Intrinsic value of Diebold Nixdorf - DBD

Previous Close

$22.75

  Intrinsic Value

$292.21

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+5000%

Previous close

$22.75

 
Intrinsic value

$292.21

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+5000%

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

We calculate the intrinsic value of DBD 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 1.7

 

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, %
  37.08
  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
  3,316
  5,306
  8,197
  12,259
  17,787
  25,095
  34,500
  46,309
  60,806
  78,243
  98,827
  122,720
  150,038
  180,846
  215,171
  253,002
  294,303
  339,012
  387,058
  438,364
  492,851
  550,449
  611,098
  674,751
  741,380
  810,975
  883,544
  959,119
  1,037,750
  1,119,508
  1,204,485
Variable operating expenses, $m
 
  5,118
  7,854
  11,695
  16,925
  23,837
  32,733
  43,903
  57,616
  74,110
  93,580
  116,082
  141,921
  171,063
  203,531
  239,316
  278,382
  320,673
  366,120
  414,650
  466,189
  520,672
  578,039
  638,249
  701,274
  767,104
  835,748
  907,234
  981,611
  1,058,947
  1,139,327
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
  3,476
  5,118
  7,854
  11,695
  16,925
  23,837
  32,733
  43,903
  57,616
  74,110
  93,580
  116,082
  141,921
  171,063
  203,531
  239,316
  278,382
  320,673
  366,120
  414,650
  466,189
  520,672
  578,039
  638,249
  701,274
  767,104
  835,748
  907,234
  981,611
  1,058,947
  1,139,327
Operating income, $m
  -160
  187
  344
  563
  862
  1,258
  1,767
  2,405
  3,190
  4,133
  5,246
  6,639
  8,117
  9,783
  11,640
  13,687
  15,921
  18,339
  20,938
  23,714
  26,662
  29,777
  33,058
  36,502
  40,106
  43,871
  47,797
  51,885
  56,139
  60,561
  65,158
EBITDA, $m
  -25
  399
  617
  923
  1,339
  1,890
  2,598
  3,487
  4,578
  5,891
  7,441
  9,240
  11,297
  13,617
  16,202
  19,050
  22,160
  25,526
  29,144
  33,007
  37,110
  41,447
  46,014
  50,806
  55,823
  61,064
  66,528
  72,218
  78,139
  84,295
  90,694
Interest expense (income), $m
  85
  118
  310
  589
  980
  1,513
  2,217
  3,124
  4,262
  5,660
  7,341
  9,325
  11,628
  14,262
  17,232
  20,541
  24,187
  28,169
  32,479
  37,110
  42,056
  47,309
  52,861
  58,707
  64,843
  71,266
  77,975
  84,971
  92,256
  99,836
  107,718
Earnings before tax, $m
  -238
  69
  34
  -25
  -118
  -255
  -451
  -719
  -1,073
  -1,527
  -2,094
  -2,686
  -3,512
  -4,479
  -5,592
  -6,854
  -8,267
  -9,829
  -11,540
  -13,396
  -15,395
  -17,531
  -19,803
  -22,206
  -24,737
  -27,396
  -30,179
  -33,086
  -36,118
  -39,275
  -42,559
Tax expense, $m
  -67
  19
  9
  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
  -33
  50
  25
  -25
  -118
  -255
  -451
  -719
  -1,073
  -1,527
  -2,094
  -2,686
  -3,512
  -4,479
  -5,592
  -6,854
  -8,267
  -9,829
  -11,540
  -13,396
  -15,395
  -17,531
  -19,803
  -22,206
  -24,737
  -27,396
  -30,179
  -33,086
  -36,118
  -39,275
  -42,559

