Intrinsic value of FleetCor Technologies - FLT

Previous Close

$148.25

  Intrinsic Value

$311.69

stock screener

  Rating & Target

str. buy

+110%

  Value-price divergence*

-81%

Previous close

$148.25

 
Intrinsic value

$311.69

 
Up/down potential

+110%

 
Rating

str. buy

 
Value-price divergence*

-81%

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

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 13.8

 

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
  25.60
  23.54
  21.69
  20.02
  18.52
  17.16
  15.95
  14.85
  13.87
  12.98
  12.18
  11.46
  10.82
  10.24
  9.71
  9.24
  8.82
  8.44
  8.09
  7.78
  7.50
  7.25
  7.03
  6.83
  6.64
  6.48
  6.33
  6.20
  6.08
  5.97
Revenue, $m
  1,832
  2,301
  2,843
  3,459
  4,152
  4,920
  5,765
  6,684
  7,677
  8,741
  9,876
  11,079
  12,350
  13,685
  15,086
  16,552
  18,081
  19,676
  21,335
  23,062
  24,857
  26,722
  28,660
  30,675
  32,768
  34,945
  37,209
  39,565
  42,017
  44,571
  47,232
Variable operating expenses, $m
 
  640
  692
  752
  818
  892
  973
  1,061
  1,157
  1,259
  1,368
  1,064
  1,186
  1,314
  1,449
  1,589
  1,736
  1,889
  2,049
  2,214
  2,387
  2,566
  2,752
  2,945
  3,146
  3,355
  3,573
  3,799
  4,034
  4,280
  4,535
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
  1,145
  1,210
  1,283
  1,362
  1,450
  1,545
  1,647
  1,758
  1,875
  1,999
  1,711
  1,849
  1,994
  2,146
  2,303
  2,468
  2,639
  2,818
  3,002
  3,195
  3,394
  3,601
  3,815
  4,038
  4,269
  4,510
  4,759
  5,018
  5,289
  5,569
Operating income, $m
  754
  1,155
  1,632
  2,177
  2,789
  3,471
  4,220
  5,037
  5,920
  6,867
  7,877
  9,369
  10,501
  11,692
  12,941
  14,248
  15,613
  17,036
  18,518
  20,059
  21,662
  23,328
  25,060
  26,860
  28,731
  30,676
  32,700
  34,806
  36,999
  39,283
  41,663
EBITDA, $m
  952
  1,681
  2,183
  2,755
  3,400
  4,117
  4,905
  5,764
  6,692
  7,689
  8,751
  9,879
  11,069
  12,322
  13,636
  15,010
  16,446
  17,942
  19,500
  21,121
  22,806
  24,558
  26,379
  28,272
  30,239
  32,285
  34,413
  36,627
  38,933
  41,335
  43,837
Interest expense (income), $m
  70
  118
  173
  236
  307
  388
  477
  575
  682
  797
  920
  1,052
  1,192
  1,339
  1,494
  1,656
  1,826
  2,004
  2,189
  2,381
  2,582
  2,790
  3,006
  3,231
  3,465
  3,708
  3,961
  4,223
  4,497
  4,781
  5,077
Earnings before tax, $m
  643
  1,037
  1,459
  1,941
  2,482
  3,083
  3,743
  4,462
  5,238
  6,070
  6,957
  8,317
  9,309
  10,353
  11,447
  12,592
  13,787
  15,032
  16,329
  17,678
  19,080
  20,538
  22,053
  23,628
  25,265
  26,968
  28,739
  30,583
  32,502
  34,502
  36,586
Tax expense, $m
  191
  280
  394
  524
  670
  832
  1,011
  1,205
  1,414
  1,639
  1,878
  2,246
  2,513
  2,795
  3,091
  3,400
  3,722
  4,059
  4,409
  4,773
  5,152
  5,545
  5,954
  6,380
  6,822
  7,281
  7,760
  8,257
  8,776
  9,315
  9,878
Net income, $m
  452
  757
  1,065
  1,417
  1,812
  2,250
  2,732
  3,257
  3,824
  4,431
  5,079
  6,071
  6,796
  7,558
  8,357
  9,192
  10,064
  10,974
  11,920
  12,905
  13,929
  14,993
  16,099
  17,249
  18,444
  19,687
  20,980
  22,325
  23,727
  25,186
  26,708

