Intrinsic value of TD Ameritrade Holding - AMTD

Previous Close

$55.17

  Intrinsic Value

$205.54

stock screener

  Rating & Target

str. buy

+273%

Previous close

$55.17

 
Intrinsic value

$205.54

 
Up/down potential

+273%

 
Rating

str. buy

Our model is not good at valuating stocks of financial companies, such as AMTD.

We calculate the intrinsic value of AMTD 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.49
  18.40
  17.06
  15.85
  14.77
  13.79
  12.91
  12.12
  11.41
  10.77
  10.19
  9.67
  9.21
  8.78
  8.41
  8.07
  7.76
  7.48
  7.23
  7.01
  6.81
  6.63
  6.47
  6.32
  6.19
  6.07
  5.96
  5.87
  5.78
  5.70
  5.63
Revenue, $m
  3,676
  4,352
  5,095
  5,903
  6,774
  7,709
  8,704
  9,759
  10,873
  12,043
  13,271
  14,554
  15,894
  17,290
  18,744
  20,255
  21,827
  23,460
  25,158
  26,922
  28,755
  30,661
  32,644
  34,707
  36,854
  39,091
  41,422
  43,851
  46,386
  49,030
  51,791
Variable operating expenses, $m
 
  2,443
  2,787
  3,162
  3,567
  4,001
  4,463
  4,953
  5,470
  6,014
  6,584
  6,759
  7,381
  8,029
  8,704
  9,406
  10,136
  10,895
  11,683
  12,502
  13,354
  14,239
  15,160
  16,118
  17,115
  18,154
  19,236
  20,364
  21,541
  22,769
  24,051
Fixed operating expenses, $m
 
  87
  89
  92
  94
  96
  99
  101
  104
  106
  109
  112
  114
  117
  120
  123
  126
  129
  133
  136
  139
  143
  146
  150
  154
  158
  162
  166
  170
  174
  178
Total operating expenses, $m
  2,211
  2,530
  2,876
  3,254
  3,661
  4,097
  4,562
  5,054
  5,574
  6,120
  6,693
  6,871
  7,495
  8,146
  8,824
  9,529
  10,262
  11,024
  11,816
  12,638
  13,493
  14,382
  15,306
  16,268
  17,269
  18,312
  19,398
  20,530
  21,711
  22,943
  24,229
Operating income, $m
  1,465
  1,823
  2,218
  2,649
  3,113
  3,611
  4,142
  4,705
  5,299
  5,923
  6,578
  7,684
  8,399
  9,144
  9,919
  10,726
  11,565
  12,436
  13,342
  14,284
  15,262
  16,280
  17,338
  18,439
  19,586
  20,780
  22,024
  23,322
  24,675
  26,087
  27,561
EBITDA, $m
  1,646
  2,315
  2,723
  3,167
  3,646
  4,159
  4,706
  5,286
  5,898
  6,542
  7,216
  7,922
  8,659
  9,427
  10,226
  11,058
  11,922
  12,820
  13,754
  14,724
  15,733
  16,782
  17,873
  19,008
  20,189
  21,420
  22,703
  24,040
  25,434
  26,890
  28,410
Interest expense (income), $m
  59
  89
  290
  511
  752
  1,011
  1,289
  1,586
  1,900
  2,231
  2,580
  2,945
  3,327
  3,726
  4,141
  4,574
  5,024
  5,492
  5,978
  6,483
  7,008
  7,554
  8,122
  8,712
  9,326
  9,965
  10,631
  11,325
  12,048
  12,802
  13,590
Earnings before tax, $m
  1,394
  1,733
  1,928
  2,138
  2,362
  2,600
  2,853
  3,119
  3,399
  3,692
  3,998
  4,739
  5,072
  5,418
  5,778
  6,152
  6,540
  6,944
  7,364
  7,800
  8,254
  8,725
  9,216
  9,727
  10,260
  10,815
  11,393
  11,997
  12,627
  13,285
  13,972
Tax expense, $m
  522
  468
  521
  577
  638
  702
  770
  842
  918
  997
  1,080
  1,280
  1,369
  1,463
  1,560
  1,661
  1,766
  1,875
  1,988
  2,106
  2,228
  2,356
  2,488
  2,626
  2,770
  2,920
  3,076
  3,239
  3,409
  3,587
  3,772
Net income, $m
  872
  1,265
  1,408
  1,560
  1,724
  1,898
  2,083
  2,277
  2,481
  2,695
  2,919
  3,459
  3,702
  3,955
  4,218
  4,491
  4,775
  5,069
  5,376
  5,694
  6,025
  6,370
  6,728
  7,101
  7,490
  7,895
  8,317
  8,758
  9,218
  9,698
  10,199

