Intrinsic value of AXIS Capital Holdings - AXS

Previous Close

$63.48

  Intrinsic Value

$482.45

stock screener

  Rating & Target

str. buy

+660%

  Value-price divergence*

-58%

Previous close

$63.48

 
Intrinsic value

$482.45

 
Up/down potential

+660%

 
Rating

str. buy

 
Value-price divergence*

-58%

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

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

We calculate the intrinsic value of AXS 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 5.7

 

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, %
  -4.07
  13.40
  12.56
  11.80
  11.12
  10.51
  9.96
  9.46
  9.02
  8.62
  8.25
  7.93
  7.64
  7.37
  7.14
  6.92
  6.73
  6.56
  6.40
  6.26
  6.13
  6.02
  5.92
  5.83
  5.74
  5.67
  5.60
  5.54
  5.49
  5.44
  5.40
Revenue, $m
  0
  4,572
  5,147
  5,754
  6,394
  7,066
  7,770
  8,505
  9,272
  10,071
  10,903
  11,767
  12,666
  13,599
  14,570
  15,578
  16,626
  17,717
  18,851
  20,031
  21,260
  22,540
  23,874
  25,265
  26,716
  28,231
  29,813
  31,466
  33,193
  34,998
  36,886
Variable operating expenses, $m
 
  800
  901
  1,007
  1,119
  1,237
  1,360
  1,488
  1,623
  1,762
  1,908
  2,059
  2,216
  2,380
  2,550
  2,726
  2,910
  3,100
  3,299
  3,505
  3,720
  3,944
  4,178
  4,421
  4,675
  4,940
  5,217
  5,506
  5,809
  6,125
  6,455
Fixed operating expenses, $m
 
  3,019
  3,094
  3,171
  3,251
  3,332
  3,415
  3,501
  3,588
  3,678
  3,770
  3,864
  3,961
  4,060
  4,161
  4,265
  4,372
  4,481
  4,593
  4,708
  4,826
  4,946
  5,070
  5,197
  5,327
  5,460
  5,596
  5,736
  5,880
  6,027
  6,177
Total operating expenses, $m
  3,580
  3,819
  3,995
  4,178
  4,370
  4,569
  4,775
  4,989
  5,211
  5,440
  5,678
  5,923
  6,177
  6,440
  6,711
  6,991
  7,282
  7,581
  7,892
  8,213
  8,546
  8,890
  9,248
  9,618
  10,002
  10,400
  10,813
  11,242
  11,689
  12,152
  12,632
Operating income, $m
  452
  754
  1,152
  1,576
  2,024
  2,498
  2,995
  3,516
  4,062
  4,631
  5,225
  5,844
  6,488
  7,160
  7,859
  8,587
  9,345
  10,135
  10,959
  11,817
  12,713
  13,649
  14,626
  15,647
  16,714
  17,831
  18,999
  20,223
  21,504
  22,847
  24,254
EBITDA, $m
  477
  763
  1,163
  1,588
  2,038
  2,512
  3,011
  3,534
  4,081
  4,652
  5,248
  5,868
  6,515
  7,188
  7,889
  8,619
  9,380
  10,172
  10,998
  11,859
  12,758
  13,696
  14,676
  15,700
  16,770
  17,890
  19,062
  20,289
  21,574
  22,920
  24,331
Interest expense (income), $m
  49
  49
  143
  245
  352
  465
  584
  708
  838
  973
  1,114
  1,261
  1,414
  1,572
  1,737
  1,908
  2,086
  2,272
  2,464
  2,664
  2,873
  3,090
  3,316
  3,551
  3,797
  4,053
  4,320
  4,600
  4,891
  5,196
  5,515
Earnings before tax, $m
  522
  705
  1,008
  1,331
  1,672
  2,033
  2,411
  2,808
  3,224
  3,658
  4,111
  4,583
  5,075
  5,588
  6,122
  6,678
  7,259
  7,864
  8,495
  9,153
  9,841
  10,559
  11,310
  12,096
  12,918
  13,778
  14,679
  15,623
  16,613
  17,650
  18,739
Tax expense, $m
  7
  190
  272
  359
  452
  549
  651
  758
  870
  988
  1,110
  1,237
  1,370
  1,509
  1,653
  1,803
  1,960
  2,123
  2,294
  2,471
  2,657
  2,851
  3,054
  3,266
  3,488
  3,720
  3,963
  4,218
  4,485
  4,766
  5,060
Net income, $m
  513
  515
  736
  972
  1,221
  1,484
  1,760
  2,050
  2,353
  2,670
  3,001
  3,345
  3,705
  4,079
  4,469
  4,875
  5,299
  5,740
  6,201
  6,682
  7,184
  7,708
  8,257
  8,830
  9,430
  10,058
  10,716
  11,405
  12,127
  12,885
  13,679

