Intrinsic value of DST Systems - DST

Previous Close

$83.99

  Intrinsic Value

$354.67

stock screener

  Rating & Target

str. buy

+322%

Previous close

$83.99

 
Intrinsic value

$354.67

 
Up/down potential

+322%

 
Rating

str. buy

We calculate the intrinsic value of DST 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

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, %
  5.63
  42.50
  38.75
  35.38
  32.34
  29.60
  27.14
  24.93
  22.94
  21.14
  19.53
  18.08
  16.77
  15.59
  14.53
  13.58
  12.72
  11.95
  11.25
  10.63
  10.07
  9.56
  9.10
  8.69
  8.32
  7.99
  7.69
  7.42
  7.18
  6.96
  6.77
Revenue, $m
  1,557
  3,161
  4,385
  5,937
  7,857
  10,182
  12,946
  16,174
  19,883
  24,087
  28,791
  33,995
  39,695
  45,884
  52,552
  59,688
  67,280
  75,320
  83,796
  92,702
  102,033
  111,787
  121,963
  132,565
  143,599
  155,075
  167,003
  179,400
  192,282
  205,670
  219,586
Variable operating expenses, $m
 
  2,612
  3,582
  4,811
  6,332
  8,175
  10,364
  12,921
  15,860
  19,190
  22,917
  26,931
  31,447
  36,350
  41,632
  47,286
  53,301
  59,669
  66,385
  73,440
  80,833
  88,560
  96,621
  105,020
  113,762
  122,853
  132,303
  142,124
  152,329
  162,935
  173,960
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
  1,304
  2,612
  3,582
  4,811
  6,332
  8,175
  10,364
  12,921
  15,860
  19,190
  22,917
  26,931
  31,447
  36,350
  41,632
  47,286
  53,301
  59,669
  66,385
  73,440
  80,833
  88,560
  96,621
  105,020
  113,762
  122,853
  132,303
  142,124
  152,329
  162,935
  173,960
Operating income, $m
  253
  549
  803
  1,125
  1,524
  2,008
  2,582
  3,252
  4,023
  4,897
  5,874
  7,064
  8,248
  9,534
  10,919
  12,402
  13,980
  15,650
  17,411
  19,262
  21,201
  23,227
  25,342
  27,545
  29,837
  32,222
  34,700
  37,276
  39,953
  42,735
  45,626
EBITDA, $m
  349
  822
  1,141
  1,545
  2,044
  2,649
  3,368
  4,208
  5,173
  6,267
  7,491
  8,845
  10,328
  11,938
  13,673
  15,530
  17,505
  19,597
  21,802
  24,120
  26,547
  29,085
  31,733
  34,491
  37,362
  40,348
  43,451
  46,677
  50,028
  53,512
  57,132
Interest expense (income), $m
  23
  34
  73
  123
  187
  267
  363
  477
  610
  764
  938
  1,132
  1,347
  1,583
  1,839
  2,114
  2,409
  2,723
  3,056
  3,406
  3,774
  4,160
  4,563
  4,984
  5,422
  5,878
  6,353
  6,846
  7,358
  7,891
  8,444
Earnings before tax, $m
  279
  515
  730
  1,002
  1,337
  1,741
  2,219
  2,775
  3,413
  4,133
  4,936
  5,931
  6,901
  7,951
  9,081
  10,288
  11,570
  12,927
  14,356
  15,856
  17,427
  19,067
  20,779
  22,561
  24,415
  26,344
  28,348
  30,430
  32,595
  34,844
  37,182
Tax expense, $m
  101
  139
  197
  271
  361
  470
  599
  749
  921
  1,116
  1,333
  1,601
  1,863
  2,147
  2,452
  2,778
  3,124
  3,490
  3,876
  4,281
  4,705
  5,148
  5,610
  6,091
  6,592
  7,113
  7,654
  8,216
  8,801
  9,408
  10,039
Net income, $m
  427
  376
  533
  732
  976
  1,271
  1,620
  2,026
  2,491
  3,017
  3,604
  4,330
  5,038
  5,804
  6,629
  7,510
  8,446
  9,437
  10,480
  11,575
  12,721
  13,919
  15,168
  16,469
  17,823
  19,231
  20,694
  22,214
  23,794
  25,436
  27,143

