Intrinsic value of Carlyle Group - CG

Previous Close

$20.65

  Intrinsic Value

$94.24

stock screener

  Rating & Target

str. buy

+356%

  Value-price divergence*

-107%

Previous close

$20.65

 
Intrinsic value

$94.24

 
Up/down potential

+356%

 
Rating

str. buy

 
Value-price divergence*

-107%

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

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

We calculate the intrinsic value of CG 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 6.6

 

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, %
  -24.35
  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
  2,274
  3,638
  5,621
  8,407
  12,198
  17,209
  23,659
  31,757
  41,699
  53,656
  67,772
  84,158
  102,891
  124,018
  147,557
  173,501
  201,823
  232,483
  265,431
  300,615
  337,980
  377,479
  419,070
  462,721
  508,413
  556,139
  605,905
  657,731
  711,654
  767,721
  825,995
Variable operating expenses, $m
 
  4,194
  6,480
  9,690
  14,060
  19,836
  27,269
  36,603
  48,061
  61,843
  78,112
  96,997
  118,588
  142,938
  170,068
  199,970
  232,613
  267,951
  305,926
  346,477
  389,543
  435,067
  483,003
  533,314
  585,977
  640,983
  698,341
  758,075
  820,224
  884,844
  952,009
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
  2,242
  4,194
  6,480
  9,690
  14,060
  19,836
  27,269
  36,603
  48,061
  61,843
  78,112
  96,997
  118,588
  142,938
  170,068
  199,970
  232,613
  267,951
  305,926
  346,477
  389,543
  435,067
  483,003
  533,314
  585,977
  640,983
  698,341
  758,075
  820,224
  884,844
  952,009
Operating income, $m
  32
  -556
  -859
  -1,284
  -1,862
  -2,626
  -3,610
  -4,846
  -6,363
  -8,187
  -10,340
  -12,839
  -15,697
  -18,920
  -22,511
  -26,469
  -30,790
  -35,468
  -40,494
  -45,862
  -51,562
  -57,588
  -63,933
  -70,593
  -77,564
  -84,845
  -92,437
  -100,344
  -108,570
  -117,124
  -126,014
EBITDA, $m
  104
  -545
  -842
  -1,259
  -1,827
  -2,577
  -3,543
  -4,756
  -6,245
  -8,036
  -10,150
  -12,603
  -15,409
  -18,573
  -22,098
  -25,983
  -30,225
  -34,817
  -39,751
  -45,020
  -50,616
  -56,531
  -62,760
  -69,297
  -76,140
  -83,287
  -90,740
  -98,502
  -106,577
  -114,974
  -123,701
Interest expense (income), $m
  59
  182
  347
  621
  1,006
  1,529
  2,222
  3,113
  4,232
  5,605
  7,257
  9,207
  11,471
  14,059
  16,978
  20,230
  23,815
  27,728
  31,963
  36,516
  41,376
  46,539
  51,996
  57,742
  63,773
  70,085
  76,679
  83,555
  90,715
  98,165
  105,911
Earnings before tax, $m
  45
  -738
  -1,205
  -1,904
  -2,867
  -4,156
  -5,832
  -7,959
  -10,594
  -13,792
  -17,597
  -22,046
  -27,168
  -32,979
  -39,489
  -46,700
  -54,605
  -63,195
  -72,458
  -82,377
  -92,939
  -104,127
  -115,929
  -128,335
  -141,336
  -154,930
  -169,116
  -183,898
  -199,285
  -215,288
  -231,925
Tax expense, $m
  30
  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
Net income, $m
  6
  -738
  -1,205
  -1,904
  -2,867
  -4,156
  -5,832
  -7,959
  -10,594
  -13,792
  -17,597
  -22,046
  -27,168
  -32,979
  -39,489
  -46,700
  -54,605
  -63,195
  -72,458
  -82,377
  -92,939
  -104,127
  -115,929
  -128,335
  -141,336
  -154,930
  -169,116
  -183,898
  -199,285
  -215,288
  -231,925

