Workday (WDAY:NAS) Fundamental Valuation Report


Fundamental Valuation Report

Workday(WDAY: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
$191.53 (USD) 19/03/2019

Weighted Valuation
$174.90 (USD)

Overall Rating
Overvalued by 8.7%

Valuation Models Analyst Consensus: $198.67 (USD)
(in order of importance) Comparables: $149.63 (USD)
Multiples: $154.13 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (WDAY:NAS USD)

Price 191.53
Range 186.81 – 192.08
52 week 117.72 – 197.93
Open 188.61
Vol / Avg. 2.23M/2.28M
Mkt cap 42.52B
P/E 0.00
Div/yield 0.00/0.00
EPS -1.93
Shares 222M
Beta 1.82

Company Description

Workday Inc is a software-as-a-service provider that offers enterprise resource planning software for medium and large enterprises. The firm’s roots are in ERP software vendor PeopleSoft, which was founded by Workday cofounder David Duffield, while fellow Workday cofounder Aneel Bhusri served as vice chairman at PeopleSoft. The company’s product portfolio is centered on human capital and financial management software, though it continues to add new applications to the product set. Just over 75% of the firm’s revenue comes from the U.S.

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 WDAY:NAS

Using a discounted cash flow model we generated an intrinsic value of $34.43 (USD) for WDAY:NAS

Sensitivity Analysis

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

WDAY:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $34.43 1% 5% 1% 5%
WACC (or Ke) 15.79 $37.48 $31.83
Terminal Growth Rate 3.00 $32.37 $36.84
Tax Rate 0.01 $36.02 $32.86
Cash Flow 1,055,546,766 $32.84 $36.02
Capital Expenditures -47,462,600 $34.38 $34.49
Long Term Debt 0 $34.43 $34.43

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $107.80 (USD) for WDAY:NAS. We also generated a valuation of $149.63 (USD) using other metrics and comparables.
The comparable companies were Adobe (ADBE:NAS), Autodesk (ADSK:NAS), Akamai Technologies (AKAM:NAS), Ansys (ANSS:NAS) and Cadence Design Systems (CDNS:NAS).

Company WDAY:NAS End Date Value
Earnings/Share ($1.93) (USD)
Book Value/Share $8.82 (USD)
Sales/Share $13.02 (USD)
Cash Flow/Share $2.80 (USD)
EBITDA/Share ($0.76) (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$77.94 (USD) 0.0
$135.39 (USD) 0.0
$104.51 (USD) 0.0
$0.00 (USD) 0.0
WDAY:NAS Ratios Used Average Values ADBE:NAS ADSK:NAS AKAM:NAS ANSS:NAS CDNS:NAS
0.00 PE Ratio 43.23 50.48 0.00 39.58 36.32 46.54
22.44 PB Ratio 8.83 13.71 0.00 3.56 5.60 12.46
15.20 PS Ratio 10.40 14.47 13.89 4.34 11.77 7.53
70.73 PCF Ratio 39.33 32.43 94.62 11.69 31.31 26.62
0.00 EV to EBITDA 87.83 40.03 328.59 13.45 26.26 30.80

Multiples

Using a multiples approach we generated a valuation of  $154.13 (USD) for WDAY:NAS

Company WDAY:NAS End Date Value
Earnings/Share ($1.93) (USD)
Book Value/Share $8.82 (USD)
Sales/Share $13.02 (USD)
Cash Flow/Share $2.80 (USD)
EBITDA/Share ($0.76) (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$131.50 (USD) 0
$165.74 (USD) 0
$165.14 (USD) 0
$0.00 (USD) 0
Ratios Ratio Average
PE Ratio 0.00
PB Ratio 14.91
PS Ratio 12.73
PCF Ratio 59.01
EV to EBITDA 0.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  WDAY:NAS for the last 6 years was  14.98

We ran the Adjusted Book Value for  WDAY:NAS and generated a book value of  $8.82 (USD)
By multiplying these we get an adjusted valuation of  $132.18 (USD)

Analyst Data

In the Stockcalc database there are 9 analysts that provide a valuation for WDAY:NAS. The 9 analysts have a concensus valuation for WDAY:NAS for 2020 of $198.67 (USD).

WDAY:NAS Workday

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
5 1 2 3.6000 Outperform 2019-3-18

Current Price: 191.53 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 1.64 2.18 2.99
# EPS Analysts 10 10 3
Mean Revenue 3,553.80 4,338.30 5,259.40
# Revenue Analysts 9 9 3
Mean Target Price 198.67
Mean Cash Flow 2.79 3.80 4.63
Mean EBITDA 261.60 429.20 409.50
Mean Net Income 404.00 537.40 669.50
Mean Debt Outstanding -553.30 -946.30 -1,857.90
Mean Tax Rate 17.00 17.00
Mean Growth Rate 29.23
Mean Capital Expenditure 300.90 366.40 492.70

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Salesforce.com (CRM:NYS) Fundamental Valuation Report


Fundamental Valuation Report

Salesforce.com(CRM:NYS)

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
$161.95 (USD) 18/03/2019

Weighted Valuation
$179.45 (USD)

Overall Rating
Undervalued by 10.8%

Valuation Models Analyst Consensus: $174.09 (USD)
(in order of importance) Adjusted Book Value: $187.50 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (CRM:NYS USD)

Price 161.95
Range 160.88 – 163.33
52 week 112.88 – 164.53
Open 161.40
Vol / Avg. 3.49M/6.44M
Mkt cap 124.86B
P/E 113.25
Div/yield 0.00/0.00
EPS 1.43
Shares 771M
Beta 1.40

Company Description

Salesforce.com Inc is a software-as-as-service vendor that primarily develops customer relationship management, or CRM, products. The firm has a variety of cloud-based tools targeting horizontal markets such as Sales Cloud, to monitor sales leads, Service Cloud, for customer support, Marketing Cloud, to launch digital marketing campaigns, Commerce Cloud, a multitenant e-commerce tool, Quip, its collaboration tools, and the Salesforce Platform, which allows enterprises to build applications. Beyond this, Salesforce has various initiatives such as Trailhead, Einstein AI, Lightning, Internet of Things, Heroku, Analytics, AppExchange, and MuleSoft. Salesforce is the largest pure-play SaaS vendor in the world.

