Discounted Cash Flow Calculation for NYSE:SFS using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
Smart & Final Stores
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.
NYSE:SFS DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
Smart & Final Stores
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
Smart & Final Stores's
is considered below, and whether this is a fair price.
Price based on past earnings
Smart & Final Stores's earnings available for a low price, and how does
this compare to other companies in the same industry?
Smart & Final Stores's earnings are expected to grow significantly at over 20% yearly.
Smart & Final Stores's revenue is expected to grow by 3.9% 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.
Smart & Final Stores'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.
Smart & Final Stores
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
Smart & Final Stores's finances.
The net worth of a company is the difference between its assets and liabilities.
Smart & Final Stores's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Smart & Final Stores's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Smart & Final Stores'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 0.6x 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. David G. Hirz, also known as Dave has been the Chief Executive Officer and President of Smart & Final Stores, Inc. since January 2012 and April 2010 respectively. Mr. Hirz served as the President and Chief Operating Officer of Smart & Final Stores, Inc. from April 2010 to January 2012. He joined Smart & Final Stores in April 2010. He served as the President of Ralphs Supermarkets at Ralphs Grocery Company from March 2004 to September 2007. He served as the President of Food 4 Less Division at Kroger Co., from 1999 to 2004 and from September 2007 to April 2010. Previously, he held store and operations management positions with several retail grocery companies.He served as President of Ralph's Grocery Company Inc., a unit of Kroger Co., from September 9, 2004 to August 19, 2007. Prior to that, he served as Group Vice President, Operations of Food 4 Less. He joined Food 4 Less in 1991. Before that, Mr. Hirz held leadership positions with The Boys Markets from 1985 to 1991, including Store Director, District Manager and Manager of Store Operations and Administration. He began his supermarket industry career in 1971 as a Courtesy Clerk with Fisher-Fazio Markets in Cleveland. He has been a Director of Smart & Final Stores, Inc. since January 2012. Mr. Hirz is a graduate of California State University, Fullerton.
Dave's compensation has been consistent with company performance over the past year, both up more than 20%.
Dave's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
Smart & Final Stores
management team in years:
The average tenure for the Smart & Final Stores management team is over 5 years, this suggests they are a seasoned and experienced team.
CEO, President & Director
Executive VP & CFO
President of Cash & Carry Smart Foodservice Division
Chief Accounting Officer
Executive Vice President of Administration
Chief Marketing & Strategy Officer and Senior Vice President
Senior Vice President of Human Resources
Senior Vice President of Sales & Merchandising - Smart & Final
Board of Directors Tenure
Average tenure and age of the
Smart & Final Stores
board of directors in years:
The tenure for the Smart & Final Stores board of directors is about average.
At US$6.07, Is It Time To Put Smart & Final Stores, Inc. (NYSE:SFS) On Your Watch List?
Smart & Final Stores, Inc. … (NYSE:SFS), which is in the consumer retailing business, and is based in United States,. … Let’s take a look at Smart & Final Stores’s outlook and value based on the most recent financial data to see if the opportunity still exists
Estimating The Fair Value Of Smart & Final Stores, Inc. (NYSE:SFS)
Help shape the future of investing tools and you could win a $250 gift card! … by projecting its future cash flows and then discounting them to today's value. … Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
Is Smart & Final Stores Inc (NYSE:SFS) A Volatile Stock?
Modern finance theory considers volatility to be a measure of risk, and there are two main types of price volatility. … Some investors use beta as a measure of how much a certain stock is impacted by market risk (volatility). … While we should keep in mind that Warren Buffett has cautioned that 'Volatility is far from synonymous with risk', beta is still a useful factor to consider.
Is There Now An Opportunity In Smart & Final Stores Inc (NYSE:SFS)?
