Intrinsic value of Endurance International Group Holdings - EIGI

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$8.50

  Intrinsic Value

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  Value-price divergence*

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

We calculate the intrinsic value of EIGI 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 1.1

 

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, %
  49.93
  51.30
  46.67
  42.50
  38.75
  35.38
  32.34
  29.61
  27.15
  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
Revenue, $m
  1,111
  1,681
  2,465
  3,513
  4,875
  6,599
  8,734
  11,319
  14,392
  17,980
  22,104
  26,778
  32,007
  37,793
  44,131
  51,011
  58,425
  66,359
  74,800
  83,739
  93,163
  103,065
  113,440
  124,284
  135,598
  147,386
  159,654
  172,413
  185,676
  199,459
  213,781
Variable operating expenses, $m
 
  1,466
  2,064
  2,862
  3,899
  5,212
  6,837
  8,807
  11,147
  13,879
  17,020
  20,394
  24,376
  28,783
  33,609
  38,849
  44,495
  50,538
  56,967
  63,774
  70,951
  78,493
  86,394
  94,653
  103,269
  112,247
  121,590
  131,307
  141,408
  151,904
  162,812
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
  1,150
  1,466
  2,064
  2,862
  3,899
  5,212
  6,837
  8,807
  11,147
  13,879
  17,020
  20,394
  24,376
  28,783
  33,609
  38,849
  44,495
  50,538
  56,967
  63,774
  70,951
  78,493
  86,394
  94,653
  103,269
  112,247
  121,590
  131,307
  141,408
  151,904
  162,812
Operating income, $m
  -39
  215
  402
  652
  976
  1,387
  1,896
  2,513
  3,245
  4,101
  5,084
  6,384
  7,631
  9,011
  10,521
  12,162
  13,929
  15,821
  17,834
  19,965
  22,212
  24,572
  27,046
  29,631
  32,329
  35,139
  38,064
  41,106
  44,268
  47,554
  50,969
EBITDA, $m
  165
  485
  711
  1,013
  1,406
  1,903
  2,518
  3,264
  4,149
  5,184
  6,373
  7,721
  9,228
  10,897
  12,724
  14,708
  16,845
  19,132
  21,566
  24,143
  26,861
  29,716
  32,707
  35,834
  39,096
  42,494
  46,032
  49,710
  53,534
  57,508
  61,637
Interest expense (income), $m
  119
  150
  234
  367
  543
  773
  1,064
  1,423
  1,859
  2,378
  2,983
  3,678
  4,466
  5,348
  6,323
  7,392
  8,552
  9,802
  11,140
  12,563
  14,070
  15,659
  17,329
  19,078
  20,907
  22,815
  24,802
  26,871
  29,022
  31,258
  33,582
Earnings before tax, $m
  -190
  64
  167
  285
  433
  615
  833
  1,089
  1,386
  1,723
  2,101
  2,706
  3,165
  3,663
  4,198
  4,770
  5,377
  6,019
  6,694
  7,401
  8,141
  8,913
  9,717
  10,553
  11,422
  12,325
  13,262
  14,235
  15,246
  16,296
  17,387
Tax expense, $m
  -110
  17
  45
  77
  117
  166
  225
  294
  374
  465
  567
  731
  855
  989
  1,134
  1,288
  1,452
  1,625
  1,807
  1,998
  2,198
  2,407
  2,624
  2,849
  3,084
  3,328
  3,581
  3,844
  4,116
  4,400
  4,694
Net income, $m
  -73
  47
  122
  208
  316
  449
  608
  795
  1,012
  1,258
  1,534
  1,976
  2,311
  2,674
  3,065
  3,482
  3,925
  4,394
  4,887
  5,403
  5,943
  6,507
  7,093
  7,704
  8,338
  8,997
  9,681
  10,392
  11,130
  11,896
  12,692