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  717
  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
  5,270
  8,200
  12,669
  18,947
  27,491
  38,786
  53,322
  71,574
  93,982
  120,931
  152,746
  189,676
  231,897
  279,514
  332,567
  391,039
  454,873
  523,975
  598,235
  677,533
  761,748
  850,771
  944,510
  1,042,892
  1,145,873
  1,253,438
  1,365,602
  1,482,410
  1,603,941
  1,730,306
  1,861,646
Adjusted assets (=assets-cash), $m
  4,553
  8,200
  12,669
  18,947
  27,491
  38,786
  53,322
  71,574
  93,982
  120,931
  152,746
  189,676
  231,897
  279,514
  332,567
  391,039
  454,873
  523,975
  598,235
  677,533
  761,748
  850,771
  944,510
  1,042,892
  1,145,873
  1,253,438
  1,365,602
  1,482,410
  1,603,941
  1,730,306
  1,861,646
Revenue / Adjusted assets
  0.728
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
  0.647
Average production assets, $m
  702
  1,125
  1,738
  2,599
  3,771
  5,320
  7,314
  9,817
  12,891
  16,587
  20,951
  26,017
  31,808
  38,339
  45,616
  53,637
  62,392
  71,871
  82,056
  92,933
  104,484
  116,695
  129,553
  143,047
  157,173
  171,927
  187,311
  203,333
  220,003
  237,336
  255,351
Working capital, $m
  795
  297
  459
  686
  996
  1,405
  1,932
  2,593
  3,405
  4,382
  5,534
  6,872
  8,402
  10,127
  12,050
  14,168
  16,481
  18,985
  21,675
  24,548
  27,600
  30,825
  34,221
  37,786
  41,517
  45,415
  49,478
  53,711
  58,114
  62,692
  67,451
Total debt, $m
  1,798
  4,425
  8,408
  14,001
  21,614
  31,678
  44,629
  60,892
  80,857
  104,869
  133,216
  166,120
  203,739
  246,166
  293,436
  345,535
  402,411
  463,981
  530,147
  600,801
  675,836
  755,156
  838,677
  926,336
  1,018,092
  1,113,933
  1,213,870
  1,317,946
  1,426,230
  1,538,822
  1,655,846
Total liabilities, $m
  4,679
  7,306
  11,289
  16,882
  24,495
  34,559
  47,510
  63,773
  83,738
  107,750
  136,097
  169,001
  206,620
  249,047
  296,317
  348,416
  405,292
  466,862
  533,028
  603,682
  678,717
  758,037
  841,558
  929,217
  1,020,973
  1,116,814
  1,216,751
  1,320,827
  1,429,111
  1,541,703
  1,658,727
Total equity, $m
  591
  894
  1,381
  2,065
  2,997
  4,228
  5,812
  7,802
  10,244
  13,182
  16,649
  20,675
  25,277
  30,467
  36,250
  42,623
  49,581
  57,113
  65,208
  73,851
  83,031
  92,734
  102,952
  113,675
  124,900
  136,625
  148,851
  161,583
  174,830
  188,603
  202,919
Total liabilities and equity, $m
  5,270
  8,200
  12,670
  18,947
  27,492
  38,787
  53,322
  71,575
  93,982
  120,932
  152,746
  189,676
  231,897
  279,514
  332,567
  391,039
  454,873
  523,975
  598,236
  677,533
  761,748
  850,771
  944,510
  1,042,892
  1,145,873
  1,253,439
  1,365,602
  1,482,410
  1,603,941
  1,730,306
  1,861,646
Debt-to-equity ratio
  3.042
  4.950
  6.090
  6.780
  7.210
  7.490
  7.680
  7.810
  7.890
  7.960
  8.000
  8.030
  8.060
  8.080
  8.090
  8.110
  8.120
  8.120
  8.130
  8.140
  8.140
  8.140
  8.150
  8.150
  8.150
  8.150
  8.150
  8.160
  8.160
  8.160
  8.160
Adjusted equity ratio
  -0.028
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109
  0.109

