Cisco Systems, Inc. (CSCO)
Discount cash flow analysis
5% margin of safety What's this?
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $24.05 | $23.73 | $23.42 | |
| Terminal Growth% | 0 | $24.17 | $23.84 | $23.53 |
| +1% | $24.28 | $23.96 | $23.64 |
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 $4.77 (overvalued by 81.57%) - 7 hours ago
- sartzberger created a new valuation of $18.45 (overvalued by 19.68%) - 1 month ago
- ecombarnardnet created a new valuation of $21.76 (overvalued by 3.59%) - 7 months ago
- Lespe959 created a new valuation of $20.57 (undervalued by 9.88%) - 10 months ago
- SethWellbourne created a new valuation of $10.01 (overvalued by 38.63%) - 11 months ago
- GordonGekko created a new valuation of $20.39 (undervalued by 20.29%) - 11 months ago
- GordonGekko created a new valuation of $20.44 (undervalued by 20.59%) - 11 months ago
- savov created a new valuation of $16.72 (overvalued by 1.53%) - 11 months ago
- GordonGekko created a new valuation of $19.60 (undervalued by 19.15%) - 1 year ago
- charmonman created a new valuation of $21.40 (undervalued by 24.56%) - 1 year ago
- KiwiEMH created a new valuation of $17.84 (undervalued by 2.47%) - 1 year ago
- DharmaWarrior created a new valuation of $30.20 (undervalued by 38.53%) - 1 year ago
- TheCrunchBlog created a new valuation of $28.51 (undervalued by 19.14%) - 1 year ago
- GordonGekko created a new valuation of $29.73 (undervalued by 24.24%) - 1 year ago
- KiwiEMH created a new valuation of $22.24 (undervalued by 0.32%) - 1 year ago
- GordonGekko created a new valuation of $23.84 (undervalued by 9.56%) - 1 year ago
- GordonGekko created a new valuation of $26.92 (undervalued by 0.94%) - 1 year ago
- silas created a new valuation of $18.26 (overvalued by 27.97%) - 1 year ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 137,018 |
| Net Debt (Long-term borrowings less cash): | -15,858 |
| Equity Value: | 137,400 |
| Number of Shares Outstanding: | 5,907,000,000 |
| Calculated value per share: | $23.84 |
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.