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
  11,505
  14,213
  17,296
  20,758
  24,601
  28,824
  33,420
  38,384
  43,707
  49,381
  55,397
  61,748
  68,427
  75,432
  82,758
  90,406
  98,378
  106,676
  115,308
  124,283
  133,609
  143,301
  153,373
  163,842
  174,727
  186,047
  197,826
  210,087
  222,856
  236,161
Adjusted assets (=assets-cash), $m
  9,152
  11,505
  14,213
  17,296
  20,758
  24,601
  28,824
  33,420
  38,384
  43,707
  49,381
  55,397
  61,748
  68,427
  75,432
  82,758
  90,406
  98,378
  106,676
  115,308
  124,283
  133,609
  143,301
  153,373
  163,842
  174,727
  186,047
  197,826
  210,087
  222,856
  236,161
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
  3,178
  3,926
  4,777
  5,733
  6,795
  7,961
  9,231
  10,602
  12,072
  13,639
  15,301
  17,055
  18,900
  20,834
  22,858
  24,970
  27,172
  29,464
  31,848
  34,327
  36,903
  39,580
  42,362
  45,253
  48,260
  51,386
  54,639
  58,026
  61,553
  65,228
Working capital, $m
  -768
  117
  145
  176
  212
  251
  294
  341
  392
  446
  504
  565
  630
  698
  769
  844
  922
  1,003
  1,088
  1,176
  1,268
  1,363
  1,462
  1,564
  1,671
  1,782
  1,898
  2,018
  2,143
  2,273
  2,409
Total debt, $m
  3,858
  4,943
  6,738
  8,782
  11,077
  13,625
  16,425
  19,473
  22,764
  26,293
  30,054
  34,043
  38,254
  42,682
  47,326
  52,184
  57,254
  62,539
  68,041
  73,764
  79,714
  85,898
  92,324
  99,002
  105,943
  113,159
  120,664
  128,473
  136,602
  145,069
  153,890
Total liabilities, $m
  6,543
  7,628
  9,423
  11,467
  13,762
  16,310
  19,110
  22,158
  25,449
  28,978
  32,739
  36,728
  40,939
  45,367
  50,011
  54,869
  59,939
  65,224
  70,726
  76,449
  82,399
  88,583
  95,009
  101,687
  108,628
  115,844
  123,349
  131,158
  139,287
  147,754
  156,575
Total equity, $m
  3,084
  3,877
  4,790
  5,829
  6,995
  8,291
  9,714
  11,263
  12,935
  14,729
  16,641
  18,669
  20,809
  23,060
  25,421
  27,890
  30,467
  33,153
  35,950
  38,859
  41,883
  45,026
  48,293
  51,687
  55,215
  58,883
  62,698
  66,667
  70,799
  75,102
  79,586
Total liabilities and equity, $m
  9,627
  11,505
  14,213
  17,296
  20,757
  24,601
  28,824
  33,421
  38,384
  43,707
  49,380
  55,397
  61,748
  68,427
  75,432
  82,759
  90,406
  98,377
  106,676
  115,308
  124,282
  133,609
  143,302
  153,374
  163,843
  174,727
  186,047
  197,825
  210,086
  222,856
  236,161
Debt-to-equity ratio
  1.251
  1.270
  1.410
  1.510
  1.580
  1.640
  1.690
  1.730
  1.760
  1.790
  1.810
  1.820
  1.840
  1.850
  1.860
  1.870
  1.880
  1.890
  1.890
  1.900
  1.900
  1.910
  1.910
  1.920
  1.920
  1.920
  1.920
  1.930
  1.930
  1.930
  1.930
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
  757
  1,065
  1,417
  1,812
  2,250
  2,732
  3,257
  3,824
  4,431
  5,079
  6,071
  6,796
  7,558
  8,357
  9,192
  10,064
  10,974
  11,920
  12,905
  13,929
  14,993
  16,099
  17,249
  18,444
  19,687
  20,980
  22,325
  23,727
  25,186
  26,708
Depreciation, amort., depletion, $m
  198
  525
  550
  579
  611
  646
  685
  727
  773
  822
  874
  510
  568
  630
  694
  762
  832
  906
  982
  1,062
  1,144
  1,230
  1,319
  1,412
  1,508
  1,609
