Intrinsic value of FleetCor Technologies - FLT

Previous Close

$178.69

  Intrinsic Value

$384.16

stock screener

  Rating & Target

str. buy

+115%

Previous close

$178.69

 
Intrinsic value

$384.16

 
Up/down potential

+115%

 
Rating

str. buy

We calculate the intrinsic value of FLT 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 16.4

 

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, %
  7.57
  29.40
  26.96
  24.76
  22.79
  21.01
  19.41
  17.97
  16.67
  15.50
  14.45
  13.51
  12.66
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.30
  7.97
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
Revenue, $m
  1,832
  2,371
  3,010
  3,755
  4,611
  5,579
  6,662
  7,859
  9,169
  10,591
  12,122
  13,759
  15,501
  17,344
  19,287
  21,328
  23,465
  25,700
  28,030
  30,459
  32,985
  35,613
  38,345
  41,183
  44,133
  47,199
  50,385
  53,699
  57,146
  60,733
  64,467
Variable operating expenses, $m
 
  647
  708
  780
  862
  955
  1,059
  1,174
  1,300
  1,436
  1,583
  1,321
  1,488
  1,665
  1,852
  2,048
  2,253
  2,468
  2,691
  2,924
  3,167
  3,419
  3,682
  3,954
  4,237
  4,532
  4,838
  5,156
  5,487
  5,831
  6,190
Fixed operating expenses, $m
 
  505
  518
  531
  544
  558
  572
  586
  601
  616
  631
  647
  663
  680
  697
  714
  732
  750
  769
  788
  808
  828
  849
  870
  892
  914
  937
  960
  984
  1,009
  1,034
Total operating expenses, $m
  1,077
  1,152
  1,226
  1,311
  1,406
  1,513
  1,631
  1,760
  1,901
  2,052
  2,214
  1,968
  2,151
  2,345
  2,549
  2,762
  2,985
  3,218
  3,460
  3,712
  3,975
  4,247
  4,531
  4,824
  5,129
  5,446
  5,775
  6,116
  6,471
  6,840
  7,224
Operating income, $m
  754
  1,218
  1,783
  2,444
  3,204
  4,066
  5,031
  6,099
  7,269
  8,539
  9,907
  11,791
  13,349
  14,999
  16,738
  18,566
  20,481
  22,482
  24,570
  26,746
  29,010
  31,366
  33,814
  36,359
  39,004
  41,753
  44,611
  47,583
  50,675
  53,893
  57,243
EBITDA, $m
  952
  1,747
  2,341
  3,036
  3,836
  4,743
  5,758
  6,880
  8,110
  9,446
  10,885
  12,425
  14,063
  15,797
  17,626
  19,548
  21,561
  23,665
  25,861
  28,148
  30,529
  33,005
  35,579
  38,255
  41,035
  43,926
  46,930
  50,055
  53,305
  56,688
  60,211
Interest expense (income), $m
  70
  118
  181
  255
  342
  441
  553
  679
  818
  970
  1,135
  1,312
  1,502
  1,704
  1,918
  2,144
  2,381
  2,629
  2,888
  3,158
  3,440
  3,733
  4,038
  4,355
  4,684
  5,027
  5,382
  5,752
  6,136
  6,536
  6,953
Earnings before tax, $m
  643
  1,100
  1,602
  2,189
  2,863
  3,625
  4,478
  5,420
  6,451
  7,569
  8,772
  10,479
  11,847
  13,294
  14,820
  16,422
  18,100
  19,853
  21,682
  23,588
  25,570
  27,633
  29,776
  32,004
  34,320
  36,726
  39,228
  41,831
  44,538
  47,356
  50,291
Tax expense, $m
  191
  297
  433
  591
  773
  979
  1,209
  1,463
  1,742
  2,044
  2,369
  2,829
  3,199
  3,590
  4,001
  4,434
  4,887
  5,360
  5,854
  6,369
  6,904
  7,461
  8,040
  8,641
  9,266
  9,916
  10,592
  11,294
  12,025
  12,786
  13,579
Net income, $m
  452
  803
  1,170
  1,598
  2,090
  2,647
  3,269
  3,957
  4,709
  5,525
  6,404
  7,649
  8,648
  9,705
  10,819
  11,988
  13,213
  14,493
  15,828
  17,219
  18,666
  20,172
  21,737
  23,363
  25,053
  26,810
  28,637
  30,536
  32,513
  34,570
  36,712