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  196
  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
  2,772
  4,186
  5,808
  7,863
  10,406
  13,487
  17,147
  21,422
  26,335
  31,903
  38,133
  45,026
  52,576
  60,773
  69,605
  79,056
  89,113
  99,761
  110,988
  122,785
  135,144
  148,062
  161,541
  175,583
  190,198
  205,397
  221,197
  237,616
  254,678
  272,410
  290,842
Adjusted assets (=assets-cash), $m
  2,576
  4,186
  5,808
  7,863
  10,406
  13,487
  17,147
  21,422
  26,335
  31,903
  38,133
  45,026
  52,576
  60,773
  69,605
  79,056
  89,113
  99,761
  110,988
  122,785
  135,144
  148,062
  161,541
  175,583
  190,198
  205,397
  221,197
  237,616
  254,678
  272,410
  290,842
Revenue / Adjusted assets
  0.604
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
  0.755
Average production assets, $m
  258
  1,656
  2,298
  3,111
  4,117
  5,336
  6,784
  8,475
  10,419
  12,622
  15,086
  17,813
  20,800
  24,043
  27,537
  31,276
  35,255
  39,467
  43,909
  48,576
  53,466
  58,576
  63,909
  69,464
  75,246
  81,259
  87,510
  94,006
  100,756
  107,771
  115,063
Working capital, $m
  27
  -145
  -202
  -273
  -361
  -468
  -596
  -744
  -915
  -1,108
  -1,324
  -1,564
  -1,826
  -2,111
  -2,417
  -2,746
  -3,095
  -3,465
  -3,855
  -4,264
  -4,694
  -5,142
  -5,610
  -6,098
  -6,606
  -7,133
  -7,682
  -8,252
  -8,845
  -9,461
  -10,101
Total debt, $m
  508
  1,343
  2,281
  3,469
  4,938
  6,719
  8,835
  11,305
  14,145
  17,364
  20,965
  24,949
  29,313
  34,051
  39,155
  44,618
  50,431
  56,585
  63,075
  69,893
  77,037
  84,504
  92,294
  100,411
  108,858
  117,643
  126,775
  136,266
  146,127
  156,377
  167,030
Total liabilities, $m
  1,657
  2,420
  3,357
  4,545
  6,015
  7,795
  9,911
  12,382
  15,222
  18,440
  22,041
  26,025
  30,389
  35,127
  40,232
  45,695
  51,507
  57,662
  64,151
  70,969
  78,113
  85,580
  93,370
  101,487
  109,934
  118,720
  127,852
  137,342
  147,204
  157,453
  168,107
Total equity, $m
  1,115
  1,767
  2,451
  3,318
  4,391
  5,691
  7,236
  9,040
  11,113
  13,463
  16,092
  19,001
  22,187
  25,646
  29,373
  33,362
  37,606
  42,099
  46,837
  51,815
  57,031
  62,482
  68,170
  74,096
  80,264
  86,678
  93,345
  100,274
  107,474
  114,957
  122,735
Total liabilities and equity, $m
  2,772
  4,187
  5,808
  7,863
  10,406
  13,486
  17,147
  21,422
  26,335
  31,903
  38,133
  45,026
  52,576
  60,773
  69,605
  79,057
  89,113
  99,761
  110,988
  122,784
  135,144
  148,062
  161,540
  175,583
  190,198
  205,398
  221,197
  237,616
  254,678
  272,410
  290,842
Debt-to-equity ratio
  0.456
  0.760
  0.930
  1.050
  1.120
  1.180
  1.220
  1.250
  1.270
  1.290
  1.300
  1.310
  1.320
  1.330
  1.330
  1.340
  1.340
  1.340
  1.350
  1.350
  1.350
  1.350
  1.350
  1.360
  1.360
  1.360
  1.360
  1.360
  1.360
  1.360
  1.360
Adjusted equity ratio
  0.357
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422
  0.422

