close
How does this work?
Valuecruncher provides a starting point for your valuation by automatically generating estimates for each of the key inputs. You can modify these estimates with your own values and Valuecruncher will update the valuation.
Your Valuation
10 June 2008 |
93
views
Comments (1)
Valuation Details
| Member: | TheCrunchBlog |
| On: | 14 Aug 2008 |
| Views: | 93 |
| Comments: | 1 |
| Updated: | 3 hours ago |
| Ticker: | EXPE |
| Market: | NASD |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/08/expedia-expe-the-on-line-travel-site-looks-a-buy/
EXPE grew revenues from US$1.8 billion in 2004 to US$2.7 billion in 2007 – a 14% compound annual growth rate. Our assumptions of revenues for the next three years are US$3.0 billion in 2008 growing to US$3.75 billion in 2010 – a 12% compound annual growth rate (2007-10). We have projected EBITDA margins to be flat at 25% to 2010. We have used a terminal growth rate of 3.75%. We calculated this terminal growth rate based on year three (2009-10) growth of 10% dropping to a 3.0% stable growth rate by year 10. We used a terminal capital expenditure number of US$150 million. We have used a WACC (discount rate) of 12.0%.
The key assumptions as we see them are:
EXPE Revenues for the next three years. We believe that 12% per annum growth (2007-10) is a reasonable estimate.
EXPE WACC. We view EXPE’s WACC in the 11-13% range. We took a mid-point. This discount rate is intended to reflect the potential uncertainties of the EXPE cash flows in the near term.