Intrinsic value of Discovery Communications Series A - DISCA

Previous Close

$17.55

  Intrinsic Value

$55.63

stock screener

  Rating & Target

str. buy

+217%

Previous close

$17.55

 
Intrinsic value

$55.63

 
Up/down potential

+217%

 
Rating

str. buy

We calculate the intrinsic value of DISCA 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 6.5

 

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, %
  1.61
  2.20
  2.48
  2.73
  2.96
  3.16
  3.35
  3.51
  3.66
  3.79
  3.92
  4.02
  4.12
  4.21
  4.29
  4.36
  4.42
  4.48
  4.53
  4.58
  4.62
  4.66
  4.69
  4.72
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
Revenue, $m
  6,497
  6,640
  6,805
  6,991
  7,197
  7,425
  7,673
  7,943
  8,234
  8,546
  8,881
  9,238
  9,619
  10,024
  10,454
  10,909
  11,392
  11,902
  12,442
  13,012
  13,613
  14,247
  14,916
  15,621
  16,363
  17,145
  17,967
  18,833
  19,744
  20,703
  21,710
Variable operating expenses, $m
 
  4,564
  4,657
  4,762
  4,879
  5,008
  5,149
  5,302
  5,466
  5,643
  5,833
  5,231
  5,447
  5,676
  5,919
  6,177
  6,451
  6,740
  7,045
  7,368
  7,708
  8,068
  8,446
  8,845
  9,266
  9,708
  10,174
  10,664
  11,180
  11,723
  12,294
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
  4,501
  4,564
  4,657
  4,762
  4,879
  5,008
  5,149
  5,302
  5,466
  5,643
  5,833
  5,231
  5,447
  5,676
  5,919
  6,177
  6,451
  6,740
  7,045
  7,368
  7,708
  8,068
  8,446
  8,845
  9,266
  9,708
  10,174
  10,664
  11,180
  11,723
  12,294
Operating income, $m
  1,996
  2,076
  2,147
  2,228
  2,318
  2,417
  2,524
  2,641
  2,767
  2,903
  3,048
  4,007
  4,172
  4,348
  4,534
  4,732
  4,941
  5,163
  5,397
  5,644
  5,905
  6,180
  6,470
  6,776
  7,097
  7,436
  7,793
  8,169
  8,564
  8,980
  9,417
EBITDA, $m
  4,091
  3,584
  3,673
  3,773
  3,885
  4,007
  4,141
  4,287
  4,444
  4,612
  4,793
  4,986
  5,191
  5,410
  5,642
  5,888
  6,148
  6,424
  6,715
  7,023
  7,347
  7,690
  8,050
  8,431
  8,831
  9,253
  9,697
  10,165
  10,656
  11,173
  11,717
Interest expense (income), $m
  343
  345
  355
  366
  379
  394
  410
  428
  447
  467
  489
  513
  538
  565
  593
  624
  656
  690
  726
  764
  804
  846
  891
  938
  988
  1,040
  1,096
  1,154
  1,215
  1,279
  1,346
Earnings before tax, $m
  1,671
  1,731
  1,793
  1,862
  1,938
  2,023
  2,114
  2,214
  2,321
  2,436
  2,559
  3,494
  3,634
  3,783
  3,941
  4,108
  4,285
  4,473
  4,671
  4,880
  5,101
  5,333
  5,579
  5,837
  6,109
  6,396
  6,698
  7,015
  7,349
  7,701
  8,070
Tax expense, $m
  453
  467
  484
  503
  523
  546
  571
  598
  627
  658
  691
  943
  981
  1,021
  1,064
  1,109
  1,157
  1,208
  1,261
  1,318
  1,377
  1,440
  1,506
  1,576
  1,650
  1,727
  1,808
  1,894
  1,984
  2,079
  2,179
Net income, $m
  1,194
  1,264
  1,309
  1,359
  1,415
  1,476
  1,543
  1,616
  1,694
  1,778
  1,868
  2,551
  2,653
  2,762
  2,877
  2,999
  3,128
  3,265
  3,410
  3,562
  3,723
  3,893
  4,072
  4,261
  4,460
  4,669
  4,889
  5,121
  5,365
  5,622
  5,891