Smart & Final Stores Inc (NYSE:SFS), which is in the consumer retailing business, and is based in United States,. … A question to answer is whether Smart & Final Stores's current trading price of $5.04 reflective of the actual value of the? … Let’s take a look at Smart & Final Stores’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change
Is Smart & Final Stores Inc (NYSE:SFS) Expensive For A Reason? A Look At The Intrinsic Value
by projecting its future cash flows and then discounting them to today's value. … Discounted Cash Flows (DCF). … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model
Smart & Final Stores Inc (NYSE:SFS): A Look At Return On Capital
and looking to gauge the potential return on investment in Smart & Final Stores Inc (NYSE:SFS). … Buying Smart & Final Stores makes you a partial owner of the company. … Therefore, looking at how efficiently Smart & Final Stores is able to use capital to create earnings will help us understand your potential return.
What does Smart & Final Stores Inc's (NYSE:SFS) Balance Sheet Tell Us About Its Future?
While small-cap stocks, such as Smart & Final Stores Inc (NYSE:SFS) with its market cap of US$457.72m, are popular for their explosive growth, investors should also be aware of their balance sheet to judge whether the company can survive a downturn. … Consumer Retailing businesses operating in the environment facing headwinds from current disruption,
Is It The Right Time To Buy Smart & Final Stores Inc (NYSE:SFS)?
Smart & Final Stores Inc (NYSE:SFS), a consumer retailing company based in United States,. … Let’s take a look at Smart & Final Stores’s outlook and value based on the most recent financial data to see if the opportunity still exists? … Check out our latest analysis for Smart & Final Stores.
What Do Expectations Tell Us About Smart & Final Stores Inc's (NYSE:SFS) Margins In The Years Ahead?
To get some insight, I will try to evaluate Smart & Final Stores's margin behaviour to help recognise the underlying make-up of revenue and expenses that is responsible for driving future earnings expectations and what it means for SFS's returns relative to its competitors. … Margin Calculation for SFS Profit Margin = Net Income ÷ Revenue ∴ Profit Margin = 7.39 Million ÷ 4.50 Billion = 0.16% There has been a contraction in Smart & Final Stores's margin over the past five years, with a 8.70% average growth in revenue surpassing average net income growth of 7.61%, indicating that that a smaller percentage of revenue is being converted in to net income despite the top line growth. … Using Smart & Final Stores's margin expectations as a way to understand projections for the future It is expected that margins will move from contraction into expansion, with an expectation of 5.59% in annual revenue growth and a forecasted 39.61% in annual net income growth.
What Should Investors Know About Smart & Final Stores Inc's (SFS) Future?
The consensus forecast from 8 analysts is extremely positive, with earnings per share estimated to surge from current levels of $0.129 to more than double over the next couple of years. … However, SFS’s earnings growth in the past couple of years has been negative at -32.87%. … Although its past performance is not supportive of a positive growth trend, it could also mean SFS is growing off a lower base, meaning a higher growth rate is easier to achieve.
Smart & Final Stores, Inc. operates as a food retailer in the United States. It operates in two segments, Smart & Final and Smart Foodservice. The company’s stores offer fresh perishables and everyday grocery items, such as produce, meat and deli, dairy and cheese, grocery, and beverage products, as well as paper and packaging, and restaurant equipment and janitorial supplies. It also provides various private label products under the First Street, Sun Harvest, Simply Value, La Romanella, Montecito, Iris, and Ambiance brands. The company sells its products to household and business customers; restaurants; caterers; and various other foodservice businesses, such as food trucks and coffee houses through vendors and suppliers. As of December 30, 2018, it operated 326 grocery and foodservice stores, including 59 Smart & Final stores, 201 Smart & Final Extra! stores, and 66 Smart Foodservice Warehouse stores located in California, Oregon, Washington, Arizona, Nevada, Idaho, Montana, and Utah, as well as 15 stores in Northwestern Mexico operated through a joint venture. Smart & Final Stores, Inc. was founded in 1871 and is headquartered in Commerce, California.
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