Starbucks Corporation (SBUX)
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $13.13 | $12.95 | $12.77 | |
| Terminal Growth% | 0 | $13.20 | $13.02 | $12.84 |
| +1% | $13.27 | $13.09 | $12.91 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $13.02 (overvalued by 40.58%) - 1 hour ago
- mlillard created a new valuation of $12.17 (overvalued by 44.15%) - 7 days ago
- smdet created a new valuation of $25.79 (undervalued by 35.88%) - 3 months ago
- smdet created a new valuation of $25.79 (undervalued by 35.88%) - 3 months ago
- GordonGekko created a new valuation of $11.95 (overvalued by 38.72%) - 5 months ago
- SethWellbourne created a new valuation of $7.52 (overvalued by 33.21%) - 10 months ago
- GordonGekko created a new valuation of $11.73 (undervalued by 40.31%) - 11 months ago
- rileyj98 created a new valuation of $17.00 (undervalued by 103.35%) - 11 months ago
- GordonGekko created a new valuation of $17.00 (undervalued by 8.01%) - 1 year ago
- TheCrunchBlog created a new valuation of $15.07 (overvalued by 4.26%) - 1 year ago
- GordonGekko created a new valuation of $17.63 (overvalued by 0.79%) - 1 year ago
- Sam created a new valuation of $18.45 (undervalued by 2.22%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 16,171 |
| Net Debt (Long-term borrowings less cash): | -116 |
| Equity Value: | 16,287 |
| Number of Shares Outstanding: | 743,000,000 |
| Calculated value per share: | $13.02 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.