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 CRM:NYS

Using a discounted cash flow model we generated an intrinsic value of $89.61 (USD) for CRM:NYS

Sensitivity Analysis

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

CRM:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $89.61 1% 5% 1% 5%
WACC (or Ke) 10.27 $104.71 $78.17
Terminal Growth Rate 3.00 $79.62 $102.79
Tax Rate -0.13 $93.59 $85.64
Cash Flow 5,017,954,000 $85.12 $94.11
Capital Expenditures -16,041,200 $89.60 $89.63
Long Term Debt 2,018,099,000 $89.75 $89.48

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $365.18 (USD) for CRM:NYS. We also generated a valuation of $339.05 (USD) using other metrics and comparables.
The comparable companies were Adobe (ADBE:NAS), Autodesk (ADSK:NAS), Intuit (INTU:NAS), ServiceNow (NOW:NYS) and Red Hat (RHT:NYS).

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor (%)
$107.52 (USD) 0.0
$467.75 (USD) 65.7
$213.91 (USD) 91.3
$195.42 (USD) -24.7
$387.94 (USD) 0.0
CRM:NYS Ratios Used Average Values ADBE:NAS ADSK:NAS INTU:NAS NOW:NYS RHT:NYS
175.97 PE Ratio 75.19 50.48 0.00 51.70 0.00 123.38
8.59 PB Ratio 24.54 13.71 0.00 22.90 38.89 22.67
10.04 PS Ratio 13.13 14.47 13.89 10.43 16.32 10.53
40.20 PCF Ratio 49.01 32.43 94.62 30.43 52.50 35.05
72.28 EV to EBITDA 143.24 40.03 328.59 34.38 263.82 49.36

Multiples

Using a multiples approach we generated a valuation of  $210.40 (USD) for CRM:NYS

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor
$383.71 (USD) 0
$175.46 (USD) 0
$125.52 (USD) 0
$128.57 (USD) 0
$238.76 (USD) 0
Ratios Ratio Average
PE Ratio 268.33
PB Ratio 9.21
PS Ratio 7.70
PCF Ratio 31.58
EV to EBITDA 88.15

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CRM:NYS for the last 10 years was  9.25

We ran the Adjusted Book Value for  CRM:NYS and generated a book value of  $20.27 (USD)
By multiplying these we get an adjusted valuation of  $187.50 (USD)

Analyst Data

In the Stockcalc database there are 11 analysts that provide a valuation for CRM:NYS. The 11 analysts have a concensus valuation for CRM:NYS for 2020 of $174.09 (USD).

CRM:NYS Salesforce.com

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
9 3 0 4.4615 Outperform 2019-3-15

Current Price: 161.95 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 2.78 3.45 4.35
# EPS Analysts 13 11 5
Mean Revenue 16,038.20 19,172.20 22,784.90
# Revenue Analysts 11 9 5
Mean Target Price 174.09
Mean Cash Flow 5.00 5.80 6.88
Mean EBITDA 3,046.70 4,224.10 4,871.80
Mean Net Income 2,070.00 2,634.30 3,058.30
Mean Debt Outstanding -5,574.10 -9,105.90 -8,198.50
Mean Tax Rate 22.00 22.50 22.75
Mean Growth Rate 21.63
Mean Capital Expenditure 733.20 866.00 1,030.00

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Salesforce.com (CRM:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Salesforce.com(CRM:NYS)

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
$160.67 (USD) 14/03/2019

Weighted Valuation
$179.53 (USD)

Overall Rating
Undervalued by 11.7%

Valuation Models Analyst Consensus: $174.09 (USD)
(in order of importance) Adjusted Book Value: $187.69 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (CRM:NYS USD)

Price 160.67
Range 159.74 – 161.59
52 week 112.88 – 164.53
Open 160.95
Vol / Avg. 3.23M/6.45M
Mkt cap 123.88B
P/E 112.36
Div/yield 0.00/0.00
EPS 1.43
Shares 771M
Beta 1.40

Company Description

Salesforce.com Inc is a software-as-as-service vendor that primarily develops customer relationship management, or CRM, products. The firm has a variety of cloud-based tools targeting horizontal markets such as Sales Cloud, to monitor sales leads, Service Cloud, for customer support, Marketing Cloud, to launch digital marketing campaigns, Commerce Cloud, a multitenant e-commerce tool, Quip, its collaboration tools, and the Salesforce Platform, which allows enterprises to build applications. Beyond this, Salesforce has various initiatives such as Trailhead, Einstein AI, Lightning, Internet of Things, Heroku, Analytics, AppExchange, and MuleSoft. Salesforce is the largest pure-play SaaS vendor in the world.

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 CRM:NYS

Using a discounted cash flow model we generated an intrinsic value of $89.61 (USD) for CRM:NYS

Sensitivity Analysis

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

CRM:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $89.61 1% 5% 1% 5%
WACC (or Ke) 10.27 $104.71 $78.17
Terminal Growth Rate 3.00 $79.62 $102.79
Tax Rate -0.13 $93.59 $85.64
Cash Flow 5,017,954,000 $85.12 $94.11
Capital Expenditures -16,041,200 $89.60 $89.63
Long Term Debt 2,018,099,000 $89.75 $89.48

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $365.39 (USD) for CRM:NYS. We also generated a valuation of $339.43 (USD) using other metrics and comparables.
The comparable companies were Adobe (ADBE:NAS), Autodesk (ADSK:NAS), Intuit (INTU:NAS), ServiceNow (NOW:NYS) and Red Hat (RHT:NYS).

