A DCF only requires 4 inputs: Free Cash Flow starting point, FCF growth, terminal value growth rate, and the discount rate.Any operating margin assumptions you want to make would be factored into that FCF start value and growth rate.
Hope that helps!Mike
Another good idea we're open to votes on. We've gone back and forth over time showing FCF DCF or Owner Earnings DCF as the default, as well as whether to show the TTM or most recent annual. It could be cool if people wanted to set their own default configuration.
Open to votes on this one. We do have on our list to improve charting, and showing various Price metrics on the Price chart is on the list.
You can think of Owner Earnings as a more conservative version of Free Cash Flow. In this case, in the trailing 12 months, WBA's Owner Earnings is almost $2B less than its FCF. This appears to mostly be a blip, as in general, FCF and OE for WBA track pretty closely, so you should probably look into why there's a big divergence. Anyway, in this case, the default DCF settings use the TTM Owner Earnings, which is much lower. This results in a lower present value of the enterprise, so when you subtract out debt, the value of the equity goes below zero. This may not be representative of the go-forward cash flows, though, so I suggest you think about whether the $2.5B or something more like $4-4.5B is a better starting point for cash flows.
We answered this over email but didn't see that it was posted here, too.
The answer is that the 20.23% growth needs to be represented as 20.23 not .2023, like the other percentages (1.64 and 4.4).
I'm open to it, but I'm not sure how we would surface this in the app. This information is pretty freely available and posted elsewhere and I don't immediately see where it would make sense to add this. Let me know what you'd like to see.
Earnings are negative now, but free cash flow, the default input to the DCF, is positive. You can review the cash flow statement to see the deltas between earnings and FCF.
This was added. Cleaning up.
We hope to expand markets to include the ASX someday, but we don't have it currently.
You can just add the company name to your default report on that page, if you want it there. Just hit "Edit" underneath the tickers and search for company name.
Customer support service by UserEcho