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  54
  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
  2,756
  4,090
  5,999
  8,548
  11,861
  16,057
  21,250
  27,541
  35,017
  43,747
  53,781
  65,153
  77,877
  91,954
  107,374
  124,115
  142,153
  161,456
  181,996
  203,744
  226,674
  250,767
  276,009
  302,395
  329,923
  358,604
  388,454
  419,497
  451,766
  485,301
  520,150
Adjusted assets (=assets-cash), $m
  2,702
  4,090
  5,999
  8,548
  11,861
  16,057
  21,250
  27,541
  35,017
  43,747
  53,781
  65,153
  77,877
  91,954
  107,374
  124,115
  142,153
  161,456
  181,996
  203,744
  226,674
  250,767
  276,009
  302,395
  329,923
  358,604
  388,454
  419,497
  451,766
  485,301
  520,150
Revenue / Adjusted assets
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
  0.411
Average production assets, $m
  572
  864
  1,267
  1,806
  2,506
  3,392
  4,489
  5,818
  7,397
  9,242
  11,362
  13,764
  16,452
  19,426
  22,683
  26,220
  30,030
  34,108
  38,447
  43,042
  47,886
  52,976
  58,308
  63,882
  69,698
  75,757
  82,062
  88,620
  95,437
  102,522
  109,884
Working capital, $m
  -363
  -568
  -833
  -1,188
  -1,648
  -2,231
  -2,952
  -3,826
  -4,864
  -6,077
  -7,471
  -9,051
  -10,818
  -12,774
  -14,916
  -17,242
  -19,748
  -22,429
  -25,283
  -28,304
  -31,489
  -34,836
  -38,343
  -42,008
  -45,832
  -49,817
  -53,963
  -58,276
  -62,758
  -67,417
  -72,258
Total debt, $m
  1,994
  3,043
  4,761
  7,055
  10,037
  13,813
  18,487
  24,149
  30,877
  38,734
  47,765
  58,000
  69,451
  82,121
  95,998
  111,066
  127,300
  144,673
  163,159
  182,731
  203,368
  225,052
  247,771
  271,517
  296,293
  322,106
  348,970
  376,909
  405,951
  436,133
  467,497
Total liabilities, $m
  2,632
  3,681
  5,399
  7,693
  10,675
  14,451
  19,125
  24,787
  31,515
  39,372
  48,403
  58,638
  70,089
  82,759
  96,636
  111,704
  127,938
  145,311
  163,797
  183,369
  204,006
  225,690
  248,409
  272,155
  296,931
  322,744
  349,608
  377,547
  406,589
  436,771
  468,135
Total equity, $m
  124
  409
  600
  855
  1,186
  1,606
  2,125
  2,754
  3,502
  4,375
  5,378
  6,515
  7,788
  9,195
  10,737
  12,412
  14,215
  16,146
  18,200
  20,374
  22,667
  25,077
  27,601
  30,239
  32,992
  35,860
  38,845
  41,950
  45,177
  48,530
  52,015
Total liabilities and equity, $m
  2,756
  4,090
  5,999
  8,548
  11,861
  16,057
  21,250
  27,541
  35,017
  43,747
  53,781
  65,153
  77,877
  91,954
  107,373
  124,116
  142,153
  161,457
  181,997
  203,743
  226,673
  250,767
  276,010
  302,394
  329,923
  358,604
  388,453
  419,497
  451,766
  485,301
  520,150
Debt-to-equity ratio
  16.081
  7.440
  7.940
  8.250
  8.460
  8.600
  8.700
  8.770
  8.820
  8.850
  8.880
  8.900
  8.920
  8.930
  8.940
  8.950
  8.960
  8.960
  8.960
  8.970
  8.970
  8.970
  8.980
  8.980
  8.980
  8.980
  8.980
  8.980
  8.990
  8.990
  8.990
Adjusted equity ratio
  0.026
  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
  -73
  47
  122
  208
  316
  449
  608
  795
  1,012
  1,258
  1,534
  1,976
  2,311
  2,674
  3,065
  3,482
  3,925
  4,394
  4,887
  5,403
  5,943
  6,507
  7,093
  7,704
  8,338
  8,997
  9,681
  10,392
  11,130
  11,896
  12,692
Depreciation, amort., depletion, $m
  204
  270
  309
  361
  429
  515
  622
  751
  904
  1,083
  1,289
  1,336
  1,597
  1,886
  2,202
