Intrinsic value of E*TRADE Financial - ETFC

Previous Close

$50.74

  Intrinsic Value

$110.09

stock screener

  Rating & Target

str. buy

+117%

Previous close

$50.74

 
Intrinsic value

$110.09

 
Up/down potential

+117%

 
Rating

str. buy

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

We calculate the intrinsic value of ETFC 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, %
  29.54
  22.20
  20.48
  18.93
  17.54
  16.28
  15.16
  14.14
  13.23
  12.40
  11.66
  11.00
  10.40
  9.86
  9.37
  8.93
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
Revenue, $m
  2,026
  2,476
  2,983
  3,548
  4,170
  4,849
  5,584
  6,373
  7,216
  8,111
  9,057
  10,053
  11,099
  12,193
  13,335
  14,527
  15,768
  17,059
  18,401
  19,796
  21,246
  22,752
  24,318
  25,946
  27,639
  29,400
  31,233
  33,142
  35,130
  37,203
  39,365
Variable operating expenses, $m
 
  2,280
  2,698
  3,164
  3,677
  4,237
  4,844
  5,495
  6,190
  6,929
  7,709
  8,294
  9,157
  10,059
  11,002
  11,985
  13,009
  14,074
  15,181
  16,332
  17,528
  18,771
  20,063
  21,406
  22,803
  24,256
  25,768
  27,343
  28,983
  30,693
  32,477
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
  1,188
  2,280
  2,698
  3,164
  3,677
  4,237
  4,844
  5,495
  6,190
  6,929
  7,709
  8,294
  9,157
  10,059
  11,002
  11,985
  13,009
  14,074
  15,181
  16,332
  17,528
  18,771
  20,063
  21,406
  22,803
  24,256
  25,768
  27,343
  28,983
  30,693
  32,477
Operating income, $m
  838
  196
  285
  384
  493
  611
  740
  878
  1,026
  1,182
  1,348
  1,759
  1,942
  2,133
  2,333
  2,542
  2,759
  2,985
  3,220
  3,464
  3,718
  3,981
  4,255
  4,540
  4,836
  5,144
  5,465
  5,799
  6,147
  6,510
  6,888
EBITDA, $m
  1,077
  489
  589
  700
  823
  957
  1,102
  1,258
  1,424
  1,600
  1,787
  1,984
  2,190
  2,406
  2,631
  2,866
  3,111
  3,366
  3,631
  3,906
  4,192
  4,489
  4,798
  5,120
  5,454
  5,801
  6,163
  6,539
  6,932
  7,341
  7,767
Interest expense (income), $m
  77
  1,039
  1,360
  1,708
  2,095
  2,522
  2,987
  3,491
  4,033
  4,611
  5,224
  5,873
  6,556
  7,273
  8,023
  8,806
  9,623
  10,474
  11,359
  12,280
  13,236
  14,230
  15,263
  16,337
  17,453
  18,614
  19,822
  21,078
  22,387
  23,751
  25,172
Earnings before tax, $m
  838
  -842
  -1,075
  -1,324
  -1,602
  -1,910
  -2,247
  -2,613
  -3,007
  -3,428
  -3,876
  -4,114
  -4,614
  -5,139
  -5,689
  -6,265
  -6,864
  -7,489
  -8,140
  -8,816
  -9,519
  -10,249
  -11,008
  -11,797
  -12,617
  -13,470
  -14,356
  -15,279
  -16,240
  -17,241
  -18,284
Tax expense, $m
  286
  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
  552
  -842
  -1,075
  -1,324
  -1,602
  -1,910
  -2,247
  -2,613
  -3,007
  -3,428
  -3,876
  -4,114
  -4,614
  -5,139
  -5,689
  -6,265
  -6,864
  -7,489
  -8,140
  -8,816
  -9,519
  -10,249
  -11,008
  -11,797
  -12,617
  -13,470
  -14,356
  -15,279
  -16,240
  -17,241
  -18,284