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  475
  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
  9,627
  11,853
  15,049
  18,775
  23,054
  27,897
  33,311
  39,296
  45,847
  52,955
  60,609
  68,796
  77,503
  86,719
  96,434
  106,638
  117,327
  128,498
  140,152
  152,293
  164,927
  178,066
  191,723
  205,916
  220,665
  235,993
  251,926
  268,494
  285,729
  303,664
  322,337
Adjusted assets (=assets-cash), $m
  9,152
  11,853
  15,049
  18,775
  23,054
  27,897
  33,311
  39,296
  45,847
  52,955
  60,609
  68,796
  77,503
  86,719
  96,434
  106,638
  117,327
  128,498
  140,152
  152,293
  164,927
  178,066
  191,723
  205,916
  220,665
  235,993
  251,926
  268,494
  285,729
  303,664
  322,337
Revenue / Adjusted assets
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
  0.200
Average production assets, $m
  2,530
  3,274
  4,156
  5,186
  6,367
  7,705
  9,201
  10,854
  12,663
  14,626
  16,740
  19,001
  21,406
  23,952
  26,635
  29,453
  32,406
  35,491
  38,710
  42,063
  45,553
  49,182
  52,954
  56,874
  60,948
  65,181
  69,582
  74,158
  78,918
  83,872
  89,029
Working capital, $m
  -768
  121
  153
  192
  235
  285
  340
  401
  468
  540
  618
  702
  791
  885
  984
  1,088
  1,197
  1,311
  1,430
  1,553
  1,682
  1,816
  1,956
  2,100
  2,251
  2,407
  2,570
  2,739
  2,914
  3,097
  3,288
Total debt, $m
  3,858
  5,174
  7,292
  9,763
  12,600
  15,811
  19,400
  23,368
  27,712
  32,424
  37,499
  42,926
  48,700
  54,810
  61,250
  68,016
  75,103
  82,509
  90,236
  98,285
  106,662
  115,373
  124,427
  133,837
  143,616
  153,778
  164,342
  175,327
  186,753
  198,644
  211,024
Total liabilities, $m
  6,543
  7,859
  9,977
  12,448
  15,285
  18,496
  22,085
  26,053
  30,397
  35,109
  40,184
  45,611
  51,385
  57,495
  63,935
  70,701
  77,788
  85,194
  92,921
  100,970
  109,347
  118,058
  127,112
  136,522
  146,301
  156,463
  167,027
  178,012
  189,438
  201,329
  213,709
Total equity, $m
  3,084
  3,994
  5,071
  6,327
  7,769
  9,401
  11,226
  13,243
  15,451
  17,846
  20,425
  23,184
  26,119
  29,224
  32,498
  35,937
  39,539
  43,304
  47,231
  51,323
  55,580
  60,008
  64,611
  69,394
  74,364
  79,530
  84,899
  90,483
  96,291
  102,335
  108,627
Total liabilities and equity, $m
  9,627
  11,853
  15,048
  18,775
  23,054
  27,897
  33,311
  39,296
  45,848
  52,955
  60,609
  68,795
  77,504
  86,719
  96,433
  106,638
  117,327
  128,498
  140,152
  152,293
  164,927
  178,066
  191,723
  205,916
  220,665
  235,993
  251,926
  268,495
  285,729
  303,664
  322,336
Debt-to-equity ratio
  1.251
  1.300
  1.440
  1.540
  1.620
  1.680
  1.730
  1.760
  1.790
  1.820
  1.840
  1.850
  1.860
  1.880
  1.880
  1.890
  1.900
  1.910
  1.910
  1.920
  1.920
  1.920
  1.930
  1.930
  1.930
  1.930
  1.940
  1.940
  1.940
  1.940
  1.940
Adjusted equity ratio
  0.285
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337
  0.337

