Intrinsic value of Caesars Entertainment - CZR

Previous Close

$12.32

  Intrinsic Value

$11.54

stock screener

  Rating & Target

hold

-6%

Previous close

$12.32

 
Intrinsic value

$11.54

 
Up/down potential

-6%

 
Rating

hold

We calculate the intrinsic value of CZR 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 8.7

 

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, %
  -1.32
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  3,877
  3,955
  4,045
  4,149
  4,266
  4,396
  4,537
  4,692
  4,859
  5,039
  5,233
  5,440
  5,661
  5,896
  6,145
  6,411
  6,691
  6,989
  7,303
  7,636
  7,986
  8,357
  8,747
  9,159
  9,592
  10,049
  10,530
  11,036
  11,568
  12,128
  12,718
Variable operating expenses, $m
 
  -2,550
  -2,612
  -2,684
  -2,764
  -2,852
  -2,950
  -3,055
  -3,170
  -3,294
  -3,426
  -3,729
  -3,880
  -4,041
  -4,213
  -4,394
  -4,587
  -4,791
  -5,006
  -5,234
  -5,474
  -5,728
  -5,996
  -6,278
  -6,575
  -6,888
  -7,218
  -7,565
  -7,930
  -8,314
  -8,718
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
  9,378
  -2,550
  -2,612
  -2,684
  -2,764
  -2,852
  -2,950
  -3,055
  -3,170
  -3,294
  -3,426
  -3,729
  -3,880
  -4,041
  -4,213
  -4,394
  -4,587
  -4,791
  -5,006
  -5,234
  -5,474
  -5,728
  -5,996
  -6,278
  -6,575
  -6,888
  -7,218
  -7,565
  -7,930
  -8,314
  -8,718
Operating income, $m
  -5,501
  6,504
  6,658
  6,833
  7,030
  7,248
  7,487
  7,747
  8,029
  8,333
  8,659
  9,169
  9,541
  9,937
  10,358
  10,805
  11,278
  11,779
  12,310
  12,870
  13,461
  14,085
  14,743
  15,436
  16,167
  16,937
  17,747
  18,600
  19,498
  20,442
  21,435
EBITDA, $m
  -5,062
  7,039
  7,200
  7,386
  7,593
  7,824
  8,076
  8,351
  8,649
  8,970
  9,314
  9,682
  10,075
  10,493
  10,938
  11,410
  11,910
  12,439
  12,999
  13,590
  14,215
  14,874
  15,569
  16,301
  17,073
  17,886
  18,741
  19,642
  20,590
  21,587
  22,636
Interest expense (income), $m
  634
  621
  96
  122
  151
  185
  222
  262
  306
  354
  405
  461
  520
  583
  650
  721
  797
  877
  962
  1,052
  1,147
  1,247
  1,353
  1,464
  1,581
  1,705
  1,836
  1,973
  2,117
  2,269
  2,429
Earnings before tax, $m
  -6,100
  5,884
  6,562
  6,711
  6,878
  7,063
  7,265
  7,485
  7,723
  7,979
  8,254
  8,708
  9,021
  9,354
  9,708
  10,084
  10,481
  10,902
  11,348
  11,818
  12,314
  12,838
  13,390
  13,972
  14,586
  15,232
  15,912
  16,627
  17,380
  18,173
  19,006
Tax expense, $m
  27
  1,589
  1,772
  1,812
  1,857
  1,907
  1,962
  2,021
  2,085
  2,154
  2,228
  2,351
  2,436
  2,526
  2,621
  2,723
  2,830
  2,944
  3,064
  3,191
  3,325
  3,466
  3,615
  3,773
  3,938
  4,113
  4,296
  4,489
  4,693
  4,907
  5,132
Net income, $m
  -3,569
  4,295
  4,790
  4,899
  5,021
  5,156
  5,304
  5,464
  5,638
  5,825
  6,025
  6,357
  6,585
  6,829
  7,087
  7,361
  7,651
  7,959
  8,284
  8,627
  8,989
  9,372
  9,775
  10,200
  10,648
  11,119
  11,615
  12,138
  12,688
  13,266
  13,874

