Intrinsic value of Elbit Imaging - EMITF

Previous Close

$2.34

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$2.34

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

Our model is not good at valuating stocks of financial companies, such as EMITF.

We calculate the intrinsic value of EMITF 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 0.0

 

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, %
  -25.21
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  89
  91
  93
  95
  98
  101
  104
  108
  112
  116
  120
  125
  130
  135
  141
  147
  154
  160
  168
  175
  183
  192
  201
  210
  220
  231
  242
  253
  266
  278
  292
Variable operating expenses, $m
 
  97
  99
  102
  104
  108
  111
  115
  119
  123
  128
  133
  139
  144
  151
  157
  164
  171
  179
  187
  196
  205
  214
  224
  235
  246
  258
  270
  283
  297
  312
Fixed operating expenses, $m
 
  81
  83
  85
  87
  89
  92
  94
  96
  99
  101
  104
  106
  109
  112
  114
  117
  120
  123
  126
  129
  133
  136
  139
  143
  146
  150
  154
  158
  162
  166
Total operating expenses, $m
  172
  178
  182
  187
  191
  197
  203
  209
  215
  222
  229
  237
  245
  253
  263
  271
  281
  291
  302
  313
  325
  338
  350
  363
  378
  392
  408
  424
  441
  459
  478
Operating income, $m
  -84
  -87
  -89
  -91
  -94
  -96
  -99
  -101
  -104
  -106
  -109
  -112
  -115
  -118
  -121
  -124
  -128
  -131
  -134
  -138
  -142
  -146
  -149
  -153
  -158
  -162
  -166
  -171
  -176
  -180
  -185
EBITDA, $m
  -31
  -87
  -89
  -91
  -94
  -96
  -99
  -101
  -104
  -106
  -109
  -112
  -115
  -118
  -121
  -124
  -128
  -131
  -134
  -138
  -142
  -146
  -149
  -153
  -158
  -162
  -166
  -171
  -176
  -180
  -185
Interest expense (income), $m
  29
  26
  22
  23
  24
  25
  25
  26
  28
  29
  30
  31
  33
  34
  36
  38
  40
  41
  44
  46
  48
  51
  53
  56
  59
  62
  65
  68
  72
  76
  79
Earnings before tax, $m
  -84
  -113
  -112
  -114
  -118
  -121
  -124
  -128
  -131
  -135
  -139
  -143
  -148
  -152
  -157
  -162
  -167
  -172
  -178
  -184
  -190
  -196
  -203
  -209
  -216
  -224
  -231
  -239
  -247
  -256
  -265
Tax expense, $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
  0
Net income, $m
  -53
  -113
  -112
  -114
  -118
  -121
  -124
  -128
  -131
  -135
  -139
  -143
  -148
  -152
  -157
  -162
  -167
  -172
  -178
  -184
  -190
  -196
  -203
  -209
  -216
  -224
  -231
  -239
  -247
  -256
  -265

