Discounted Cash Flow Calculation for NYSE:SOGO 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.
NYSE:SOGO 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.
Sogou's share price is below the future cash flow value, but not at a moderate discount (< 20%).
Sogou'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
Sogou's earnings available for a low price, and how does
this compare to other companies in the same industry?
Sogou's earnings are expected to grow significantly at over 20% yearly.
Sogou's revenue is expected to grow by 12.4% 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.
Sogou'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
Interactive Media and Services
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.
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. Xiaochuan Wang serves as an Independent Director at Sunlands Online Education Grou since March 2018. Mr. Wang serves as an Independent Director at Sunlands Technology Group since March 2018. He serves as Chief Executive Officer of Beijing Sougou Technology Development Co., Ltd. Mr. Wang has been the Chief Executive Officer of Sogou Inc., since August 2010. In this role, Mr. Wang has led the development of a range of popular Sogou-branded products, including a search engine, Chinese character input tool and web browser. Mr. Wang serves as Cornerstone Investor at ATM Capital. He served as Chief Technology Officer of Beijing Sohu New Era Information Technology Co., Ltd. Mr. Wang served as the Chief Technology Officer of Sohu.com Inc. from November 30, 2009 to February 3, 2013. Mr. Wang served as an Senior Vice President of Sohu.com Limited until November 30, 2009. He worked at ChinaRen, previously the largest online Chinese alumni club, where he spearheaded the development of the first open promotion search engine platform in China. He joined Sohu in 2000 upon its acquisition of ChinaRen. He has been an Independent Director of Jiayuan.com International Ltd. since May 1, 2012. He serves as a Director of Sogou Inc. He served as Independent Director of NavInfo Co., Ltd. since January 27, 2014. He serves as an Independent Director of Jiayuan Dating Network. He holds a bachelor's degree in Computer Ccience and a Master's degree in Engineering from Tsinghua University.
Xiaochuan's compensation has been consistent with company performance over the past year, both up more than 20%.
Xiaochuan's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure and age of the
management team in years:
The tenure for the Sogou management team is about average.
CEO & Director
Chief Financial Officer
Chief Technology Officer
Chief Marketing Officer
Investor Relations Director
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Sogou board of directors is less than 3 years, this suggests a new board.
The formula for ROE is: Return on Equity = Net Profit ÷ Shareholders' Equity Or for Sogou: 7.9% = US$80m ÷ US$1.0b (Based on the trailing twelve months to March 2019.) Most know that net profit is the total earnings after all expenses, but the concept of shareholders' equity is a little more complicated. … How Does Debt Impact Return On Equity? … A company that can achieve a high return on equity without debt could be considered a high quality business.
Investors Who Bought Sogou (NYSE:SOGO) Shares A Year Ago Are Now Down 55%
The falls have accelerated recently, with the share price down 32% in the last three months. … Check out our latest analysis for Sogou While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. … Before deciding if you like the current share price, check how Sogou scores on these 3 valuation metrics.
What Should Investors Know About Sogou Inc.'s (NYSE:SOGO) Earnings Trajectory?
Want to participate in a short research study? … Help shape the future of investing tools and you could win a $250 gift card! … The most recent earnings release Sogou Inc.'s (NYSE:SOGO) announced in March 2019a
Does Sogou Inc.'s (NYSE:SOGO) P/E Ratio Signal A Buying Opportunity?
This article is for investors who would like to improve their understanding of price to earnings ratios (P/E ratios). … We'll show how you can use Sogou Inc.'s (NYSE:SOGO) P/E ratio to inform your assessment of the investment opportunity. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Is Sogou Inc.'s (NYSE:SOGO) Liquidity Good Enough?
Small-cap and large-cap companies receive a lot of attention from investors, but mid-cap stocks like Sogou Inc. … SOGO’s financial liquidity and debt position will be analysed in this article, to get an idea of whether the company can fund opportunities for strategic growth and maintain strength through economic downturns. … Note that this commentary is very high-level and solely focused on financial health, so I suggest you dig deeper yourself.
Have Investors Priced In Sogou Inc.'s (NYSE:SOGO) Growth?
(NYSE:SOGO) is considered a high-growth stock, but its last closing price of $6.34 left some investors wondering if this high future earnings potential can be rationalized by its current price tag. … What are the future expectations. … The excitement around Sogou's growth potential is not unfounded
Imagine Owning Sogou And Wondering If The 34% Share Price Slide Is Justified
(NYSE:SOGO) have tasted that bitter downside in the last year, as the share price dropped 34%. … During the unfortunate twelve months during which the Sogou share price fell, it actually saw its earnings per share (EPS) improve by 13%. … Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.
Sogou Inc. (NYSE:SOGO): An Investing Strategy To Help You Win
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Do You Know What Sogou Inc.'s (NYSE:SOGO) P/E Ratio Means?
The goal of this article is to teach you how to use price to earnings ratios (P/E ratios). … We'll look at Sogou Inc.'s (NYSE:SOGO) P/E ratio and reflect on what it tells us about the company's share price. … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)
Based On Its ROE, Is Sogou Inc. (NYSE:SOGO) A High Quality Stock?
With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. … Another way to think of that is that for every $1 worth of equity in the company, it was able to earn $0.090. … Return on Equity = Net Profit ÷ Shareholders' Equity
Sogou Inc. provides search and search-related services in the People’s Republic of China. The company provides Sogou Search, a search engine; and Sogou Input Method, a Chinese language input software for PC and mobile users. It also offers search and search-related advertising services; Internet value-added services related to the operation of Web games and mobile games developed by third parties; and online reading services, as well as other products and services, including smart hardware products. The company was incorporated in 2005 and is based in Beijing, the People’s Republic of China. Sogou Inc. is a subsidiary of Sohu.com Limited.
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