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  300
  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
  15,672
  15,697
  16,087
  16,526
  17,015
  17,553
  18,141
  18,778
  19,465
  20,204
  20,995
  21,840
  22,740
  23,697
  24,713
  25,790
  26,931
  28,138
  29,413
  30,761
  32,182
  33,682
  35,263
  36,929
  38,683
  40,531
  42,476
  44,523
  46,677
  48,942
  51,325
Adjusted assets (=assets-cash), $m
  15,372
  15,697
  16,087
  16,526
  17,015
  17,553
  18,141
  18,778
  19,465
  20,204
  20,995
  21,840
  22,740
  23,697
  24,713
  25,790
  26,931
  28,138
  29,413
  30,761
  32,182
  33,682
  35,263
  36,929
  38,683
  40,531
  42,476
  44,523
  46,677
  48,942
  51,325
Revenue / Adjusted assets
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
  0.423
Average production assets, $m
  3,925
  4,011
  4,110
  4,222
  4,347
  4,485
  4,635
  4,798
  4,973
  5,162
  5,364
  5,580
  5,810
  6,054
  6,314
  6,589
  6,881
  7,189
  7,515
  7,859
  8,222
  8,605
  9,009
  9,435
  9,883
  10,355
  10,852
  11,375
  11,926
  12,504
  13,113
Working capital, $m
  941
  737
  755
  776
  799
  824
  852
  882
  914
  949
  986
  1,025
  1,068
  1,113
  1,160
  1,211
  1,264
  1,321
  1,381
  1,444
  1,511
  1,581
  1,656
  1,734
  1,816
  1,903
  1,994
  2,090
  2,192
  2,298
  2,410
Total debt, $m
  7,923
  8,061
  8,325
  8,623
  8,954
  9,319
  9,717
  10,149
  10,615
  11,116
  11,652
  12,225
  12,835
  13,484
  14,173
  14,904
  15,677
  16,496
  17,360
  18,274
  19,238
  20,254
  21,326
  22,456
  23,645
  24,898
  26,217
  27,605
  29,065
  30,601
  32,216
Total liabilities, $m
  10,505
  10,643
  10,907
  11,205
  11,536
  11,901
  12,299
  12,731
  13,197
  13,698
  14,234
  14,807
  15,417
  16,066
  16,755
  17,486
  18,259
  19,078
  19,942
  20,856
  21,820
  22,836
  23,908
  25,038
  26,227
  27,480
  28,799
  30,187
  31,647
  33,183
  34,798
Total equity, $m
  5,167
  5,055
  5,180
  5,321
  5,479
  5,652
  5,841
  6,046
  6,268
  6,506
  6,760
  7,032
  7,322
  7,630
  7,958
  8,304
  8,672
  9,060
  9,471
  9,905
  10,363
  10,846
  11,355
  11,891
  12,456
  13,051
  13,677
  14,336
  15,030
  15,759
  16,527
Total liabilities and equity, $m
  15,672
  15,698
  16,087
  16,526
  17,015
  17,553
  18,140
  18,777
  19,465
  20,204
  20,994
  21,839
  22,739
  23,696
  24,713
  25,790
  26,931
  28,138
  29,413
  30,761
  32,183
  33,682
  35,263
  36,929
  38,683
  40,531
  42,476
  44,523
  46,677
  48,942
  51,325
Debt-to-equity ratio
  1.533
  1.590
  1.610
  1.620
  1.630
  1.650
  1.660
  1.680
  1.690
  1.710
  1.720
  1.740
  1.750
  1.770
  1.780
  1.790
  1.810
  1.820
  1.830
  1.840
  1.860
  1.870
  1.880
  1.890
  1.900
  1.910
  1.920
  1.930
  1.930
  1.940
  1.950
Adjusted equity ratio
  0.317
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322
  0.322