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  20,814
  23,568
  26,529
  29,660
  32,959
  36,424
  40,052
  43,842
  47,796
  51,914
  56,199
  60,655
  65,287
  70,100
  75,102
  80,300
  85,704
  91,323
  97,168
  103,252
  109,586
  116,184
  123,061
  130,232
  137,714
  145,522
  153,676
  162,194
  171,095
  180,402
  190,136
Adjusted assets (=assets-cash), $m
  20,814
  23,568
  26,529
  29,660
  32,959
  36,424
  40,052
  43,842
  47,796
  51,914
  56,199
  60,655
  65,287
  70,100
  75,102
  80,300
  85,704
  91,323
  97,168
  103,252
  109,586
  116,184
  123,061
  130,232
  137,714
  145,522
  153,676
  162,194
  171,095
  180,402
  190,136
Revenue / Adjusted assets
  0.000
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
  0.194
Average production assets, $m
  86
  96
  108
  121
  134
  148
  163
  179
  195
  211
  229
  247
  266
  286
  306
  327
  349
  372
  396
  421
  446
  473
  501
  531
  561
  593
  626
  661
  697
  735
  775
Working capital, $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
  0
Total debt, $m
  993
  2,925
  4,995
  7,183
  9,490
  11,911
  14,447
  17,097
  19,860
  22,739
  25,734
  28,849
  32,086
  35,451
  38,947
  42,581
  46,358
  50,286
  54,372
  58,624
  63,052
  67,664
  72,471
  77,484
  82,713
  88,171
  93,870
  99,824
  106,047
  112,552
  119,356
Total liabilities, $m
  14,541
  16,474
  18,544
  20,732
  23,039
  25,460
  27,996
  30,646
  33,409
  36,288
  39,283
  42,398
  45,635
  49,000
  52,496
  56,130
  59,907
  63,835
  67,921
  72,173
  76,601
  81,213
  86,020
  91,033
  96,262
  101,720
  107,419
  113,373
  119,596
  126,101
  132,905
Total equity, $m
  6,272
  7,094
  7,985
  8,928
  9,921
  10,964
  12,056
  13,197
  14,387
  15,626
  16,916
  18,257
  19,651
  21,100
  22,606
  24,170
  25,797
  27,488
  29,248
  31,079
  32,985
  34,971
  37,041
  39,200
  41,452
  43,802
  46,256
  48,820
  51,500
  54,301
  57,231
Total liabilities and equity, $m
  20,813
  23,568
  26,529
  29,660
  32,960
  36,424
  40,052
  43,843
  47,796
  51,914
  56,199
  60,655
  65,286
  70,100
  75,102
  80,300
  85,704
  91,323
  97,169
  103,252
  109,586
  116,184
  123,061
  130,233
  137,714
  145,522
  153,675
  162,193
  171,096
  180,402
  190,136
Debt-to-equity ratio
  0.158
  0.410
  0.630
  0.800
  0.960
  1.090
  1.200
  1.300
  1.380
  1.460
  1.520
  1.580
  1.630
  1.680
  1.720
  1.760
  1.800
  1.830
  1.860
  1.890
  1.910
  1.930
  1.960
  1.980
  2.000
  2.010
  2.030
  2.040
  2.060
  2.070
  2.090
Adjusted equity ratio
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301
  0.301

