Intrinsic value of Autohome ADR - ATHM

Previous Close

$34.60

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$34.60

 
Intrinsic value

$879.33

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying

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

We calculate the intrinsic value of ATHM 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 3.9

 

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, %
  72.06
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  862
  1,379
  2,131
  3,187
  4,624
  6,523
  8,968
  12,038
  15,807
  20,339
  25,690
  31,901
  39,003
  47,011
  55,934
  65,768
  76,504
  88,127
  100,616
  113,953
  128,117
  143,090
  158,856
  175,403
  192,723
  210,814
  229,679
  249,325
  269,765
  291,018
  313,108
Variable operating expenses, $m
 
  902
  1,394
  2,084
  3,024
  4,266
  5,865
  7,873
  10,338
  13,302
  16,801
  20,864
  25,508
  30,745
  36,581
  43,013
  50,034
  57,635
  65,803
  74,526
  83,789
  93,581
  103,892
  114,713
  126,041
  137,873
  150,210
  163,058
  176,426
  190,326
  204,773
Fixed operating expenses, $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
Total operating expenses, $m
  696
  902
  1,394
  2,084
  3,024
  4,266
  5,865
  7,873
  10,338
  13,302
  16,801
  20,864
  25,508
  30,745
  36,581
  43,013
  50,034
  57,635
  65,803
  74,526
  83,789
  93,581
  103,892
  114,713
  126,041
  137,873
  150,210
  163,058
  176,426
  190,326
  204,773
Operating income, $m
  167
  477
  737
  1,103
  1,600
  2,257
  3,103
  4,165
  5,469
  7,037
  8,889
  11,038
  13,495
  16,266
  19,353
  22,756
  26,471
  30,492
  34,813
  39,428
  44,329
  49,509
  54,964
  60,689
  66,682
  72,942
  79,469
  86,266
  93,339
  100,692
  108,335
EBITDA, $m
  175
  484
  748
  1,118
  1,622
  2,289
  3,147
  4,224
  5,546
  7,136
  9,014
  11,193
  13,684
  16,494
  19,625
  23,076
  26,842
  30,920
  35,302
  39,982
  44,951
  50,205
  55,736
  61,542
  67,619
  73,967
  80,585
  87,478
  94,650
  102,107
  109,857
Interest expense (income), $m
  0
  0
  9
  22
  41
  66
  100
  143
  197
  264
  344
  439
  548
  674
  815
  973
  1,146
  1,336
  1,541
  1,762
  1,997
  2,248
  2,512
  2,790
  3,083
  3,389
  3,708
  4,041
  4,388
  4,749
  5,125
Earnings before tax, $m
  181
  477
  728
  1,080
  1,559
  2,191
  3,003
  4,022
  5,272
  6,773
  8,545
  10,599
  12,947
  15,592
  18,538
  21,783
  25,324
  29,156
  33,272
  37,666
  42,331
  47,262
  52,452
  57,899
  63,599
  69,553
  75,761
  82,225
  88,950
  95,943
  103,211
Tax expense, $m
  5
  129
  197
  292
  421
  591
  811
  1,086
  1,423
  1,829
  2,307
  2,862
  3,496
  4,210
  5,005
  5,881
  6,838
  7,872
  8,983
  10,170
  11,429
  12,761
  14,162
  15,633
  17,172
  18,779
  20,455
  22,201
  24,017
  25,905
  27,867
Net income, $m
  178
  348
  532
  789
  1,138
  1,599
  2,192
  2,936
  3,848
  4,945
  6,238
  7,738
  9,451
  11,382
  13,533
  15,902
  18,487
  21,284
  24,289
  27,496
  30,902
  34,501
  38,290
  42,266
  46,428
  50,774
  55,305
  60,024
  64,934
  70,038
  75,344