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  427
  376
  533
  732
  976
  1,271
  1,620
  2,026
  2,491
  3,017
  3,604
  4,330
  5,038
  5,804
  6,629
  7,510
  8,446
  9,437
  10,480
  11,575
  12,721
  13,919
  15,168
  16,469
  17,823
  19,231
  20,694
  22,214
  23,794
  25,436
  27,143
Depreciation, amort., depletion, $m
  96
  274
  338
  419
  520
  642
  787
  956
  1,150
  1,370
  1,617
  1,781
  2,080
  2,404
  2,754
  3,128
  3,525
  3,947
  4,391
  4,858
  5,347
  5,858
  6,391
  6,946
  7,525
  8,126
  8,751
  9,401
  10,076
  10,777
  11,506
Funds from operations, $m
  83
  650
  871
  1,151
  1,496
  1,913
  2,406
  2,982
  3,641
  4,387
  5,220
  6,111
  7,118
  8,209
  9,383
  10,638
  11,972
  13,383
  14,871
  16,432
  18,068
  19,777
  21,559
  23,416
  25,348
  27,357
  29,445
  31,615
  33,870
  36,213
  38,649
Change in working capital, $m
  -106
  -43
  -56
  -71
  -88
  -107
  -127
  -148
  -171
  -193
  -216
  -239
  -262
  -285
  -307
  -328
  -349
  -370
  -390
  -410
  -429
  -449
  -468
  -488
  -508
  -528
  -549
  -570
  -593
  -616
  -640
Cash from operations, $m
  189
  693
  928
  1,222
  1,584
  2,020
  2,534
  3,130
  3,812
  4,581
  5,437
  6,351
  7,380
  8,493
  9,689
  10,966
  12,321
  13,753
  15,261
  16,842
  18,497
  20,226
  22,027
  23,904
  25,855
  27,885
  29,993
  32,185
  34,462
  36,829
  39,289
Maintenance CAPEX, $m
  0
  -116
  -166
  -230
  -311
  -412
  -534
  -678
  -847
  -1,042
  -1,262
  -1,509
  -1,781
  -2,080
  -2,404
  -2,754
  -3,128
  -3,525
  -3,947
  -4,391
  -4,858
  -5,347
  -5,858
  -6,391
  -6,946
  -7,525
  -8,126
  -8,751
  -9,401
  -10,076
  -10,777
New CAPEX, $m
  -60
  -493
  -642
  -813
  -1,006
  -1,219
  -1,448
  -1,691
  -1,944
  -2,203
  -2,465
  -2,727
  -2,987
  -3,243
  -3,494
  -3,739
  -3,979
  -4,213
  -4,442
  -4,667
  -4,890
  -5,111
  -5,332
  -5,556
  -5,782
  -6,013
  -6,251
  -6,496
  -6,750
  -7,015
  -7,292
Cash from investing activities, $m
  296
  -609
  -808
  -1,043
  -1,317
  -1,631
  -1,982
  -2,369
  -2,791
  -3,245
  -3,727
  -4,236
  -4,768
  -5,323
  -5,898
  -6,493
  -7,107
  -7,738
  -8,389
  -9,058
  -9,748
  -10,458
  -11,190
  -11,947
  -12,728
  -13,538
  -14,377
  -15,247
  -16,151
  -17,091
  -18,069
Free cash flow, $m
  485
  84
  120
  180
  267
  389
  552
  761
  1,021
  1,336
  1,710
  2,115
  2,611
  3,170
  3,791
  4,473
  5,215
  6,015
  6,872
  7,784
  8,750
  9,768
  10,837
  11,957
  13,127
  14,347
  15,617
  16,938
  18,311
  19,738
  21,220
Issuance/(repayment) of debt, $m
  -53
  722
  938
  1,188
  1,470
  1,781
  2,116
  2,471
  2,840
  3,218
  3,601
  3,984
  4,364
  4,738
  5,105
  5,463
  5,813
  6,155
  6,489
  6,818
  7,144
  7,467
  7,791
  8,117
  8,447
  8,785
  9,132
  9,490
  9,862
  10,249
  10,654
Issuance/(repurchase) of shares, $m
  -311
  150
  151
  136
  97
  29
  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  
  -332
  872
  1,089
  1,324
  1,567
  1,810
  2,116
  2,471
  2,840
  3,218
  3,601
  3,984
  4,364
  4,738
  5,105
  5,463
  5,813
  6,155
  6,489
  6,818
  7,144
  7,467
  7,791
  8,117
  8,447
  8,785
  9,132
  9,490
  9,862
  10,249
  10,654
Total cash flow (excl. dividends), $m
  153
  956
  1,209
  1,503
  1,834
  2,199
  2,668
  3,231
  3,861
  4,554
  5,311
  6,099
  6,975
  7,908
  8,896
  9,936
  11,028
  12,170
  13,361
  14,603
  15,894
  17,235
  18,628
  20,074
  21,574
  23,132
  24,749
  26,428
  28,173
  29,987
  31,874
Retained Cash Flow (-), $m
  -69
  -526
  -685
  -867
  -1,073
  -1,300
  -1,545
  -1,804
  -2,073
  -2,350
  -2,629
  -2,909
  -3,186
  -3,459
  -3,727
  -3,989
  -4,244
  -4,493
  -4,738
  -4,978
  -5,216
  -5,452
  -5,688
  -5,926
  -6,167
  -6,414
  -6,667
  -6,929
  -7,200
  -7,483
  -7,778
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
 