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  3,410
  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
  48,999
  56,268
  67,791
  80,625
  94,766
  110,199
  126,901
  144,846
  164,004
  184,347
  205,849
  228,486
  252,243
  277,109
  303,080
  330,159
  358,359
  387,699
  418,205
  449,911
  482,860
  517,101
  552,688
  589,683
  628,157
  668,183
  709,843
  753,223
  798,418
  845,526
  894,652
Adjusted assets (=assets-cash), $m
  45,589
  56,268
  67,791
  80,625
  94,766
  110,199
  126,901
  144,846
  164,004
  184,347
  205,849
  228,486
  252,243
  277,109
  303,080
  330,159
  358,359
  387,699
  418,205
  449,911
  482,860
  517,101
  552,688
  589,683
  628,157
  668,183
  709,843
  753,223
  798,418
  845,526
  894,652
Revenue / Adjusted assets
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
Average production assets, $m
  485
  592
  713
  848
  997
  1,159
  1,334
  1,523
  1,725
  1,939
  2,165
  2,403
  2,653
  2,914
  3,187
  3,472
  3,769
  4,077
  4,398
  4,731
  5,078
  5,438
  5,812
  6,201
  6,606
  7,027
  7,465
  7,921
  8,396
  8,892
  9,408
Working capital, $m
  0
  1,238
  1,491
  1,774
  2,085
  2,424
  2,792
  3,187
  3,608
  4,056
  4,529
  5,027
  5,549
  6,096
  6,668
  7,264
  7,884
  8,529
  9,201
  9,898
  10,623
  11,376
  12,159
  12,973
  13,819
  14,700
  15,617
  16,571
  17,565
  18,602
  19,682
Total debt, $m
  33,085
  38,861
  48,794
  59,857
  72,046
  85,349
  99,747
  115,215
  131,729
  149,265
  167,799
  187,313
  207,792
  229,226
  251,613
  274,955
  299,264
  324,554
  350,850
  378,182
  406,584
  436,099
  466,775
  498,665
  531,829
  566,332
  602,242
  639,636
  678,594
  719,201
  761,548
Total liabilities, $m
  42,727
  48,503
  58,436
  69,499
  81,688
  94,991
  109,389
  124,857
  141,371
  158,907
  177,441
  196,955
  217,434
  238,868
  261,255
  284,597
  308,906
  334,196
  360,492
  387,824
  416,226
  445,741
  476,417
  508,307
  541,471
  575,974
  611,884
  649,278
  688,236
  728,843
  771,190
Total equity, $m
  6,272
  7,765
  9,355
  11,126
  13,078
  15,207
  17,512
  19,989
  22,633
  25,440
  28,407
  31,531
  34,810
  38,241
  41,825
  45,562
  49,454
  53,502
  57,712
  62,088
  66,635
  71,360
  76,271
  81,376
  86,686
  92,209
  97,958
  103,945
  110,182
  116,683
  123,462
Total liabilities and equity, $m
  48,999
  56,268
  67,791
  80,625
  94,766
  110,198
  126,901
  144,846
  164,004
  184,347
  205,848
  228,486
  252,244
  277,109
  303,080
  330,159
  358,360
  387,698
  418,204
  449,912
  482,861
  517,101
  552,688
  589,683
  628,157
  668,183
  709,842
  753,223
  798,418
  845,526
  894,652
Debt-to-equity ratio
  5.275
  5.000
  5.220
  5.380
  5.510
  5.610
  5.700
  5.760
  5.820
  5.870
  5.910
  5.940
  5.970
  5.990
  6.020
  6.030
  6.050
  6.070
  6.080
  6.090
  6.100
  6.110
  6.120
  6.130
  6.140
  6.140
  6.150
  6.150
  6.160
  6.160
  6.170
Adjusted equity ratio
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138
  0.138