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -33
  50
  25
  -25
  -118
  -255
  -451
  -719
  -1,073
  -1,527
  -2,094
  -2,686
  -3,512
  -4,479
  -5,592
  -6,854
  -8,267
  -9,829
  -11,540
  -13,396
  -15,395
  -17,531
  -19,803
  -22,206
  -24,737
  -27,396
  -30,179
  -33,086
  -36,118
  -39,275
  -42,559
Depreciation, amort., depletion, $m
  135
  212
  274
  360
  477
  632
  831
  1,082
  1,389
  1,759
  2,195
  2,602
  3,181
  3,834
  4,562
  5,364
  6,239
  7,187
  8,206
  9,293
  10,448
  11,670
  12,955
  14,305
  15,717
  17,193
  18,731
  20,333
  22,000
  23,734
  25,535
Funds from operations, $m
  177
  263
  298
  335
  359
  377
  380
  363
  316
  231
  100
  -85
  -331
  -645
  -1,030
  -1,490
  -2,027
  -2,642
  -3,335
  -4,103
  -4,946
  -5,862
  -6,847
  -7,901
  -9,020
  -10,203
  -11,447
  -12,753
  -14,117
  -15,541
  -17,024
Change in working capital, $m
  150
  111
  162
  227
  310
  409
  527
  661
  812
  976
  1,153
  1,338
  1,530
  1,725
  1,922
  2,119
  2,313
  2,504
  2,691
  2,873
  3,051
  3,225
  3,396
  3,565
  3,731
  3,897
  4,064
  4,232
  4,403
  4,578
  4,759
Cash from operations, $m
  27
  151
  136
  107
  50
  -33
  -146
  -298
  -496
  -745
  -1,052
  -1,423
  -1,861
  -2,370
  -2,952
  -3,609
  -4,340
  -5,146
  -6,025
  -6,976
  -7,997
  -9,087
  -10,244
  -11,466
  -12,751
  -14,100
  -15,511
  -16,985
  -18,521
  -20,120
  -21,783
Maintenance CAPEX, $m
  0
  -70
  -112
  -174
  -260
  -377
  -532
  -731
  -982
  -1,289
  -1,659
  -2,095
  -2,602
  -3,181
  -3,834
  -4,562
  -5,364
  -6,239
  -7,187
  -8,206
  -9,293
  -10,448
  -11,670
  -12,955
  -14,305
  -15,717
  -17,193
  -18,731
  -20,333
  -22,000
  -23,734
New CAPEX, $m
  -40
  -423
  -613
  -861
  -1,172
  -1,549
  -1,994
  -2,503
  -3,073
  -3,697
  -4,364
  -5,065
  -5,791
  -6,531
  -7,277
  -8,020
  -8,756
  -9,478
  -10,186
  -10,877
  -11,551
  -12,211
  -12,858
  -13,495
  -14,125
  -14,754
  -15,385
  -16,022
  -16,670
  -17,333
  -18,015
Cash from investing activities, $m
  -561
  -493
  -725
  -1,035
  -1,432
  -1,926
  -2,526
  -3,234
  -4,055
  -4,986
  -6,023
  -7,160
  -8,393
  -9,712
  -11,111
  -12,582
  -14,120
  -15,717
  -17,373
  -19,083
  -20,844
  -22,659
  -24,528
  -26,450
  -28,430
  -30,471
  -32,578
  -34,753
  -37,003
  -39,333
  -41,749
Free cash flow, $m
  -534
  -342
  -589
  -928
  -1,382
  -1,959
  -2,672
  -3,533
  -4,551
  -5,731
  -7,075
  -8,583
  -10,254
  -12,082
  -14,063
  -16,191
  -18,460
  -20,864
  -23,398
  -26,058
  -28,842
  -31,746
  -34,771
  -37,915
  -41,181
  -44,571
  -48,089
  -51,738
  -55,524
  -59,453
  -63,531
Issuance/(repayment) of debt, $m
  997
  2,734
  3,982
  5,593
  7,613
  10,064
  12,952
  16,262
  19,965
  24,012
  28,347
  32,905
  37,619
  42,427
  47,270
  52,099
  56,875
  61,570
  66,166
  70,654
  75,036
  79,320
  83,521
  87,659
  91,757
  95,840
  99,937
  104,076
  108,285
  112,591
  117,024
Issuance/(repurchase) of shares, $m
  -2
  287
  462
  709
  1,049
  1,486
  2,035
  2,708
  3,515
  4,465
  5,562
  6,712
  8,114
  9,669
  11,374
  13,227
  15,225
  17,362
  19,635
  22,040
  24,574
  27,235
  30,020
  32,929
  35,962
  39,120
  42,404
  45,818
  49,365
  53,048
  56,875
Cash from financing (excl. dividends), $m  
  947
  3,021
  4,444
  6,302
  8,662
  11,550
  14,987
  18,970
  23,480
  28,477
  33,909
  39,617
  45,733
  52,096
  58,644
  65,326
  72,100
  78,932
  85,801
  92,694
  99,610
  106,555
  113,541
  120,588
  127,719
  134,960
  142,341
  149,894
  157,650
  165,639
  173,899
Total cash flow (excl. dividends), $m
  404
  2,680
  3,855
  5,375
  7,280
  9,591
  12,315
  15,437
  18,929
  22,746
  26,834
  31,033
  35,479
  40,013
  44,581
  49,136
  53,640
  58,068
  62,402
  66,635
  70,768
  74,808
  78,770
  82,673
  86,538
  90,389
  94,253
  98,156
  102,125
  106,187
  110,368
Retained Cash Flow (-), $m
  -179
  -337
  -487
  -709
  -1,049
  -1,486
  -2,035
  -2,708
  -3,515
  -4,465
  -5,562
  -6,712
  -8,114
  -9,669
  -11,374
  -13,227
  -15,225
  -17,362
  -19,635
  -22,040
  -24,574
  -27,235
  -30,020
  -32,929
  -35,962
  -39,120
  -42,404
  -45,818
  -49,365
  -53,048
  -56,875
Prev. year cash balance distribution, $m
 
