Discounted Cash Flow Calculation for DB:ZZA 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:ZZA 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.
Cinemark Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
Cinemark Holdings'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
Cinemark Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Cinemark Holdings's earnings are expected to grow by 11.4% yearly, however this is not considered high growth (20% yearly).
Cinemark Holdings's revenue is expected to grow by 2.7% 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.
Cinemark Holdings'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
2/6, 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
Cinemark Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Cinemark Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Cinemark Holdings's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Cinemark Holdings'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.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.3x debt.
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.
TENURE AS CEO
Mr. Mark Zoradi serves as the Chief Executive Officer at Cinemark USA, Inc. Mr. Zoradi has been the Chief Executive Officer of Cinemark Holdings, Inc. since August 24, 2015. He has been a Non Executive Strategic Advisor of IMAX Corporation since April 12, 2010. He served as the Chief Operating Officer of DreamWorks Animation SKG Inc. from July 2014 to January 2015. From January 2011 to July 2014, he served as the President and Chief Operating Officer of Dick Cook Studios, a new media and entertainment start up company. He served as the President of Walt Disney Motion Pictures Group, Inc. since July 2006. He is a 30-year veteran of the motion picture industry. He served as the President of Buena Vista Home Entertainment International since 1999. He served as the President of Walt Disney Studios Motion Pictures Group until November 2009. He served as the Head of Disney's International Operation of Walt Disney Co. Mr. Zoradi served as Director of Sales of Walt Disney Studios Motion Pictures, Inc. He served as the President of Buena Vista International. He has spent nearly all his career as a Disney Executive. He's made a global impact overseeing BVI. He started his Disney career as Marketing Coordinator for Walt Disney Home Video in 1980 at ground zero of the home entertainment boom and served as Marketing Director for the Disney Channel. He segued into domestic theatrical distribution as Director of Sales for Buena Vista Pictures Distribution in the mid 1980s and also served as Senior Vice President and General Manager of Buena Vista Television from 1987 to 1992. He was plucked from BVI that year to set up a stand-alone international theatrical marketing and distribution organization. He has been a Director at Cinemark USA, Inc. since August 27, 2015 and Cinemark Holdings, Inc. since June 4, 2015. He serves as a Director of Rave Cinemas, LLC. He is a Member of the following organizations: Board of Trustees at Westmont College, Board of Directors of Providence St. Joseph Medical Center and Los Angeles Regional Young Life. In November of last year, he received the Louis B. Mayer Motion Picture Business Leader of the year award from his alma mater, the UCLA Anderson School of Management. Mr. Zoradi holds an MBA in Marketing and Finance from UCLA's Graduate School of Management and a BA in Economics and Sociology from Westmont College.
Mark's compensation has been consistent with company performance over the past year.
Mark'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 Cinemark Holdings management team is about average.
Executive Chairman of the Board
CEO & Director
CFO & COO
President of Cinemark International LLC
Vice President of Investor Relations & Corporate Communications
Senior Vice President of Marketing & Communications
Executive VP & Chief Marketing Officer
Executive Vice President of Design & Construction
Executive Vice President of Food & Beverage
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Cinemark Holdings board of directors is about average.
Cinemark Holdings, Inc., together with its subsidiaries, engages in the motion picture exhibition business. As of December 31, 2018, it operated 341 theatres and 4,586 screens in 41 states of the United States; and 205 theatres and 1,462 screens in Brazil, Argentina, Chile, Colombia, Peru, Ecuador, Honduras, El Salvador, Nicaragua, Costa Rica, Panama, Guatemala, Bolivia, Curacao, and Paraguay. The company was founded in 1984 and is headquartered in Plano, Texas.
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