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  452
  803
  1,170
  1,598
  2,090
  2,647
  3,269
  3,957
  4,709
  5,525
  6,404
  7,649
  8,648
  9,705
  10,819
  11,988
  13,213
  14,493
  15,828
  17,219
  18,666
  20,172
  21,737
  23,363
  25,053
  26,810
  28,637
  30,536
  32,513
  34,570
  36,712
Depreciation, amort., depletion, $m
  198
  529
  558
  592
  632
  676
  726
  781
  842
  907
  978
  633
  714
  798
  888
  982
  1,080
  1,183
  1,290
  1,402
  1,518
  1,639
  1,765
  1,896
  2,032
  2,173
  2,319
  2,472
  2,631
  2,796
  2,968
Funds from operations, $m
  642
  1,331
  1,728
  2,190
  2,721
  3,323
  3,995
  4,738
  5,551
  6,432
  7,381
  8,283
  9,362
  10,503
  11,706
  12,970
  14,293
  15,676
  17,118
  18,621
  20,185
  21,811
  23,502
  25,259
  27,085
  28,983
  30,956
  33,008
  35,143
  37,366
  39,680
Change in working capital, $m
  -64
  27
  33
  38
  44
  49
  55
  61
  67
  73
  78
  84
  89
  94
  99
  104
  109
  114
  119
  124
  129
  134
  139
  145
  150
  156
  163
  169
  176
  183
  190
Cash from operations, $m
  706
  1,304
  1,695
  2,152
  2,678
  3,273
  3,940
  4,677
  5,484
  6,360
  7,303
  8,199
  9,273
  10,409
  11,607
  12,866
  14,184
  15,562
  17,000
  18,497
  20,056
  21,677
  23,362
  25,114
  26,934
  28,827
  30,794
  32,839
  34,968
  37,183
  39,490
Maintenance CAPEX, $m
  0
  -84
  -109
  -139
  -173
  -212
  -257
  -307
  -362
  -422
  -488
  -558
  -633
  -714
  -798
  -888
  -982
  -1,080
  -1,183
  -1,290
  -1,402
  -1,518
  -1,639
  -1,765
  -1,896
  -2,032
  -2,173
  -2,319
  -2,472
  -2,631
  -2,796
New CAPEX, $m
  -59
  -744
  -883
  -1,029
  -1,182
  -1,338
  -1,495
  -1,653
  -1,809
  -1,963
  -2,114
  -2,261
  -2,405
  -2,545
  -2,683
  -2,818
  -2,952
  -3,085
  -3,219
  -3,353
  -3,490
  -3,629
  -3,772
  -3,920
  -4,074
  -4,234
  -4,401
  -4,576
  -4,760
  -4,954
  -5,158
Cash from investing activities, $m
  -1,390
  -828
  -992
  -1,168
  -1,355
  -1,550
  -1,752
  -1,960
  -2,171
  -2,385
  -2,602
  -2,819
  -3,038
  -3,259
  -3,481
  -3,706
  -3,934
  -4,165
  -4,402
  -4,643
  -4,892
  -5,147
  -5,411
  -5,685
  -5,970
  -6,266
  -6,574
  -6,895
  -7,232
  -7,585
  -7,954
Free cash flow, $m
  -684
  476
  703
  984
  1,323
  1,724
  2,188
  2,717
  3,313
  3,975
  4,702
  5,380
  6,235
  7,150
  8,126
  9,159
  10,250
  11,396
  12,598
  13,854
  15,164
  16,530
  17,951
  19,429
  20,965
  22,561
  24,220
  25,944
  27,736
  29,599
  31,536
Issuance/(repayment) of debt, $m
  923
  1,791
  2,119
  2,471
  2,837
  3,211
  3,590
  3,968
  4,343
  4,713
  5,074
  5,428
  5,773
  6,110
  6,441
  6,766
  7,087
  7,406
  7,726
  8,049
  8,377
  8,711
  9,055
  9,410
  9,778
  10,162
  10,564
  10,985
  11,426
  11,891
  12,380
Issuance/(repurchase) of shares, $m
  -166
  108
  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  
  754
  1,899
  2,119
  2,471
  2,837
  3,211
  3,590
  3,968
  4,343
  4,713
  5,074
  5,428
  5,773
  6,110
  6,441
  6,766
  7,087
  7,406
  7,726
  8,049
  8,377
  8,711
  9,055
  9,410
  9,778
  10,162
  10,564
  10,985
  11,426
  11,891
  12,380
Total cash flow (excl. dividends), $m
  28
  2,374
  2,822
  3,455
  4,160
  4,935
  5,777
  6,685
  7,656
  8,687
  9,776
  10,808
  12,008
  13,261
  14,566
  15,925
  17,337
  18,803
  20,324
  21,903
  23,541
  25,241
  27,006
  28,839
  30,743
  32,724
  34,784
  36,928
  39,162
  41,490
  43,917
Retained Cash Flow (-), $m
  -254
  -910
  -1,077
  -1,256
  -1,442
  -1,632
  -1,825
  -2,017
  -2,208
  -2,395
  -2,579
  -2,759
  -2,934
  -3,106
  -3,274
  -3,439
  -3,602
  -3,765
  -3,927
  -4,091
  -4,258
  -4,428
  -4,603
  -4,783
  -4,970
  -5,166
  -5,370
  -5,583
  -5,808
  -6,044
  -6,293
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
 
  1,464
  1,745
  2,199
  2,718
  3,302
  3,953
  4,668
  5,448
  6,292
  7,197
  8,049
  9,073
  10,155
  11,293
  12,486
  13,735
  15,038
  16,397
  17,812
  19,283
  20,813
  22,403
  24,056
  25,773
  27,558
  29,414
  31,345
  33,354
  35,445
  37,624
Discount rate, %
 
