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.


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.


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.

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Red Hat (RHT:NYS) Fundamental Valuation Report


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Red Hat $164.13 (USD) Close Price as of 03/05/2018

Based on the analysis conducted in this report, Red Hat, (RHT:NYS) is found to be  Fairly valued to slightly Undervalued.

Company Red Hat
Symbol:Exchange RHT:NYS
Industry Technology:Software-Application
Close Price/Date $164.13 (USD) 03/05/2018
Weighted Average Valuation $170.54 (USD)
Summary RHT:NYS is found to be  Fairly valued to slightly Undervalued by 3.9% using the 3 valuation models shown below.
Valuation Models Used Analyst Consensus: $170.00 (USD)
(in order of importance) Comparables: $213.14 (USD)
Adjusted Book Value: $86.94 (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

Red Hat 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 RHT:NYS

Using a discounted cash flow model we generated an intrinsic value of $73.00 (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: $73.00 1% 5% 1% 5%
WACC (or Ke) 8.94 $88.85 $61.72
Terminal Growth Rate 3.00 $63.01 $87.04
Tax Rate 0.21 $76.94 $69.07
Cash Flow 967,170,000 $69.73 $76.28
Capital Expenditures -64,316,400 $72.80 $73.21
Long Term Debt 734,700,000 $73.21 $72.80

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

Comparables Model

Using similar companies and price based ratios we generated a valuation of $213.14 (USD) for RHT:NYS. We also generated a valuation of $125.53 (USD) using other metrics and comparables.
The comparable companies were Adobe Systems (ADBE:NAS), Fortinet (FTNT:NAS), Splunk (SPLK:NAS), Square (SQ:NYS) and Tyler Technologies (TYL:NYS)

Company RHT:NYS End Date Value
Earnings/Share $1.40 (USD)
Book Value/Share $8.27 (USD)
Sales/Share $15.82 (USD)
Cash Flow/Share $5.00 (USD)
EBITDA/Share $0.00 (USD)
Price Based on Comps Adjustment Factor (%)
$198.11 (USD) 4.5
$131.46 (USD) 31.3
$161.82 (USD) 95.2
$293.00 (USD) -46.4
$0.00 (USD) 66.4
RHT:NYS Ratios Used Average Values ADBE:NAS FTNT:NAS SPLK:NAS SQ:NYS TYL:NYS
117.24 PE Ratio 141.51 60.28 311.72 0.00 0.00 52.53
19.83 PB Ratio 15.89 12.89 16.00 19.01 24.34 7.19
10.37 PS Ratio 10.23 14.70 6.68 11.65 7.86 10.25
32.82 PCF Ratio 58.59 35.69 16.81 56.30 140.14 44.02
46.76 EV to EBITDA 41.97 38.54 49.37 0.00 0.00 38.00

Multiples

Using a multiples approach we generated a valuation of  $99.10 (USD) for RHT:NYS

Company RHT:NYS End Date Value
Earnings/Share $1.40 (USD)
Book Value/Share $8.27 (USD)
Sales/Share $15.82 (USD)
Cash Flow/Share $5.00 (USD)
EBITDA/Share $2.33 (USD)
Price Based on Comps Adjustment Factor
$97.34 (USD) 0
$89.31 (USD) 0
$115.57 (USD) 0
$107.82 (USD) 0
$85.48 (USD) 0
Ratios Ratio Average
PE Ratio 69.53
PB Ratio 10.79
PS Ratio 7.31
PCF Ratio 21.56
EV to EBITDA 36.76

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  RHT:NYS for the last 10 years was  10.73

We ran the Adjusted Book Value for  RHT:NYS and generated a book value of  $8.10 (USD)
By multiplying these we get an adjusted valuation of  $86.94 (USD)

Analyst Data

In the Stockcalc database there are 6 analysts that provide a valuation for RHT:NYS. The 6 analysts have a concensus valuation for RHT:NYS for 2019 of $170.00 (USD).

RHT:NYS Red Hat

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
4 3 0 4.1429 Outperform 2018-5-1

Current Price: not available

Analyst Consensus
USD Millions 2018 2019 2020
Mean EPS 2.97 3.44 4.12
# EPS Analysts 6 6 5
Mean Revenue 2,920.50 3,441.10 3,970.50
# Revenue Analysts 5 5 4
Mean Target Price 170.00
Mean Cash Flow 5.05 5.60 6.36
Mean EBITDA 682.40 808.30 939.00
Mean Net Income 540.00 641.60 772.00
Mean Debt Outstanding -1,298.30 -1,945.20 -2,519.10
Mean Tax Rate
Mean Growth Rate 18.88
Mean Capital Expenditure 85.00 82.40 91.70

Company Overview (RHT:NYS USD)

Price 164.13
Range 160.86 – 165.04
52 week 85.52 – 164.13
Open 162.45
Vol / Avg. 1.2M/2.49M
Mkt cap 29.05B
P/E 117.24
Div/yield 0.00/0.00
EPS 1.39
Shares 177M
Beta 1.21