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor (%)
$107.52 (USD) 0.0
$467.75 (USD) 65.9
$213.91 (USD) 91.3
$195.42 (USD) -24.7
$387.94 (USD) 0.0
CRM:NYS Ratios Used Average Values ADBE:NAS ADSK:NAS INTU:NAS NOW:NYS RHT:NYS
175.97 PE Ratio 75.19 50.48 0.00 51.70 0.00 123.38
8.59 PB Ratio 24.54 13.71 0.00 22.90 38.89 22.67
10.04 PS Ratio 13.13 14.47 13.89 10.43 16.32 10.53
40.20 PCF Ratio 49.01 32.43 94.62 30.43 52.50 35.05
72.28 EV to EBITDA 143.24 40.03 328.59 34.38 263.82 49.36

Multiples

Using a multiples approach we generated a valuation of  $210.40 (USD) for CRM:NYS

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor
$383.71 (USD) 0
$175.47 (USD) 0
$125.52 (USD) 0
$128.57 (USD) 0
$238.76 (USD) 0
Ratios Ratio Average
PE Ratio 268.33
PB Ratio 9.21
PS Ratio 7.70
PCF Ratio 31.58
EV to EBITDA 88.15

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CRM:NYS for the last 10 years was  9.26

We ran the Adjusted Book Value for  CRM:NYS and generated a book value of  $20.27 (USD)
By multiplying these we get an adjusted valuation of  $187.69 (USD)

Analyst Data

In the Stockcalc database there are 11 analysts that provide a valuation for CRM:NYS. The 11 analysts have a concensus valuation for CRM:NYS for 2020 of $174.09 (USD).

CRM:NYS Salesforce.com

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
9 3 0 4.4615 Outperform 2019-3-13

Current Price: 160.67 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 2.78 3.45 4.35
# EPS Analysts 13 11 5
Mean Revenue 16,038.20 19,172.20 22,784.90
# Revenue Analysts 11 9 5
Mean Target Price 174.09
Mean Cash Flow 5.00 5.80 6.88
Mean EBITDA 3,046.70 4,224.10 4,871.80
Mean Net Income 2,070.00 2,634.30 3,058.30
Mean Debt Outstanding -5,574.10 -9,105.90 -8,198.50
Mean Tax Rate 22.00 22.50 22.75
Mean Growth Rate 21.63
Mean Capital Expenditure 733.20 866.00 1,030.00

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Salesforce.com (CRM:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Salesforce.com(CRM:NYS)

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
$157.65 (USD) 11/03/2019

Weighted Valuation
$179.48 (USD)

Overall Rating
Undervalued by 13.8%

Valuation Models Analyst Consensus: $174.00 (USD)
(in order of importance) Adjusted Book Value: $187.69 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (CRM:NYS USD)

Price 157.65
Range 153.43 – 157.77
52 week 112.88 – 164.53
Open 155.90
Vol / Avg. 5.65M/6.72M
Mkt cap 121.55B
P/E 110.24
Div/yield 0.00/0.00
EPS 1.43
Shares 771M
Beta 1.40

Company Description

Salesforce.com Inc is a software-as-as-service vendor that primarily develops customer relationship management, or CRM, products. The firm has a variety of cloud-based tools targeting horizontal markets such as Sales Cloud, to monitor sales leads, Service Cloud, for customer support, Marketing Cloud, to launch digital marketing campaigns, Commerce Cloud, a multitenant e-commerce tool, Quip, its collaboration tools, and the Salesforce Platform, which allows enterprises to build applications. Beyond this, Salesforce has various initiatives such as Trailhead, Einstein AI, Lightning, Internet of Things, Heroku, Analytics, AppExchange, and MuleSoft. Salesforce is the largest pure-play SaaS vendor in the world.

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 CRM:NYS

Using a discounted cash flow model we generated an intrinsic value of $89.84 (USD) for CRM:NYS

Sensitivity Analysis

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

CRM:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $89.84 1% 5% 1% 5%
WACC (or Ke) 10.27 $104.94 $78.39
Terminal Growth Rate 3.00 $79.85 $103.02
Tax Rate -0.13 $93.82 $85.86
Cash Flow 5,017,954,000 $85.33 $94.35
Capital Expenditures -16,041,200 $89.83 $89.85
Long Term Debt 2,018,099,000 $89.97 $89.71

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $365.41 (USD) for CRM:NYS. We also generated a valuation of $339.17 (USD) using other metrics and comparables.
The comparable companies were Adobe (ADBE:NAS), Autodesk (ADSK:NAS), Intuit (INTU:NAS), ServiceNow (NOW:NYS) and Red Hat (RHT:NYS).

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor (%)
$107.52 (USD) 0.0
$467.75 (USD) 65.9
$213.91 (USD) 91.3
$195.42 (USD) -24.7
$387.94 (USD) 0.0
CRM:NYS Ratios Used Average Values ADBE:NAS ADSK:NAS INTU:NAS NOW:NYS RHT:NYS
175.97 PE Ratio 75.19 50.48 0.00 51.70 0.00 123.38
8.59 PB Ratio 24.54 13.71 0.00 22.90 38.89 22.67
10.04 PS Ratio 13.13 14.47 13.89 10.43 16.32 10.53
40.20 PCF Ratio 49.01 32.43 94.62 30.43 52.50 35.05
72.28 EV to EBITDA 143.24 40.03 328.59 34.38 263.82 49.36

Multiples

Using a multiples approach we generated a valuation of  $210.40 (USD) for CRM:NYS

Company CRM:NYS End Date Value
Earnings/Share $1.43 (USD)
Book Value/Share $19.06 (USD)
Sales/Share $16.30 (USD)
Cash Flow/Share $4.07 (USD)
EBITDA/Share $2.71 (USD)
Price Based on Comps Adjustment Factor
$383.71 (USD) 0
$175.47 (USD) 0
$125.52 (USD) 0
$128.57 (USD) 0
$238.76 (USD) 0
Ratios Ratio Average
PE Ratio 268.33
PB Ratio 9.21
PS Ratio 7.70
PCF Ratio 31.58
EV to EBITDA 88.15

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CRM:NYS for the last 10 years was  9.26

We ran the Adjusted Book Value for  CRM:NYS and generated a book value of  $20.27 (USD)
By multiplying these we get an adjusted valuation of  $187.69 (USD)

Analyst Data

In the Stockcalc database there are 11 analysts that provide a valuation for CRM:NYS. The 11 analysts have a concensus valuation for CRM:NYS for 2020 of $174.00 (USD).