  44
  63
  88
  119
  157
  204
  259
  323
  398
  482
  576
  680
  794
  918
  1,051
  1,194
  1,346
  1,506
  1,676
  1,854
  2,041
  2,236
  2,439
  2,651
  2,872
  3,101
  3,340
  3,588
  3,846
  4,113
Cash available for distribution, $m
 
  430
  525
  636
  761
  899
  1,123
  1,427
  1,787
  2,205
  2,682
  3,190
  3,789
  4,449
  5,169
  5,947
  6,784
  7,676
  8,624
  9,625
  10,678
  11,783
  12,940
  14,148
  15,407
  16,718
  18,082
  19,500
  20,973
  22,504
  24,095
Discount rate, %
 
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
 
  409
  471
  536
  600
  658
  758
  883
  1,005
  1,119
  1,217
  1,283
  1,338
  1,364
  1,362
  1,331
  1,274
  1,194
  1,095
  984
  865
  743
  625
  514
  413
  324
  247
  184
  134
  94
  65
Current shareholders' claim on cash, %
  100
  97.2
  95.2
  93.9
  93.3
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1
  93.1

DST Systems, Inc. (DST) is a provider of technology-based information processing and servicing solutions. The Company offers its solutions through data management, business processing and customer communications solutions to clients within the asset management, brokerage, retirement and healthcare markets. The Company operates through two segments: Financial Services and Healthcare Services. Through the Financial Services segment, DST provides investor, investment, advisor/intermediary and asset distribution services to companies within the financial services industry. The Healthcare Services segment uses the Company's software applications to provide healthcare organizations a range of medical and pharmacy benefit solutions to aid their information processing, quality of care, cost management and payment integrity needs. Its investments in equity securities, private equity investments, real estate and certain financial interests are aggregated into an Investments and Other segment.

FINANCIAL RATIOS  of  DST Systems (DST)

Valuation Ratios
P/E Ratio 12.6
Price to Sales 3.5
Price to Book 4.8
Price to Tangible Book
Price to Cash Flow 28.4
Price to Free Cash Flow 41.7
Growth Rates
Sales Growth Rate 5.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -32.6%
Cap. Spend. - 3 Yr. Gr. Rate -10.2%
Financial Strength
Quick Ratio 1
Current Ratio 0.6
LT Debt to Equity 26.8%
Total Debt to Equity 45.6%
Interest Coverage 13
Management Effectiveness
Return On Assets 15.8%
Ret/ On Assets - 3 Yr. Avg. 16.4%
Return On Total Capital 26.4%
Ret/ On T. Cap. - 3 Yr. Avg. 26.6%
Return On Equity 39.5%
Return On Equity - 3 Yr. Avg. 40%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 22%
Gross Margin - 3 Yr. Avg. 22.6%
EBITDA Margin 25.6%
EBITDA Margin - 3 Yr. Avg. 40.6%
Operating Margin 16.2%
Oper. Margin - 3 Yr. Avg. 18.7%
Pre-Tax Margin 17.9%
Pre-Tax Margin - 3 Yr. Avg. 32.9%
Net Profit Margin 27.4%
Net Profit Margin - 3 Yr. Avg. 30.4%
Effective Tax Rate 36.2%
Eff/ Tax Rate - 3 Yr. Avg. 31.1%
Payout Ratio 10.1%

DST stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DST stock intrinsic value calculation we used $2218 million for the last fiscal year's total revenue generated by DST Systems. The default revenue input number comes from 2016 income statement of DST Systems. 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 DST stock valuation model: a) initial revenue growth rate of 42.5% 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 5.3%, whose default value for DST is calculated based on our internal credit rating of DST Systems, 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 DST Systems.
    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 DST stock the variable cost ratio is equal to 84.1%.

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 DST 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 5.4% for DST Systems.

Corporate tax rate of 27% is the nominal tax rate for DST Systems. 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 DST stock is equal to 2%.

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 DST are equal to 52.4%.

Life of production assets of 10 years is the average useful life of capital assets used in DST Systems 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 DST is equal to -4.6%. 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 - $1241 million for DST Systems - 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 61 million for DST Systems 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 DST Systems at the current share price and the inputted number of shares is $5.1 billion.

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Financial statements of DST
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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