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,472
  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
  38,627
  43,963
  51,464
  59,623
  68,428
  77,866
  87,920
  98,577
  109,824
  121,650
  134,048
  147,013
  160,546
  174,649
  189,331
  204,601
  220,476
  236,974
  254,119
  271,936
  290,455
  309,709
  329,736
  350,574
  372,266
  394,858
  418,400
  442,942
  468,541
  495,254
  523,142
Adjusted assets (=assets-cash), $m
  37,155
  43,963
  51,464
  59,623
  68,428
  77,866
  87,920
  98,577
  109,824
  121,650
  134,048
  147,013
  160,546
  174,649
  189,331
  204,601
  220,476
  236,974
  254,119
  271,936
  290,455
  309,709
  329,736
  350,574
  372,266
  394,858
  418,400
  442,942
  468,541
  495,254
  523,142
Revenue / Adjusted assets
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
  0.099
Average production assets, $m
  1,662
  1,967
  2,303
  2,668
  3,062
  3,484
  3,934
  4,411
  4,914
  5,444
  5,998
  6,579
  7,184
  7,815
  8,472
  9,155
  9,866
  10,604
  11,371
  12,169
  12,997
  13,859
  14,755
  15,687
  16,658
  17,669
  18,723
  19,821
  20,966
  22,162
  23,410
Working capital, $m
  0
  -1,628
  -1,905
  -2,208
  -2,534
  -2,883
  -3,255
  -3,650
  -4,066
  -4,504
  -4,963
  -5,443
  -5,944
  -6,467
  -7,010
  -7,576
  -8,163
  -8,774
  -9,409
  -10,069
  -10,754
  -11,467
  -12,209
  -12,980
  -13,784
  -14,620
  -15,492
  -16,400
  -17,348
  -18,337
  -19,370
Total debt, $m
  2,652
  8,289
  14,604
  21,474
  28,888
  36,835
  45,301
  54,274
  63,744
  73,701
  84,140
  95,057
  106,452
  118,327
  130,688
  143,546
  156,913
  170,804
  185,240
  200,242
  215,835
  232,047
  248,910
  266,455
  284,720
  303,743
  323,565
  344,229
  365,783
  388,275
  411,758
Total liabilities, $m
  31,380
  37,017
  43,332
  50,202
  57,616
  65,563
  74,029
  83,002
  92,472
  102,429
  112,868
  123,785
  135,180
  147,055
  159,416
  172,274
  185,641
  199,532
  213,968
  228,970
  244,563
  260,775
  277,638
  295,183
  313,448
  332,471
  352,293
  372,957
  394,511
  417,003
  440,486
Total equity, $m
  7,247
  6,946
  8,131
  9,420
  10,812
  12,303
  13,891
  15,575
  17,352
  19,221
  21,180
  23,228
  25,366
  27,595
  29,914
  32,327
  34,835
  37,442
  40,151
  42,966
  45,892
  48,934
  52,098
  55,391
  58,818
  62,388
  66,107
  69,985
  74,029
  78,250
  82,656
Total liabilities and equity, $m
  38,627
  43,963
  51,463
  59,622
  68,428
  77,866
  87,920
  98,577
  109,824
  121,650
  134,048
  147,013
  160,546
  174,650
  189,330
  204,601
  220,476
  236,974
  254,119
  271,936
  290,455
  309,709
  329,736
  350,574
  372,266
  394,859
  418,400
  442,942
  468,540
  495,253
  523,142
Debt-to-equity ratio
  0.366
  1.190
  1.800
  2.280
  2.670
  2.990
  3.260
  3.480
  3.670
  3.830
  3.970
  4.090
  4.200
  4.290
  4.370
  4.440
  4.500
  4.560
  4.610
  4.660
  4.700
  4.740
  4.780
  4.810
  4.840
  4.870
  4.890
  4.920
  4.940
  4.960
  4.980
Adjusted equity ratio
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158
  0.158