CRM:NYS Salesforce.com

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
9 3 0 4.4615 Outperform 2019-3-8

Current Price: 157.65 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 2.79 3.45 4.32
# EPS Analysts 13 11 4
Mean Revenue 16,030.70 19,127.30 22,677.60
# Revenue Analysts 11 9 4
Mean Target Price 174.00
Mean Cash Flow 5.00 5.80 6.88
Mean EBITDA 3,214.90 4,224.10 4,871.80
Mean Net Income 2,070.00 2,634.30 3,058.30
Mean Debt Outstanding -5,574.10 -9,105.90 -8,198.50
Mean Tax Rate 22.00 22.50 22.75
Mean Growth Rate 21.63
Mean Capital Expenditure 733.20 866.00 1,030.00

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Adobe (ADBE:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Adobe(ADBE: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
$253.74 (USD) 07/02/2019

Weighted Valuation
$285.01 (USD)

Overall Rating
Undervalued by 12.3%

Valuation Models Analyst Consensus: $290.14 (USD)
(in order of importance) Multiples: $277.31 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (ADBE:NAS USD)

Price 253.74
Range 250.28 – 254.31
52 week 187.99 – 275.49
Open 251.33
Vol / Avg. 2.07M/3.06M
Mkt cap 123.76B
P/E 48.80
Div/yield 0.00/0.00
EPS 5.20
Shares 487.73M
Beta 1.15

Company Description

Adobe Systems Inc is a diversified software-as-a-service vendor that operates in two main strategic segments: digital media and digital experience. In digital media, the firm sells Creative Cloud, which is composed of a variety of software for developers, designers, photographers, and videographers, such as Photoshop, Lightroom, Illustrator, Adobe XD, InDesign, Adobe Premiere Pro, Dimension, After Effects, and Adobe Stock. Adobe’s digital experience segment, sold through Experience Cloud, is composed of Marketing Cloud, Analytics Cloud, and Advertising Cloud. These products allow enterprises to launch multichannel marketing campaigns, build brands, and gain customer insights. A minority of revenue comes from Adobe’s publishing segment.

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 ADBE:NAS

Using a discounted cash flow model we generated an intrinsic value of $184.39 (USD) for ADBE:NAS

Sensitivity Analysis

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

ADBE:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $184.39 1% 5% 1% 5%
WACC (or Ke) 9.96 $216.73 $160.19
Terminal Growth Rate 3.00 $163.17 $212.73
Tax Rate 0.07 $193.93 $174.85
Cash Flow 7,390,456,000 $175.37 $193.42
Capital Expenditures -184,799,000 $184.20 $184.59
Long Term Debt 1,916,591,000 $184.59 $184.19

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $0.00 (USD) for ADBE:NAS. We also generated a valuation of $190.88 (USD) using other metrics and comparables.
The comparable companies were Autodesk (ADSK:NAS), Salesforce.com (CRM:NYS), Intuit (INTU:NAS), ServiceNow (NOW:NYS) and Red Hat (RHT:NYS).

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $0.00 (USD)
Sales/Share $0.00 (USD)
Cash Flow/Share $0.00 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -15.3
$0.00 (USD) -19.9
$0.00 (USD) 76.1
($8.29) (USD) -51.9
$0.00 (USD) 21.3
ADBE:NAS Ratios Used Average Values ADSK:NAS CRM:NYS INTU:NAS NOW:NYS RHT:NYS
0.00 PE Ratio 0.00 0.00 0.00 0.00 0.00 0.00
0.00 PB Ratio 35.50 0.00 0.00 0.00 35.50 0.00
0.00 PS Ratio 15.00 0.00 0.00 0.00 15.00 0.00
0.00 PCF Ratio 48.24 0.00 0.00 0.00 48.24 0.00
0.00 EV to EBITDA 236.44 0.00 0.00 0.00 236.44 0.00

Multiples

Using a multiples approach we generated a valuation of  $277.31 (USD) for ADBE:NAS

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $0.00 (USD)
Sales/Share $0.00 (USD)
Cash Flow/Share $0.00 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor
$314.42 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
$240.19 (USD) 0
Ratios Ratio Average
PE Ratio 60.47
PB Ratio 7.56
PS Ratio 10.25
PCF Ratio 30.42
EV to EBITDA 37.02

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ADBE:NAS for the last 10 years was  7.32

We ran the Adjusted Book Value for  ADBE:NAS and generated a book value of  $19.20 (USD)
By multiplying these we get an adjusted valuation of  $140.52 (USD)

Analyst Data

In the Stockcalc database there are 7 analysts that provide a valuation for ADBE:NAS. The 7 analysts have a concensus valuation for ADBE:NAS for 2019 of $290.14 (USD).

ADBE:NAS Adobe

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
7 2 0 4.5000 Outperform 2019-2-6

Current Price: 253.74 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 7.81 9.58 11.42
# EPS Analysts 10 9 3
Mean Revenue 11,093.00 13,157.90 15,179.50
# Revenue Analysts 8 7 3
Mean Target Price 290.14
Mean Cash Flow 9.45 11.31 12.89
Mean EBITDA 4,808.50 6,088.50 7,175.20
Mean Net Income 3,900.00 4,841.10 6,193.20
Mean Debt Outstanding -1,640.00 -5,829.90 -13,838.80
Mean Tax Rate 10.05 13.00 18.00
Mean Growth Rate 26.58
Mean Capital Expenditure 290.30 317.50 327.40

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Adobe (ADBE:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Adobe(ADBE: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
$254.35 (USD) 06/02/2019

Weighted Valuation
$285.01 (USD)

Overall Rating
Undervalued by 12.1%

Valuation Models Analyst Consensus: $290.14 (USD)
(in order of importance) Multiples: $277.31 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (ADBE:NAS USD)

Price 254.35
Range 250.71 – 255.93
52 week 185.16 – 275.49
Open 255.06
Vol / Avg. 2.46M/3.13M
Mkt cap 124.05B
P/E 48.91
Div/yield 0.00/0.00
EPS 5.20
Shares 487.73M
Beta 1.15

Company Description

Adobe Systems Inc is a diversified software-as-a-service vendor that operates in two main strategic segments: digital media and digital experience. In digital media, the firm sells Creative Cloud, which is composed of a variety of software for developers, designers, photographers, and videographers, such as Photoshop, Lightroom, Illustrator, Adobe XD, InDesign, Adobe Premiere Pro, Dimension, After Effects, and Adobe Stock. Adobe’s digital experience segment, sold through Experience Cloud, is composed of Marketing Cloud, Analytics Cloud, and Advertising Cloud. These products allow enterprises to launch multichannel marketing campaigns, build brands, and gain customer insights. A minority of revenue comes from Adobe’s publishing segment.