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  513
  515
  736
  972
  1,221
  1,484
  1,760
  2,050
  2,353
  2,670
  3,001
  3,345
  3,705
  4,079
  4,469
  4,875
  5,299
  5,740
  6,201
  6,682
  7,184
  7,708
  8,257
  8,830
  9,430
  10,058
  10,716
  11,405
  12,127
  12,885
  13,679
Depreciation, amort., depletion, $m
  25
  10
  11
  12
  13
  15
  16
  18
  19
  21
  23
  25
  27
  29
  31
  33
  35
  37
  40
  42
  45
  47
  50
  53
  56
  59
  63
  66
  70
  73
  77
Funds from operations, $m
  100
  524
  747
  984
  1,234
  1,499
  1,777
  2,068
  2,373
  2,691
  3,024
  3,370
  3,731
  4,107
  4,499
  4,908
  5,334
  5,778
  6,241
  6,724
  7,229
  7,756
  8,307
  8,883
  9,486
  10,117
  10,778
  11,471
  12,197
  12,958
  13,757
Change in working capital, $m
  -307
  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 operations, $m
  407
  524
  747
  984
  1,234
  1,499
  1,777
  2,068
  2,373
  2,691
  3,024
  3,370
  3,731
  4,107
  4,499
  4,908
  5,334
  5,778
  6,241
  6,724
  7,229
  7,756
  8,307
  8,883
  9,486
  10,117
  10,778
  11,471
  12,197
  12,958
  13,757
Maintenance CAPEX, $m
  0
  -9
  -10
  -11
  -12
  -13
  -15
  -16
  -18
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -40
  -42
  -45
  -47
  -50
  -53
  -56
  -59
  -63
  -66
  -70
  -73
New CAPEX, $m
  -27
  -10
  -12
  -13
  -13
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -35
  -36
  -38
  -40
Cash from investing activities, $m
  -144
  -19
  -22
  -24
  -25
  -27
  -30
  -31
  -34
  -36
  -38
  -41
  -44
  -47
  -49
  -52
  -55
  -58
  -61
  -65
  -68
  -72
  -75
  -79
  -83
  -88
  -92
  -98
  -102
  -108
  -113
Free cash flow, $m
  263
  506
  725
  960
  1,209
  1,471
  1,747
  2,036
  2,339
  2,655
  2,985
  3,329
  3,688
  4,061
  4,451
  4,856
  5,279
  5,720
  6,180
  6,660
  7,161
  7,684
  8,231
  8,804
  9,402
  10,029
  10,686
  11,374
  12,095
  12,851
  13,644
Issuance/(repayment) of debt, $m
  0
  1,932
  2,069
  2,189
  2,306
  2,422
  2,536
  2,650
  2,764
  2,879
  2,995
  3,115
  3,238
  3,364
  3,496
  3,634
  3,777
  3,928
  4,086
  4,252
  4,428
  4,612
  4,807
  5,013
  5,229
  5,458
  5,699
  5,954
  6,222
  6,506
  6,804
Issuance/(repurchase) of shares, $m
  -29
  308
  155
  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  
  -30
  2,240
  2,224
  2,189
  2,306
  2,422
  2,536
  2,650
  2,764
  2,879
  2,995
  3,115
  3,238
  3,364
  3,496
  3,634
  3,777
  3,928
  4,086
  4,252
  4,428
  4,612
  4,807
  5,013
  5,229
  5,458
  5,699
  5,954
  6,222
  6,506
  6,804
Total cash flow (excl. dividends), $m
  223
  2,745
  2,949
  3,149
  3,515
  3,893
  4,283
  4,686
  5,102
  5,534
  5,980
  6,444
  6,925
  7,426
  7,947
  8,490
  9,056
  9,648
  10,266
  10,912
  11,588
  12,296
  13,038
  13,816
  14,632
  15,487
  16,385
  17,328
  18,317
  19,356
  20,448
Retained Cash Flow (-), $m
  -405
  -822
  -891
  -943
  -993
  -1,043
  -1,092
  -1,141
  -1,190
  -1,240
  -1,290
  -1,341
  -1,394
  -1,449
  -1,506
  -1,565
  -1,627
  -1,691
  -1,759
  -1,831
  -1,907
  -1,986
  -2,070
  -2,158
  -2,252
  -2,350
  -2,454
  -2,564
  -2,679
  -2,801
  -2,930
Prev. year cash balance distribution, $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 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
 
  1,923
  2,058
  2,206
  2,522
  2,850
  3,191
  3,545
  3,912
  4,294
  4,691
  5,103
  5,531
  5,977
  6,441
  6,925
  7,430
  7,956
  8,506
  9,081
  9,682
  10,310
  10,968
  11,658
  12,380
  13,137
  13,931
  14,764
  15,638
  16,555
  17,518
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
 
  1,844
  1,884
  1,920
  2,077
  2,209
  2,316
  2,395
  2,445
  2,467
  2,459
  2,423
  2,360
  2,273
  2,162
  2,033
  1,888
  1,731
  1,566
  1,398
  1,230
  1,066
  910
  764
  631
  511
  406
  317
  242
  181
  132
Current shareholders' claim on cash, %
  100
  94.9
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6
  92.6

AXIS Capital Holdings Limited, through its subsidiaries, provides various specialty insurance and reinsurance products worldwide. It operates through two segments, Insurance and Reinsurance. The Insurance segment offers property insurance for commercial buildings, residential premises, construction projects, and onshore energy installations; marine insurance covering offshore energy, cargo, liability, recreational marine, fine art, specie, hull, and war; and terrorism, aviation, credit and political risk, and liability insurance. It also provides professional lines insurance that cover directors’ and officers’ liability, errors and omissions liability, employment practices liability, fiduciary liability, crime, professional indemnity, medical malpractice, and other financial insurance related coverages for commercial enterprises, financial institutions, and not-for-profit organizations. In addition, this segment offers accidental death, travel, and specialty health products for employer and affinity groups, as well as accident and health reinsurance for catastrophic or per life events through wholesale and retail brokers, managing general agents, and underwriters. The Reinsurance segment offers reinsurance to insurance companies, including catastrophe; property reinsurance covering property damage and related losses resulting from natural and man-made perils; professional lines; credit and surety; and motor reinsurance providing coverage for motor liability and property damages. This segment also provides coverage to insurers of standard casualty, excess and surplus casualty, and specialty casualty program businesses; agriculture; coverage for various types of construction risks and risks related to erection, testing, and commissioning of machinery and plants during the construction stage; marine, aviation, and personal accident reinsurance; and derivative based risk management products. The company was founded in 2001 and is headquartered in Pembroke, Bermuda.

