Discounted Cash Flow Calculation for DB:SB3 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:SB3 DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
SoftBank Technology's earnings available for a low price, and how does
this compare to other companies in the same industry?
SoftBank Technology's earnings are expected to grow by 19.2% yearly, however this is not considered high growth (20% yearly).
Unable to determine if SoftBank Technology is high growth as no revenue estimate data is available.
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.
SoftBank Technology'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.
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
SoftBank Technology's finances.
The net worth of a company is the difference between its assets and liabilities.
SoftBank Technology is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
SoftBank Technology's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
SoftBank Technology'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.
Debt is covered by short term assets, assets are 41.9x 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. Shinichi Ata has been the Chairman and President of Softbank Technology Corp. since June 2012 and served its Chief Executive Officer since April 2012. Mr. Ata served as the Chief Information Security Officer and General Manager of Group Information Security at SOFTBANK Corp. since 2006. Mr. Ata served as Chief Information Security Officer and Executive Vice President at Softbank BB Corp. since 2004. He has been Group Chief Information Security Officer (GCISO) of SOFTBANK since 2004. He served as the Chief Information Security Officer (CISO) and Executive Vice President of Softbank Mobile Corp. since 2006. He served as the Chief Information Security Officer and Executive Vice President of SOFTBANK Telecom Corp., since 2006. Mr. Ata served as Director of Softbank Telecom Corp., Softbank Mobile Corp. and Softbank BB Corp. since June 2010. He serves as Chief Executive Officer at Cybertrust Japan Co.
Insufficient data for Shinichi to compare compensation growth.
Insufficient data for Shinichi to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the SoftBank Technology management team is over 5 years, this suggests they are a seasoned and experienced team.
Chairman & President
Head of Sales
Head of Technology
Managing Executive Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the SoftBank Technology board of directors is about average.
SoftBank Technology Corp. provides ICT services for corporate clients in Japan. It operates in the Digital Marketing, IT Infrastructure Solutions, and System Integration business fields. The company offers BPO services for e-commerce operations; Web font tools; foreign currency payment support; e-commerce relative products; Website access analysis/optimization tools; and consulting and support services for digital marketing. It also constructs, operates, and maintains wireless network, thin client, and other IT platforms, as well as security systems; and provides SSL server certification and device authentication services. In addition, the company develops IT systems; and provides operation and maintenance services, and application services for smart devices, as well as Office 365 solutions and other Microsoft cloud services. Further, it provides systems architecting/developing and operative, technical, Web analysis consulting, certification, managed security, online payment, and e-business services; delivers mobile applications/mobile movie content services; and develops and sells digital fonts and software. The company was formerly known as SB Networks Corp. and changed its name to SoftBank Technology Corp. in January 1999. SoftBank Technology Corp. was founded in 1990 and is headquartered in Tokyo, Japan.
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