Nelson – BUS 4922 – Valuation Project – Page I Business Description: GPRO develops hardware and software solutions to alleviate consumer pain points associated.

Slides:

Advertisements

Similar presentations

(What they are and how to measure). Decisions Communication Comparison Priorities.

Advertisements

Financial Statement Analysis

Firm Valuation: A Summary

9-1 CHAPTER 9 Stocks and Their Valuation Features of common stock Determining common stock values Preferred stock.

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Equity Valuation 13 Bodie, Kane, and Marcus Essentials of Investments,

Chapter 8 Stock Valuation. Copyright ©2014 Pearson Education, Inc. All rights reserved.8-2 Valuing a Company and Its Future Value of a stock depends upon.

Chapter 9 An Introduction to Security Valuation. 2 The Investment Decision Process Determine the required rate of return Evaluate the investment to determine.

1 FINANCIAL ANALYSIS 1. Financial Statement Analysis 2. Common Size Statement Analysis 3. Ratio Analysis 4. Sources/ Uses of Funds 5. Statement of Cash.

Common Stock Valuation

Theory of Valuation The value of an asset is the present value of its expected cash flows You expect an asset to provide a stream of cash flows while you.

McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc., All Rights Reserved. Financial Statement Analysis CHAPTER 14.

Finance/Accounting Functional Review. The Finance/Accounting Functions Defined Investment Decision The Allocation and Reallocation of Capital and Resources.

Valuation: Principles and Practice: Part 1 – Relative Valuation 03/03/08 Ch. 12.

Aswath Damodaran1 Session 18: Revenue Multiples. Aswath Damodaran2 Price Sales Ratio: Definition The price/sales ratio is the ratio of the market value.

Valuation: Principles and Practice

Valuing a company relative to another company

Lecture Presentation Software to accompany Investment Analysis and Portfolio Management Seventh Edition by Frank K. Reilly & Keith C. Brown Chapter 13.

MGMT 315: Financial Valuation Project Ashli Edwards, Xiang Li, and Katerina Goudouros.

© 2010 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible Web site, in whole or in part.

Valuation Terms and Ratios Tanveer Chandok (Director of Mentorship)

Equity Valuation and Analysis with eVal

SESSION 18: REVENUE MULTIPLES Aswath Damodaran 1.

Business Valuations  Highly visible companies tend to be called as market leaders because of various competitive advantages enjoyed by them.  Does that.

Chapter 10 Profitability and Return on Investment.

Chapter Common Stock Valuation McGraw-Hill/IrwinCopyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved. 6.

Security Analysis. Learning Goals Analyzing shares based on Economic, Industry and Fundamental of the company Analyzing shares to determine WHAT shares.

Part 1: financial statement analysis

Investments: Analysis and Behavior Chapter 10- Financial Statement Analysis ©2008 McGraw-Hill/Irwin.

Financial Analysis Macrovision Corporation An Overview of Financial Performance Presented November 30, 2006 by Radityo Ardi Nugraha and Chenchen (Carl)

$$ Entrepreneurial Finance, 5th Edition Adelman and Marks Pearson Higher Education ©2010 by Pearson Education, Inc. Upper Saddle River, NJ Chapter.

Assets Valuation Methods

Historical Performance Analysis Analysts:. 3-Year Compound Average Growth Rates.

Netgear, Inc April/03/2012 Presentors: Ryo-Seob(Joseph) Kim Jionghan(JD) Dai Han(Henry) Yang Pattharaporn (Pauline) Lertphaiboonsiri Yen-Hua(Gina) Huang.

MT 217 Unit 3 Seminar.

CHAPTER 9 Stocks and Their Valuation

STAPLES COMPANY VALUATION JACKIE PHAN LATRISHA SEARCY ANNA DAI.

Intro to Financial Management Evaluating a Firm’s Financial Performance.

FINANCE MAP By Gaylen K. Bunker. Objectives of Workshop Principles: Time lag between investment and return. Compounding versus Summing Value = Discounted.

Chapter 2 Financial Ratio Analysis. 2-2 Example 2.1 Problem  Rylan Enterprises has 5 million shares outstanding.  The market price per share is $22.

Evaluating Companies. Research: Products Earnings Debt Performance Consider: PROFITABILITY GROWTH POTENTIAL VALUATION.

Analysis of Financial Statements. Learning Objectives  Understand the purpose of financial statement analysis.  Perform a vertical analysis of a company’s.

Stock Trading 102 Seminar Arlen Novelli, Sesame Chen, Stefan Filipovic and Abby Holtan.

ZARA ALI, CORY CARLSON, DANIELLA COMITO & EMMA HEBBLETHWAITE Valuation.

1 CHAPTERS 15 & 25 Corporate Valuation and Merger Analysis.

Corporate value model Also called the free cash flow method. Suggests the value of the entire firm equals the present value of the firm’s free cash flows.

1 Chapter 03 Analyzing Financial Statements McGraw-Hill/Irwin Copyright © 2012 by The McGraw-Hill Companies, Inc. All rights reserved.

FIN 614: Financial Management Larry Schrenk, Instructor.

TradeQuest Workshop B Valuation, Analysis & Research Record-keeping.

Class Business Upcoming Case Clip Proforma Assignment.