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,432
  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
  9,973
  15,958
  24,655
  36,871
  53,499
  75,479
  103,766
  139,284
  182,889
  235,334
  297,246
  369,112
  451,275
  543,938
  647,179
  760,967
  885,188
  1,019,662
  1,164,173
  1,318,486
  1,482,370
  1,655,610
  1,838,026
  2,029,479
  2,229,883
  2,439,205
  2,657,476
  2,884,786
  3,121,287
  3,367,195
  3,622,785
Adjusted assets (=assets-cash), $m
  8,541
  15,958
  24,655
  36,871
  53,499
  75,479
  103,766
  139,284
  182,889
  235,334
  297,246
  369,112
  451,275
  543,938
  647,179
  760,967
  885,188
  1,019,662
  1,164,173
  1,318,486
  1,482,370
  1,655,610
  1,838,026
  2,029,479
  2,229,883
  2,439,205
  2,657,476
  2,884,786
  3,121,287
  3,367,195
  3,622,785
Revenue / Adjusted assets
  0.266
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
  0.228
Average production assets, $m
  65
  102
  157
  235
  342
  482
  662
  889
  1,168
  1,502
  1,898
  2,356
  2,881
  3,472
  4,132
  4,858
  5,651
  6,510
  7,432
  8,417
  9,463
  10,569
  11,734
  12,956
  14,236
  15,572
  16,965
  18,416
  19,926
  21,496
  23,128
Working capital, $m
  0
  -364
  -562
  -841
  -1,220
  -1,721
  -2,366
  -3,176
  -4,170
  -5,366
  -6,777
  -8,416
  -10,289
  -12,402
  -14,756
  -17,350
  -20,182
  -23,248
  -26,543
  -30,061
  -33,798
  -37,748
  -41,907
  -46,272
  -50,841
  -55,614
  -60,590
  -65,773
  -71,165
  -76,772
  -82,599
Total debt, $m
  5,211
  9,908
  17,735
  28,730
  43,695
  63,477
  88,935
  120,902
  160,146
  207,347
  263,067
  327,747
  401,693
  485,090
  578,007
  680,416
  792,215
  913,242
  1,043,302
  1,182,184
  1,329,679
  1,485,595
  1,649,770
  1,822,078
  2,002,440
  2,190,831
  2,387,274
  2,591,853
  2,804,705
  3,026,022
  3,256,052
Total liabilities, $m
  9,665
  14,362
  22,189
  33,184
  48,149
  67,931
  93,389
  125,356
  164,600
  211,801
  267,521
  332,201
  406,147
  489,544
  582,461
  684,870
  796,669
  917,696
  1,047,756
  1,186,638
  1,334,133
  1,490,049
  1,654,224
  1,826,532
  2,006,894
  2,195,285
  2,391,728
  2,596,307
  2,809,159
  3,030,476
  3,260,506
Total equity, $m
  308
  1,596
  2,465
  3,687
  5,350
  7,548
  10,377
  13,928
  18,289
  23,533
  29,725
  36,911
  45,127
  54,394
  64,718
  76,097
  88,519
  101,966
  116,417
  131,849
  148,237
  165,561
  183,803
  202,948
  222,988
  243,921
  265,748
  288,479
  312,129
  336,720
  362,278
Total liabilities and equity, $m
  9,973
  15,958
  24,654
  36,871
  53,499
  75,479
  103,766
  139,284
  182,889
  235,334
  297,246
  369,112
  451,274
  543,938
  647,179
  760,967
  885,188
  1,019,662
  1,164,173
  1,318,487
  1,482,370
  1,655,610
  1,838,027
  2,029,480
  2,229,882
  2,439,206
  2,657,476
  2,884,786
  3,121,288
  3,367,196
  3,622,784
Debt-to-equity ratio
  16.919
  6.210
  7.190
  7.790
  8.170
  8.410
  8.570
  8.680
  8.760
  8.810
  8.850
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
Adjusted equity ratio
  -0.132
  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
  6
  -738
  -1,205
  -1,904
  -2,867
  -4,156
  -5,832
  -7,959
  -10,594
  -13,792
  -17,597
  -22,046
  -27,168
  -32,979
  -39,489
  -46,700
  -54,605
  -63,195
  -72,458
  -82,377
  -92,939
  -104,127
  -115,929
  -128,335
  -141,336
  -154,930
  -169,116
  -183,898
  -199,285
  -215,288
  -231,925
Depreciation, amort., depletion, $m
  72
  11
  17
  25
  35
  49
  67
  90
  118
  151
  191
  236
  288
  347
  413
  486
  565
  651
  743
  842
  946
  1,057
  1,173
  1,296
  1,424
  1,557
  1,697
  1,842
  1,993
  2,150
  2,313
Funds from operations, $m
  485
  -727
  -1,189
  -1,880