FINANCIAL RATIOS  of  AXIS Capital Holdings (AXS)

Valuation Ratios
P/E Ratio 10.7
Price to Sales 1.4
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 13.5
Price to Free Cash Flow 14.4
Growth Rates
Sales Growth Rate -4.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -20.6%
Cap. Spend. - 3 Yr. Gr. Rate 2.4%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 15.8%
Total Debt to Equity 15.8%
Interest Coverage 12
Management Effectiveness
Return On Assets 2.8%
Ret/ On Assets - 3 Yr. Avg. 3.5%
Return On Total Capital 7.3%
Ret/ On T. Cap. - 3 Yr. Avg. 9.5%
Return On Equity 8.5%
Return On Equity - 3 Yr. Avg. 11.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 14.8%
EBITDA Margin - 3 Yr. Avg. 17.7%
Operating Margin 11.2%
Oper. Margin - 3 Yr. Avg. 14.5%
Pre-Tax Margin 12.9%
Pre-Tax Margin - 3 Yr. Avg. 15.8%
Net Profit Margin 12.7%
Net Profit Margin - 3 Yr. Avg. 15.5%
Effective Tax Rate 1.3%
Eff/ Tax Rate - 3 Yr. Avg. 1.6%
Payout Ratio 33.5%

AXS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AXS stock intrinsic value calculation we used $4032 million for the last fiscal year's total revenue generated by AXIS Capital Holdings. The default revenue input number comes from 2016 income statement of AXIS Capital Holdings. 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 AXS stock valuation model: a) initial revenue growth rate of 13.4% 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 AXS is calculated based on our internal credit rating of AXIS Capital Holdings, 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 AXIS Capital Holdings.
    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 AXS stock the variable cost ratio is equal to 17.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $2945 million in the base year in the intrinsic value calculation for AXS 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 4.9% for AXIS Capital Holdings.

Corporate tax rate of 27% is the nominal tax rate for AXIS Capital Holdings. 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 AXS 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 AXS are equal to 2.1%.

Life of production assets of 10 years is the average useful life of capital assets used in AXIS Capital Holdings 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 AXS is equal to 0%. 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 - $6272 million for AXIS Capital Holdings - 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 89.397 million for AXIS Capital Holdings 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 AXIS Capital Holdings at the current share price and the inputted number of shares is $5.7 billion.

RELATED COMPANIES Price Int.Val. Rating
AHL Aspen Insuranc 46.75 110.67  str.buy
RNR RenaissanceRe 145.54 214.64  str.buy
ACGL Arch Capital G 96.17 448.58  str.buy
VR Validus Holdin 52.46 80.84  str.buy
TPRE Third Point Re 14.30 114.52  str.buy
JRVR James River Gr 40.26 375.81  str.buy

COMPANY NEWS

▶ Axis Capital beats 2Q profit forecasts   [12:01AM  Associated Press]
▶ AXIS Capital Reports Second Quarter 2017 Results   [Jul-26-17 04:15PM  Business Wire]
▶ AXIS Capital Approved to Launch Lloyds Managing Agency   [Jul-14-17 08:30AM  Business Wire]
▶ AXIS Capital Launches Global Day of Giving Rally   [Jul-11-17 08:00AM  Business Wire]
▶ [$$] Axis Capital to buy UK insurer Novae for £468m   [Jul-05-17 07:21PM  Financial Times]
▶ Reinsurance Companies: What You Need to Know   [Jun-14-17 01:06PM  Motley Fool]
▶ Axis Capital misses 1Q profit forecasts   [Apr-26-17 06:50PM  Associated Press]
▶ Low volatility vs. growth: Where to put your money   [Mar-14-17 03:50PM  CNBC Videos]
▶ Insuring Your Portfolio With Insurance Stocks   [Mar-08-17 11:00AM  Insider Monkey]
▶ Insuring Your Portfolio With Insurance Stocks   [11:00AM  at Insider Monkey]
▶ [$$] Axis Capital Operating Earnings Fall   [04:42PM  at The Wall Street Journal]
Stock chart of AXS Financial statements of AXS
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.