  2,546
  2,916
  3,311
  3,733
  4,179
  4,649
  5,143
  5,661
  6,202
  6,767
  7,355
  7,967
  8,604
  9,266
  9,954
  10,668
Funds from operations, $m
  222
  317
  431
  569
  745
  964
  1,230
  1,546
  1,916
  2,341
  2,823
  3,312
  3,908
  4,560
  5,267
  6,028
  6,841
  7,705
  8,619
  9,582
  10,592
  11,650
  12,754
  13,906
  15,105
  16,352
  17,649
  18,996
  20,396
  21,850
  23,361
Change in working capital, $m
  67
  -193
  -265
  -354
  -460
  -583
  -721
  -874
  -1,039
  -1,213
  -1,394
  -1,580
  -1,768
  -1,956
  -2,142
  -2,326
  -2,506
  -2,682
  -2,853
  -3,021
  -3,185
  -3,347
  -3,507
  -3,665
  -3,824
  -3,984
  -4,147
  -4,312
  -4,483
  -4,659
  -4,841
Cash from operations, $m
  155
  645
  696
  924
  1,206
  1,547
  1,951
  2,420
  2,954
  3,554
  4,217
  4,892
  5,675
  6,515
  7,409
  8,354
  9,347
  10,387
  11,473
  12,603
  13,778
  14,997
  16,261
  17,571
  18,929
  20,336
  21,795
  23,308
  24,878
  26,508
  28,202
Maintenance CAPEX, $m
  0
  -55
  -84
  -123
  -175
  -243
  -329
  -436
  -565
  -718
  -897
  -1,103
  -1,336
  -1,597
  -1,886
  -2,202
  -2,546
  -2,916
  -3,311
  -3,733
  -4,179
  -4,649
  -5,143
  -5,661
  -6,202
  -6,767
  -7,355
  -7,967
  -8,604
  -9,266
  -9,954
New CAPEX, $m
  -37
  -293
  -403
  -539
  -700
  -886
  -1,097
  -1,329
  -1,579
  -1,844
  -2,120
  -2,402
  -2,688
  -2,974
  -3,257
  -3,537
  -3,810
  -4,078
  -4,339
  -4,594
  -4,844
  -5,090
  -5,333
  -5,574
  -5,816
  -6,059
  -6,306
  -6,558
  -6,817
  -7,084
  -7,362
Cash from investing activities, $m
  -932
  -348
  -487
  -662
  -875
  -1,129
  -1,426
  -1,765
  -2,144
  -2,562
  -3,017
  -3,505
  -4,024
  -4,571
  -5,143
  -5,739
  -6,356
  -6,994
  -7,650
  -8,327
  -9,023
  -9,739
  -10,476
  -11,235
  -12,018
  -12,826
  -13,661
  -14,525
  -15,421
  -16,350
  -17,316
Free cash flow, $m
  -777
  297
  209
  262
  330
  417
  525
  655
  810
  991
  1,200
  1,386
  1,651
  1,944
  2,266
  2,615
  2,991
  3,393
  3,822
  4,276
  4,755
  5,258
  5,785
  6,336
  6,911
  7,511
  8,134
  8,783
  9,457
  10,158
  10,886
Issuance/(repayment) of debt, $m
  928
  1,091
  1,718
  2,295
  2,981
  3,776
  4,674
  5,662
  6,728
  7,857
  9,031
  10,234
  11,452
  12,670
  13,878
  15,068
  16,234
  17,373
  18,486
  19,573
  20,637
  21,684
  22,718
  23,747
  24,776
  25,813
  26,865
  27,939
  29,042
  30,182
  31,364
Issuance/(repurchase) of shares, $m
  3
  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  
  796
  1,091
  1,718
  2,295
  2,981
  3,776
  4,674
  5,662
  6,728
  7,857
  9,031
  10,234
  11,452
  12,670
  13,878
  15,068
  16,234
  17,373
  18,486
  19,573
  20,637
  21,684
  22,718
  23,747
  24,776
  25,813
  26,865
  27,939
  29,042
  30,182
  31,364
Total cash flow (excl. dividends), $m
  21
  1,388
  1,927
  2,557
  3,312
  4,194
  5,198
  6,317
  7,539
  8,848
  10,231
  11,621
  13,103
  14,614
  16,143
  17,682
  19,224
  20,767
  22,308
  23,849
  25,392
  26,942
  28,503
  30,083
  31,687
  33,323
  34,999
  36,722
  38,500
  40,340
  42,250
Retained Cash Flow (-), $m
  56
  -297
  -191
  -255
  -331
  -420
  -519
  -629
  -748
  -873
  -1,003
  -1,137
  -1,272
  -1,408
  -1,542
  -1,674
  -1,804
  -1,930
  -2,054
  -2,175
  -2,293
  -2,409
  -2,524
  -2,639
  -2,753
  -2,868
  -2,985
  -3,104
  -3,227
  -3,354
  -3,485
Prev. year cash balance distribution, $m
 