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  828
  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
  1,359
  850
  1,313
  1,963
  2,849
  4,019
  5,526
  7,417
  9,739
  12,532
  15,829
  19,656
  24,031
  28,966
  34,463
  40,523
  47,138
  54,299
  61,994
  70,212
  78,939
  88,164
  97,878
  108,073
  118,745
  129,892
  141,515
  153,620
  166,214
  179,309
  192,919
Adjusted assets (=assets-cash), $m
  531
  850
  1,313
  1,963
  2,849
  4,019
  5,526
  7,417
  9,739
  12,532
  15,829
  19,656
  24,031
  28,966
  34,463
  40,523
  47,138
  54,299
  61,994
  70,212
  78,939
  88,164
  97,878
  108,073
  118,745
  129,892
  141,515
  153,620
  166,214
  179,309
  192,919
Revenue / Adjusted assets
  1.623
  1.622
  1.623
  1.624
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
  1.623
Average production assets, $m
  121
  193
  298
  446
  647
  913
  1,256
  1,685
  2,213
  2,848
  3,597
  4,466
  5,460
  6,582
  7,831
  9,208
  10,711
  12,338
  14,086
  15,953
  17,936
  20,033
  22,240
  24,556
  26,981
  29,514
  32,155
  34,905
  37,767
  40,743
  43,835
Working capital, $m
  722
  -163
  -251
  -376
  -546
  -770
  -1,058
  -1,420
  -1,865
  -2,400
  -3,031
  -3,764
  -4,602
  -5,547
  -6,600
  -7,761
  -9,028
  -10,399
  -11,873
  -13,447
  -15,118
  -16,885
  -18,745
  -20,698
  -22,741
  -24,876
  -27,102
  -29,420
  -31,832
  -34,340
  -36,947
Total debt, $m
  4
  261
  640
  1,173
  1,898
  2,857
  4,091
  5,640
  7,541
  9,829
  12,529
  15,663
  19,246
  23,288
  27,790
  32,753
  38,171
  44,036
  50,338
  57,068
  64,216
  71,771
  79,727
  88,077
  96,817
  105,946
  115,466
  125,379
  135,694
  146,419
  157,566
Total liabilities, $m
  439
  696
  1,075
  1,608
  2,333
  3,292
  4,526
  6,075
  7,976
  10,264
  12,964
  16,098
  19,681
  23,723
  28,225
  33,188
  38,606
  44,471
  50,773
  57,503
  64,651
  72,206
  80,162
  88,512
  97,252
  106,381
  115,901
  125,814
  136,129
  146,854
  158,001
Total equity, $m
  920
  154
  238
  355
  516
  728
  1,000
  1,342
  1,763
  2,268
  2,865
  3,558
  4,350
  5,243
  6,238
  7,335
  8,532
  9,828
  11,221
  12,708
  14,288
  15,958
  17,716
  19,561
  21,493
  23,510
  25,614
  27,805
  30,085
  32,455
  34,918
Total liabilities and equity, $m
  1,359
  850
  1,313
  1,963
  2,849
  4,020
  5,526
  7,417
  9,739
  12,532
  15,829
  19,656
  24,031
  28,966
  34,463
  40,523
  47,138
  54,299
  61,994
  70,211
  78,939
  88,164
  97,878
  108,073
  118,745
  129,891
  141,515
  153,619
  166,214
  179,309
  192,919
Debt-to-equity ratio
  0.004
  1.700
  2.690
  3.300
  3.680
  3.930
  4.090
  4.200
  4.280
  4.330
  4.370
  4.400
  4.420
  4.440
  4.460
  4.470
  4.470
  4.480
  4.490
  4.490
  4.490
  4.500
  4.500
  4.500
  4.500
  4.510
  4.510
  4.510
  4.510
  4.510
  4.510
Adjusted equity ratio
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181
  0.181

