Intrinsic value of Colliers International Group Inc. Subord - CIGI

Previous Close

$69.65

  Intrinsic Value

$120.26

stock screener

  Rating & Target

str. buy

+73%

  Value-price divergence*

0%

Previous close

$69.65

 
Intrinsic value

$120.26

 
Up/down potential

+73%

 
Rating

str. buy

 
Value-price divergence*

0%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of CIGI stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 2.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.14
  3.60
  3.74
  3.87
  3.98
  4.08
  4.17
  4.26
  4.33
  4.40
  4.46
  4.51
  4.56
  4.60
  4.64
  4.68
  4.71
  4.74
  4.77
  4.79
  4.81
  4.83
  4.85
  4.86
  4.88
  4.89
  4.90
  4.91
  4.92
  4.93
  4.93
Revenue, $m
  2,563
  2,655
  2,755
  2,861
  2,975
  3,096
  3,226
  3,363
  3,508
  3,663
  3,826
  3,999
  4,181
  4,374
  4,577
  4,791
  5,017
  5,254
  5,505
  5,768
  6,046
  6,338
  6,645
  6,968
  7,308
  7,665
  8,041
  8,436
  8,851
  9,287
  9,745
Variable operating expenses, $m
 
  1,663
  1,724
  1,788
  1,858
  1,932
  2,010
  2,094
  2,182
  2,276
  2,376
  2,434
  2,545
  2,662
  2,786
  2,916
  3,053
  3,198
  3,351
  3,511
  3,680
  3,858
  4,045
  4,241
  4,448
  4,666
  4,894
  5,134
  5,387
  5,652
  5,931
Fixed operating expenses, $m
 
  796
  816
  837
  858
  879
  901
  924
  947
  970
  995
  1,019
  1,045
  1,071
  1,098
  1,125
  1,153
  1,182
  1,212
  1,242
  1,273
  1,305
  1,338
  1,371
  1,405
  1,441
  1,477
  1,513
  1,551
  1,590
  1,630
Total operating expenses, $m
  2,365
  2,459
  2,540
  2,625
  2,716
  2,811
  2,911
  3,018
  3,129
  3,246
  3,371
  3,453
  3,590
  3,733
  3,884
  4,041
  4,206
  4,380
  4,563
  4,753
  4,953
  5,163
  5,383
  5,612
  5,853
  6,107
  6,371
  6,647
  6,938
  7,242
  7,561
Operating income, $m
  198
  196
  215
  236
  260
  286
  314
  345
  379
  416
  456
  545
  591
  640
  693
  749
  810
  874
  942
  1,015
  1,093
  1,175
  1,263
  1,356
  1,455
  1,559
  1,670
  1,788
  1,912
  2,044
  2,184
EBITDA, $m
  259
  266
  286
  308
  333
  360
  390
  422
  457
  495
  537
  581
  628
  679
  734
  792
  854
  921
  991
  1,066
  1,146
  1,231
  1,322
  1,418
  1,519
  1,627
  1,741
  1,863
  1,991
  2,126
  2,270
Interest expense (income), $m
  11
  12
  13
  15
  17
  19
  21
  24
  26
  29
  31
  34
  37
  41
  44
  48
  52
  56
  60
  65
  69
  74
  79
  85
  91
  97
  103
  110
  117
  125
  132
Earnings before tax, $m
  188
  183
  201
  221
  242
  267
  293
  322
  353
  387
  424
  511
  554
  600
  649
  702
  758
  818
  882
  951
  1,024
  1,101
  1,183
  1,271
  1,364
  1,462
  1,567
  1,678
  1,795
  1,920
  2,051
Tax expense, $m
  64
  50
  54
  60
  65
  72
  79
  87
  95
  105
  115
  138
  150
  162
  175
  189
  205
  221
  238
  257
  276
  297
  320
  343
  368
  395
  423
  453
  485
  518
  554
Net income, $m
  92
  134
  147
  161
  177
  195
  214
  235
  258
  283
  310
  373
  404
  438
  474
  512
  553
  597
  644
  694
  747
  804
  864
  928
  996
  1,067
  1,144
  1,225
  1,310
  1,401
  1,497