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,513
  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
  14,894
  13,636
  13,950
  14,308
  14,711
  15,157
  15,646
  16,179
  16,756
  17,377
  18,044
  18,758
  19,519
  20,330
  21,191
  22,105
  23,074
  24,099
  25,184
  26,330
  27,539
  28,816
  30,162
  31,581
  33,076
  34,651
  36,309
  38,054
  39,890
  41,822
  43,854
Adjusted assets (=assets-cash), $m
  13,381
  13,636
  13,950
  14,308
  14,711
  15,157
  15,646
  16,179
  16,756
  17,377
  18,044
  18,758
  19,519
  20,330
  21,191
  22,105
  23,074
  24,099
  25,184
  26,330
  27,539
  28,816
  30,162
  31,581
  33,076
  34,651
  36,309
  38,054
  39,890
  41,822
  43,854
Revenue / Adjusted assets
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
  0.290
Average production assets, $m
  7,981
  8,138
  8,326
  8,540
  8,780
  9,046
  9,338
  9,656
  10,000
  10,371
  10,769
  11,195
  11,649
  12,133
  12,647
  13,193
  13,771
  14,383
  15,030
  15,714
  16,436
  17,198
  18,001
  18,848
  19,741
  20,680
  21,670
  22,711
  23,807
  24,960
  26,173
Working capital, $m
  -2,760
  -4,267
  -4,365
  -4,477
  -4,603
  -4,743
  -4,896
  -5,063
  -5,243
  -5,438
  -5,646
  -5,869
  -6,108
  -6,361
  -6,631
  -6,917
  -7,220
  -7,541
  -7,880
  -8,239
  -8,617
  -9,017
  -9,438
  -9,882
  -10,350
  -10,843
  -11,361
  -11,907
  -12,482
  -13,087
  -13,722
Total debt, $m
  6,838
  1,040
  1,322
  1,645
  2,007
  2,408
  2,849
  3,328
  3,847
  4,407
  5,007
  5,649
  6,334
  7,064
  7,839
  8,662
  9,534
  10,456
  11,432
  12,464
  13,552
  14,701
  15,913
  17,190
  18,536
  19,953
  21,445
  23,015
  24,668
  26,407
  28,236
Total liabilities, $m
  18,071
  12,273
  12,555
  12,878
  13,240
  13,641
  14,082
  14,561
  15,080
  15,640
  16,240
  16,882
  17,567
  18,297
  19,072
  19,895
  20,767
  21,689
  22,665
  23,697
  24,785
  25,934
  27,146
  28,423
  29,769
  31,186
  32,678
  34,248
  35,901
  37,640
  39,469
Total equity, $m
  -3,177
  1,364
  1,395
  1,431
  1,471
  1,516
  1,565
  1,618
  1,676
  1,738
  1,804
  1,876
  1,952
  2,033
  2,119
  2,211
  2,307
  2,410
  2,518
  2,633
  2,754
  2,882
  3,016
  3,158
  3,308
  3,465
  3,631
  3,805
  3,989
  4,182
  4,385
Total liabilities and equity, $m
  14,894
  13,637
  13,950
  14,309
  14,711
  15,157
  15,647
  16,179
  16,756
  17,378
  18,044
  18,758
  19,519
  20,330
  21,191
  22,106
  23,074
  24,099
  25,183
  26,330
  27,539
  28,816
  30,162
  31,581
  33,077
  34,651
  36,309
  38,053
  39,890
  41,822
  43,854
Debt-to-equity ratio
  -2.152
  0.760
  0.950
  1.150
  1.360
  1.590
  1.820
  2.060
  2.300
  2.540
  2.770
  3.010
  3.250
  3.470
  3.700
  3.920
  4.130
  4.340
  4.540
  4.730
  4.920
  5.100
  5.280
  5.440
  5.600
  5.760
  5.910
  6.050
  6.180
  6.310
  6.440
Adjusted equity ratio
  -0.350
  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
  -3,569
  4,295
  4,790
  4,899
  5,021
  5,156
  5,304
  5,464
  5,638
  5,825
  6,025
  6,357
  6,585
  6,829
  7,087
  7,361
  7,651
  7,959
  8,284
  8,627
  8,989
  9,372
  9,775
  10,200
  10,648
  11,119
  11,615
  12,138
  12,688
  13,266
  13,874
Depreciation, amort., depletion, $m