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  872
  1,265
  1,408
  1,560
  1,724
  1,898
  2,083
  2,277
  2,481
  2,695
  2,919
  3,459
  3,702
  3,955
  4,218
  4,491
  4,775
  5,069
  5,376
  5,694
  6,025
  6,370
  6,728
  7,101
  7,490
  7,895
  8,317
  8,758
  9,218
  9,698
  10,199
Depreciation, amort., depletion, $m
  181
  493
  505
  518
  532
  548
  564
  581
  599
  619
  639
  238
  260
  283
  307
  332
  357
  384
  412
  441
  471
  502
  535
  568
  604
  640
  678
  718
  760
  803
  848
Funds from operations, $m
  296
  1,758
  1,912
  2,078
  2,256
  2,446
  2,646
  2,858
  3,081
  3,314
  3,557
  3,698
  3,963
  4,238
  4,525
  4,823
  5,132
  5,454
  5,788
  6,135
  6,496
  6,872
  7,263
  7,669
  8,093
  8,535
  8,995
  9,476
  9,977
  10,501
  11,048
Change in working capital, $m
  -391
  -253
  -278
  -302
  -326
  -349
  -372
  -395
  -416
  -438
  -459
  -480
  -501
  -522
  -544
  -565
  -588
  -611
  -635
  -660
  -686
  -713
  -742
  -772
  -803
  -837
  -872
  -909
  -948
  -989
  -1,033
Cash from operations, $m
  687
  2,011
  2,190
  2,380
  2,582
  2,795
  3,019
  3,253
  3,497
  3,752
  4,016
  4,178
  4,464
  4,760
  5,068
  5,388
  5,720
  6,064
  6,422
  6,795
  7,182
  7,585
  8,004
  8,441
  8,896
  9,371
  9,867
  10,385
  10,925
  11,490
  12,080
Maintenance CAPEX, $m
  0
  -60
  -71
  -83
  -97
  -111
  -126
  -143
  -160
  -178
  -197
  -217
  -238
  -260
  -283
  -307
  -332
  -357
  -384
  -412
  -441
  -471
  -502
  -535
  -568
  -604
  -640
  -678
  -718
  -760
  -803
New CAPEX, $m
  -197
  -306
  -336
  -365
  -394
  -422
  -450
  -477
  -503
  -529
  -555
  -580
  -606
  -631
  -657
  -683
  -710
  -738
  -767
  -797
  -829
  -862
  -896
  -932
  -971
  -1,011
  -1,053
  -1,098
  -1,145
  -1,195
  -1,248
Cash from investing activities, $m
  -1,547
  -366
  -407
  -448
  -491
  -533
  -576
  -620
  -663
  -707
  -752
  -797
  -844
  -891
  -940
  -990
  -1,042
  -1,095
  -1,151
  -1,209
  -1,270
  -1,333
  -1,398
  -1,467
  -1,539
  -1,615
  -1,693
  -1,776
  -1,863
  -1,955
  -2,051
Free cash flow, $m
  -860
  1,645
  1,783
  1,932
  2,092
  2,262
  2,443
  2,633
  2,834
  3,044
  3,264
  3,380
  3,620
  3,869
  4,128
  4,398
  4,678
  4,969
  5,271
  5,585
  5,912
  6,252
  6,606
  6,974
  7,357
  7,757
  8,173
  8,608
  9,061
  9,535
  10,029
Issuance/(repayment) of debt, $m
  456
  5,734
  6,315
  6,870
  7,414
  7,946
  8,466
  8,973
  9,470
  9,958
  10,439
  10,917
  11,395
  11,875
  12,362
  12,858
  13,367
  13,892
  14,436
  15,002
  15,593
  16,212
  16,862
  17,546
  18,265
  19,023
  19,822
  20,665
  21,554
  22,492
  23,482
Issuance/(repurchase) of shares, $m
  396
  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  
  856
  5,734
  6,315
  6,870
  7,414
  7,946
  8,466
  8,973
  9,470
  9,958
  10,439
  10,917
  11,395
  11,875
  12,362
  12,858
  13,367
  13,892
  14,436
  15,002
  15,593
  16,212
  16,862
  17,546
  18,265
  19,023
  19,822
  20,665
  21,554
  22,492
  23,482
Total cash flow (excl. dividends), $m
  -4
  7,379
  8,098
  8,802
  9,506
  10,208
  10,908
  11,607
  12,304
  13,002
  13,703
  14,297
  15,014
  15,744
  16,490
  17,255
  18,044
  18,860
  19,707
  20,587
  21,505
  22,464
  23,468
  24,519
  25,622
  26,780
  27,995
  29,273
  30,615
  32,027
  33,511
Retained Cash Flow (-), $m
  -2,196
  -1,074
  -1,185
  -1,289
  -1,391
  -1,491
  -1,589
  -1,684
  -1,777
  -1,869
  -1,959
  -2,049
  -2,138
  -2,228
  -2,320
  -2,413
  -2,508
  -2,607
  -2,709
  -2,815
  -2,926
  -3,042
  -3,164
  -3,292
  -3,427
  -3,570
  -3,720
  -3,878
  -4,045
  -4,221
  -4,406
Prev. year cash balance distribution, $m
 