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,194
  1,264
  1,309
  1,359
  1,415
  1,476
  1,543
  1,616
  1,694
  1,778
  1,868
  2,551
  2,653
  2,762
  2,877
  2,999
  3,128
  3,265
  3,410
  3,562
  3,723
  3,893
  4,072
  4,261
  4,460
  4,669
  4,889
  5,121
  5,365
  5,622
  5,891
Depreciation, amort., depletion, $m
  2,095
  1,508
  1,525
  1,545
  1,567
  1,591
  1,617
  1,646
  1,676
  1,710
  1,745
  979
  1,019
  1,062
  1,108
  1,156
  1,207
  1,261
  1,318
  1,379
  1,443
  1,510
  1,581
  1,655
  1,734
  1,817
  1,904
  1,996
  2,092
  2,194
  2,301
Funds from operations, $m
  -705
  2,771
  2,834
  2,904
  2,982
  3,067
  3,161
  3,262
  3,371
  3,488
  3,613
  3,530
  3,672
  3,824
  3,985
  4,155
  4,336
  4,526
  4,728
  4,941
  5,166
  5,403
  5,653
  5,916
  6,194
  6,486
  6,793
  7,117
  7,457
  7,815
  8,192
Change in working capital, $m
  -2,078
  16
  18
  21
  23
  25
  28
  30
  32
  35
  37
  40
  42
  45
  48
  51
  54
  57
  60
  63
  67
  70
  74
  78
  82
  87
  91
  96
  101
  106
  112
Cash from operations, $m
  1,373
  2,755
  2,816
  2,883
  2,959
  3,042
  3,133
  3,232
  3,338
  3,453
  3,576
  3,490
  3,630
  3,779
  3,937
  4,104
  4,282
  4,470
  4,668
  4,878
  5,099
  5,333
  5,579
  5,838
  6,111
  6,399
  6,702
  7,021
  7,356
  7,709
  8,080
Maintenance CAPEX, $m
  0
  -689
  -704
  -721
  -741
  -763
  -787
  -813
  -842
  -872
  -906
  -941
  -979
  -1,019
  -1,062
  -1,108
  -1,156
  -1,207
  -1,261
  -1,318
  -1,379
  -1,443
  -1,510
  -1,581
  -1,655
  -1,734
  -1,817
  -1,904
  -1,996
  -2,092
  -2,194
New CAPEX, $m
  -88
  -86
  -99
  -112
  -125
  -137
  -150
  -163
  -176
  -189
  -202
  -216
  -230
  -245
  -260
  -275
  -291
  -308
  -326
  -344
  -363
  -383
  -404
  -426
  -448
  -472
  -497
  -523
  -550
  -579
  -609
Cash from investing activities, $m
  -256
  -775
  -803
  -833
  -866
  -900
  -937
  -976
  -1,018
  -1,061
  -1,108
  -1,157
  -1,209
  -1,264
  -1,322
  -1,383
  -1,447
  -1,515
  -1,587
  -1,662
  -1,742
  -1,826
  -1,914
  -2,007
  -2,103
  -2,206
  -2,314
  -2,427
  -2,546
  -2,671
  -2,803
Free cash flow, $m
  1,117
  1,981
  2,012
  2,050
  2,093
  2,142
  2,196
  2,256
  2,321
  2,392
  2,468
  2,333
  2,421
  2,515
  2,615
  2,721
  2,834
  2,954
  3,081
  3,215
  3,357
  3,507
  3,665
  3,832
  4,008
  4,193
  4,388
  4,594
  4,810
  5,038
  5,278
Issuance/(repayment) of debt, $m
  289
  220
  264
  298
  332
  365
  398
  432
  466
  501
  536
  573
  610
  649
  689
  730
  773
  818
  865
  913
  964
  1,017
  1,072
  1,129
  1,190
  1,253
  1,319
  1,388
  1,460
  1,536
  1,615
Issuance/(repurchase) of shares, $m
  -1,431
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -1,177
  220
  264
  298
  332
  365
  398
  432
  466
  501
  536
  573
  610
  649
  689
  730
  773
  818
  865
  913
  964
  1,017
  1,072
  1,129
  1,190
  1,253
  1,319
  1,388
  1,460
  1,536
  1,615
Total cash flow (excl. dividends), $m
  -90
  2,201
  2,276
  2,348
  2,425
  2,507
  2,594
  2,688
  2,787
  2,893
  3,005
  2,906
  3,031
  3,164
  3,304
  3,452
  3,608
  3,772
  3,946
  4,129
  4,321
  4,524
  4,737
  4,961
  5,198
  5,446
  5,707
  5,982
  6,270
  6,574
  6,893
Retained Cash Flow (-), $m
  284
  -106
  -125
  -142
  -157
  -173
  -189
  -205
  -221
  -238
  -255
  -272
  -290
  -308
  -327
  -347
  -367
  -389
  -411
  -434
  -458
  -483
  -509
  -536
  -565
  -595
  -626
  -659
  -693
  -729
  -767
Prev. year cash balance distribution, $m
 