  35
  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
 
  2,376
  3,368
  4,666
  6,231
  8,105
  10,279
  12,729
  15,414
  18,282
  21,272
  24,321
  27,365
  30,345
  33,207
  35,908
  38,416
  40,707
  42,768
  44,595
  46,194
  47,573
  48,750
  49,743
  50,575
  51,269
  51,849
  52,338
  52,761
  53,139
  53,493
Discount rate, %
 
  9.40
  9.87
  10.36
  10.88
  11.43
  12.00
  12.60
  13.23
  13.89
  14.58
  15.31
  16.08
  16.88
  17.73
  18.61
  19.54
  20.52
  21.54
  22.62
  23.75
  24.94
  26.19
  27.50
  28.87
  30.32
  31.83
  33.42
  35.09
  36.85
  38.69
PV of cash for distribution, $m
 
  2,172
  2,790
  3,471
  4,122
  4,719
  5,209
  5,548
  5,706
  5,672
  5,453
  5,074
  4,573
  3,994
  3,381
  2,775
  2,209
  1,705
  1,276
  926
  651
  443
  292
  186
  115
  68
  39
  22
  12
  6
  3
Current shareholders' claim on cash, %
  100
  84.5
  71.4
  60.4
  51.2
  43.5
  37.2
  31.9
  27.5
  23.8
  20.7
  18.1
  15.9
  14.0
  12.4
  11.0
  9.7
  8.6
  7.7
  6.9
  6.2
  5.5
  4.9
  4.4
  4.0
  3.6
  3.2
  2.9
  2.6
  2.4
  2.1