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  178
  348
  532
  789
  1,138
  1,599
  2,192
  2,936
  3,848
  4,945
  6,238
  7,738
  9,451
  11,382
  13,533
  15,902
  18,487
  21,284
  24,289
  27,496
  30,902
  34,501
  38,290
  42,266
  46,428
  50,774
  55,305
  60,024
  64,934
  70,038
  75,344
Depreciation, amort., depletion, $m
  8
  7
  10
  15
  22
  32
  44
  59
  77
  99
  125
  155
  190
  229
  272
  320
  372
  428
  489
  554
  623
  696
  772
  853
  937
  1,025
  1,116
  1,212
  1,311
  1,415
  1,522
Funds from operations, $m
  265
  355
  542
  804
  1,160
  1,631
  2,236
  2,995
  3,925
  5,043
  6,363
  7,893
  9,641
  11,611
  13,805
  16,221
  18,859
  21,712
  24,778
  28,050
  31,525
  35,197
  39,062
  43,119
  47,364
  51,799
  56,422
  61,236
  66,245
  71,453
  76,866
Change in working capital, $m
  54
  -61
  -89
  -125
  -170
  -224
  -288
  -362
  -445
  -535
  -631
  -733
  -838
  -945
  -1,053
  -1,160
  -1,267
  -1,371
  -1,474
  -1,574
  -1,671
  -1,767
  -1,860
  -1,953
  -2,044
  -2,135
  -2,226
  -2,318
  -2,412
  -2,508
  -2,607
Cash from operations, $m
  211
  517
  631
  929
  1,330
  1,855
  2,524
  3,357
  4,370
  5,578
  6,994
  8,626
  10,479
  12,556
  14,858
  17,382
  20,125
  23,084
  26,251
  29,624
  33,196
  36,963
  40,923
  45,071
  49,408
  53,933
  58,648
  63,554
  68,657
  73,961
  79,472
Maintenance CAPEX, $m
  0
  -4
  -7
  -10
  -15
  -22
  -32
  -44
  -59
  -77
  -99
  -125
  -155
  -190
  -229
  -272
  -320
  -372
  -428
  -489
  -554
  -623
  -696
  -772
  -853
  -937
  -1,025
  -1,116
  -1,212
  -1,311
  -1,415
New CAPEX, $m
  -13
  -72
  -105
  -148
  -201
  -266
  -342
  -430
  -528
  -635
  -749
  -870
  -994
  -1,121
  -1,249
  -1,377
  -1,503
  -1,627
  -1,749
  -1,867
  -1,983
  -2,096
  -2,207
  -2,317
  -2,425
  -2,533
  -2,641
  -2,750
  -2,862
  -2,975
  -3,093
Cash from investing activities, $m
  -59
  -76
  -112
  -158
  -216
  -288
  -374
  -474
  -587
  -712
  -848
  -995
  -1,149
  -1,311
  -1,478
  -1,649
  -1,823
  -1,999
  -2,177
  -2,356
  -2,537
  -2,719
  -2,903
  -3,089
  -3,278
  -3,470
  -3,666
  -3,866
  -4,074
  -4,286
  -4,508
Free cash flow, $m
  152
  441
  519
  770
  1,113
  1,567
  2,150
  2,883
  3,784
  4,867
  6,146
  7,631
  9,329
  11,245
  13,380
  15,733
  18,303
  21,085
  24,075
  27,268
  30,659
  34,244
  38,020
  41,983
  46,131
  50,464
  54,982
  59,688
  64,583
  69,674
  74,965
Issuance/(repayment) of debt, $m
  0
  261
  379
  533
  725
  959
  1,234
  1,549
  1,902
  2,287
  2,700
  3,134
  3,583
  4,041
  4,503
  4,963
  5,418
  5,865
  6,303
  6,730
  7,147
  7,556
  7,956
  8,350
  8,740
  9,129
  9,519
  9,914
  10,315
  10,725
  11,147
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  
  4
  261
  379
  533
  725
  959
  1,234
  1,549
  1,902
  2,287
  2,700
  3,134
  3,583
  4,041
  4,503
  4,963
  5,418
  5,865
  6,303
  6,730
  7,147
  7,556
  7,956
  8,350
  8,740
  9,129
  9,519
  9,914
  10,315
  10,725
  11,147
Total cash flow (excl. dividends), $m
  159
  702
  898
  1,303
  1,838
  2,525
  3,384
  4,432
  5,686
  7,154
  8,846
  10,765
  12,913
  15,286
  17,883
  20,696
  23,720
  26,949
  30,377
  33,998
  37,807
  41,800
  45,976
  50,332
  54,871
  59,593
  64,502
  69,601
  74,898
  80,399
  86,112
Retained Cash Flow (-), $m
  -218
  -58
  -84
  -118
  -160
  -212
  -273
  -342
  -420
  -505
  -597
  -693
  -792
  -893
  -995
  -1,097
  -1,197
  -1,296
  -1,393
  -1,487
  -1,580
  -1,670
  -1,758
  -1,845
  -1,932
  -2,018
  -2,104
  -2,191
  -2,280
  -2,370
  -2,464
Prev. year cash balance distribution, $m
 