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  612
  589
  603
  619
  636
  655
  676
  699
  724
  751
  780
  811
  844
  879
  916
  956
  997
  1,042
  1,089
  1,138
  1,190
  1,246
  1,304
  1,365
  1,430
  1,498
  1,570
  1,645
  1,724
  1,808
  1,896
Adjusted assets (=assets-cash), $m
  577
  589
  603
  619
  636
  655
  676
  699
  724
  751
  780
  811
  844
  879
  916
  956
  997
  1,042
  1,089
  1,138
  1,190
  1,246
  1,304
  1,365
  1,430
  1,498
  1,570
  1,645
  1,724
  1,808
  1,896
Revenue / Adjusted assets
  0.154
  0.154
  0.154
  0.153
  0.154
  0.154
  0.154
  0.155
  0.155
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
  0.154
Average production assets, $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
  0
Working capital, $m
  -97
  -7
  -7
  -8
  -8
  -8
  -8
  -9
  -9
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -13
  -14
  -14
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -23
Total debt, $m
  536
  431
  443
  457
  472
  490
  509
  529
  552
  576
  602
  630
  659
  691
  724
  760
  798
  838
  880
  924
  971
  1,021
  1,073
  1,129
  1,187
  1,248
  1,313
  1,381
  1,452
  1,527
  1,606
Total liabilities, $m
  636
  531
  543
  557
  572
  590
  609
  629
  652
  676
  702
  730
  759
  791
  824
  860
  898
  938
  980
  1,024
  1,071
  1,121
  1,173
  1,229
  1,287
  1,348
  1,413
  1,481
  1,552
  1,627
  1,706
Total equity, $m
  -24
  59
  60
  62
  64
  66
  68
  70
  72
  75
  78
  81
  84
  88
  92
  96
  100
  104
  109
  114
  119
  125
  130
  137
  143
  150
  157
  165
  172
  181
  190
Total liabilities and equity, $m
  612
  590
  603
  619
  636
  656
  677
  699
  724
  751
  780
  811
  843
  879
  916
  956
  998
  1,042
  1,089
  1,138
  1,190
  1,246
  1,303
  1,366
  1,430
  1,498
  1,570
  1,646
  1,724
  1,808
  1,896
Debt-to-equity ratio
  -22.333
  7.300
  7.340
  7.380
  7.430
  7.470
  7.520
  7.570
  7.620
  7.670
  7.720
  7.770
  7.810
  7.860
  7.910
  7.950
  8.000
  8.040
  8.080
  8.120
  8.160
  8.200
  8.230
  8.270
  8.300
  8.330
  8.360
  8.390
  8.420
  8.450
  8.470
Adjusted equity ratio
  -0.042
  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
  -53
  -113
  -112
  -114
  -118
  -121
  -124
  -128
  -131
  -135
  -139
  -143
  -148
  -152
  -157
  -162
  -167
  -172
  -178
  -184
  -190
  -196
  -203
  -209
  -216
  -224
  -231
  -239
  -247
  -256
  -265
Depreciation, amort., depletion, $m
  53
  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
Funds from operations, $m
  44
  -113
  -112
  -114
  -118
  -121
  -124
  -128
  -131
  -135
  -139
  -143
  -148
  -152
  -157
  -162
  -167
  -172
  -178
  -184
  -190
  -196
  -203
  -209
  -216
  -224
  -231
  -239
  -247
  -256
  -265
Change in working capital, $m
  1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  -1
Cash from operations, $m
  43
  -113
  -111
  -114
  -117
  -120
  -124
  -127
  -131
  -135
  -139
  -143
  -147
  -152
  -157
  -161
  -167
  -172
  -177
  -183
  -189
  -195
  -202
  -209
  -216
  -223
  -230
  -238
  -246
  -255
  -264
Maintenance CAPEX, $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
  0
New CAPEX, $m
  -1
  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 investing activities, $m
  4
  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
Free cash flow, $m
  47
  -113
  -111
  -114
  -117
  -120
  -124
  -127
  -131
  -135
  -139
  -143
  -147
  -152
  -157
  -161
  -167
  -172
  -177
  -183
  -189
  -195
  -202
  -209
  -216
  -223
  -230
  -238
  -246
  -255
  -264
Issuance/(repayment) of debt, $m
  -35
  -70
  12
  14
  16
  17
  19
  21
  22
  24
  26
  28
  30
  32
  34
  36
  38
  40
  42
  45
  47
  50
  52
  55
  58
  61
  65
  68
  71
  75
  79
Issuance/(repurchase) of shares, $m
  0
  196
  113
  116
  119
  123
  126
  130
  134
  138
  142
  146
  151
  156
  161
  166
  171
  177
  183
  189
  195
  202
  208
  215
  223
  230
  238
  247
  255
  264
  273
Cash from financing (excl. dividends), $m  
  -65
  126
  125
  130
  135
  140
  145
  151
  156
  162
  168
  174
  181
  188
  195
  202
  209
  217
  225
  234
  242
  252
  260
  270
  281
  291
  303
  315
  326
  339
  352
Total cash flow (excl. dividends), $m
  -18
  13
  14
  16
  18
  20
  21
  23
  25
  27
  29
  31
  33
  35
  38
  40
  42
  45
  47
  50
  53
  56
  59
  62
  65
  69
  73
  76
  80
  85
  89
Retained Cash Flow (-), $m
  29
  -196
  -113
  -116
  -119
  -123
  -126
  -130
  -134
  -138
  -142
  -146
  -151
  -156
  -161
  -166
  -171
  -177
  -183
  -189
  -195
  -202
  -208
  -215
  -223
  -230
  -238
  -247
  -255
  -264
  -273
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
 
  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
 
  -183
  -99
  -100
  -102
  -103
  -105
  -107
  -109
  -111
  -113
  -115
  -118
  -120
  -123
  -126
  -129
  -132
  -135
  -139
  -142
  -146
  -149
  -153
  -157
  -162
  -166
  -170
  -175
  -180
  -185
Discount rate, %
 