  7.70
  8.09
  8.49
  8.91
  9.36
  9.83
  10.32
  10.83
  11.38
  11.95
  12.54
  13.17
  13.83
  14.52
  15.25
  16.01
  16.81
  17.65
  18.53
  19.46
  20.43
  21.45
  22.52
  23.65
  24.83
  26.07
  27.38
  28.75
  30.18
  31.69
PV of cash for distribution, $m
 
  1,359
  1,494
  1,722
  1,932
  2,111
  2,252
  2,348
  2,393
  2,386
  2,329
  2,194
  2,056
  1,886
  1,692
  1,486
  1,277
  1,072
  879
  705
  551
  420
  311
  225
  158
  108
  71
  46
  28
  17
  10
Current shareholders' claim on cash, %
  100
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3
  99.3

FleetCor Technologies, Inc. is a provider of workforce payment products. The Company offers fuel card payments product solutions, corporate payments products, toll products, lodging cards and gift cards. The Company operates through two segments: North America and International. Its products are sold to businesses, retailers, oil companies and marketers and government entities. Its payment programs enable its customers to manage and control their commercial payments, card programs, and employee spending and provide card-accepting merchants with a customer base that can increase their sales and customer loyalty. The Company also provides a suite of fleet related and workforce payment products, including mobile telematics services, fleet maintenance management and employee benefit and transportation related payments. As of December 31, 2016, its products were used in 53 countries around the world, with its primary geographies in the United States, Brazil and the United Kingdom.

FINANCIAL RATIOS  of  FleetCor Technologies (FLT)

Valuation Ratios
P/E Ratio 36.3
Price to Sales 9
Price to Book 5.3
Price to Tangible Book
Price to Cash Flow 23.2
Price to Free Cash Flow 25.4
Growth Rates
Sales Growth Rate 7.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 40.5%
Cap. Spend. - 3 Yr. Gr. Rate 22.9%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 81.7%
Total Debt to Equity 125.1%
Interest Coverage 10
Management Effectiveness
Return On Assets 5.7%
Ret/ On Assets - 3 Yr. Avg. 5.7%
Return On Total Capital 7.1%
Ret/ On T. Cap. - 3 Yr. Avg. 7.2%
Return On Equity 15.3%
Return On Equity - 3 Yr. Avg. 15.9%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 94.3%
Gross Margin - 3 Yr. Avg. 93.3%
EBITDA Margin 49.7%
EBITDA Margin - 3 Yr. Avg. 50.3%
Operating Margin 41.2%
Oper. Margin - 3 Yr. Avg. 42.1%
Pre-Tax Margin 35.1%
Pre-Tax Margin - 3 Yr. Avg. 36.5%
Net Profit Margin 24.7%
Net Profit Margin - 3 Yr. Avg. 25.6%
Effective Tax Rate 29.7%
Eff/ Tax Rate - 3 Yr. Avg. 30.1%
Payout Ratio 0%

FLT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the FLT stock intrinsic value calculation we used $1832 million for the last fiscal year's total revenue generated by FleetCor Technologies. The default revenue input number comes from 2016 income statement of FleetCor Technologies. 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 FLT stock valuation model: a) initial revenue growth rate of 29.4% 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 7.7%, whose default value for FLT is calculated based on our internal credit rating of FleetCor Technologies, 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 FleetCor Technologies.
    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 FLT stock the variable cost ratio is equal to 32.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $493 million in the base year in the intrinsic value calculation for FLT 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 FleetCor Technologies.

Corporate tax rate of 27% is the nominal tax rate for FleetCor Technologies. 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 FLT 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 FLT are equal to 138.1%.

Life of production assets of 32.3 years is the average useful life of capital assets used in FleetCor Technologies 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 FLT is equal to 5.1%. 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 - $3084 million for FleetCor Technologies - 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 91.875 million for FleetCor Technologies 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 FleetCor Technologies at the current share price and the inputted number of shares is $16.4 billion.

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COMPANY NEWS

▶ FleetCor Technologies tops Street 3Q forecasts   [Nov-01-17 06:34PM  Associated Press]
▶ FLEETCOR to Attend Upcoming Conferences   [Oct-27-17 10:41AM  Business Wire]
▶ 2 U.S. Picks As Europe Outsources Gasoline Cards   [Oct-10-17 06:40PM  Barrons.com]
▶ FLEETCOR Renews its Contract with ARCO®   [Aug-23-17 09:00AM  Business Wire]
▶ FleetCor Technologies tops Street 2Q forecasts   [03:15AM  Associated Press]
▶ FLEETCOR Reports Second Quarter 2017 Financial Results   [Aug-03-17 04:05PM  Business Wire]
Financial statements of FLT
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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