  824
  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
 
  1,468
  814
  1,185
  1,678
  2,313
  3,111
  4,090
  5,265
  6,649
  8,249
  10,073
  12,121
  14,393
  16,887
  19,599
  22,523
  25,653
  28,984
  32,510
  36,227
  40,130
  44,217
  48,487
  52,939
  57,575
  62,398
  67,410
  72,618
  78,029
  83,649
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
 
  1,407
  745
  1,032
  1,382
  1,793
  2,258
  2,763
  3,291
  3,819
  4,325
  4,783
  5,172
  5,473
  5,669
  5,754
  5,724
  5,582
  5,338
  5,006
  4,603
  4,151
  3,669
  3,178
  2,696
  2,240
  1,820
  1,447
  1,124
  852
  630
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

Autohome Inc. operates as an online destination for automobile consumers in the People’s Republic of China. The company, through its Websites, autohome.com.cn and che168.com, delivers comprehensive, independent, and interactive content to automobile buyers and owners, including professionally produced content that comprises automobile-related articles and reviews, pricing trends in various markets, and photos and video clips; automobile library, which includes a range of specifications covering performance levels, dimensions, powertrains, vehicle bodies, interiors, safety, entertainment systems, and other unique features, as well as manufacturers’ suggested retail prices; new and used automobile listings, and promotional information; and user forums and user generated content. Autohome Inc. also offers advertising services for automakers and dealers; dealer subscription services that allow dealers to market their inventory and services through its Websites; used automobile listings services, which allow used automobile dealers and individuals to market their automobiles for sale on its Websites; and automobile dealer subscription services that enable dealers to establish and maintain online showrooms of automobiles with pricing and promotional information on autohome.com.cn. In addition, it operates Autohome Mall, an online transaction platform that facilitates direct vehicle sales and commission-based services; provides iOS- and Android-based applications to allow its users to access its content; and offers technical and consulting services. The company was formerly known as Sequel Limited and changed its name to Autohome Inc. in October 2011. The company was founded in 2008 and is headquartered in Beijing, the People’s Republic of China. Autohome Inc. operates as a subsidiary of Telstra Holdings Pty Ltd.

FINANCIAL RATIOS  of  Autohome ADR (ATHM)

Valuation Ratios
P/E Ratio 21.5
Price to Sales 4.4
Price to Book 4.2
Price to Tangible Book
Price to Cash Flow 18.1
Price to Free Cash Flow 19.3
Growth Rates
Sales Growth Rate 72.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 116.7%
Cap. Spend. - 3 Yr. Gr. Rate 26.6%
Financial Strength
Quick Ratio 207
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 0.4%
Interest Coverage 0
Management Effectiveness
Return On Assets 14.5%
Ret/ On Assets - 3 Yr. Avg. 15.7%
Return On Total Capital 21.6%
Ret/ On T. Cap. - 3 Yr. Avg. 23.2%
Return On Equity 21.9%
Return On Equity - 3 Yr. Avg. 23.5%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 59.9%
Gross Margin - 3 Yr. Avg. 74.1%
EBITDA Margin 21.9%
EBITDA Margin - 3 Yr. Avg. 35.2%
Operating Margin 19.3%
Oper. Margin - 3 Yr. Avg. 32.1%
Pre-Tax Margin 21%
Pre-Tax Margin - 3 Yr. Avg. 34%
Net Profit Margin 20.6%
Net Profit Margin - 3 Yr. Avg. 28%
Effective Tax Rate 2.8%
Eff/ Tax Rate - 3 Yr. Avg. 15.4%
Payout Ratio 0%

