Discounted Cash Flow Calculation for OTCPK:FDRV.F 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.
OTCPK:FDRV.F 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
First Derivatives's earnings available for a low price, and how does
this compare to other companies in the same industry?
First Derivatives's earnings are expected to grow by 17.1% yearly, however this is not considered high growth (20% yearly).
First Derivatives's revenue is expected to grow by 8.7% 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.
First Derivatives'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
4/6, 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
First Derivatives's finances.
The net worth of a company is the difference between its assets and liabilities.
First Derivatives's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
First Derivatives's cash and other short term assets cover its long term commitments.
This treemap shows a more detailed breakdown of
First Derivatives'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 covered by short term assets, assets are 1.9x 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.
Mr. Brian G. Conlon founded First Derivatives Plc in 1996 and serves as its Chief Executive Officer. Mr. Conlon has been Chief Executive Officer at Kx Systems, Inc. since November 25, 2015. He served as Managing Director of First Derivatives Plc. Mr. Conlon was trained at KPMG before joining the Risk Management team in Morgan Stanley International in London. He served SunGard as a Capital markets consultant and served at more than 60 financial institutions worldwide. Mr. Conlon serves as a Director of First Derivatives plc.
Brian's compensation has been consistent with company performance over the past year.
Brian'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 First Derivatives management team is about average.
CEO & Director
CFO & Director
Executive VP - Growth & Strategic Development of North America
Chief Operating Officer
Chief Technology Officer
Head of Investor Relations
Global Head of Software Sales
Senior Vice President of Business Development
Vice President of Marketing & Innovation
Vice President of HR & Training
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The tenure for the First Derivatives board of directors is about average.
First Derivatives plc provides software and consulting services internationally. The company operates through Consulting and Software segments. It provides kdb+, an in-memory, time-series database. The company also designs, develops, implements, and supports a range of data and trading systems for front, middle, and back-office operations. In addition, it provides capital markets consulting and managed services, as well as intellectual property and related services. The company serves finance, technology, retail, pharma, manufacturing, telecom, digital marketing, utilities, Industrial Internet of Things, and energy markets. First Derivatives plc was founded in 1996 and is headquartered in Newry, the United Kingdom.
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