  12
  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
 
  1,103
  1,736
  2,302
  2,981
  3,774
  4,679
  5,688
  6,791
  7,975
  9,228
  10,483
  11,830
  13,206
  14,601
  16,008
  17,421
  18,836
  20,254
  21,674
  23,099
  24,532
  25,979
  27,444
  28,934
  30,455
  32,014
  33,618
  35,273
  36,986
  38,765
Discount rate, %
 
  14.20
  14.91
  15.66
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
  25.50
  26.78
  28.12
  29.52
  31.00
  32.55
  34.17
  35.88
  37.68
  39.56
  41.54
  43.62
  45.80
  48.09
  50.49
  53.02
  55.67
  58.45
PV of cash for distribution, $m
 
  966
  1,315
  1,488
  1,621
  1,702
  1,722
  1,680
  1,581
  1,437
  1,260
  1,063
  871
  689
  527
  389
  278
  191
  127
  81
  50
  30
  17
  9
  5
  2
  1
  1
  0
  0
  0
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

Endurance International Group Holdings, Inc., together with its subsidiaries, provides cloud-based platform solutions for small-and medium-sized businesses worldwide. It offers Web hosting services, including entry-level shared hosting, and virtual private server and dedicated hosting solutions; Website building tools that enable subscribers with varying degrees of technical sophistication to create a Web presence; domain registration, management, and resale services; malware protection solutions to protect subscribersÂ’ Websites from viruses, malicious code, and other threats; and backup control solutions that enable subscribers to schedule, maintain, manage, and restore backups of their online data and Websites to meet their particular business needs, as well as Mojo Marketplace, online marketplace for WordPress themes, plugins, and other digital goods. The company also provides solutions that allow subscribers to have their Websites rendered on mobile devices; search engine optimization and marketing solutions; tools and services that enable subscribers to communicate with their customers and potential customers through social networks; and control panels and dashboards that enable subscribers to analyze activity on their Websites, optimize the impact of their Web presence design, and marketing campaigns. In addition, it offers a platform that enables subscribers to communicate with their customers and potential customers through email; email capabilities, including custom mailboxes that reflect a subscriberÂ’s domain name, spam filters, email aliases, and forwarding functionality; products that enable secure and encrypted payments, shopping carts, payment processing and related services, mobile payments, and other forms of e-commerce; platform that creates and manages digital storefront listings through one interface; and professional services. Endurance International Group Holdings, Inc. was founded in 1997 and is headquartered in Burlington, Massachusetts.