  -2,832
  -4,107
  -5,765
  -7,869
  -10,476
  -13,641
  -17,407
  -21,811
  -26,880
  -32,632
  -39,076
  -46,214
  -54,040
  -62,544
  -71,715
  -81,536
  -91,992
  -103,070
  -114,756
  -127,039
  -139,913
  -153,373
  -167,419
  -182,057
  -197,292
  -213,139
  -229,612
Change in working capital, $m
  786
  -136
  -198
  -279
  -379
  -501
  -645
  -810
  -994
  -1,196
  -1,412
  -1,639
  -1,873
  -2,113
  -2,354
  -2,594
  -2,832
  -3,066
  -3,295
  -3,518
  -3,737
  -3,950
  -4,159
  -4,365
  -4,569
  -4,773
  -4,977
  -5,183
  -5,392
  -5,607
  -5,827
Cash from operations, $m
  -301
  -591
  -990
  -1,601
  -2,453
  -3,605
  -5,120
  -7,059
  -9,482
  -12,445
  -15,995
  -20,172
  -25,007
  -30,519
  -36,722
  -43,619
  -51,207
  -59,478
  -68,420
  -78,017
  -88,256
  -99,120
  -110,597
  -122,674
  -135,344
  -148,600
  -162,443
  -176,874
  -191,900
  -207,532
  -223,785
Maintenance CAPEX, $m
  0
  -6
  -10
  -16
  -24
  -34
  -48
  -66
  -89
  -117
  -150
  -190
  -236
  -288
  -347
  -413
  -486
  -565
  -651
  -743
  -842
  -946
  -1,057
  -1,173
  -1,296
  -1,424
  -1,557
  -1,697
  -1,842
  -1,993
  -2,150
New CAPEX, $m
  -25
  -37
  -56
  -78
  -106
  -140
  -181
  -227
  -278
  -335
  -395
  -459
  -525
  -592
  -659
  -726
  -793
  -858
  -923
  -985
  -1,046
  -1,106
  -1,165
  -1,222
  -1,279
  -1,336
  -1,393
  -1,451
  -1,510
  -1,570
  -1,632
Cash from investing activities, $m
  -20
  -43
  -66
  -94
  -130
  -174
  -229
  -293
  -367
  -452
  -545
  -649
  -761
  -880
  -1,006
  -1,139
  -1,279
  -1,423
  -1,574
  -1,728
  -1,888
  -2,052
  -2,222
  -2,395
  -2,575
  -2,760
  -2,950
  -3,148
  -3,352
  -3,563
  -3,782
Free cash flow, $m
  -321
  -635
  -1,056
  -1,695
  -2,583
  -3,780
  -5,349
  -7,352
  -9,849
  -12,896
  -16,541
  -20,821
  -25,767
  -31,399
  -37,729
  -44,759
  -52,486
  -60,902
  -69,993
  -79,746
  -90,144
  -101,173
  -112,818
  -125,070
  -137,919
  -151,360
  -165,394
  -180,022
  -195,252
  -211,094
  -227,566
Issuance/(repayment) of debt, $m
  568
  4,697
  7,827
  10,995
  14,964
  19,782
  25,458
  31,967
  39,244
  47,200
  55,721
  64,679
  73,947
  83,397
  92,917
  102,410
  111,798
  121,027
  130,060
  138,882
  147,495
  155,916
  164,174
  172,308
  180,363
  188,390
  196,444
  204,579
  212,851
  221,317
  230,030
Issuance/(repurchase) of shares, $m
  -59
  2,026
  2,075
  3,126
  4,530
  6,354
  8,661
  11,510
  14,955
  19,036
  23,789
  29,233
  35,384
  42,246
  49,814
  58,078
  67,027
  76,643
  86,909
  97,809
  109,327
  121,451
  134,171
  147,480
  161,377
  175,862
  190,943
  206,629
  222,935
  239,879
  257,484
Cash from financing (excl. dividends), $m  
  156
  6,723
  9,902
  14,121
  19,494
  26,136
  34,119
  43,477
  54,199
  66,236
  79,510
  93,912
  109,331
  125,643
  142,731
  160,488
  178,825
  197,670
  216,969
  236,691
  256,822
  277,367
  298,345
  319,788
  341,740
  364,252
  387,387
  411,208
  435,786
  461,196
  487,514
Total cash flow (excl. dividends), $m
  -180
  6,089
  8,846
  12,426
  16,912
  22,356
  28,771
  36,125
  44,349
  53,340
  62,969
  73,092
  83,564
  94,243
  105,002
  115,729
  126,339
  136,768
  146,976
  156,945
  166,679
  176,195
  185,527
  194,718
  203,821
  212,892
  221,993
  231,186
  240,535
  250,102
  259,948
Retained Cash Flow (-), $m
  209
  -2,026
  -2,075
  -3,126
  -4,530
  -6,354
  -8,661
  -11,510
  -14,955
  -19,036
  -23,789
  -29,233
  -35,384
  -42,246
  -49,814
  -58,078
  -67,027
  -76,643
  -86,909
  -97,809
  -109,327
  -121,451
  -134,171
  -147,480
  -161,377
  -175,862
  -190,943
  -206,629
  -222,935
  -239,879
  -257,484
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
 
