Discounted Cash Flow Calculation for DB:U3I 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:U3I 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.
G5 Entertainment's share price is below the future cash flow value, and at a moderate discount (> 20%).
G5 Entertainment'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
G5 Entertainment's earnings available for a low price, and how does
this compare to other companies in the same industry?
G5 Entertainment's earnings are expected to grow by 13.2% yearly, however this is not considered high growth (20% yearly).
G5 Entertainment's revenue is expected to grow by 5.7% 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.
G5 Entertainment'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
5/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
G5 Entertainment's finances.
The net worth of a company is the difference between its assets and liabilities.
G5 Entertainment is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
G5 Entertainment has no long term commitments.
This treemap shows a more detailed breakdown of
G5 Entertainment's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
Low level of unsold assets.
G5 Entertainment has no debt, it does not need to be covered by short term assets.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
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.
Mr. Vladislav Suglobov, also known as Vlad, Co-Founded G5 Entertainment AB in 2001 and serves as its Chief Executive Officer. Mr. Suglobov is responsible for corporate strategy, customer relations and daily operations management. Mr. Suglobov was involved in several startups in IT and games industry. Mr. Suglobov serves as a Director of G5 Entertainment AB (publ). Mr. Suglobov is active participant of the Russian game development community, frequent speaker at Russian Game Developers Conference (KRI) and Game Developers Conference Russia and Member of the jury of Russian Game Developers Conference Awards. He has been a Director of G5 Entertainment AB (publ) since 2006. He has extensive network of contacts within Russian and U.S. game industry. Mr. Suglobov holds M.S. degree in Computer Science from Lomonosov Moscow State University in 2000.
Vlad's compensation has increased by more than 20% in the past year.
Vlad'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 tenure for the G5 Entertainment management team is about average.
Co-Founder & COO
CFO & Deputy CEO
Lead Marketing Manager
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the G5 Entertainment board of directors is less than 3 years, this suggests a new board.
Board of Directors
Who owns this company?
Recent Insider Trading
More shares have been bought than sold by G5 Entertainment insiders in the past 3 months, but not in substantial volumes.
G5 Entertainment AB (publ) develops and publishes free-to-play games for smartphones and tablets. The company provides casual time management and hidden object games on the Apple App store. Its portfolio of games includes Hidden City, Mahjongg Journey, Survivors: The Quest, The Secret Society, Pirates & Pearls, Twin Moons, Virtual City, Supermarket Mania, and Stand O’ Food. The company distributes games through Apple’s App Store, Google Play, Amazon Appstore, and Microsoft’s Windows Store. G5 Entertainment AB (publ) was founded in 2001 and is headquartered in Stockholm, Sweden.
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