Discounted Cash Flow Calculation for AIM:TPX 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.
AIM:TPX 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
Panoply Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Panoply Holdings's earnings are expected to grow significantly at over 20% yearly.
Panoply Holdings's revenue is expected to grow significantly at over 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.
Panoply 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
0/6, 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
Panoply Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Panoply Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Panoply Holdings's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
Panoply 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.
Low level of unsold assets.
Panoply Holdings has no debt, it does not need to be covered by short term assets.
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.
Mr. Neal Narendra Gandhi is the Co-Founder and Chief Executive Officer and Director of The Panoply Holdings plc. Mr. Gandhi is the Co-Founder and Chief Executive Officer at Quickstart Global Limited. Mr. Gandhi Co-Founded Attenda Limited in 1997 and served as its Vice President of Product Management and Marketing. He served as Sales Manager of WordPerfect UK. After Novell's takeover, Mr. Gandhi became UK channel Sales Manager and served as Marketing Manager of Novell Europe until 1996. Mr. Gandhi Co-Founded Xplora, taking responsibility for business development. Mr. Gandhi was then employed at USWeb.
Insufficient data for Neal to compare compensation growth.
Insufficient data for Neal to establish whether their remuneration is reasonable compared to companies of similar size in United Kingdom of Great Britain and Northern Ireland.
Calculating The Intrinsic Value Of The Panoply Holdings plc (LON:TPX)
Today we will run through one way of estimating the intrinsic value of The Panoply Holdings plc (LON:TPX). … This is done using the Discounted Cash Flow (DCF) model! … If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model.
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