  1,713
  1,821
  1,934
  2,052
  2,174
Funds from operations, $m
  642
  1,282
  1,616
  1,995
  2,422
  2,896
  3,417
  3,984
  4,597
  5,253
  5,953
  6,581
  7,364
  8,188
  9,051
  9,954
  10,897
  11,879
  12,902
  13,966
  15,073
  16,223
  17,418
  18,661
  19,952
  21,295
  22,693
  24,147
  25,661
  27,238
  28,882
Change in working capital, $m
  -64
  24
  28
  31
  35
  39
  43
  47
  51
  54
  58
  61
  65
  68
  71
  75
  78
  81
  85
  88
  92
  95
  99
  103
  107
  111
  115
  120
  125
  130
  136
Cash from operations, $m
  706
  1,258
  1,588
  1,964
  2,387
  2,857
  3,374
  3,937
  4,546
  5,199
  5,895
  6,520
  7,299
  8,120
  8,980
  9,879
  10,819
  11,798
  12,818
  13,878
  14,981
  16,128
  17,319
  18,558
  19,845
  21,184
  22,577
  24,027
  25,536
  27,108
  28,746
Maintenance CAPEX, $m
  0
  -84
  -106
  -131
  -159
  -191
  -226
  -265
  -308
  -353
  -402
  -455
  -510
  -568
  -630
  -694
  -762
  -832
  -906
  -982
  -1,062
  -1,144
  -1,230
  -1,319
  -1,412
  -1,508
  -1,609
  -1,713
  -1,821
  -1,934
  -2,052
New CAPEX, $m
  -59
  -648
  -748
  -851
  -956
  -1,062
  -1,166
  -1,270
  -1,371
  -1,470
  -1,567
  -1,662
  -1,754
  -1,845
  -1,935
  -2,024
  -2,112
  -2,202
  -2,292
  -2,384
  -2,479
  -2,576
  -2,677
  -2,782
  -2,892
  -3,006
  -3,127
  -3,253
  -3,386
  -3,527
  -3,675
Cash from investing activities, $m
  -1,390
  -732
  -854
  -982
  -1,115
  -1,253
  -1,392
  -1,535
  -1,679
  -1,823
  -1,969
  -2,117
  -2,264
  -2,413
  -2,565
  -2,718
  -2,874
  -3,034
  -3,198
  -3,366
  -3,541
  -3,720
  -3,907
  -4,101
  -4,304
  -4,514
  -4,736
  -4,966
  -5,207
  -5,461
  -5,727
Free cash flow, $m
  -684
  526
  734
  982
  1,272
  1,605
  1,981
  2,403
  2,867
  3,375
  3,925
  4,404
  5,035
  5,706
  6,415
  7,161
  7,944
  8,764
  9,620
  10,512
  11,441
  12,408
  13,412
  14,457
  15,542
  16,670
  17,842
  19,060
  20,328
  21,647
  23,019
Issuance/(repayment) of debt, $m
  923
  1,560
  1,796
  2,044
  2,295
  2,548
  2,800
  3,048
  3,291
  3,529
  3,762
  3,989
  4,211
  4,429
  4,644
  4,857
  5,071
  5,285
  5,502
  5,723
  5,950
  6,184
  6,426
  6,678
  6,941
  7,216
  7,505
  7,809
  8,129
  8,466
  8,821
Issuance/(repurchase) of shares, $m
  -166
  36
  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
  1,596
  1,796
  2,044
  2,295
  2,548
  2,800
  3,048
  3,291
  3,529
  3,762
  3,989
  4,211
  4,429
  4,644
  4,857
  5,071
  5,285
  5,502
  5,723
  5,950
  6,184
  6,426
  6,678
  6,941
  7,216
  7,505
  7,809
  8,129
  8,466
  8,821
Total cash flow (excl. dividends), $m
  28
  2,122
  2,530
  3,025
  3,567
  4,153
  4,781
  5,450
  6,158
  6,904
  7,687
  8,392
  9,246
  10,135
  11,059
  12,019
  13,015
  14,049
  15,122
  16,235
  17,391
  18,591
  19,838
  21,134
  22,483
  23,886
  25,347
  26,870
  28,457
  30,113
  31,841
Retained Cash Flow (-), $m
  -254
  -793
  -913
  -1,039
  -1,167
  -1,295
  -1,423
  -1,549
  -1,673
  -1,794
  -1,912
  -2,027
  -2,140
  -2,251
  -2,360
  -2,469
  -2,577
  -2,686
  -2,797
  -2,909
  -3,024
  -3,143
  -3,266
  -3,394
  -3,528
  -3,668
  -3,815
  -3,969
  -4,132
  -4,303
  -4,484
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
 