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  153
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  1,614
  1,514
  1,570
  1,631
  1,696
  1,765
  1,839
  1,917
  2,000
  2,088
  2,181
  2,280
  2,384
  2,493
  2,609
  2,731
  2,860
  2,996
  3,138
  3,289
  3,447
  3,613
  3,789
  3,973
  4,167
  4,370
  4,584
  4,809
  5,046
  5,295
  5,556
Adjusted assets (=assets-cash), $m
  1,461
  1,514
  1,570
  1,631
  1,696
  1,765
  1,839
  1,917
  2,000
  2,088
  2,181
  2,280
  2,384
  2,493
  2,609
  2,731
  2,860
  2,996
  3,138
  3,289
  3,447
  3,613
  3,789
  3,973
  4,167
  4,370
  4,584
  4,809
  5,046
  5,295
  5,556
Revenue / Adjusted assets
  1.754
  1.754
  1.755
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.755
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
  1.754
Average production assets, $m
  262
  271
  281
  292
  303
  316
  329
  343
  358
  374
  390
  408
  426
  446
  467
  489
  512
  536
  561
  588
  617
  646
  678
  711
  745
  782
  820
  860
  903
  947
  994
Working capital, $m
  19
  -135
  -140
  -146
  -152
  -158
  -165
  -172
  -179
  -187
  -195
  -204
  -213
  -223
  -233
  -244
  -256
  -268
  -281
  -294
  -308
  -323
  -339
  -355
  -373
  -391
  -410
  -430
  -451
  -474
  -497
Total debt, $m
  355
  381
  432
  487
  545
  608
  674
  745
  819
  898
  982
  1,071
  1,164
  1,263
  1,367
  1,477
  1,593
  1,715
  1,844
  1,979
  2,121
  2,271
  2,429
  2,595
  2,769
  2,952
  3,145
  3,347
  3,560
  3,784
  4,019
Total liabilities, $m
  1,336
  1,362
  1,413
  1,468
  1,526
  1,589
  1,655
  1,726
  1,800
  1,879
  1,963
  2,052
  2,145
  2,244
  2,348
  2,458
  2,574
  2,696
  2,825
  2,960
  3,102
  3,252
  3,410
  3,576
  3,750
  3,933
  4,126
  4,328
  4,541
  4,765
  5,000
Total equity, $m
  278
  151
  157
  163
  170
  177
  184
  192
  200
  209
  218
  228
  238
  249
  261
  273
  286
  300
  314
  329
  345
  361
  379
  397
  417
  437
  458
  481
  505
  529
  556
Total liabilities and equity, $m
  1,614
  1,513
  1,570
  1,631
  1,696
  1,766
  1,839
  1,918
  2,000
  2,088
  2,181
  2,280
  2,383
  2,493
  2,609
  2,731
  2,860
  2,996
  3,139
  3,289
  3,447
  3,613
  3,789
  3,973
  4,167
  4,370
  4,584
  4,809
  5,046
  5,294
  5,556
Debt-to-equity ratio
  1.277
  2.520
  2.750
  2.990
  3.220
  3.440
  3.670
  3.880
  4.100
  4.300
  4.500
  4.700
  4.880
  5.070
  5.240
  5.410
  5.570
  5.730
  5.870
  6.020
  6.150
  6.290
  6.410
  6.530
  6.650
  6.760
  6.860
  6.960
  7.060
  7.150
  7.230
Adjusted equity ratio
  0.086
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  92
  134
  147
  161
  177
  195
  214
  235
  258
  283
  310
  373
  404
  438
  474
  512
  553
  597
  644
  694
  747
  804
  864
  928
  996
  1,067
  1,144
  1,225
  1,310
  1,401
  1,497
Depreciation, amort., depletion, $m
  61
  71
  71
  72
  73
  74
  76
  77
  78
  79
  81
  35
  37
  39
  41
  42
  44
  47
  49
  51
  54
  56
  59
  62
  65
  68
  71
  75
  79
  82
  86
Funds from operations, $m
  204
  204
  218
  234
  250
  269
  289
  312
  336
  362
  391
  408
  441
  477
  514
  555
  598
  644
  693
  745
  801
  860
  923
  990
  1,060
  1,135
  1,215
  1,300
  1,389
  1,484
  1,584
Change in working capital, $m
  -7
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
Cash from operations, $m
  211
  224
  223
  239
  256
  275
  296
  319
  343
  370
  399
  417
  451
  486
  525
  566
  609
  656
  706
  759
  815
  875
  938
  1,006
  1,078
  1,154
  1,234
  1,320
  1,410
  1,506
  1,607
Maintenance CAPEX, $m
  0
  -23
  -24
  -24
  -25
  -26
  -27
  -29
  -30
  -31
  -32
  -34
  -35
  -37
  -39
  -41
  -42
  -44
  -47
  -49
  -51
  -54
  -56
  -59
  -62
  -65
  -68
  -71
  -75
  -79
  -82
New CAPEX, $m
  -34
  -9
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -23
  -24
  -26
  -27
  -28
  -30
  -31
  -33
  -35
  -36
  -38
  -40
  -42
  -44
  -47
Cash from investing activities, $m
  -181
  -32
  -34
  -35
  -37
  -38
  -40
  -43
  -45
  -47
  -49
  -52
  -54
  -57
  -60
  -63
  -65
  -68
  -73
  -76
  -79
  -84
  -87
  -92
  -97
  -101
  -106
  -111
  -117
  -123
  -129
Free cash flow, $m
  30
  192
  190
  204
  219
  236
  255
  276
  299
  323
  350
  366
  397
  430
  465
  503
  544
  587
  634
  683
  736
  791
  851
  914
  981
  1,052
  1,128
  1,208
  1,293
  1,383
  1,478
Issuance/(repayment) of debt, $m
  23
  29
  51
  55
  58
  62
  66
  70
  75
  79
  84
  89
  94
  99
  104
  110
  116
  122
  129
  135
  142
  150
  158
  166
  174
  183
  193
  203
  213
  224
  235
Issuance/(repurchase) of shares, $m
  4
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -15
  29
  51
  55
  58
  62
  66
  70
  75
  79
  84
  89
  94
  99
  104
  110
  116
  122
  129
  135
  142
  150
  158
  166
  174
  183
  193
  203
  213
  224
  235
Total cash flow (excl. dividends), $m
  1
  222
  241
  258
  278
  299
  322
  347
  373
  402
  434
  454
  490
  528
  569
  613
  660
  709
  762
  818
  878
  941
  1,009
  1,080
  1,156
  1,236
  1,321
  1,411
  1,506
  1,607
  1,713
Retained Cash Flow (-), $m
  -87
  -23
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -14
  -15
  -16
  -17
  -18
  -18
  -19
  -20
  -21
  -23
  -24
  -25
  -26
Prev. year cash balance distribution, $m
 