  439
  534
  543
  553
  564
  576
  589
  604
  620
  637
  655
  514
  534
  557
  580
  605
  632
  660
  689
  721
  754
  789
  826
  865
  906
  949
  994
  1,042
  1,092
  1,145
  1,201
Funds from operations, $m
  6,417
  4,829
  5,333
  5,452
  5,585
  5,732
  5,893
  6,068
  6,257
  6,461
  6,680
  6,870
  7,120
  7,385
  7,667
  7,966
  8,283
  8,619
  8,973
  9,348
  9,743
  10,161
  10,601
  11,064
  11,553
  12,068
  12,610
  13,180
  13,780
  14,411
  15,075
Change in working capital, $m
  5,829
  -84
  -98
  -112
  -126
  -140
  -153
  -167
  -180
  -194
  -209
  -223
  -238
  -254
  -270
  -286
  -303
  -321
  -339
  -359
  -379
  -399
  -421
  -444
  -468
  -493
  -519
  -546
  -575
  -605
  -636
Cash from operations, $m
  588
  4,913
  5,431
  5,564
  5,711
  5,871
  6,046
  6,235
  6,438
  6,656
  6,889
  7,094
  7,358
  7,639
  7,937
  8,252
  8,586
  8,939
  9,312
  9,706
  10,122
  10,560
  11,022
  11,509
  12,021
  12,560
  13,128
  13,726
  14,354
  15,015
  15,711
Maintenance CAPEX, $m
  0
  -366
  -373
  -382
  -392
  -403
  -415
  -428
  -443
  -459
  -476
  -494
  -514
  -534
  -557
  -580
  -605
  -632
  -660
  -689
  -721
  -754
  -789
  -826
  -865
  -906
  -949
  -994
  -1,042
  -1,092
  -1,145
New CAPEX, $m
  -220
  -158
  -187
  -214
  -240
  -266
  -292
  -318
  -344
  -371
  -398
  -426
  -454
  -484
  -514
  -546
  -578
  -612
  -647
  -684
  -722
  -762
  -803
  -847
  -892
  -940
  -989
  -1,041
  -1,096
  -1,153
  -1,213
Cash from investing activities, $m
  4,258
  -524
  -560
  -596
  -632
  -669
  -707
  -746
  -787
  -830
  -874
  -920
  -968
  -1,018
  -1,071
  -1,126
  -1,183
  -1,244
  -1,307
  -1,373
  -1,443
  -1,516
  -1,592
  -1,673
  -1,757
  -1,846
  -1,938
  -2,035
  -2,138
  -2,245
  -2,358
Free cash flow, $m
  4,846
  4,389
  4,871
  4,968
  5,079
  5,202
  5,339
  5,488
  5,651
  5,826
  6,015
  6,174
  6,390
  6,621
  6,866
  7,127
  7,403
  7,696
  8,006
  8,333
  8,679
  9,044
  9,430
  9,836
  10,264
  10,715
  11,190
  11,690
  12,217
  12,770
  13,353
Issuance/(repayment) of debt, $m
  -148
  -5,709
  282
  323
  362
  401
  440
  480
  519
  559
  600
  642
  685
  730
  775
  823
  872
  923
  976
  1,031
  1,089
  1,149
  1,212
  1,277
  1,346
  1,417
  1,492
  1,571
  1,653
  1,739
  1,829
Issuance/(repurchase) of shares, $m
  -1,126
  1,670
  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  
  -1,609
  -4,039
  282
  323
  362
  401
  440
  480
  519
  559
  600
  642
  685
  730
  775
  823
  872
  923
  976
  1,031
  1,089
  1,149
  1,212
  1,277
  1,346
  1,417
  1,492
  1,571
  1,653
  1,739
  1,829
Total cash flow (excl. dividends), $m
  3,237
  349
  5,153
  5,291
  5,441
  5,604
  5,779
  5,968
  6,170
  6,385
  6,615
  6,816
  7,075
  7,350
  7,641
  7,949
  8,275
  8,619
  8,981
  9,364
  9,768
  10,193
  10,641
  11,113
  11,610
  12,132
  12,682
  13,261
  13,869
  14,509
  15,182
Retained Cash Flow (-), $m
  4,164
  -5,965
  -31
  -36
  -40
  -45
  -49
  -53
  -58
  -62
  -67
  -71
  -76
  -81
  -86
  -91
  -97
  -103
  -108
  -115
  -121
  -128
  -135
  -142
  -150
  -157
  -166
  -175
  -184
  -193
  -203
Prev. year cash balance distribution, $m
 