Diebold Nixdorf, Incorporated provides connected commerce services, software, and technology for financial, commercial, and industrial customers. The company operates in four segments: North America; Asia Pacific; Europe, Middle East and Africa; and Latin America. It offers financial self-service solutions and technologies, including automated teller machine (ATM) outsourcing, ATM security, deposit automation, recycling and payment terminals, and software. The company also provides financial self-service support and maintenance services comprising installation and ongoing maintenance of products, availability management, branch automation, and distribution channel consulting; outsourced and managed services, such as remote monitoring, troubleshooting, transaction processing, currency management, maintenance, and online communication services; and strategic analysis and planning for new systems, systems integration, architectural engineering, consulting, and project management services, as well as multi-vendor services. In addition, it offers electronic security services and products; security monitoring solutions comprising remote monitoring and diagnostics, fire detection, intrusion protection, managed access control, energy management, remote video management and storage, logical security, and Web-based solutions; and physical security and facility products. Further, the company provides development, training, support, and maintenance of elections and lottery equipment, networking, tabulation, and diagnostic software; and IT solutions and services to retail banks and the retail industry. The company was formerly known as Diebold, Incorporated and changed its name to Diebold Nixdorf, Incorporated in December 2016. Diebold Nixdorf, Incorporated was founded in 1859 and is headquartered in North Canton, Ohio.

FINANCIAL RATIOS  of  Diebold Nixdorf (DBD)

Valuation Ratios
P/E Ratio -51.8
Price to Sales 0.5
Price to Book 2.9
Price to Tangible Book
Price to Cash Flow 63.3
Price to Free Cash Flow -131.5
Growth Rates
Sales Growth Rate 37.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -23.1%
Cap. Spend. - 3 Yr. Gr. Rate 3.3%
Financial Strength
Quick Ratio 7
Current Ratio 0.1
LT Debt to Equity 286.1%
Total Debt to Equity 304.2%
Interest Coverage -2
Management Effectiveness
Return On Assets 0.7%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital -1.9%
Ret/ On T. Cap. - 3 Yr. Avg. 5.2%
Return On Equity -6.6%
Return On Equity - 3 Yr. Avg. 9.8%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 22.5%
Gross Margin - 3 Yr. Avg. 25.4%
EBITDA Margin -0.5%
EBITDA Margin - 3 Yr. Avg. 4.9%
Operating Margin -4.8%
Oper. Margin - 3 Yr. Avg. 1.2%
Pre-Tax Margin -7.2%
Pre-Tax Margin - 3 Yr. Avg. 0.1%
Net Profit Margin -1%
Net Profit Margin - 3 Yr. Avg. 2.1%
Effective Tax Rate 28.2%
Eff/ Tax Rate - 3 Yr. Avg. 9.6%
Payout Ratio -197%

DBD stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DBD stock intrinsic value calculation we used $3316 million for the last fiscal year's total revenue generated by Diebold Nixdorf. The default revenue input number comes from 2016 income statement of Diebold Nixdorf. 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 DBD 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 9.4%, whose default value for DBD is calculated based on our internal credit rating of Diebold Nixdorf, 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 Diebold Nixdorf.
    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 DBD stock the variable cost ratio is equal to 97.6%.

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 DBD 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 7% for Diebold Nixdorf.

Corporate tax rate of 27% is the nominal tax rate for Diebold Nixdorf. 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 DBD 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 DBD are equal to 21.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Diebold Nixdorf 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 DBD is equal to 5.6%. 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 - $591 million for Diebold Nixdorf - 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 73.226 million for Diebold Nixdorf 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 Diebold Nixdorf at the current share price and the inputted number of shares is $1.7 billion.

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COMPANY NEWS

▶ Diebold reports 2Q loss   [Jul-19-17 09:01PM  Associated Press]
▶ Story Stocks from Briefing.com   [12:10PM  Briefing.com]
▶ [$$] Banks rush to bring old-fashioned ATMs into digital age   [Jun-27-17 12:28AM  Financial Times]
▶ [$$] NCR: Profiting From the Amazon Arms Race   [Jun-24-17 12:01AM  Barrons.com]
▶ [$$] Cash's Survival Is Diebold's Opportunity   [Jun-10-17 12:58AM  Barrons.com]
▶ Diebold reports 1Q loss   [May-04-17 08:31AM  Associated Press]
▶ Diebold reports 4Q loss   [07:26AM  AP]
▶ Diebold Inc (DBD): Hedge Fund Ownership Surges 90% in 1 Year   [Nov-28-16 03:03PM  at Insider Monkey]
Stock chart of DBD Financial statements of DBD Annual reports of DBD
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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