:Exchange SNAP:NYS
Industry Technology:Internet Content & Information
Close Price/Date $17.45 (USD) 23/02/2018
Weighted Average Valuation $14.96 (USD)
Summary SNAP:NYS is found to be  Overvalued by 14.3% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $15.30 (USD)
(in order of importance) Adjusted Book Value: $13.15 (USD)
Multiples: $17.55 (USD)
Valuation Methods Analysis This company is:
Cash Flow Basis: Overvalued on a Cash Flow Valuation basis
Comparable Company Basis: Undervalued on a Comparable Valuation basis
Asset Basis: Overvalued on an Asset Valuation basis

Valuation Details

Snap Valuations

Summary chart

 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 SNAP:NYS

Using a discounted cash flow model generates a negative intrinsic value due to one of 1) zero or negative projected cash flows 2) excessive capital expenditures or 3) excessive debt to calculated equity value for SNAP:NYS. We have not shown the calculated value here for that reason.

Sensitivity Analysis

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

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $20.57 (USD) for SNAP:NYS. We also generated a valuation of $26.20 (USD) using other metrics and comparables.
The comparable companies were GoDaddy (GDDY:NYS), IAC/InterActive (IAC:NAS), Match Group (MTCH:NAS), Twitter (TWTR:NYS) and VeriSign (VRSN:NAS)

Company SNAP:NYS End Date Value
Cash/Share $0.29 (USD)
Book Value/Share $2.44 (USD)
MarketCap 21,411,770,206
1 Year Return 0.000
NetPPE 166,762,000
Price Based on Comps Adjustment Factor (%)
$31.52 (USD) 0
$39.87 (USD) 0
$8.03 (USD) 0
$0.00 (USD) 0
$51.60 (USD) 0
Ratios Used Average Values GDDY:NYS IAC:NAS MTCH:NAS TWTR:NYS VRSN:NAS
Cash / Share 0.75 0.00 0.00 0.00 0.00 3.74
Book Value / Share 4.99 2.85 25.60 2.12 6.42 -12.06
Market Cap 9,367,931,828 7,422,548,108 8,861,057,484 6,223,017,473 14,204,210,691 10,128,825,385
1 Year Return 0.97 0.67 1.08 1.59 1.07 0.43
Net PPE 263,513,000 0 0 0 0 263,513,000

Multiples

Using a multiples approach we generated a valuation of  $17.55 (USD) for SNAP:NYS

Company SNAP:NYS End Date Value
Earnings/Share ($2.95) (USD)
Book Value/Share $2.44 (USD)
Sales/Share $0.71 (USD)
Cash Flow/Share ($0.63) (USD)
EBITDA/Share ($2.91) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$13.10 (USD) 0
$22.00 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 0.00
PB Ratio 5.37
PS Ratio 31.09
PCF Ratio 0.00
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  SNAP:NYS for the last 1 years was  5.37

We ran the Adjusted Book Value for  SNAP:NYS and generated a book value of  $2.45 (USD)
By multiplying these we get an adjusted valuation of  $13.15 (USD)

Analyst Data

In the Stockcalc database there are 10 analysts that provide a valuation for SNAP:NYS. The 10 analysts have a concensus valuation for SNAP:NYS for 2018 of $15.30 (USD).

SNAP:NYS Snap

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
3 8 3 3.0000 Hold 2018-2-22

Current Price: not available

Analyst Consensus
USD Millions 2018 2019 2020
Mean EPS -0.75 -0.48 -0.09
# EPS Analysts 12 8 6
Mean Revenue 1,342.70 2,047.10 2,879.80
# Revenue Analysts 9 7 6
Mean Target Price 15.30
Mean Cash Flow -0.42 -0.12 0.06
Mean EBITDA -886.20 -711.10 -202.50
Mean Net Income -845.40 -536.60 -109.50
Mean Debt Outstanding 96.60 626.30 375.60
Mean Tax Rate 0.00 0.00 0.00
Mean Growth Rate
Mean Capital Expenditure 93.50 107.80 140.60

Company Overview (SNAP:NYS USD)

Price 0.00
Range 0.00 – 0.00
52 week 0.00 – 0.00
Open 0.00
Vol / Avg. 0/0
Mkt cap 0
P/E 0.00
Div/yield 0.00/0.00
EPS 0.00
Shares 0
Beta 0.00
Summary chart

Detailed Company Description

Snap Inc is a camera application developer. Its main product is Snapchat, a camera application created to help people communicate through short videos and images. It also offers Spectacles, which are camera-enabled sunglasses.

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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