Discounted Cash Flow Calculation for OTCPK:AMAD.Y using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
Amadeus IT Group
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.
OTCPK:AMAD.Y DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
Amadeus IT Group
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
Amadeus IT Group's
is considered below, and whether this is a fair price.
Price based on past earnings
Amadeus IT Group's earnings available for a low price, and how does
this compare to other companies in the same industry?
Amadeus IT Group's earnings are expected to grow by 8% yearly, however this is not considered high growth (20% yearly).
Amadeus IT Group's revenue is expected to grow by 6.9% 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.
Amadeus IT Group'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.
Amadeus IT Group
has a total score of
2/6, 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
Amadeus IT Group's finances.
The net worth of a company is the difference between its assets and liabilities.
Amadeus IT Group's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Amadeus IT Group's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Amadeus IT Group'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 0.4x 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. Luis Maroto Camino has been the Chief Executive Officer and President at Amadeus IT Group S.A. (formerly, Amadeus IT Holding SA) since January 1, 2011. Mr. Maroto Camino served as Managing Director of Amadeus IT Group S.A. since September 18, 2015. He served as the Chief Financial Officer and Vice President of Finance at Amadeus IT Group S.A. from May 2003 to February 1, 2010. Mr. Maroto Camino also served as Deputy Chief Executive Officer at Amadeus IT Group S.A. since January 2009. He was responsible for financial management and control for the Amadeus Group. He served as Director of Marketing Finance at Amadeus Technology Group since his joining in 2000. At Amadeus, he has been responsible for the financial management of its commercial operations. He worked in high level marketing, business planning and financial functions for the Bertelsmann Group. He served as a Director of Finance and Human Resources at the group’s G&J unit in Spain, which included responsibility for acquisitions and business development. He has been an Executive Director of Amadeus IT Group S.A. since June 26, 2014. Mr. Maroto Camino has been a Director at Amadeus Capital Markets, S.A. since June 10, 2011. He is an MBA degree at IESE Business School/Wharton, a Law graduate from Madrid’s Complutense University and further postgraduate qualifications from Harvard Business School and Stanford.
Luis's compensation has been consistent with company performance over the past year.
Luis's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure
Average tenure of the
Amadeus IT Group
management team in years:
The average tenure for the Amadeus IT Group management team is over 5 years, this suggests they are a seasoned and experienced team.
Luis Maroto Camino
Ana De Gonzalo
Chief Financial Officer
Director of Investor Relations
Tomás López Fernebrand
Sabine Hansen Peck
Senior Vice President of People
Senior Vice President of Airlines
Paco Pérez-Lozao Rüter
Senior Vice President of Hospitality
Senior Vice President of Global Core Development
Senior Vice President of Airlines Research & Development
Senior Vice President of Travel Channels
Board of Directors Tenure
Average tenure and age of the
Amadeus IT Group
board of directors in years:
The tenure for the Amadeus IT Group board of directors is about average.
Amadeus IT Group, S.A., together with its subsidiaries, operates as a transaction processor for the travel and tourism industry worldwide. The company operates in two segments, Distribution and IT Solutions. The company acts as an international network providing real-time search, pricing, booking, and ticketing services. It also offers travel providers a portfolio of technology solutions, which automate certain mission-critical business processes and strategic operations, such as sales and reservations, inventory management, and other operational processes. In addition, the company is involved in the provision of software development and definition, regional support, data processing, intermediation, computer consulting, and information technology services; and financing and e-commerce businesses. It serves providers of travel products and services, such as airlines, airports, hotels, tour operators, insurance companies, land and sea transport companies, travel sellers and brokers, travel buyers, and ground handlers. The company was formerly known as Amadeus IT Holding, S.A. and changed its name to Amadeus IT Group, S.A. in August 2016. Amadeus IT Group, S.A. was founded in 1987 and is headquartered in Madrid, Spain.
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