  1,329
  1,617
  1,987
  2,400
  2,858
  3,358
  3,901
  4,486
  5,111
  5,775
  6,365
  7,106
  7,884
  8,698
  9,550
  10,438
  11,363
  12,325
  13,326
  14,367
  15,448
  16,572
  17,740
  18,955
  20,218
  21,532
  22,900
  24,325
  25,809
  27,357
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
 
  1,234
  1,384
  1,556
  1,706
  1,827
  1,913
  1,962
  1,970
  1,938
  1,869
  1,735
  1,610
  1,464
  1,304
  1,137
  970
  810
  661
  527
  410
  311
  230
  166
  116
  79
  52
  33
  21
  12
  7
Current shareholders' claim on cash, %
  100
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7
  99.7

FleetCor Technologies, Inc. provides fuel cards, commercial payment and data solutions, stored value solutions, and workforce payment products and services. It sells a range of customized fleet and lodging payment programs; and offers card products to purchase fuel, lodging, food, toll, transportation, and related products and services at participating locations. The company also offers telematics solution that allows fleet operators to monitor the capacity utilization and movement of vehicles and drivers; vehicle maintenance services; prepaid fuel and food vouchers, and cards; and workforce payment product related to public transportation and toll vouchers. In addition, it provides proprietary equipment that reduces unauthorized and fraudulent transactions to over-the-road trucking fleets, shipping fleets, and other operators of heavily industrialized equipment, including sea-going vessels, mining equipment, agricultural equipment, and locomotives. Further, the company owns and operates proprietary closed-loop networks, such as fleet card, truck stop and fuel merchant, lodging, fueling, fleet management telematics, fuel and food card, voucher, fuel control, maintenance and repair, toll, and distribution networks through which it electronically connects to merchants, and captures, analyzes, and reports customized information. Additionally, it uses third-party networks to deliver its payment programs and services; and provides a range of services, such as issuing and processing, as well as specialized information services. The company sells its products and services directly to businesses, commercial fleets, retailers, oil companies, petroleum marketers, and government entities in North America, Latin America, Europe, Australia, and New Zealand. It has strategic relationships with oil and leasing companies, petroleum marketers, value-added resellers, and others. FleetCor Technologies, Inc. was founded in 1986 and is headquartered in Norcross, Georgia.

FINANCIAL RATIOS  of  FleetCor Technologies (FLT)

Valuation Ratios
P/E Ratio 30.1
Price to Sales 7.4
Price to Book 4.4
Price to Tangible Book
Price to Cash Flow 19.3
Price to Free Cash Flow 21
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 25.6% 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 92.868 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 $13.8 billion.

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COMPANY NEWS

▶ FLEETCOR Appoints New Head of Global Fuel Cards   [Jun-19-17 04:05PM  Business Wire]
▶ FLEETCOR Announces Fortune 1000 Debut   [Jun-13-17 09:30AM  Business Wire]
▶ 11 Best Growth Company Stocks To Buy Now   [Jun-12-17 12:11PM  Insider Monkey]
▶ FleetCor Technologies beats Street 1Q forecasts   [May-01-17 04:52PM  Associated Press]
▶ FLEETCOR Appoints Hala Moddelmog to its Board of Directors   [Apr-26-17 05:55PM  Business Wire]
Stock chart of FLT Financial statements of FLT Annual reports 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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