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 ADBE:NAS

Using a discounted cash flow model we generated an intrinsic value of $184.39 (USD) for ADBE:NAS

Sensitivity Analysis

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

ADBE:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $184.39 1% 5% 1% 5%
WACC (or Ke) 9.96 $216.73 $160.19
Terminal Growth Rate 3.00 $163.17 $212.73
Tax Rate 0.07 $193.93 $174.85
Cash Flow 7,390,456,000 $175.37 $193.42
Capital Expenditures -184,799,000 $184.20 $184.59
Long Term Debt 1,916,591,000 $184.59 $184.19

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $0.00 (USD) for ADBE:NAS. We also generated a valuation of $191.23 (USD) using other metrics and comparables.
The comparable companies were Autodesk (ADSK:NAS), Salesforce.com (CRM:NYS), Intuit (INTU:NAS), ServiceNow (NOW:NYS) and Red Hat (RHT:NYS).

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $0.00 (USD)
Sales/Share $0.00 (USD)
Cash Flow/Share $0.00 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) -15.3
$0.00 (USD) -19.9
$0.00 (USD) 76.1
($8.29) (USD) -51.9
$0.00 (USD) 21.3
ADBE:NAS Ratios Used Average Values ADSK:NAS CRM:NYS INTU:NAS NOW:NYS RHT:NYS
0.00 PE Ratio 0.00 0.00 0.00 0.00 0.00 0.00
0.00 PB Ratio 35.50 0.00 0.00 0.00 35.50 0.00
0.00 PS Ratio 15.00 0.00 0.00 0.00 15.00 0.00
0.00 PCF Ratio 48.24 0.00 0.00 0.00 48.24 0.00
0.00 EV to EBITDA 236.44 0.00 0.00 0.00 236.44 0.00

Multiples

Using a multiples approach we generated a valuation of  $277.31 (USD) for ADBE:NAS

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $0.00 (USD)
Sales/Share $0.00 (USD)
Cash Flow/Share $0.00 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor
$314.42 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
$0.00 (USD) 0
$240.19 (USD) 0
Ratios Ratio Average
PE Ratio 60.47
PB Ratio 7.56
PS Ratio 10.25
PCF Ratio 30.42
EV to EBITDA 37.02

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ADBE:NAS for the last 10 years was  7.31

We ran the Adjusted Book Value for  ADBE:NAS and generated a book value of  $19.20 (USD)
By multiplying these we get an adjusted valuation of  $140.42 (USD)

Analyst Data

In the Stockcalc database there are 7 analysts that provide a valuation for ADBE:NAS. The 7 analysts have a concensus valuation for ADBE:NAS for 2019 of $290.14 (USD).

ADBE:NAS Adobe

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
7 2 0 4.5000 Outperform 2019-2-5

Current Price: 254.35 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 7.81 9.58 11.42
# EPS Analysts 10 9 3
Mean Revenue 11,093.00 13,157.90 15,179.50
# Revenue Analysts 8 7 3
Mean Target Price 290.14
Mean Cash Flow 9.45 11.31 12.89
Mean EBITDA 4,808.50 6,088.50 7,175.20
Mean Net Income 3,900.00 4,841.10 6,193.20
Mean Debt Outstanding -1,640.00 -5,829.90 -13,838.80
Mean Tax Rate 10.05 13.00 18.00
Mean Growth Rate 26.58
Mean Capital Expenditure 290.30 317.50 327.40

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Cisco Systems (CSCO:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Cisco Systems(CSCO:NAS)

Technology:Communication Equipment

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

Close Price/Date
$45.75 (USD) 28/01/2019

Weighted Valuation
$51.69 (USD)

Overall Rating
Undervalued by 13.0%

Valuation Models Analyst Consensus: $52.00 (USD)
(in order of importance) Discounted Cash Flow: $50.41 (USD)
Comparables: $53.30 (USD)
Valuation Methods This company is:
Cash Flow: Undervalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (CSCO:NAS USD)

Price 45.75
Range 45.23 – 45.77
52 week 38.77 – 49.14
Open 45.73
Vol / Avg. 18.03M/21.4M
Mkt cap 205.69B
P/E 2287.50
Div/yield 1.24/0.03
EPS 0.02
Shares 4.5B
Beta 1.16

Company Description

Cisco Systems, Inc. is the world’s largest hardware and software supplier within the networking solutions sector. The infrastructure platforms group includes hardware and software products for switching, routing, data center, and wireless applications. Its applications portfolio contains collaboration, analytics, and Internet of Things products. The security segment contains Cisco’s firewall and software-defined security products. Services are Cisco’s technical support and advanced services offerings. The company’s wide array of hardware is complemented with solutions for software-defined networking, analytics, and intent-based networking. In collaboration with Cisco’s initiative on growing software and services, its revenue model is focused on increasing subscriptions and recurring sales.

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 CSCO:NAS

Using a discounted cash flow model we generated an intrinsic value of $50.41 (USD) for CSCO:NAS

Sensitivity Analysis

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

CSCO:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $50.41 1% 5% 1% 5%
WACC (or Ke) 8.17 $64.10 $41.16
Terminal Growth Rate 3.00 $42.09 $62.71
Tax Rate 0.36 $54.22 $46.60
Cash Flow 20,145,667,000 $47.87 $52.94
Capital Expenditures -1,017,000,000 $50.28 $50.54
Long Term Debt 28,643,000,000 $50.72 $50.09

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $53.30 (USD) for CSCO:NAS. We also generated a valuation of $59.77 (USD) using other metrics and comparables.
The comparable companies were Accenture (ACN:NYS), Adobe (ADBE:NAS), Salesforce.com (CRM:NYS), IBM (IBM:NYS) and SAP (SAP:NYS).