  150
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  349
  235
  252
  271
  292
  314
  339
  365
  394
  424
  444
  480
  517
  558
  601
  647
  696
  748
  803
  862
  925
  991
  1,061
  1,136
  1,215
  1,299
  1,388
  1,482
  1,582
  1,687
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  334
  215
  220
  223
  226
  228
  229
  228
  226
  222
  211
  205
  197
  187
  176
  164
  151
  138
  124
  110
  96
  82
  70
  58
  47
  38
  30
  23
  17
  13
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Colliers International Group Inc. provides commercial real estate services to real estate occupiers, owners, and investors worldwide. The company’s Sales and Lease Brokerage Division offers transaction brokerage services, including landlord representation, tenant representation, and capital markets and investment services, as well as property management, leasing, and valuations. This division provides its services for various asset classes, including office, industrial, retail, multi-family, hotel and mixed-use properties. Its Outsourcing & Advisory Services Division offers corporate solutions, such as portfolio management, transaction management, project management, workplace solutions, strategic consulting, property and asset management, and other corporate real estate services, as well as lease administration and facilities management systems; valuation and advisory services comprising valuation and appraisal review and management, portfolio or single asset valuation, arbitration and consulting, various studies, tax appeals, and litigation support; property and asset management services consisting of property level accounting, tenant service/relations and bidding, awarding and administering subcontracts for management and maintenance, landscaping, security, parking, capital, and tenant improvements. This division also provides project management services, including bid document review, construction monitoring and delivery management, contract administration and integrated cost control, facility and engineering functionality, milestone and performance monitoring, quality assurance, risk management, and strategic project consulting; workplace solutions, such as visioning, change management, and strategic consulting services; property marketing services for commercial and residential projects; and research services for owners and landlords. The company was founded in 1972 and is headquartered in Toronto, Canada.

FINANCIAL RATIOS  of  Colliers International Group Inc. Subord (CIGI)

Valuation Ratios
P/E Ratio 29.3
Price to Sales 1.1
Price to Book 9.7
Price to Tangible Book
Price to Cash Flow 12.8
Price to Free Cash Flow 15.2
Growth Rates
Sales Growth Rate 10.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 13.3%
Cap. Spend. - 3 Yr. Gr. Rate -6.3%
Financial Strength
Quick Ratio 51
Current Ratio 0
LT Debt to Equity 126.6%
Total Debt to Equity 127.7%
Interest Coverage 18
Management Effectiveness
Return On Assets 6.4%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital 15.6%
Ret/ On T. Cap. - 3 Yr. Avg. 9.7%
Return On Equity 39.2%
Return On Equity - 3 Yr. Avg. 23.6%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 37.8%
Gross Margin - 3 Yr. Avg. 39.1%
EBITDA Margin 10.1%
EBITDA Margin - 3 Yr. Avg. 8.2%
Operating Margin 7.7%
Oper. Margin - 3 Yr. Avg. 5.8%
Pre-Tax Margin 7.3%
Pre-Tax Margin - 3 Yr. Avg. 5.4%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 2.6%
Effective Tax Rate 34%
Eff/ Tax Rate - 3 Yr. Avg. 34.6%
Payout Ratio 5.4%

CIGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIGI stock intrinsic value calculation we used $2563 million for the last fiscal year's total revenue generated by Colliers International Group Inc. Subord. The default revenue input number comes from 2016 income statement of Colliers International Group Inc. Subord. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our CIGI stock valuation model: a) initial revenue growth rate of 3.6% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for CIGI is calculated based on our internal credit rating of Colliers International Group Inc. Subord, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Colliers International Group Inc. Subord.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of CIGI stock the variable cost ratio is equal to 62.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $777 million in the base year in the intrinsic value calculation for CIGI stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Colliers International Group Inc. Subord.

Corporate tax rate of 27% is the nominal tax rate for Colliers International Group Inc. Subord. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the CIGI stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for CIGI are equal to 10.2%.

Life of production assets of 11.5 years is the average useful life of capital assets used in Colliers International Group Inc. Subord operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for CIGI is equal to -5.1%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $278 million for Colliers International Group Inc. Subord - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 37.549 million for Colliers International Group Inc. Subord is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Colliers International Group Inc. Subord at the current share price and the inputted number of shares is $2.6 billion.

Stock chart of CIGI Financial statements of CIGI
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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