Oracle Corporation (ORCL)
Discount cash flow analysis
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $50.02 | $48.76 | $47.57 | |
| Terminal Growth% | 0 | $50.82 | $49.52 | $48.28 |
| +1% | $51.64 | $50.29 | $49.02 |
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 $20.73 (overvalued by 17.25%) - 8 hours ago
- noura created a new valuation of $25.51 (undervalued by 2.24%) - 2 months ago
- noura created a new valuation of $49.52 (undervalued by 139.0%) - 5 months ago
- noura created a new valuation of $49.52 (undervalued by 139.0%) - 5 months ago
- noura created a new valuation of $52.92 (undervalued by 155.41%) - 5 months ago
- laguerriere created a new valuation of $19.62 (overvalued by 4.62%) - 8 months ago
- SethWellbourne created a new valuation of $21.95 (undervalued by 24.29%) - 11 months ago
- GordonGekko created a new valuation of $19.27 (undervalued by 39.13%) - 1 year ago
- balli created a new valuation of $18.14 (undervalued by 30.97%) - 1 year ago
- balli created a new valuation of $22.53 (undervalued by 62.67%) - 1 year ago
- balli created a new valuation of $20.58 (undervalued by 48.59%) - 1 year ago
- TheCrunchBlog created a new valuation of $24.14 (undervalued by 12.7%) - 1 year ago
- KiwiEMH created a new valuation of $24.66 (undervalued by 9.36%) - 1 year ago
- GordonGekko created a new valuation of $21.64 (undervalued by 2.56%) - 1 year ago
- silas created a new valuation of $15.43 (overvalued by 28.27%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 123,193 |
| Net Debt (Long-term borrowings less cash): | -2,386 |
| Equity Value: | 103,872 |
| Number of Shares Outstanding: | 5,013,000,000 |
| Calculated value per share: | $49.52 |
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.