Company CSCO:NAS End Date Value
Earnings/Share $0.31 (USD)
Book Value/Share $9.75 (USD)
Sales/Share $10.50 (USD)
Cash Flow/Share $3.00 (USD)
EBITDA/Share $3.38 (USD)
Price Based on Comps Adjustment Factor (%)
$15.82 (USD) -60.7
$69.27 (USD) 5.0
$60.24 (USD) 61.3
$64.07 (USD) -47.3
$89.54 (USD) -36.1
CSCO:NAS Ratios Used Average Values ACN:NYS ADBE:NAS CRM:NYS IBM:NYS SAP:NYS
139.77 PE Ratio 51.02 21.66 43.51 147.28 18.16 24.51
4.44 PB Ratio 7.10 7.41 11.78 7.13 5.22 3.97
4.13 PS Ratio 5.74 2.18 12.47 8.41 1.30 4.32
14.45 PCF Ratio 23.15 15.25 37.05 33.64 6.22 23.60
10.45 EV to EBITDA 26.50 13.09 35.27 60.12 8.18 15.82

Multiples

Using a multiples approach we generated a valuation of  $25.13 (USD) for CSCO:NAS

Company CSCO:NAS End Date Value
Earnings/Share $0.31 (USD)
Book Value/Share $9.75 (USD)
Sales/Share $10.50 (USD)
Cash Flow/Share $3.00 (USD)
EBITDA/Share $3.38 (USD)
Price Based on Comps Adjustment Factor
$5.63 (USD) 0
$23.97 (USD) 0
$33.43 (USD) 0
$35.56 (USD) 0
$27.08 (USD) 0
Ratios Ratio Average
PE Ratio 18.17
PB Ratio 2.46
PS Ratio 3.18
PCF Ratio 11.86
EV to EBITDA 8.01

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  CSCO:NAS for the last 10 years was  2.46

We ran the Adjusted Book Value for  CSCO:NAS and generated a book value of  $9.50 (USD)
By multiplying these we get an adjusted valuation of  $23.42 (USD)

Analyst Data

In the Stockcalc database there are 6 analysts that provide a valuation for CSCO:NAS. The 6 analysts have a concensus valuation for CSCO:NAS for 2019 of $52.00 (USD).

CSCO:NAS Cisco Systems

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
7 2 0 4.5556 Buy 2019-1-25

Current Price: 45.75 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 3.05 3.36 3.56
# EPS Analysts 7 7 3
Mean Revenue 51,891.10 53,819.50 56,240.10
# Revenue Analysts 6 6 3
Mean Target Price 52.00
Mean Cash Flow 3.72 4.04 4.18
Mean EBITDA 17,785.20 18,310.20 19,558.90
Mean Net Income 13,755.40 14,690.30 15,042.50
Mean Debt Outstanding -14,362.50 -15,197.90 -2,106.40
Mean Tax Rate 19.00 19.00
Mean Growth Rate 8.48
Mean Capital Expenditure 878.00 913.60 943.10

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Adobe (ADBE:NAS) Fundamental Valuation Report

Fundamental Valuation Report

Adobe(ADBE: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
$244.95 (USD) 25/01/2019

Weighted Valuation
$264.68 (USD)

Overall Rating
Undervalued by 8.1%

Valuation Models Analyst Consensus: $290.14 (USD)
(in order of importance) Multiples: $226.49 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (ADBE:NAS USD)

Price 244.95
Range 243.43 – 247.10
52 week 185.16 – 275.49
Open 244.99
Vol / Avg. 3.79M/3.3M
Mkt cap 119.57B
P/E 49.54
Div/yield 0.00/0.00
EPS 5.20
Shares 488.13M
Beta 1.16

Company Description

Adobe Systems Inc is a diversified software-as-a-service vendor that operates in two main strategic segments: digital media and digital experience. In digital media, the firm sells Creative Cloud, which is composed of a variety of software for developers, designers, photographers, and videographers, such as Photoshop, Lightroom, Illustrator, Adobe XD, InDesign, Adobe Premiere Pro, Dimension, After Effects, and Adobe Stock. Adobe’s digital experience segment, sold through Experience Cloud, is composed of Marketing Cloud, Analytics Cloud, and Advertising Cloud. These products allow enterprises to launch multichannel marketing campaigns, build brands, and gain customer insights. A minority of revenue comes from Adobe’s publishing segment.

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 ADBE:NAS

Using a discounted cash flow model we generated an intrinsic value of $184.05 (USD) for ADBE:NAS

Sensitivity Analysis

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

ADBE:NAS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $184.05 1% 5% 1% 5%
WACC (or Ke) 9.97 $216.28 $159.92
Terminal Growth Rate 3.00 $162.89 $212.29
Tax Rate 0.07 $193.57 $174.53
Cash Flow 7,390,456,000 $175.04 $193.06
Capital Expenditures -184,799,000 $183.85 $184.24
Long Term Debt 1,916,591,000 $184.24 $183.85

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $529.11 (USD) for ADBE:NAS. We also generated a valuation of $232.21 (USD) using other metrics and comparables.
The comparable companies were Autodesk (ADSK:NAS), Salesforce.com (CRM:NYS), ServiceNow (NOW:NYS), Red Hat (RHT:NYS) and Square (SQ:NYS).

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $19.18 (USD)
Sales/Share $18.14 (USD)
Cash Flow/Share $8.09 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor (%)
$691.48 (USD) -15.3
$387.92 (USD) -19.9
$183.62 (USD) 76.1
$799.74 (USD) -51.9
$863.24 (USD) 21.3
ADBE:NAS Ratios Used Average Values ADSK:NAS CRM:NYS NOW:NYS RHT:NYS SQ:NYS
43.51 PE Ratio 132.98 0.00 147.28 0.00 118.68 0.00
11.80 PB Ratio 20.23 0.00 7.13 31.29 21.81 20.67
12.47 PS Ratio 10.12 11.79 8.41 12.78 10.13 7.52
27.95 PCF Ratio 99.84 194.16 33.64 44.45 33.71 193.21
34.47 EV to EBITDA 4054.18 0.00 60.12 291.68 47.40 15817.51

Multiples

Using a multiples approach we generated a valuation of  $226.49 (USD) for ADBE:NAS

Company ADBE:NAS End Date Value
Earnings/Share $5.20 (USD)
Book Value/Share $19.18 (USD)
Sales/Share $18.14 (USD)
Cash Flow/Share $8.09 (USD)
EBITDA/Share $6.49 (USD)
Price Based on Comps Adjustment Factor
$317.30 (USD) 0
$144.35 (USD) 0
$184.51 (USD) 0
$246.09 (USD) 0
$240.20 (USD) 0
Ratios Ratio Average
PE Ratio 61.02
PB Ratio 7.53
PS Ratio 10.17
PCF Ratio 30.41
EV to EBITDA 37.03

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  ADBE:NAS for the last 10 years was  7.30

We ran the Adjusted Book Value for  ADBE:NAS and generated a book value of  $19.20 (USD)
By multiplying these we get an adjusted valuation of  $140.07 (USD)

Analyst Data

In the Stockcalc database there are 7 analysts that provide a valuation for ADBE:NAS. The 7 analysts have a concensus valuation for ADBE:NAS for 2019 of $290.14 (USD).