  1,424
  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
 
  -4,192
  5,122
  5,255
  5,401
  5,559
  5,730
  5,915
  6,112
  6,323
  6,548
  6,745
  6,999
  7,269
  7,555
  7,858
  8,178
  8,516
  8,873
  9,250
  9,647
  10,066
  10,507
  10,971
  11,460
  11,975
  12,516
  13,086
  13,686
  14,316
  14,979
Discount rate, %
 
  16.10
  16.91
  17.75
  18.64
  19.57
  20.55
  21.58
  22.65
  23.79
  24.98
  26.23
  27.54
  28.91
  30.36
  31.88
  33.47
  35.14
  36.90
  38.75
  40.68
  42.72
  44.85
  47.10
  49.45
  51.92
  54.52
  57.25
  60.11
  63.11
  66.27
PV of cash for distribution, $m
 
  -3,610
  3,747
  3,219
  2,726
  2,275
  1,867
  1,507
  1,193
  927
  704
  520
  378
  268
  185
  124
  81
  51
  31
  18
  10
  6
  3
  2
  1
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0
  50.0

Caesars Entertainment Corporation is a holding company. The Company provides casino-entertainment and hospitality services. The Company's segments include Caesars Entertainment Resort Properties, LLC (CERP), Caesars Growth Partners, LLC (CGP) and Other. The Company's resorts operate primarily under the Harrah's, Caesars and Horseshoe brand names. The Company also owns the London clubs international family of casinos. The Company's facilities include gaming offerings, food and beverage outlets, hotel and convention space, and non-gaming entertainment options. As of July 14, 2017, the Company through its subsidiaries, operates 47 casinos in 13 states and five countries. As of December 31, 2016, CERP owned six casinos in the United States and The LINQ promenade along with leasing Octavius Tower at Caesars Palace Las Vegas (Octavius Tower) to Caesars Entertainment Operating Company (CEOC) and gaming space at The LINQ promenade to CGP.

FINANCIAL RATIOS  of  Caesars Entertainment (CZR)

