Discounted Cash Flow Calculation for BST:5RZ 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.
BST:5RZ 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
Razer's earnings available for a low price, and how does
this compare to other companies in the same industry?
Razer's earnings are expected to grow significantly at over 20% yearly.
Razer's revenue is expected to grow by 19.4% 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.
Razer'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. Min-Liang Tan Co-founded Razer Inc. in 1998 and has been its Chief Executive Officer and Creative Director since September 1, 2006. He is Member of the Global Advisory Council at CyLon Limited since December, 2018. Mr. Tan has been Executive Director of Razer Inc. since June 21, 2017 and its Chairman since June 21, 2017. Mr. Tan directs and oversees the design and development of all Razer products. He serves as Chief Executive Officer at THX Ltd. He has been ‘Top 10 Most Influential Leaders in Tech’ by Juniper Research. Mr. Tan is a trained technology lawyer and worked at one of the intellectual property and technology law firms in Singapore before he founded Razer in 2005. He is the Chairman of zVentures. He holds an LL.B from the National University of Singapore.
Min-Liang's compensation has been consistent with company performance over the past year.
Insufficient data for Min-Liang 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 Razer management team is over 5 years, this suggests they are a seasoned and experienced team.
CFO & Executive Director
Senior VP of Corporate Development
Senior Vice President of Sales & Marketing
Executive Director & Chief of Staff
Chief Strategy Officer
Joint Company Secretary
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Razer board of directors is less than 3 years, this suggests a new board.
Razer Inc. designs, develops, and sells gaming hardware, software, and services under the Razer brand for gamers worldwide. The company operates through four segments: Peripherals, Systems, Software and Services, and Others. It offers gaming peripherals, including high-precision mice, customizable keyboards, audio devices, mouse mats, and gaming console controllers; and systems, such as laptops. The company also provides Razer Synapse, an IoT platform, which allows users to access its software platform; Razer Chroma, a proprietary RGB lighting technology system; and Razer Cortex, an all-in-one game launcher, optimizer, and aggregator, as well as price comparison engine. In addition, it offers zGold, a virtual credits service, which allows gamers to purchase digital content and in-game items; and zSilver loyalty-based reward points. Further, the company provides Razer Phone, a smartphone; and zVentures investment services. It sells its products through a network of distributors and retailers, as well as through stores and online at razerstore.com. The company was founded in 2005 and is headquartered in San Francisco, California.
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