  4,062
  6,771
  9,300
  12,382
  16,002
  20,110
  24,615
  29,395
  34,304
  39,180
  43,859
  48,180
  51,998
  55,188
  57,651
  59,312
  60,125
  60,067
  59,136
  57,351
  54,744
  51,356
  47,238
  42,444
  37,030
  31,050
  24,557
  17,600
  10,223
  2,465
Discount rate, %
 
  11.90
  12.50
  13.12
  13.78
  14.46
  15.19
  15.95
  16.74
  17.58
  18.46
  19.38
  20.35
  21.37
  22.44
  23.56
  24.74
  25.98
  27.28
  28.64
  30.07
  31.57
  33.15
  34.81
  36.55
  38.38
  40.30
  42.31
  44.43
  46.65
  48.98
PV of cash for distribution, $m
 
  3,630
  5,351
  6,425
  7,389
  8,144
  8,609
  8,737
  8,519
  7,985
  7,200
  6,247
  5,216
  4,193
  3,243
  2,413
  1,726
  1,186
  782
  494
  299
  172
  94
  49
  24
  11
  5
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  60.3
  53.4
  47.4
  42.2
  37.7
  33.8
  30.5
  27.5
  24.9
  22.6
  20.6
  18.8
  17.2
  15.7
  14.4
  13.3
  12.2
  11.3
  10.4
  9.6
  8.9
  8.2
  7.6
  7.0
  6.5
  6.0
  5.6
  5.2
  4.8
  4.5