Valuation Ratios
P/E Ratio -0.5
Price to Sales 0.5
Price to Book -0.6
Price to Tangible Book
Price to Cash Flow 3.1
Price to Free Cash Flow 4.9
Growth Rates
Sales Growth Rate -1.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -35.5%
Cap. Spend. - 3 Yr. Gr. Rate -21.2%
Financial Strength
Quick Ratio 17
Current Ratio 0.4
LT Debt to Equity -212.4%
Total Debt to Equity -215.2%
Interest Coverage -9
Management Effectiveness
Return On Assets -21.6%
Ret/ On Assets - 3 Yr. Avg. 3.7%
Return On Total Capital -61.5%
Ret/ On T. Cap. - 3 Yr. Avg. -10.4%
Return On Equity 325.9%
Return On Equity - 3 Yr. Avg. 33.1%
Asset Turnover 0.3
Profitability Ratios
Gross Margin 54.6%
Gross Margin - 3 Yr. Avg. 51.6%
EBITDA Margin -129.7%
EBITDA Margin - 3 Yr. Avg. 12.4%
Operating Margin -141.9%
Oper. Margin - 3 Yr. Avg. 4.8%
Pre-Tax Margin -157.3%
Pre-Tax Margin - 3 Yr. Avg. -17.3%
Net Profit Margin -92.1%
Net Profit Margin - 3 Yr. Avg. 7.9%
Effective Tax Rate -0.4%
Eff/ Tax Rate - 3 Yr. Avg. 5.2%
Payout Ratio 0%

CZR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CZR stock intrinsic value calculation we used $3877 million for the last fiscal year's total revenue generated by Caesars Entertainment. The default revenue input number comes from 2016 income statement of Caesars Entertainment. 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 CZR stock valuation model: a) initial revenue growth rate of 2% 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 16.1%, whose default value for CZR is calculated based on our internal credit rating of Caesars Entertainment, 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 Caesars Entertainment.
    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 CZR stock the variable cost ratio is equal to -64.4%.

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 CZR 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 9.2% for Caesars Entertainment.

Corporate tax rate of 27% is the nominal tax rate for Caesars Entertainment. 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 CZR 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 CZR are equal to 205.8%.

Life of production assets of 21.8 years is the average useful life of capital assets used in Caesars Entertainment 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 CZR is equal to -107.9%. 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 - $-3177 million for Caesars Entertainment - 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 703.279 million for Caesars Entertainment 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 Caesars Entertainment at the current share price and the inputted number of shares is $8.7 billion.

RELATED COMPANIES Price Int.Val. Rating
FLL Full House Res 3.45 1.42  str.sell
NYNY Empire Resorts 21.25 2.25  str.sell
UWN Nevada Gold&Ca 2.44 2.58  hold
MGM MGM Resorts In 33.00 1.91  str.sell
ERI Eldorado Resor 29.20 18.63  sell

COMPANY NEWS

▶ Casino giant Caesars to buying Centaur Holdings   [Nov-16-17 07:09PM  Associated Press]
▶ Caesars reports 3Q loss   [Nov-01-17 04:41PM  Associated Press]
▶ These 4 Casino Stocks Have Deep Las Vegas Roots   [Oct-31-17 01:34PM  Forbes]
▶ [$$] CIO Pay Jumps With Demand For Digital Change   [Oct-26-17 02:47PM  The Wall Street Journal]
▶ [$$] Caesars Returns to Building Its Gaming Empire   [Oct-21-17 12:01AM  Barrons.com]
▶ [$$] Caesars Entertainment: imperial ambition   [Oct-06-17 01:07PM  Financial Times]
▶ Casino Stocks Rebound Following Las Vegas Attack   [Oct-04-17 03:24PM  TheStreet.com]
▶ Casino Stock Trying To Cash In On Potential Breakout   [10:36AM  Investor's Business Daily]
▶ [$$] Buyers Lie in Wait to Pounce on Big Acquisition   [Sep-25-17 08:51PM  The Wall Street Journal]
▶ Caesars Entertainment Shows Market Leadership With Jump To 91 RS Rating   [Sep-15-17 03:00AM  Investor's Business Daily]
▶ Options say these three stocks are ready to break out   [Aug-24-17 01:39PM  CNBC Videos]
▶ Las Vegas: There's Good News And Bad News   [Aug-14-17 11:49AM  Barrons.com]
▶ 3 Casino Stocks to Buy Now   [Aug-08-17 03:39PM  Zacks]
▶ Caesars reports 2Q loss   [03:11AM  Associated Press]
Financial statements of CZR
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.