Discounted Cash Flow Calculation for DB:TNM1 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:TNM1 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.
Technicolor's share price is below the future cash flow value, and at a moderate discount (> 20%).
Technicolor's share price is below the future cash flow value, and 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
Technicolor's earnings available for a low price, and how does
this compare to other companies in the same industry?
Technicolor's earnings are expected to grow significantly at over 20% yearly.
Technicolor's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.
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.
Technicolor'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
0/6, 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. Frédéric Rose has been the Chief Executive Officer of Technicolor SA since September 1, 2008. Mr. Rose serves as President at Technicolor Inc. Mr. Rose has extensive global experience working in the US, Europe and Asia. Mr. Rose gained an extensive international experience during his 15 years with Alcatel-Lucent and has a strong working knowledge of businesses and markets and has established a track record of building winning teams. He served as Chairman and Chief Executive Officer of Thomson Reuters Corporation. He served as an Executive Vice President, Head of Asia-Pacific Region and President of Europe Africa, Asia Business and Asia Pacifc at Alcatel-Lucent. Mr. Rose served as the President at Alcatel Shanghai Bell, Alcatel-Lucent's flagship joint venture in China. Mr. Rose served as President of Alcatel's Integration and Services activities from 2003 to 2006. From 2000 to 2002, he served as Chief Operating Officer of Network Services activities at Alcatel. He served as Senior International Counsel in Alcatel's Belgian subsidiary and as a Member of the Alcatel Trade and Project Finance Team. He worked at Alcatel from 1993 to 2008. He was a Partner in Repton Group and served as an Associate at Marks & Murase, both in the USA. He served as the Chairman of Technicolor SA from April 27, 2009 to February 17, 2010. He has been Director of Technicolor SA since October 15 2008. He has been a Non Executive Director of Logica France SAS since April 2009. He has been a Director of Logica PLC since April 2009. Mr. Rose is a graduate of the Georgetown University School of Foreign Service and holds a Juris Doctor degree from the Georgetown University Law Center.
Frédéric's compensation has been consistent with company performance over the past year.
Frédéric's remuneration is higher than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Technicolor management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO & Director
Chief Financial Officer
CTO and Head of Research & Innovation
Chief Information Officer & Chief Security Officer
Group General Counsel & Company Secretary
Chief Marketing Officer
Head of Human Resources & Corporate Social Responsibility
Deputy CEO & President of Production Services Division
Creative Head & VP of Animation
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Technicolor board of directors is about average.
Technicolor SA develops video technologies, products, and services for the media and entertainment sectors worldwide. It operates through two segments, Entertainment Services and Connected Home. The Entertainment Services segment offers visual effects (VFX) services, including pre-visualization, asset creation, texturing, animation, rigging, rotoscoping, lighting, match move, and compositing; computer-generated imagery animation solutions; and post production services, such as camera capture on the production set and creation of final distribution masters comprising on-set services, color correction, and VFX integration. It also replicates, packages, and distributes DVD, Blu-ray discs, and CDs; and provides turnkey integrated supply-chain solutions, as well as virtual reality/augmented reality and other technology work, resources, and technical services. This segment offers its services for feature films, TV series, advertising, video games, and other audiovisual content. The Connected Home segment offers a portfolio of broadband and video customer premise equipment, including broadband modems and gateways, digital set-top boxes, and Internet of Things connected devices for Pay-Tv operators and network service providers. The company was founded in 1953 and is headquartered in Paris, France.
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