The Carlyle Group LP is an investment firm specializing in direct and fund of fund investments. Within direct investments, it specializes in management-led/ Leveraged buyouts, privatizations, divestitures, strategic minority equity investments, structured credit, global distressed and corporate opportunities, small and middle market, equity private placements, consolidations and buildups, senior debt, mezzanine and leveraged finance, and venture and growth capital financings, seed/startup, early venture, emerging growth, turnaround, mid venture, late venture, PIPES. The firm invests across four segments which include Corporate Private Equity, Real Assets, Global Market Strategies, and Solutions. The firm typically invests in agribusiness, ecological sector, airports, parking, Plastics, Rubber, diversified natural resources, minerals, farming, aerospace, defense, automotive, consumer, retail, industrial, infrastructure, energy, power, healthcare, software, software enabled services, semiconductors, communications infrastructure, financial technology, utilities, gaming, systems and related supply chain, electronic systems, systems, oil and gas, processing facilities, power generation assets, technology, systems, real estate, financial services, transportation, business services, telecommunications, media, and logistics sectors. Within the industrial sector, the firm invests in manufacturing, building products, packaging, chemicals, metals and mining, forestry and paper products, and industrial consumables and services. In consumer and retail sectors, it invests in food and beverage, retail, restaurants, consumer products, domestic consumption, consumer services, personal care products, direct marketing, and education. Within aerospace, defense, business services, and government services sectors, it seeks to invest in defense electronics, manufacturing and services, government contracting and services, information technology, distribution companies. In telecommunication and media sectors, it invests in cable TV, directories, publishing, entertainment and content delivery services, wireless infrastructure/services, fixed line networks, satellite services, broadband and Internet, and infrastructure. Within real estate, the firm invests in office, hotel, industrial, retail, for sale residential, student housing, hospitality, multifamily residential, homebuilding and building products, and senior living sectors. The firm seeks to make investments in growing business including those with overleveraged balance sheets. The firm seeks to hold its investments for four to six years. In the healthcare sector, it invests in healthcare services, outsourcing services, companies running clinical trials for pharmaceutical companies, managed care, pharmaceuticals, pharmaceutical related services, healthcare IT, medical, products, and devices. It seeks to invest in companies based in Sub-Saharan focusing on Ghana, Kenya, Mozambique, Botswana, Nigeria, Uganda, West Africa, North Africa and South Africa focusing on Tanzania and Zambia; Asia focusing on Pakistan, India, South East Asia, Indonesia, Korea, and Japan; Australia; New Zealand; Europe focusing on France, Italy, Denmark, United Kingdom, Germany, Austria, Belgium, Finland, Iceland, Ireland, Netherlands, Norway, Portugal, Spain, Benelux , Sweden, Switzerland, Hungary, Poland, and Russia; Middle East focusing on Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Turkey, and UAE; North America focusing on United States which further invest in Southeastern United States, Texas, Boston, San Francisco Bay Area and Pacific Northwest; Asia Pacific; Soviet Union, Central-Eastern Europe, and Israel; Nordic region; and South America focusing on Mexico, Argentina, Brazil, Chile, and Peru. The firm seeks to invest in food, financial, and healthcare industries in Western China. In the real estate sector, the firm seeks to invest in various locations across Europe focusing on France and Central Europe, United States, Asia focusing on China, and Latin America. It typically invests between $5 million and $50 million for venture investments and between $20 million and $1 billion for buyouts in companies with enterprise value of between $37.15 million and $1000 million and sales value of $10 million and $500 million. It seeks to invest in companies with market capitalization greater than $50 million. It typically holds its investments for three to five years. Within automotive and transportation sectors, the firm seeks to hold its investments in for four to six years. While investing in Japan, it does not invest in companies with more than 1,000 employees and prefers companies worth between $100 million and $150 million. The firm originates, structures, and acts as lead equity investor in the transactions. The Carlyle Group LP was founded in 1987 and is based in Washington, District of Columbia with additional offices in 20 countries across six continents (North America, South America, Asia, Australia, Europe, and Africa).

FINANCIAL RATIOS  of  Carlyle Group (CG)

Valuation Ratios
P/E Ratio 291.2
Price to Sales 0.8
Price to Book 5.7
Price to Tangible Book
Price to Cash Flow -5.8
Price to Free Cash Flow -5.4
Growth Rates
Sales Growth Rate -24.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -59.7%
Cap. Spend. - 3 Yr. Gr. Rate -3.6%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 1691.9%
Total Debt to Equity 1691.9%
Interest Coverage 2
Management Effectiveness
Return On Assets 0.1%
Ret/ On Assets - 3 Yr. Avg. 0.2%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0.1%
Return On Equity 1.5%
Return On Equity - 3 Yr. Avg. 3.3%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 76.1%
Gross Margin - 3 Yr. Avg. 57.3%
EBITDA Margin 7.7%
EBITDA Margin - 3 Yr. Avg. 21.9%
Operating Margin 1.4%
Oper. Margin - 3 Yr. Avg. -3.8%
Pre-Tax Margin 2%
Pre-Tax Margin - 3 Yr. Avg. 13.6%
Net Profit Margin 0.3%
Net Profit Margin - 3 Yr. Avg. 0.6%
Effective Tax Rate 66.7%
Eff/ Tax Rate - 3 Yr. Avg. 25%
Payout Ratio 2350%

CG stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CG stock intrinsic value calculation we used $2274 million for the last fiscal year's total revenue generated by Carlyle Group. The default revenue input number comes from 2016 income statement of Carlyle Group. 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 CG 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 11.9%, whose default value for CG is calculated based on our internal credit rating of Carlyle Group, 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 Carlyle Group.
    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 CG stock the variable cost ratio is equal to 115.3%.

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 CG 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 Carlyle Group.