ADBE:NAS Adobe

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
7 2 0 4.5000 Outperform 2019-1-24

Current Price: 244.95 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 7.81 9.58 11.42
# EPS Analysts 10 9 3
Mean Revenue 11,093.00 13,157.90 15,179.50
# Revenue Analysts 8 7 3
Mean Target Price 290.14
Mean Cash Flow 9.45 11.31 12.89
Mean EBITDA 4,820.50 6,088.50 7,175.20
Mean Net Income 3,900.00 4,841.10 6,193.20
Mean Debt Outstanding -1,640.00 -5,829.90 -13,838.80
Mean Tax Rate 10.05 13.00 18.00
Mean Growth Rate 26.58
Mean Capital Expenditure 290.30 317.50 327.40

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.


Eli Lilly (LLY:NYS) and Adobe (ADBE:NAS) Downgraded

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I have used the analysis tools on the website stockcalc.com to generate some of the content of this blog post. These tools and reports are available for free at www.stockcalc.com/toppicks.aspx.

Downgraded Stocks on NYSE, NASDAQ, AMEX, TSE, and TSX

Today we are looking at companies whose share price has been downgraded by at least one analyst in the last few days.

Why Do Companies Get Downgraded?

Companies can get downgraded for a number of reasons but primarily due to reduced future earnings potential due to loss of contracts, faultering product lines, increasing costs relative to revenue or financial risk.

In the list below you can see the number of analysts we have in the StockCalc database along with the number of buy-hold-sell on the company.

Today’s Data on NYSE, NASDAQ, AMEX, TSE, and TSX

Below we have today’s data for companies listed on all of the New York Stock Exchange, NASDAQ Stock Exchange, American Stock Exchange, Toronto Stock Exchange, and TSX Venture Exchange.

New York Stock Exchange
Symbol Name Buy Out Perform Hold Under Perform Sell No Opinion Mean Rating Prev Mean Rating Mean Label
MRK Merck & Co Inc 4 0 0 1 0 0 4.4000 4.6000 Outperform
LLY Eli Lilly and Co 2 0 2 1 0 0 3.6000 3.8000 Outperform
CHA China Telecom Corp Ltd 0 0 3 0 0 0 3.0000 3.5000 Hold
SRE Sempra Energy 3 1 0 0 0 0 4.7500 4.8000 Buy
SQ Square Inc 5 0 1 1 0 0 4.2857 4.3750 Outperform
FDC First Data Corp 5 0 2 0 0 0 4.4286 4.7143 Outperform
CMA Comerica Inc 3 0 4 0 0 0 3.8571 4.0000 Outperform
HFC HollyFrontier Corp 2 0 3 0 0 0 3.8000 4.0000 Outperform
GG Goldcorp Inc 4 2 5 0 3 0 3.2857 3.4000 Hold
IPG The Interpublic Group of Companies Inc 1 0 3 0 0 0 3.5000 4.0000 Hold
X United States Steel Corp 2 0 5 0 0 0 3.5714 3.8571 Outperform
IAG Iamgold Corp 5 4 6 0 0 0 3.9333 4.0667 Outperform
CRC California Resources Corp 1 0 1 0 0 0 4.0000 4.3333 Outperform
AVH Avianca Holdings SA 1 0 1 0 0 0 4.0000 5.0000 Outperform
NLS Nautilus Inc 1 0 1 0 0 0 4.0000 5.0000 Outperform
Toronto Stock Exchange
Symbol Name Buy Out Perform Hold Under Perform Sell No Opinion Mean Rating Prev Mean Rating Mean Label
HSE Husky Energy Inc 0 3 7 0 1 0 3.0909 3.1000 Hold
G Goldcorp Inc 4 2 5 0 3 0 3.2857 3.4000 Hold
IMG Iamgold Corp 5 4 6 0 0 0 3.9333 4.0667 Outperform
PEY Peyto Exploration & Development Corp 2 1 11 0 0 0 3.3571 3.5000 Hold
TDG Trinidad Drilling Ltd 0 0 4 0 2 0 2.3333 2.5714 Underperform
TV Trevali Mining Corp 6 4 2 0 0 0 4.3333 4.4167 Outperform
TRZ Transat A.T. Inc 0 2 4 0 1 0 3.0000 3.1250 Hold
HWO High Arctic Energy Services Inc 0 1 2 0 0 0 3.3333 3.5000 Hold
TXP Touchstone Exploration Inc 0 2 0 0 0 0 4.0000 4.3333 Outperform
TSX Venture Exchange
Symbol Name Buy Out Perform Hold Under Perform Sell No Opinion Mean Rating Prev Mean Rating Mean Label
JSE Jadestone Energy Inc 1 1 0 0 0 0 4.5000 4.6667 Outperform
NASDAQ
Symbol Name Buy Out Perform Hold Under Perform Sell No Opinion Mean Rating Prev Mean Rating Mean Label
ADBE Adobe Inc 7 1 2 0 0 0 4.5000 4.5455 Outperform
VOD Vodafone Group PLC 4 1 0 0 1 0 4.1667 4.2857 Outperform
FANG Diamondback Energy Inc 5 0 1 0 0 0 4.6667 4.8333 Buy
MLCO Melco Resorts and Entertainment Ltd 3 0 1 0 0 0 4.5000 4.7500 Outperform

Let’s look at a few companies…

Lets look at a couple of the companies on this list to get a better understanding of them.

LLY:NYS Eli Lilly

http://www.lilly.com
Eli Lilly has 40655 employees and is headquartered in United States.
Eli Lilly and Co is a pharmaceutical company with a focus on neuroscience, endocrinology, oncology, and immunology. It discovers, develops, manufactures, and sells human pharmaceutical products and animal health products.

