Oracle Corporation (ORCL)
Discount cash flow analysis
Sensitivity matrix
|
-1% |
Discount Rate % 0% |
1% |
||
|---|---|---|---|---|
| -1% | $21.84 | $21.53 | $21.23 | |
| Terminal Growth% | 0 | $21.95 | $21.64 | $21.33 |
| +1% | $22.07 | $21.74 | $21.43 |
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 $19.92 (overvalued by 11.94%) - 13 hours ago
- noura created a new valuation of $25.51 (undervalued by 2.24%) - 8 months ago
- noura created a new valuation of $49.52 (undervalued by 139.0%) - 10 months ago
- noura created a new valuation of $49.52 (undervalued by 139.0%) - 10 months ago
- noura created a new valuation of $52.92 (undervalued by 155.41%) - 10 months ago
- laguerriere created a new valuation of $19.62 (overvalued by 4.62%) - 1 year ago
- SethWellbourne created a new valuation of $21.95 (undervalued by 24.29%) - 1 year 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%) - over 2 years ago
- KiwiEMH created a new valuation of $24.66 (undervalued by 9.36%) - over 2 years ago
- GordonGekko created a new valuation of $21.64 (undervalued by 2.56%) - over 2 years ago
- silas created a new valuation of $15.43 (overvalued by 28.27%) - over 2 years ago
Comments
The boring details
| All amounts in millions | Figures |
| Enterprise Value: | 117,100 |
| Net Debt (Long-term borrowings less cash): | 573 |
| Equity Value: | 108,697 |
| Number of Shares Outstanding: | 5,151,000,000 |
| Calculated value per share: | $21.64 |
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.
WACC at 12.5% - variability in the enterprise software market. Terminal growth at 4.5% - growth opportunities remain. Solid margins - ~50%.