Corporate tax rate of 27% is the nominal tax rate for Carlyle Group. 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 CG 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 CG are equal to 2.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Carlyle Group 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 CG is equal to -10%. 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 - $308 million for Carlyle Group - 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 320.743 million for Carlyle Group 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 Carlyle Group at the current share price and the inputted number of shares is $6.6 billion.

RELATED COMPANIES Price Int.Val. Rating
GRA W.R. Grace 67.92 56.86  sell
BX Blackstone Gro 31.36 501.61  str.buy
KKR KKR 18.14 57.29  str.buy
NUTR Nutraceutical 41.75 27.42  sell
OAK Oaktree Capita 46.40 1.32  str.sell
FIG Fortress Inves 7.97 11.38  buy
OZM Och-Ziff Capit 2.95 0.75  str.sell
BLK BlackRock 415.37 1,367.78  str.buy
APO Apollo Global 28.98 2,881.48  str.buy

COMPANY NEWS

▶ Insights on Valuations of Alternative Asset Managers   [Aug-17-17 09:06AM  Market Realist]
▶ Blackstone Beats Carlyle and Apollo on Realizations   [Aug-15-17 05:06PM  Market Realist]
▶ Insights on Apollos Premium Valuation   [07:36AM  Market Realist]
▶ Apollos Dividend to Rise in 2017   [Aug-11-17 10:38AM  Market Realist]
▶ Behind Apollos Real Assets Division   [09:08AM  Market Realist]
▶ Understanding Carlyles Discounted Valuations   [07:36AM  Market Realist]
▶ Apollos Private Equity Division Sees Fall in Total Revenue   [Aug-10-17 05:35PM  Market Realist]
▶ Carlyles Real Estate Division in 2H17   [07:37AM  Market Realist]
▶ Why Carlyles Credit Division Saw a Fall in 2Q17   [Aug-09-17 05:05PM  Market Realist]
▶ Behind Carlyle Groups Rising ENI   [01:48PM  Market Realist]
▶ U.S. Alt Managers Stockpile Dry Powder   [11:08AM  Barrons.com]
▶ [$$] McDonald's Expansion in China Is Backed by Citic, Carlyle   [Aug-08-17 01:21PM  The Wall Street Journal]
▶ Do KKRs Lower Valuations Present a Buying Opportunity?   [Aug-04-17 10:36AM  Market Realist]
▶ KKRs Dividends to Increase Marginally in 2017   [09:09AM  Market Realist]
▶ Insights on KKRs Capital Market Segment   [07:36AM  Market Realist]
▶ Behind KKRs Public Market Division   [Aug-03-17 04:35PM  Market Realist]
▶ KKRs Private Equity Divisions Deployments   [03:05PM  Market Realist]
▶ Carlyle beats 2Q profit forecasts   [Aug-02-17 09:22PM  Associated Press]
▶ Carlyle's Plan Is Right on Track   [10:21AM  Bloomberg]
▶ [$$] Carlyle's Profit Jumps as Investments Appreciate   [08:06AM  The Wall Street Journal]
▶ Carlyle beats 2Q profit forecasts   [06:45AM  Associated Press]
▶ Behind Blackstones Premium Valuations   [Jul-31-17 07:36AM  Market Realist]
▶ Why Carlyle Group's Ullman Whistles While He Works   [Jul-28-17 03:59PM  Bloomberg Video]
▶ Blackstones Hedge Fund Solutions See Inflows   [07:39AM  Market Realist]
▶ Blackstone Group: What Led to Strong Numbers in 2Q17?   [Jul-27-17 11:43AM  Market Realist]
▶ The Top General Motors Shareholders (GM)   [08:24AM  Investopedia]
▶ Insights on Carlyle Groups Fair Valuations   [07:36AM  Market Realist]
▶ Report: Carlyle Group seeks to break domestic records with $15B buyout fund   [Jul-24-17 05:55PM  American City Business Journals]
▶ EU mergers and takeovers (July 20)   [10:54AM  Reuters]
▶ [$$] HCR Manorcare Lines Up New Financing From Centerbridge Partners   [Jul-18-17 07:13PM  The Wall Street Journal]
▶ Crude Oil's Slide to Weigh on U.S. Alt Managers' Returns   [Jul-10-17 03:31PM  Barrons.com]
Stock chart of CG Financial statements of CG
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.