ADBE:NAS Adobe

http://www.adobe.com
Adobe has 17973 employees and is headquartered in United States.
Adobe Systems Inc offers a line of software and services for content creation and the measurement of digital advertising and marketing. Its software applications includes Photoshop and Lightroom, Adobe Analytics, Media Optimizer and Campaign Manager.

Free Valuation

Run a valuation on any of the companies listed above at www.stockcalc.com/valureport.aspx or subscribe at our Stockcalc Facebook Page to receive this list each day Stockcalc Reports.

The content presented here is in part from the website stockcalc.com and is provided on an as is or as available basis with all faults and may not be current in all cases. You should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment decision.

Red Hat (RHT:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Red Hat(RHT:NYS)

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
$175.33 (USD) 16/01/2019

Weighted Valuation
$180.00 (USD)

Overall Rating
Fairly valued to slightly Undervalued by 2.7%

Valuation Models Analyst Consensus: $180.00 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (RHT:NYS USD)

Price 175.33
Range 175.26 – 175.98
52 week 116.68 – 178.56
Open 175.26
Vol / Avg. 1.7M/2.59M
Mkt cap 30.99B
P/E 80.16
Div/yield 0.00/0.00
EPS 1.40
Shares 176.76M
Beta 0.60

Company Description

Red Hat provides services for its version of the open-source (free from licensing costs) Linux software operating systems, middleware, storage, virtualization, and management tools. The company reports revenue through two categories: subscriptions, and training and services. The Americas contributed approximately 64% of total revenue in fiscal 2018; Europe, the Middle East, and Africa contributed 23%; and Asia-Pacific contributed 14%.

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 RHT:NYS

Using a discounted cash flow model we generated an intrinsic value of $125.95 (USD) for RHT:NYS

Sensitivity Analysis

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

RHT:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $125.95 1% 5% 1% 5%
WACC (or Ke) 7.31 $159.38 $103.65
Terminal Growth Rate 2.30 $105.81 $156.11
Tax Rate 0.27 $133.24 $118.65
Cash Flow 1,485,686,297 $120.41 $131.48
Capital Expenditures -64,175,600 $125.71 $126.18
Long Term Debt 734,700,000 $126.15 $125.74

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $228.50 (USD) for RHT:NYS. We also generated a valuation of $242.08 (USD) using other metrics and comparables.
The comparable companies were Adobe (ADBE:NAS), Autodesk (ADSK:NAS), Fortinet (FTNT:NAS), Square (SQ:NYS) and Twilio (TWLO:NYS).

Company RHT:NYS End Date Value
Earnings/Share $1.48 (USD)
Book Value/Share $8.05 (USD)
Sales/Share $17.35 (USD)
Cash Flow/Share $5.21 (USD)
EBITDA/Share $3.18 (USD)
Price Based on Comps Adjustment Factor (%)
$106.65 (USD) 1.7
$133.85 (USD) 34.5
$187.91 (USD) 91.3
$562.74 (USD) -46.9
$122.43 (USD) 63.4
RHT:NYS Ratios Used Average Values ADBE:NAS ADSK:NAS FTNT:NAS SQ:NYS TWLO:NYS
118.68 PE Ratio 72.06 43.51 0.00 100.61 0.00 0.00
21.81 PB Ratio 16.62 11.80 0.00 13.46 20.67 20.56
10.13 PS Ratio 10.83 12.47 11.79 7.17 7.52 15.22
33.71 PCF Ratio 189.72 27.95 194.16 19.90 193.21 513.38
47.40 EV to EBITDA 5298.19 34.47 0.00 42.58 15817.51 0.00

Multiples

Using a multiples approach we generated a valuation of  $113.21 (USD) for RHT:NYS

Company RHT:NYS End Date Value
Earnings/Share $1.48 (USD)
Book Value/Share $8.05 (USD)
Sales/Share $17.35 (USD)
Cash Flow/Share $5.21 (USD)
EBITDA/Share $3.18 (USD)
Price Based on Comps Adjustment Factor
$106.22 (USD) 0
$94.03 (USD) 0
$130.38 (USD) 0
$116.96 (USD) 0
$118.44 (USD) 0
Ratios Ratio Average
PE Ratio 71.77
PB Ratio 11.68
PS Ratio 7.52
PCF Ratio 22.45
EV to EBITDA 37.27

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  RHT:NYS for the last 10 years was  11.61

We ran the Adjusted Book Value for  RHT:NYS and generated a book value of  $8.04 (USD)
By multiplying these we get an adjusted valuation of  $93.35 (USD)

Analyst Data

In the Stockcalc database there are 7 analysts that provide a valuation for RHT:NYS. The 7 analysts have a concensus valuation for RHT:NYS for 2020 of $180.00 (USD).

RHT:NYS Red Hat

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
4 4 0 4.0000 Outperform 2019-1-15

Current Price: 175.33 USD

Analyst Consensus
USD Millions 2019 2020 2021
Mean EPS 3.43 3.99 4.57
# EPS Analysts 6 6 2
Mean Revenue 3,374.40 3,875.40 4,439.20
# Revenue Analysts 5 5 2
Mean Target Price 180.00
Mean Cash Flow 5.51 6.23
Mean EBITDA 788.80 910.90
Mean Net Income 689.40 792.60 1,102.20
Mean Debt Outstanding -2,001.50 -2,376.30
Mean Tax Rate
Mean Growth Rate 18.39
Mean Capital Expenditure 76.00 88.60

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.

Notice to User


The contents of this report and the Stockcalc website are provided on an ‘‘as is’’ or ‘‘as available’’ basis with all faults and may not be current in all cases. The information in this report or on the website is subject to continuous change and Patchell Brook Equity Analytics Inc. assumes no responsibility to update or amend such information or that the information will be current. Patchell Brook Equity Analytics Inc. does not claim that all information, calculations or opinions presented in this report or on its website are true, reliable, or complete. Accordingly, you should not rely on any of the information as authoritative or as a substitute for the exercise of your own skill and judgment in making an investment or other decision. Any information, data, opinions, calculations or recommendations provided by third parties through links to other websites or otherwise made available through this report or website are solely those of the third party and not of Patchell Brook Equity Analytics Inc. Please refer to the Terms of Use on stockcalc.com for further information.
To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.