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  552
  -842
  -1,075
  -1,324
  -1,602
  -1,910
  -2,247
  -2,613
  -3,007
  -3,428
  -3,876
  -4,114
  -4,614
  -5,139
  -5,689
  -6,265
  -6,864
  -7,489
  -8,140
  -8,816
  -9,519
  -10,249
  -11,008
  -11,797
  -12,617
  -13,470
  -14,356
  -15,279
  -16,240
  -17,241
  -18,284
Depreciation, amort., depletion, $m
  239
  292
  304
  316
  330
  345
  362
  379
  398
  418
  439
  225
  248
  272
  298
  324
  352
  381
  411
  442
  475
  508
  543
  580
  617
  657
  698
  740
  785
  831
  879
Funds from operations, $m
  2,350
  -550
  -772
  -1,008
  -1,272
  -1,565
  -1,885
  -2,234
  -2,609
  -3,010
  -3,437
  -3,889
  -4,366
  -4,867
  -5,392
  -5,940
  -6,512
  -7,108
  -7,729
  -8,374
  -9,044
  -9,741
  -10,465
  -11,218
  -12,000
  -12,813
  -13,659
  -14,539
  -15,455
  -16,410
  -17,405
Change in working capital, $m
  725
  225
  254
  282
  311
  340
  367
  395
  421
  448
  473
  498
  523
  547
  571
  596
  620
  645
  671
  698
  725
  753
  783
  814
  846
  881
  917
  954
  994
  1,036
  1,081
Cash from operations, $m
  1,625
  -775
  -1,025
  -1,290
  -1,583
  -1,904
  -2,253
  -2,628
  -3,030
  -3,458
  -3,910
  -4,387
  -4,889
  -5,414
  -5,963
  -6,536
  -7,133
  -7,754
  -8,400
  -9,071
  -9,769
  -10,494
  -11,248
  -12,031
  -12,846
  -13,694
  -14,575
  -15,493
  -16,450
  -17,446
  -18,486
Maintenance CAPEX, $m
  0
  -45
  -55
  -67
  -79
  -93
  -108
  -125
  -142
  -161
  -181
  -202
  -225
  -248
  -272
  -298
  -324
  -352
  -381
  -411
  -442
  -475
  -508
  -543
  -580
  -617
  -657
  -698
  -740
  -785
  -831
New CAPEX, $m
  -75
  -107
  -121
  -135
  -149
  -162
  -176
  -189
  -201
  -214
  -226
  -238
  -250
  -261
  -273
  -285
  -297
  -309
  -321
  -333
  -346
  -360
  -374
  -389
  -405
  -421
  -438
  -456
  -475
  -495
  -517
Cash from investing activities, $m
  -4,004
  -152
  -176
  -202
  -228
  -255
  -284
  -314
  -343
  -375
  -407
  -440
  -475
  -509
  -545
  -583
  -621
  -661
  -702
  -744
  -788
  -835
  -882
  -932
  -985
  -1,038
  -1,095
  -1,154
  -1,215
  -1,280
  -1,348
Free cash flow, $m
  -2,379
  -927
  -1,202
  -1,492
  -1,811
  -2,160
  -2,537
  -2,942
  -3,374
  -3,833
  -4,317
  -4,828
  -5,363
  -5,923
  -6,508
  -7,118
  -7,754
  -8,414
  -9,102
  -9,816
  -10,558
  -11,329
  -12,130
  -12,964
  -13,830
  -14,732
  -15,670
  -16,647
  -17,665
  -18,726
  -19,833
Issuance/(repayment) of debt, $m
  2,237
  9,186
  9,933
  11,063
  12,189
  13,303
  14,397
  15,468
  16,514
  17,536
  18,534
  19,514
  20,478
  21,434
  22,387
  23,343
  24,308
  25,291
  26,296
  27,331
  28,402
  29,515
  30,676
  31,890
  33,164
  34,502
  35,911
  37,394
  38,958
  40,607
  42,347
Issuance/(repurchase) of shares, $m
  -52
  2,335
  2,665
  3,095
  3,554
  4,040
  4,552
  5,089
  5,651
  6,236
  6,844
  7,238
  7,892
  8,571
  9,273
  10,001
  10,756
  11,538
  12,349
  13,191
  14,066
  14,974
  15,919
  16,903
  17,926
  18,993
  20,106
  21,266
  22,477
  23,742
  25,063
Cash from financing (excl. dividends), $m  
  2,096
  11,521
  12,598
  14,158
  15,743
  17,343
  18,949
  20,557
  22,165
  23,772
  25,378
  26,752
  28,370
  30,005
  31,660
  33,344
  35,064
  36,829
  38,645
  40,522
  42,468
  44,489
  46,595
  48,793
  51,090
  53,495
  56,017
  58,660
  61,435
  64,349
  67,410
Total cash flow (excl. dividends), $m
  -283
  10,593
  11,397
  12,667
  13,932
  15,183
  16,413
  17,616
  18,791
  19,939
  21,061
  21,924
  23,008
  24,082
  25,152
  26,226
  27,311
  28,414
  29,544
  30,707
  31,910
  33,161
  34,465
  35,829
  37,260
  38,764
  40,346
  42,013
  43,770
  45,622
  47,577
Retained Cash Flow (-), $m
  -473
  -2,335
  -2,665
  -3,095
  -3,554
  -4,040
  -4,552
  -5,089
  -5,651
  -6,236
  -6,844
  -7,238
  -7,892
  -8,571
  -9,273
  -10,001
  -10,756
  -11,538
  -12,349
  -13,191
  -14,066
  -14,974
  -15,919
  -16,903
  -17,926
  -18,993
  -20,106
  -21,266
  -22,477
  -23,742
  -25,063
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
 