  14.60
  15.33
  16.10
  16.90
  17.75
  18.63
  19.57
  20.54
  21.57
  22.65
  23.78
  24.97
  26.22
  27.53
  28.91
  30.35
  31.87
  33.46
  35.14
  36.89
  38.74
  40.68
  42.71
  44.84
  47.09
  49.44
  51.91
  54.51
  57.23
  60.10
PV of cash for distribution, $m
 
  -160
  -75
  -64
  -54
  -46
  -38
  -31
  -24
  -19
  -15
  -11
  -8
  -6
  -4
  -3
  -2
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  17.1
  5.9
  2.0
  0.7
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Elbit Imaging Ltd. engages, directly and through its investee companies, in the fields of commercial centers, hotels, medical industries and devices, and plots in India. The Company's segments include Commercial centers, Hotel, Medical Industries and devices, and Plots in India. Commercial centers segment include initiation, construction and sale of commercial centers and other mixed-use real property projects, principally in the retail sector. Hotel segment is engaged in the operation and management of hotels. Medical Industries and devices segment includes research and development, production and marketing of magnetic resonance imaging guided focused ultrasound treatment equipment, and development of stem cell population expansion technologies and stem cell therapy products for transplantation and regenerative medicine. Plots in India segment includes plots designated for sale, initially designated to residential projects.

FINANCIAL RATIOS  of  Elbit Imaging (EMITF)

Valuation Ratios
P/E Ratio -0.4
Price to Sales 0.2
Price to Book -0.9
Price to Tangible Book
Price to Cash Flow 0.5
Price to Free Cash Flow 0.5
Growth Rates
Sales Growth Rate -25.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity -1712.5%
Total Debt to Equity -2233.3%
Interest Coverage -2
Management Effectiveness
Return On Assets -3.6%
Ret/ On Assets - 3 Yr. Avg. 9.9%
Return On Total Capital -9.6%
Ret/ On T. Cap. - 3 Yr. Avg. 9.4%
Return On Equity 557.9%
Return On Equity - 3 Yr. Avg. 52.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 15.7%
Gross Margin - 3 Yr. Avg. 10.7%
EBITDA Margin -2.2%
EBITDA Margin - 3 Yr. Avg. 30.1%
Operating Margin -93.3%
Oper. Margin - 3 Yr. Avg. -5.1%
Pre-Tax Margin -94.4%
Pre-Tax Margin - 3 Yr. Avg. -5.8%
Net Profit Margin -59.6%
Net Profit Margin - 3 Yr. Avg. 30.2%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. -0.5%
Payout Ratio 0%

EMITF stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the EMITF stock intrinsic value calculation we used $89 million for the last fiscal year's total revenue generated by Elbit Imaging. The default revenue input number comes from 2016 income statement of Elbit Imaging. 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 EMITF stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 14.6%, whose default value for EMITF is calculated based on our internal credit rating of Elbit Imaging, 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 Elbit Imaging.
    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 EMITF stock the variable cost ratio is equal to 106.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $79 million in the base year in the intrinsic value calculation for EMITF 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 5.2% for Elbit Imaging.

Corporate tax rate of 27% is the nominal tax rate for Elbit Imaging. 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 EMITF 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 EMITF are equal to 0%.

Life of production assets of 0 years is the average useful life of capital assets used in Elbit Imaging 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 EMITF is equal to -7.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $-24 million for Elbit Imaging - 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 9.134 million for Elbit Imaging 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 Elbit Imaging at the current share price and the inputted number of shares is $0.0 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ [$$] Clinical Development News, May 8-12   [12:31AM  The Wall Street Journal]
▶ Elbit Imaging Announces Update Regarding Class Action   [May-02-17 02:47PM  Accesswire]
▶ Elbit Imaging Ltd. Announces Notes Buyback   [Dec-22-16 12:50PM  GlobeNewswire]
▶ Elbit Imaging Ltd. Announces Notes Buyback   [Dec-15-16 02:13PM  GlobeNewswire]
▶ Elbit Imaging Ltd. Announces Third Quarter Results for 2016   [Dec-02-16 01:05PM  GlobeNewswire]
▶ Elbit Imaging Ltd. Announces Notes Buyback   [Sep-29-16 02:10PM  GlobeNewswire]
▶ Elbit Imaging Ltd. Announces Notes Buyback   [Sep-01-16 11:05AM  GlobeNewswire]
▶ Elbit Imaging Ltd. Announces Notes Buyback   [Jul-14-16 10:45AM  GlobeNewswire]
Financial statements of EMITF
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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