Discounted Cash Flow Calculation for WSE:PEP 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.
WSE:PEP 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.
Polenergia's share price is below the future cash flow value, and at a moderate discount (> 20%).
Polenergia's share price is below the future cash flow value, and 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
Polenergia's earnings available for a low price, and how does
this compare to other companies in the same industry?
Polenergia's earnings are expected to grow significantly at over 20% yearly.
Polenergia's revenue is expected to grow by 5.1% 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.
Polenergia'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. Michal Michalski, Ph.D. has been President of the Management Board of Polenergia SA since January 23, 2019 and has been its Member of Management Board since November 12, 2016. Mr. Michalski was a Director of the Business Development in Polenergia since 2012. He supervised the Division of Development Projects in Polenergia, and was responsible for investments in wind energy sector. He has been working with Kulczyk Investments Group since 2001. He supervised, participated and managed investment projects in oil & gas and energy sectors. Mr. Michalski is a graduate from Poznan University of Economics (Foreign Trade) and he gained post graduate degrees Executive Studies in Finance” at SGH. In 2001, he holds a Ph.D. in Economics (“The theory of enterprise value for shareholders”).
Insufficient data for Michal to compare compensation growth.
Michal's remuneration is lower than average for companies of similar size in Poland.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Polenergia management team is less than 2 years, this suggests a new team.
President of Management Board
Member of Management Board
Member of Management Board
Director of Investment Department
Director of Accounting Department
Board of Directors Tenure
Average tenure of the
board of directors in years:
The average tenure for the Polenergia board of directors is less than 3 years, this suggests a new board.
Should You Buy Polenergia SA (WSE:PEP) At zł018.45?
saw a decent share price growth in the teens level on the WSE over the last few months. … Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing? … So, could the stock still be trading at a low price relative to its actual value.
Negative Sentiment Around Polenergia SA (WSE:PEP) Is Justified
Whether a company has a good future, in terms of its business operation and financial health, is an important question to address. … PEP has high near term liquidity, with short term assets (cash and other liquid assets) amply covering upcoming one-year liabilities, as well as long-term commitments. … A good company is reflected in its financials, and for PEP, the financials don't look good.
Polenergia SA's (WSE:PEP) Most Important Factor To Consider
Free Cash Flow = Operating Cash Flows – Net Capital Expenditure Free Cash Flow Yield = Free Cash Flow / Enterprise Value where Enterprise Value = Market Capitalisation + Net Debt Along with a positive operating cash flow, Polenergia also generates a positive free cash flow. … Below is a table of Polenergia’s operating cash flow in the past year, as well as the anticipated level going forward. … Current +1 year +2 year +3 year Operating Cash Flow (OCF) ZŁ111.59M ZŁ81.10M ZŁ105.60M ZŁ158.36M OCF Growth Year-On-Year -27.32% 30.21% 49.96% OCF Growth From Current Year -5.37% 41.91% Next Steps: Although its positive operating cash flow, and high future growth, is appealing, the low free cash flow yield is unattractive.
Has Polenergia SA (WSE:PEP) Improved Earnings Growth In Recent Times?
I look at data from the most recent 12 months, which annualizes the latest 6-month earnings release, or some times, the latest annual report is already the most recent financial data. … WSE:PEP Income Statement Apr 4th 18 We can further examine Polenergia's loss by looking at what the industry has been experiencing over the past few years. … Each year, for the past five years Polenergia's top-line has grown by 44.82% on average, implying that the company is in a high-growth phase with expenses shooting ahead of revenues, leading to annual losses.
Is It The Right Time To Buy Polenergia SA (WSE:PEP)?
Polenergia SA (WSE:PEP), a renewable energy company based in Poland, saw a significant share price rise of over 20% in the past couple of months on the WSE. … Polenergia’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. … Though in the case of Polenergia, it is expected to deliver a relatively unexciting top-line growth of 3.68% in the next few years, which doesn’t help build up its investment thesis.
What You Must Know About Polenergia SA's (WSE:PEP) Financial Strength
How does PEP’s operating cash flow stack up against its debt? … On top of this, PEP has generated ZŁ111.59M in operating cash flow over the same time period, resulting in an operating cash to total debt ratio of 11.12%, meaning that PEP’s operating cash is not sufficient to cover its debt. … Running high debt, while not yet making money, can be risky in unexpected downturns as liquidity may dry up, making it hard to operate.Next Steps: PEP’s debt and cash flow levels indicate room for improvement.
Polenergia S.A., together with its subsidiaries, generates, distributes, and transmits electricity in Poland. The company operates through Conventional Energy, Development and Implementation, Wind Power, Biomass, Distribution, and Trading segments. It produces energy from conventional and renewable sources, such as wind, gas, coal, and biomass. The company distributes electricity to industrial customers, shopping centers, and housing estates in various regions of Poland through its distribution infrastructure; distributes and supplies natural gas to industrial customers through its distribution infrastructure; and sells and trades in electric energy and green certificates. It also produces pellets. In addition, the company develops and constructs wind farms and conventional energy plants. The company was formerly known as Polish Energy Partners Spolka Akcyjna. The company was founded in 1997 and is headquartered in Warsaw, Poland.
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