  218
  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
 
  2,313
  2,151
  2,206
  2,267
  2,333
  2,405
  2,483
  2,566
  2,655
  2,750
  2,634
  2,742
  2,856
  2,977
  3,105
  3,241
  3,384
  3,535
  3,695
  3,863
  4,041
  4,228
  4,425
  4,633
  4,851
  5,081
  5,323
  5,577
  5,845
  6,126
Discount rate, %
 
  6.70
  7.04
  7.39
  7.76
  8.14
  8.55
  8.98
  9.43
  9.90
  10.39
  10.91
  11.46
  12.03
  12.63
  13.27
  13.93
  14.63
  15.36
  16.12
  16.93
  17.78
  18.67
  19.60
  20.58
  21.61
  22.69
  23.82
  25.01
  26.26
  27.58
PV of cash for distribution, $m
 
  2,168
  1,878
  1,782
  1,682
  1,578
  1,470
  1,360
  1,248
  1,135
  1,023
  843
  746
  652
  563
  479
  402
  332
  270
  216
  169
  130
  98
  72
  52
  36
  25
  17
  11
  7
  4
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Discovery Communications, Inc. (Discovery) is a global media company. The Company provides content across multiple distribution platforms, including pay-television (pay-TV), free-to-air (FTA) and broadcast television, Websites, digital distribution arrangements and content licensing agreements. Its segments include U.S. Networks, which consists principally of domestic television networks and digital content services; International Networks, consisting primarily of international television networks and digital content services, and Education and Other, which consists principally of curriculum-based product and service offerings, and production studios. The Company's portfolio of networks includes television brands, such as Discovery Channel, Animal Planet, ID, Velocity (known as Turbo outside of the United States) and Eurosport. It is also engaged in extending content distribution across various platforms, including brand-aligned Websites, Web-native networks and online streaming.

FINANCIAL RATIOS  of  Discovery Communications Series A (DISCA)