  1,375
  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
 
  7,680
  6,913
  7,513
  8,115
  8,717
  9,320
  9,923
  10,527
  11,133
  11,745
  12,249
  12,876
  13,516
  14,170
  14,843
  15,536
  16,254
  16,998
  17,772
  18,579
  19,422
  20,304
  21,227
  22,195
  23,210
  24,276
  25,395
  26,571
  27,806
  29,105
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
 
  7,363
  6,329
  6,538
  6,681
  6,757
  6,764
  6,704
  6,579
  6,396
  6,157
  5,817
  5,495
  5,139
  4,757
  4,358
  3,948
  3,537
  3,130
  2,736
  2,361
  2,009
  1,685
  1,391
  1,130
  903
  708
  545
  411
  304
  219
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

TD Ameritrade Holding Corporation is a provider of securities brokerage services and related technology-based financial services. The Company provides its services to retail investors, traders and independent registered investment advisors (RIAs). The Company provides its services through the Internet, a national branch network and relationships with RIAs. The Company's products and services include common and preferred stock, exchange-traded funds, options, futures, foreign exchange, mutual funds, fixed income, new and secondary issue securities, margin lending, cash management services and annuities. The Company uses its platform to offer brokerage services to retail investors and investment advisors. In addition, it also offers various products and services to retail clients, such as touch-tone trading, trading over the Internet, real-time quotes, extended trading hours and direct access to market destinations.

FINANCIAL RATIOS  of  TD Ameritrade Holding (AMTD)

Valuation Ratios
P/E Ratio 35.9
Price to Sales 8.5
Price to Book 4.3
Price to Tangible Book
Price to Cash Flow 45.5
Price to Free Cash Flow 63.8
Growth Rates
Sales Growth Rate 10.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 87.6%
Cap. Spend. - 3 Yr. Gr. Rate 6.5%
Financial Strength
Quick Ratio 15
Current Ratio NaN
LT Debt to Equity 35.3%
Total Debt to Equity 36.6%
Interest Coverage 25
Management Effectiveness
Return On Assets 2.7%
Ret/ On Assets - 3 Yr. Avg. 3.1%
Return On Total Capital 10.4%
Ret/ On T. Cap. - 3 Yr. Avg. 11.9%
Return On Equity 14.2%
Return On Equity - 3 Yr. Avg. 16%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 44.5%
EBITDA Margin - 3 Yr. Avg. 45.2%
Operating Margin 39.9%
Oper. Margin - 3 Yr. Avg. 40.1%
Pre-Tax Margin 37.9%
Pre-Tax Margin - 3 Yr. Avg. 38.5%
Net Profit Margin 23.7%
Net Profit Margin - 3 Yr. Avg. 24.7%
Effective Tax Rate 37.4%
Eff/ Tax Rate - 3 Yr. Avg. 35.9%
Payout Ratio 43.5%

AMTD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AMTD stock intrinsic value calculation we used $3676 million for the last fiscal year's total revenue generated by TD Ameritrade Holding. The default revenue input number comes from 2017 income statement of TD Ameritrade Holding. 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 AMTD stock valuation model: a) initial revenue growth rate of 18.4% 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 AMTD is calculated based on our internal credit rating of TD Ameritrade Holding, 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 TD Ameritrade Holding.
    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 AMTD stock the variable cost ratio is equal to 57.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $85 million in the base year in the intrinsic value calculation for AMTD 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 TD Ameritrade Holding.

Corporate tax rate of 27% is the nominal tax rate for TD Ameritrade Holding. 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 AMTD 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 AMTD are equal to 45.2%.

Life of production assets of 27.6 years is the average useful life of capital assets used in TD Ameritrade Holding 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 AMTD is equal to -37.4%. 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 - $7247 million for TD Ameritrade Holding - 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 570.702 million for TD Ameritrade Holding 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 TD Ameritrade Holding at the current share price and the inputted number of shares is $31.5 billion.

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Financial statements of AMTD
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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