FINANCIAL RATIOS  of  Endurance International Group Holdings (EIGI)

Valuation Ratios
P/E Ratio -15.7
Price to Sales 1
Price to Book 9.2
Price to Tangible Book
Price to Cash Flow 7.4
Price to Free Cash Flow 9.7
Growth Rates
Sales Growth Rate 49.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 19.4%
Cap. Spend. - 3 Yr. Gr. Rate 1.7%
Financial Strength
Quick Ratio 1
Current Ratio 0
LT Debt to Equity 1574.2%
Total Debt to Equity 1608.1%
Interest Coverage -1
Management Effectiveness
Return On Assets -1%
Ret/ On Assets - 3 Yr. Avg. 0.7%
Return On Total Capital -4.3%
Ret/ On T. Cap. - 3 Yr. Avg. -3.3%
Return On Equity -48%
Return On Equity - 3 Yr. Avg. -29.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 48.2%
Gross Margin - 3 Yr. Avg. 43.5%
EBITDA Margin 12%
EBITDA Margin - 3 Yr. Avg. 19.9%
Operating Margin -3.5%
Oper. Margin - 3 Yr. Avg. 1.9%
Pre-Tax Margin -17.1%
Pre-Tax Margin - 3 Yr. Avg. -8.1%
Net Profit Margin -6.6%
Net Profit Margin - 3 Yr. Avg. -5.6%
Effective Tax Rate 57.9%
Eff/ Tax Rate - 3 Yr. Avg. 14.9%
Payout Ratio 0%

EIGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EIGI stock intrinsic value calculation we used $1111 million for the last fiscal year's total revenue generated by Endurance International Group Holdings. The default revenue input number comes from 2016 income statement of Endurance International Group Holdings. 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 EIGI stock valuation model: a) initial revenue growth rate of 51.3% 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 14.2%, whose default value for EIGI is calculated based on our internal credit rating of Endurance International Group Holdings, 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 Endurance International Group Holdings.
    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 EIGI stock the variable cost ratio is equal to 92.9%.

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 EIGI 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 7.7% for Endurance International Group Holdings.

Corporate tax rate of 27% is the nominal tax rate for Endurance International Group Holdings. 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 EIGI 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 EIGI are equal to 51.4%.

Life of production assets of 10.3 years is the average useful life of capital assets used in Endurance International Group Holdings 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 EIGI is equal to -33.8%. 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 - $124 million for Endurance International Group Holdings - 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 129.825 million for Endurance International Group Holdings 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 Endurance International Group Holdings at the current share price and the inputted number of shares is $1.1 billion.


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COMPANY NEWS

▶ Endurance International posts 1Q loss   [May-02-17 07:23AM  Associated Press]
▶ Constant Contact Announces New General Manager   [Apr-24-17 04:15PM  PR Newswire]
▶ Endurance Announces CEO Transition Plan   [Apr-17-17 04:35PM  GlobeNewswire]
▶ Endurance Implements Rebootless Updates with KernelCare   [Mar-29-17 09:00AM  PR Newswire]
▶ Constant Contact Expands to India   [Mar-09-17 07:00AM  PR Newswire]
▶ Endurance International posts 4Q loss   [07:54AM  Associated Press]
▶ Massachusetts tech firm expanding Tempe office, adding 600 workers   [Jan-31-17 07:06PM  at bizjournals.com]
▶ Are Hedge Funds On To Something With Buckle Inc (BKE)?   [Dec-03-16 05:45PM  at Insider Monkey]
▶ Hedge Funds Are Buying Acceleron Pharma Inc (XLRN)   [Nov-30-16 05:14AM  at Insider Monkey]
▶ Five Under-the-Radar Tech Stocks that Okumus Fund Loves   [Oct-07-16 08:00AM  at Insider Monkey]
▶ Insiders Load Up on Endurance International   [Oct-05-16 03:32PM  Gurufocus]
▶ Endurance Announces Acquisition of AppMachine   [Aug-23-16 09:00AM  PR Newswire]
▶ Endurance International, Skechers in Tuesdays 52-Week Low Club   [Aug-02-16 04:04PM  at 24/7 Wall St.]
Stock chart of EIGI Financial statements of EIGI Annual reports of EIGI
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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