Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, and Other European countries.
The last earnings update was 73 days ago.
Discounted Cash Flow Calculation for XTRA:RY4C 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.
XTRA:RY4C 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.
Ryanair Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
Ryanair Holdings'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
Ryanair Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Ryanair Holdings's earnings are expected to grow by 14.2% yearly, however this is not considered high growth (20% yearly).
Ryanair Holdings's revenue is expected to grow by 8.9% 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.
Ryanair 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
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
Ryanair Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Ryanair Holdings's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Ryanair Holdings's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Ryanair 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 0.7x 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. Michael O'Leary has been the Chief Executive Officer of Ryanair Limited, a subsidiary of Ryanair Holdings plc since January 1, 1994. Mr. O'Leary has been the Chief Executive Officer of Ryanair Holdings plc since April 21, 1997. He served as the Deputy Chief Executive of Ryanair Limited from 1991 to May 1993 and Chief Operating Officer from June 1993 to December 1993. He previously served as CFO at Ryanair since 1988. He has been an Executive Director of Ryanair Holdings PLC since July 2, 1996. Mr. O'Leary has been a Director of Ryanair Limited since November 25, 1988.
Michael's compensation has been consistent with company performance over the past year.
Michael's remuneration is lower than average for companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Ryanair Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO & Executive Director
Chief Financial Officer
Chief Operations Officer
Chief Technology Officer
Head of Investor Relations
Chief Legal & Regulatory Officer and Company Secretary
Chief Marketing Officer
Chief People Officer
Chief Commercial Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the Ryanair Holdings board of directors is about average.
Ryanair Holdings plc, together with its subsidiaries, provides scheduled-passenger airline services in Ireland, the United Kingdom, and Other European countries. The company is also involved in the provision of various ancillary services, such as non-flight scheduled services and Internet-related services; in-flight sale of beverages, food, and merchandise; and marketing accommodation services, holidays, car hire, and travel insurance through its Website. In addition, it sells bus and rail tickets onboard its aircraft and through its Website, as well as gift vouchers through its Website; and markets car parking, attractions, and activities through its Website. As of June 30, 2018, the company operated a fleet of 440 Boeing 737 aircraft; and offered approximately 2,000 scheduled short-haul flights per day serving approximately 200 airports in Europe. Ryanair Holdings plc was founded in 1985 and is headquartered in Swords, Ireland.
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