DES Chapter 4 1 DES Chapter 4 Estimating the Value of ACME.

1 Research term paper Five major sections: Company background / introduction Competitive strengths Financial analysis (focus section) Stock valuation analysis.

BUSINESS VALUATION MODELS Two methods: 1. Discounted Cash Flow 2. Relative Values.

Estimating the Value of ACME 1. Steps in a valuation Estimate cost of capital (WACC) – Debt – Equity Project financial statements and FCF Calculate horizon.

Chapter 2 Financial Statements, Cash Flow, and Taxes 1.

Cost of debt = Interest Payments. Debts are the borrowing which company takes to finance the company therefore they have to pay interest on those borrowing.

McGraw-Hill/Irwin © 2007 The McGraw-Hill Companies, Inc., All Rights Reserved. Financial Statement Analysis CHAPTER 13.

Rivanna Investments: Intro to Equity Research. Rivanna Investments First step is to gather information Financial statement and reports (EDGAR)

Estimating the Value of ACME

Historical Performance Analysis

Henderson Land Development Company Limited

Demonstration Problem

iRobot Equity Report FIN 422 – Student Managed Investment Fund

13 Equity Valuation Bodie, Kane, and Marcus

A firm which does not pay dividends can be valued by discounting all its FREE CASH FLOWS by its WACC Free Cash Flows = the cash flows actually available.

Profitability and Return on Investment

Principles of Investing FIN 330

Estimating the Value of ACME

Analysis of Financial Statements

CH14 Operating-Income-Based Valuation

Valuation by Comparables

Presentation transcript:

Nelson – BUS 4922 – Valuation Project – Page I Business Description: GPRO develops hardware and software solutions to alleviate consumer pain points associated with capturing, managing, sharing, and enjoying engaging content. Known for their high-definition personal cameras, GPRO is often associated with extreme-action video photography. As of 2014, GPRO is a publically traded company. News (ReferenceUSA)  The coalition for drones (18-24 months)  Yi Action Camera – a top 5 gadget at Mobile World Congress  President, Tony Bates, new eBay board member Industry: Consumer Goods Sector: Electronics Founded: 2004 Headquartered: San Mateo, CA Key Financials12/31/14 Revenue1,394,205,000 Operating Profit187,000,000 Net Income128,088,000 Assets917,700,000 Outstanding shares129,100,000 Earnings per share0.99 Dividend per sharen/a Capital Structure* % Debt128,240,28020% Equity512,961,12080% D/E Ratio0.25 DuPont Analysis Profit Margin0.09 Asset Turnover1.52 Equity Multiplier1.79 ROE3.4% Market Pricing Price per share$40.40 Market Cap5,220,000,000 Price/Earnings$40.72 Price/Sales3.74 Price/Book10.17 Cost of Capital Beta0.61 Ke5.55% ROE3.4% Credit RatingA- Kdt2.5% WACC4.94% ROI1.29% *Since debt for 2014 is zero, a stable capital structure is estimated. Kdt and WACC are therefore estimated figures for 2015

Relative Valuation Methods CompanyMarket Cap $BP/EPEGP/SalesP/Book GoPro (GPRO) $ Sony (SNE) $ Eastman Kodiak (KODK) $ Garmin (GRMN) $ Orbotech Lmt. (ORBK) $ Parrot SA (PARRO.PA) $ Hewlett-Packard Co. (HPQ) $ Digital Ally Inc. (DGLY) $ Median Range* Nelson – BUS 4922 – Valuation Project – Page II P/EPEGP/SalesP/Book Base for GPRO0.9925% Estimated Multiples Relative Valution Estimate$5 B *Negative P/E and PEG are not included because data is not valid and GPRO is not included P/S Multiple is used in final valuation

Nelson – BUS 4922 – Valuation Project – Page III Intrinsic Valuation Methods, Summery Valuation & Recommendations Actual Forecast (in millions)12/31/ Revenue1, , , , , , Gross Profit Operating Expense1, , , , , , EBIT Tax Rate29%35% NOPAT Total Capital Change in Total Capital Free Cash Flow Return on Operating Capital ROI WACC4.94% Terminal Growth3% Terminal Value FCF + Terminal Value Value of operations $6, Add Short Term Investments Less Debt 0 Intrinsic Value Estimation $6, Summary Relative Valuation ($M)3,559,405,365 Intrinsic Valuation ($M)6,994,600,000 Valuation estimate ($M)5,277,002,683 Fully-dilluted Shares129,100,000 Value per Share40.88 Current Price per Share$40.40 Value relative to Price1.18% At the current price, GoPro looks overvalued. GoPro is in a critical period where its next steps determine the fate of this company. GoPro should acquire some debt, diversify its products, and have a plan for the upcoming drone market. Investors are advised to revisit the stock in about 1 ½ years to make buy/sell decision. Recommendation: Hold

Sources Nelson – BUS 4922 – Valuation Project – Page IV SLIDE I FinancialsReference USA Analyst Recommendations BetaYahoo Finance: 0.66 NASDAQ: 0.55 MorningStar: 0.0 Google Finance: - Average: 0.61 Credit Rating (estimated)A- Spreads (Reuters)89bps NewsReference USA SLIDE II Comparables MarketWatch & NASDAQ Ratios (comparables) Yahoo Finance & Ref USA