Discounted Cash Flow Calculation for DB:JNP 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:JNP 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.
Juniper Networks's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Juniper Networks's share price is below the future cash flow value, but not 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
Juniper Networks's earnings available for a low price, and how does
this compare to other companies in the same industry?
Juniper Networks's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.
Juniper Networks's revenue is expected to grow by 0.6% 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.
Juniper Networks'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
4/6, 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
Juniper Networks's finances.
The net worth of a company is the difference between its assets and liabilities.
Juniper Networks is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Juniper Networks's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Juniper Networks'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 2.1x 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. Rami Rahim has been the Chief Executive Officer of Juniper Networks, Inc. since November 2014. Mr. Rahim served as an Executive Vice President and General Manager of Platform Systems Division at Juniper Networks, Inc. from October 2012 to November 2014. Mr. Rahim responsible for driving strategy, development and business growth for juniper's entire portfolio of routing, switching, branch and wlan products, as well as for the ongoing evolution of our silicon technology and the junos operating systems. He is a 15-year veteran of Juniper Networks and leads Juniper's largest business unit focused on edge and aggregation routing. He joined juniper in January 1997. He served juniper in a number of roles, including senior vice president and gm of the edge and aggregation business unit and vice president of product management for eabu. He spent the majority of his time at juniper in the development organization where he helped with the architecture, design and implementation of many juniper core, edge and carrier ethernet products. He has been Director of Juniper Networks, Inc. since November 2014. He holds a bachelor of science degree in electrical engineering from the university of toronto and a master of science degree in electrical engineering from Stanford university.
Rami's compensation has increased by more than 20% in the past year.
Rami'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 Juniper Networks management team is about average.
CEO & Director
Executive VP & CTO
Executive VP & Chief Development Officer
Chief Information Officer & Senior VP
Vice President of Investor Relations
Chief Marketing Officer & Senior VP
Senior Vice President of Strategy & Corporate Development
Senior VP & Acting World Wide Head of Sales
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Juniper Networks board of directors is about average.
Juniper Networks, Inc. designs, develops, and sells network products and services worldwide. The company offers various routing products, such as ACX series universal access routers to deploy new high-bandwidth services; MX series Ethernet routers that functions as a universal edge platform; PTX series packet transport routers; cloud customer premises equipment; and NorthStar controllers. It also provides switching products, including EX series Ethernet switches to address the access, aggregation, and core layer switching requirements of micro branch, branch office, and campus and data center environments; and QFX series of core, spine, and top-of-rack data center switches. In addition, the company offers security products comprising SRX series services gateways for the data centers; Branch SRX family provides integrated firewall capabilities; vSRX Virtual Firewall that delivers various features of physical firewalls; and Sky Advanced Threat Prevention, a cloud-based service for static and dynamic analysis. Further, it offers Junos OS, a network operating system; Contrail networking and cloud platform, which provides an open-source and standards-based platform for SDN and NFV; and AppFormix, an optimization and management software platform for public, private, and hybrid clouds. Additionally, the company provides technical support, maintenance, and professional services, as well as education and training programs. It sells its products through direct sales, distributors, value-added resellers, and original equipment manufacturer partners to end-users in the cloud, telecom/cable, and strategic enterprise markets. Juniper Networks, Inc. was founded in 1996 and is headquartered in Sunnyvale, California.
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