  8,258
  8,732
  9,571
  10,378
  11,143
  11,860
  12,527
  13,140
  13,703
  14,217
  14,686
  15,115
  15,511
  15,878
  16,224
  16,555
  16,876
  17,195
  17,516
  17,844
  18,186
  18,545
  18,927
  19,334
  19,771
  20,241
  20,747
  21,293
  21,881
  22,514
Discount rate, %
 
  12.30
  12.92
  13.56
  14.24
  14.95
  15.70
  16.48
  17.31
  18.17
  19.08
  20.04
  21.04
  22.09
  23.19
  24.35
  25.57
  26.85
  28.19
  29.60
  31.08
  32.64
  34.27
  35.98
  37.78
  39.67
  41.65
  43.73
  45.92
  48.22
  50.63
PV of cash for distribution, $m
 
  7,354
  6,849
  6,536
  6,093
  5,552
  4,945
  4,305
  3,664
  3,049
  2,480
  1,970
  1,529
  1,158
  856
  617
  433
  296
  197
  127
  80
  48
  28
  16
  9
  5
  2
  1
  1
  0
  0
Current shareholders' claim on cash, %
  100
  85.4
  73.7
  64.0
  55.8
  48.8
  42.9
  37.9
  33.5
  29.7
  26.4
  23.7
  21.2
  19.1
  17.1
  15.4
  13.9
  12.6
  11.4
  10.3
  9.3
  8.4
  7.7
  7.0
  6.3
  5.7
  5.2
  4.7
  4.3
  3.9
  3.6

E*Trade Financial Corporation is a financial services company. The Company provides online brokerage and related products and services primarily to individual retail investors under the brand E*TRADE Financial. The Company also provides investor-focused banking products, primarily sweep deposits, to retail investors. It provides its services to customers through its digital platforms and network of industry-licensed customer service representatives and Financial Consultants, over the phone and by e-mail. The Company's brokerage business is organized into three product areas: Trading, Investing, and Corporate Services. The Company's Trading products deliver automated trade order placement and execution services. The Company's Investing products help investors build wealth and address their long-term investing needs. The Company's Corporate Services channel provides stock plan administration services for both public and private companies.

FINANCIAL RATIOS  of  E*TRADE Financial (ETFC)

Valuation Ratios
P/E Ratio 25.2
Price to Sales 6.9
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 8.6
Price to Free Cash Flow 9
Growth Rates
Sales Growth Rate 29.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 7.1%
Cap. Spend. - 3 Yr. Gr. Rate 9.8%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 22.4%
Total Debt to Equity 527.5%
Interest Coverage 12
Management Effectiveness
Return On Assets 1.3%
Ret/ On Assets - 3 Yr. Avg. 1.4%
Return On Total Capital 1.5%
Ret/ On T. Cap. - 3 Yr. Avg. 1%
Return On Equity 9.1%
Return On Equity - 3 Yr. Avg. 6.6%
Asset Turnover 0
Profitability Ratios
Gross Margin 90.6%
Gross Margin - 3 Yr. Avg. 83.9%
EBITDA Margin 57%
EBITDA Margin - 3 Yr. Avg. 50.5%
Operating Margin 41.4%
Oper. Margin - 3 Yr. Avg. 23.2%
Pre-Tax Margin 41.4%
Pre-Tax Margin - 3 Yr. Avg. 23.2%
Net Profit Margin 27.2%
Net Profit Margin - 3 Yr. Avg. 19.6%
Effective Tax Rate 34.1%
Eff/ Tax Rate - 3 Yr. Avg. -41.7%
Payout Ratio 0%

ETFC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ETFC stock intrinsic value calculation we used $2026 million for the last fiscal year's total revenue generated by E*TRADE Financial. The default revenue input number comes from 2016 income statement of E*TRADE Financial. 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 ETFC stock valuation model: a) initial revenue growth rate of 22.2% 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 12.3%, whose default value for ETFC is calculated based on our internal credit rating of E*TRADE Financial, 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 E*TRADE Financial.
    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 ETFC stock the variable cost ratio is equal to 94.2%.

