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Your Valuation
10 June 2008 |
185
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Comments (1)
Valuation Details
| Member: | TheCrunchBlog |
| On: | 06 Oct 2008 |
| Views: | 185 |
| Comments: | 1 |
| Updated: | 4 hours ago |
| Ticker: | DELL |
| Market: | NASD |
This valuation is part of this blog post:
http://blog.valuecruncher.com/2008/10/running-the-numbers-dell-has-fallen-too-far/
Our assumptions are revenues of US$65.0 billion in 2009 growing to US$70.0 billion in 2011. We have used a flat EBITDA margin of 6.5% to 2010 and then 7% in 2011. Our terminal growth rate is 3.0%. We used a terminal capital expenditure number of US$800 million. Our WACC (discount rate) is 12.0%. All of these assumptions can be amended in the Valuecruncher on-line valuation model to adjust the valuation. Our analysis incorporates the cash and debt on the $DELL balance sheet – Valuecruncher calculates a net debt number.
We believe that our assumptions are reasonably conservative. The near-term revenues and profitability are very achievable. The terminal growth rate is about the US economic long-term growth rate. The discount rate of 12% is reasonably high reflecting the uncertainty around $DELL.