ATHM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ATHM stock intrinsic value calculation we used $862 million for the last fiscal year's total revenue generated by Autohome ADR. The default revenue input number comes from 2016 income statement of Autohome ADR. 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 ATHM stock valuation model: a) initial revenue growth rate of 60% 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 ATHM is calculated based on our internal credit rating of Autohome ADR, 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 Autohome ADR.
    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 ATHM stock the variable cost ratio is equal to 65.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for ATHM 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 Autohome ADR.

Corporate tax rate of 27% is the nominal tax rate for Autohome ADR. 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 ATHM 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 ATHM are equal to 14%.

Life of production assets of 28.8 years is the average useful life of capital assets used in Autohome ADR 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 ATHM is equal to -11.8%. 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 - $920 million for Autohome ADR - 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 112.685 million for Autohome ADR 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 Autohome ADR at the current share price and the inputted number of shares is $3.9 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
BITA Bitauto Holdin 29.32 63.99  str.buy
SINA Sina 76.81 51.82  sell
SOHU Sohu.com 38.80 7.63  str.sell
WB Weibo ADR 55.86 175.85  str.buy
NTES Netease ADR 265.39 3,117.13  str.buy
WUBA 58.com ADR 39.58 70.93  str.buy
SFUN Fang Holdings 3.35 28.70  str.buy
TRUE TrueCar 17.52 0.50  str.sell

COMPANY NEWS

▶ ETFs with exposure to Autohome, Inc. : April 27, 2017   [Apr-27-17 03:44PM  Capital Cube]
▶ As Weibo Rises, This Other Chinese Internet Stock Also Climbs   [12:18PM  Investor's Business Daily]
▶ Which Companies Are Now Outperforming 95% Of All Stocks?   [11:29AM  Investor's Business Daily]
▶ Autohome Inc. Files Its Annual Report on Form 20-F   [Apr-25-17 05:00PM  GlobeNewswire]
▶ Why Autohome (ATHM) Could Be a Potential Winner   [Mar-10-17 08:40AM  Zacks]
▶ Near a 3-Year Low, Is 58.com Inc. (ADR) a Buy?   [Dec-09-16 10:19AM  at Motley Fool]
▶ Hedge Funds Are Buying The Timken Company (TKR)   [Dec-08-16 02:23AM  at Insider Monkey]
▶ Tiger Pacific Capitals Bets on China Lead to Big Q3   [Nov-07-16 02:34PM  at Insider Monkey]
▶ Autohome Inc. Announces Board Change   [Oct-03-16 06:00AM  GlobeNewswire]
▶ Will Autohome (ATHM) Stock Be Helped by Upgrade?   [Aug-17-16 02:32PM  at TheStreet]
▶ Autohome Inc. Announces Board Change   [06:00AM  GlobeNewswire]
▶ CVR, CVR Refining in Mondays 52-Week Low Club   [Jul-18-16 04:04PM  at 24/7 Wall St.]
▶ Autohome, ImmunoGen Lead Fridays 52-Week Low Club   [Jul-15-16 04:04PM  at 24/7 Wall St.]
▶ [$$] China's used car market: fast and spurious   [Jul-11-16 12:27PM  at Financial Times]
▶ Autohome Inc. Announces Appointment of New Director   [May-31-16 07:00AM  GlobeNewswire]
▶ The Electric Car You Can Charge Next to Your Phone   [May-26-16 06:00PM  at Bloomberg]
▶ [$$] In Autohome Fight, Telstra Packs a Mean Punch   [May-17-16 07:37AM  at The Wall Street Journal]
▶ Autohome Inc. Special Committee Appoints Legal Counsel   [May-11-16 04:10PM  GlobeNewswire]
Stock chart of ATHM Financial statements of ATHM
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.