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 ETFC 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 3.5% for E*TRADE Financial.

Corporate tax rate of 27% is the nominal tax rate for E*TRADE Financial. 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 ETFC 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 ETFC are equal to 23.9%.

Life of production assets of 10.7 years is the average useful life of capital assets used in E*TRADE Financial 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 ETFC is equal to 50%. 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 - $6272 million for E*TRADE Financial - 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 268.509 million for E*TRADE Financial 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 E*TRADE Financial at the current share price and the inputted number of shares is $13.6 billion.

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NHLD National Holdi 4.15 15.28  str.buy
RJF Raymond James 90.08 157.94  str.buy
LTS Ladenburg Thal 3.27 8.72  str.buy
LPLA LPL Financial 62.50 35.84  sell

COMPANY NEWS

▶ E*TRADE Is Bullish on Gaming Stocks   [Feb-22-18 04:10PM  Investopedia]
▶ E*TRADE Announces 24-Hour Trading   [Feb-20-18 04:05PM  Business Wire]
▶ This Top Mutual Fund's Surprising Appetite For Leading Stocks   [Feb-08-18 04:49PM  Investor's Business Daily]
▶ E*TRADE Ends Margin Trading on Volatility ETF   [Feb-07-18 01:33PM  Investopedia]
▶ Will Brokerages Receive Fresh Lift From Tax Reform, Rate Hikes?   [Feb-01-18 03:56PM  Investor's Business Daily]
▶ E*TRADE Returns to the Super Bowl Ad Game   [Jan-30-18 02:04PM  Investopedia]
▶ Trying To Choose The Best Online Stock Broker? Start Here   [10:09AM  Investor's Business Daily]
▶ Traders Making $100M Deals on Mobile Apps   [02:05PM  Investopedia]
▶ E*TRADE Acquires 1M Brokerage Accounts From Capital One   [Jan-26-18 04:39PM  Investopedia]
▶ E*Trade Financial's Earnings Preview   [12:24PM  Benzinga]
▶ E*TRADE Could Beat Q4 on Revenue, DARTs: Zacks   [Jan-24-18 01:03PM  Investopedia]
▶ E*TRADE's Value Is in Investment Income: Trefis   [Jan-19-18 01:32PM  Investopedia]
▶ E*TRADE: Bullish Investor Sentiment at Historic Highs   [Jan-18-18 01:27PM  Investopedia]
▶ Bull of the Day: E*Trade (ETFC)   [07:00AM  Zacks]
▶ Charles Schwab Earnings, Revenue Meet Views   [Jan-17-18 04:02PM  Investor's Business Daily]
▶ E*TRADE Under Review for Upgrade by Moody's   [Jan-12-18 11:22AM  Investopedia]
▶ E*TRADE to Host Education Day in Orlando   [08:05AM  Business Wire]
▶ 10 Trades to make at all-time highs   [Jan-10-18 05:00PM  CNBC Videos]
▶ TD Ameritrade May Not Slash Commissions in 2018: Barclays   [Jan-08-18 01:52PM  Investopedia]
▶ E*TRADE Stock Upgraded by Morgan Stanley on Valuation   [Jan-05-18 12:58PM  Investopedia]
▶ E*TRADE Expands Bitcoin Offering With CME Bitcoin Futures   [Jan-03-18 10:58AM  Investopedia]
▶ E-Trade to allow Cboe bitcoin futures trading   [Dec-21-17 03:04PM  CNBC Videos]
▶ Here Are The Latest Stocks Joining The Bitcoin Frenzy   [08:42AM  Investor's Business Daily]
▶ E*TRADE Stock May Have Room to Grow: Zacks   [01:50PM  Investopedia]
▶ Robinhood Adds Free Options Trades To Free Stock Trading Platform   [Dec-13-17 04:11PM  Investor's Business Daily]
Financial statements of ETFC
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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