Valuation Ratios
P/E Ratio 5.7
Price to Sales 1.1
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow 5
Price to Free Cash Flow 5.3
Growth Rates
Sales Growth Rate 1.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -14.6%
Cap. Spend. - 3 Yr. Gr. Rate -5.2%
Financial Strength
Quick Ratio 4
Current Ratio 0.2
LT Debt to Equity 151.8%
Total Debt to Equity 153.3%
Interest Coverage 6
Management Effectiveness
Return On Assets 9.2%
Ret/ On Assets - 3 Yr. Avg. 8.6%
Return On Total Capital 9.1%
Ret/ On T. Cap. - 3 Yr. Avg. 8.7%
Return On Equity 22.5%
Return On Equity - 3 Yr. Avg. 20.2%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 62.6%
Gross Margin - 3 Yr. Avg. 64%
EBITDA Margin 63.2%
EBITDA Margin - 3 Yr. Avg. 62.5%
Operating Margin 30.7%
Oper. Margin - 3 Yr. Avg. 31.6%
Pre-Tax Margin 25.7%
Pre-Tax Margin - 3 Yr. Avg. 26%
Net Profit Margin 18.4%
Net Profit Margin - 3 Yr. Avg. 17.6%
Effective Tax Rate 27.1%
Eff/ Tax Rate - 3 Yr. Avg. 31.6%
Payout Ratio 0%

DISCA stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DISCA stock intrinsic value calculation we used $6497 million for the last fiscal year's total revenue generated by Discovery Communications Series A. The default revenue input number comes from 2016 income statement of Discovery Communications Series A. 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 DISCA stock valuation model: a) initial revenue growth rate of 2.2% 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 6.7%, whose default value for DISCA is calculated based on our internal credit rating of Discovery Communications Series A, 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 Discovery Communications Series A.
    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 DISCA stock the variable cost ratio is equal to 69%.

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 DISCA 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 4.4% for Discovery Communications Series A.

Corporate tax rate of 27% is the nominal tax rate for Discovery Communications Series A. 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 DISCA 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 DISCA are equal to 60.4%.

Life of production assets of 5.7 years is the average useful life of capital assets used in Discovery Communications Series A 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 DISCA is equal to 11.1%. 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 - $5167 million for Discovery Communications Series A - 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 367.669 million for Discovery Communications Series A 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 Discovery Communications Series A at the current share price and the inputted number of shares is $6.5 billion.

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COMPANY NEWS

▶ Faber Report: Malone bullish on Discovery   [09:42AM  CNBC Videos]
▶ Fast Money Final Trade: IYT, XOP, PHM & DISCA   [Nov-16-17 05:58PM  CNBC Videos]
▶ 6 Ways to trade major media mergers   [05:00PM  CNBC Videos]
▶ Why millennials are obsessed with HGTV   [Nov-13-17 03:50PM  Yahoo Finance]
▶ Disney, 21st Century Fox held talks over assets   [Nov-07-17 10:35AM  Yahoo Finance Video]
▶ Discovery Communications Fell on November 2   [07:30AM  Market Realist]
▶ Media Stocks Punished As Investors Flee On Cord-Cutting Fears   [Nov-03-17 04:57PM  Investor's Business Daily]
▶ Why Discovery Communications Inc Stock Dropped Today   [Nov-02-17 06:22PM  Motley Fool]
▶ Discovery posts 3Q profit   [07:31AM  Associated Press]
▶ Discovery posts 3Q profit   [07:26AM  Associated Press]
▶ Discovery misses 3Q profit forecasts   [07:23AM  Associated Press]
▶ Discovery's revenue rises 6.1 pct   [07:07AM  Reuters]
▶ Can Snap Help Discovery Go for the Gold?   [Oct-18-17 04:19PM  Motley Fool]
▶ Disney a battleground stock?   [Oct-12-17 02:34PM  CNBC Videos]
▶ Are Trekkies the Key to CBSs Future?   [Oct-11-17 05:00AM  Bloomberg]
▶ Discovery CEO on Group Nine and Acquisitions   [Oct-03-17 07:16PM  Bloomberg Video]
▶ Discovery Communications: Don't Sell, But Don't Buy   [Sep-26-17 03:51PM  Barrons.com]
▶ Facebook Stock (FB) Will Benefit from Facebook Watch   [Sep-25-17 12:58PM  InvestorPlace]
▶ Don't Buy the "Death of ESPN" Hype   [Sep-22-17 07:44AM  Motley Fool]
Financial statements of DISCA
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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