Discounted Cash Flow Calculation for DB:QSV using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
DB:QSV DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Edenred's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Edenred's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Edenred's earnings available for a low price, and how does
this compare to other companies in the same industry?
Edenred's earnings are expected to grow by 15.1% yearly, however this is not considered high growth (20% yearly).
Edenred's revenue is expected to grow by 10.3% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Edenred's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
1/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Bertrand Dumazy, CA has been the Chief Executive Officer of Edenred SA since October 26, 2015. Mr. Dumazy serves as Director of Neoen S.A. Mr. Dumazy has been a Director of Edenred SA since October 26, 2015. Mr. Dumazy served as the Chairman and Chief Executive Officer of Deutsch at President Engineered Connecting Devices, LLC. He served as President and Chief Executive Officer of Deutsch Group from 2011 to 2012. Mr. Dumazy served as Chief Executive Officer and President of Cromology SAS until October 31, 2015. In 2012, he joined Materis as Senior Vice-President and then Chief Executive Officer and eventually Chairman and Chief Executive Officer of Cromology. He served as Deputy Managing Director and Managing Director of Cromology. Over three years, Mr. Dumazy has implemented a number of major initiatives to boost sales, foster innovation and increase profitability. He served as the Chief Executive Officer at Materis Paints SAS since 2012. Mr. Dumazy served as the Chief Financial Officer and Head of Neopost France at Neopost SA until July 2011. He served as the Head of Strategic Marketing of Neopost S.A. He joined The Neopost Group in 2002 as Head of Marketing and Strategy. He founded Constructeo. He served as an Investment Director at BC Partners in 1999 before founding Constructeo. He served as Chairman and Chief Executive Officer of Neopost France since 2005 and Executive Vice-President of Finance for the Neopost group since 2008. In 1994, he began his career as a Management Consultant at Bain & Company first in Paris and later in Los Angeles. He is Chairman of the Supervisory Board of UTA since November 2015. Mr. Dumazy has been the Chairman and Chief Executive Officer of Edenred SA since October 26, 2015 and previously served as its Chairman from September 11, 2015 to October 26, 2015. Mr. Dumazy served as the Chairman of Cromology SAS until October 31, 2015. He served as the Chairman of the Board at Materis Paints. He serves as a Director of Terreal SAS. Mr. Dumazy is a graduate of ESCP and holds an M.B.A. from Harvard Business School.
Bertrand's compensation has been consistent with company performance over the past year.
Bertrand's remuneration is about average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Edenred management team is about average.
Chairman & CEO
Executive Vice President of Finance
Financial Communication & Investor Relations Director
Executive Vice President of Legal & Regulatory Affairs
Vice President of Corporate Communications
Elie du de Saint Maur
COO of Corporate Payment Services and Executive VP of Marketing & Strategy
Executive Vice President of Human Resources & Corporate Social Responsibility
Chief Operating Officer of Southern Europe & Africa
Chief Operating Officer of Europe
Chief Operating Officer of Asia-Pacific
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Edenred board of directors is about average.
Board of Directors
Vice-Chairman of the Board & Lead Independent Director
Chairman & CEO
Senior Vice-President of Treasury & Financing and Employee Director
Edenred SA provides transactional solutions for companies, employees, and merchants worldwide. It offers employee benefit solutions, including Ticket Restaurant, Ticket Alimentación, Ticket Plus, Nutrisavings, etc.; and fleet and mobility solutions, such as Ticket Log, Ticket Car, UTA, Ticket Empresarial, etc. The company also provides complementary solutions comprising corporate payment solutions that enhance the management of inter-company cash flows made through checks or transfers; PrePay solutions; incentives and rewards programs, including Ticket Compliments and Ticket Kadéos; and public social programs. Its solutions are used in various areas, such as meals, food, fuel, business travel, childcare, shopping, transportation, healthcare, training, and human services, as well as purchases of environmentally-friendly products. The company was founded in 1954 and is headquartered in Malakoff, France.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.