Discounted Cash Flow Calculation for OM:LIME 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.
OM:LIME 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
Lime Technologies's earnings available for a low price, and how does
this compare to other companies in the same industry?
Lime Technologies's earnings are expected to grow significantly at over 20% yearly.
Lime Technologies's revenue is expected to grow by 14.4% 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.
Lime Technologies'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
1/6, 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
Lime Technologies's finances.
The net worth of a company is the difference between its assets and liabilities.
Lime Technologies's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Lime Technologies's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Lime Technologies'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 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. Erik Syren has been the Chief Executive Officer at Lime Technologies AB (publ) since 2012. Mr. Syren is a Board member of Syringa Capital AB and Wiraya Solutions AB. Mr. Syren is Chief Executive Officer and Deputy Board Member of Remotex Technologies AB, Hysminai AB and Netoptions Sweden AB. He was Board member of Aivo Norge AS. Mr. Syren holds Master of Science in Business and Economics from Lund University.
Insufficient data for Erik to compare compensation growth.
Insufficient data for Erik to establish whether their remuneration is reasonable compared to companies of similar size in Sweden.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Lime Technologies management team is over 5 years, this suggests they are a seasoned and experienced team.
Can Lime Technologies AB (publ) (STO:LIME) Maintain Its Strong Returns?
While some investors are already well versed in financial metrics (hat tip), this article is for those who would like to learn about Return On Equity (ROE) and why it is important. … That means that for every SEK1 worth of shareholders' equity, it generated SEK0.75 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity
Lime Technologies AB (publ) provides software as a service based customer relationship management (CRM) solutions on the Nordic markets. It develops, sells, and implements CRM systems, as well as provides consultancy services. The company’s products include Lime GO, a tool for sales representatives with contact details for various businesses and executive officers in Sweden; and Lime CRM, a CRM system that collects sales, projects, documents, e-mails, reminders, etc. in one place. It offers its pre-packaged CRM solutions to customers in verticals, such as energy, real estate, wholesale, and consultancy. The company was founded in 1990 and is headquartered in Lund, Sweden.
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