Intrinsic value of Gaming&Leisure Properties - GLPI

Previous Close

$38.15

  Intrinsic Value

$105.01

stock screener

  Rating & Target

str. buy

+175%

  Value-price divergence*

+2331%

Previous close

$38.15

 
Intrinsic value

$105.01

 
Up/down potential

+175%

 
Rating

str. buy

 
Value-price divergence*

+2331%

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

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

We calculate the intrinsic value of GLPI 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 7.9

 

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, %
  44.00
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  828
  1,325
  2,047
  3,061
  4,441
  6,266
  8,614
  11,563
  15,183
  19,537
  24,677
  30,643
  37,464
  45,157
  53,728
  63,174
  73,487
  84,651
  96,648
  109,459
  123,064
  137,446
  152,590
  168,484
  185,121
  202,499
  220,620
  239,491
  259,124
  279,539
  300,758
Variable operating expenses, $m
 
  152
  230
  341
  491
  689
  945
  1,266
  1,660
  2,134
  2,693
  3,335
  4,077
  4,914
  5,847
  6,875
  7,997
  9,212
  10,517
  11,911
  13,392
  14,957
  16,605
  18,335
  20,145
  22,036
  24,008
  26,062
  28,198
  30,420
  32,729
Fixed operating expenses, $m
 
  262
  269
  276
  283
  290
  297
  304
  312
  320
  328
  336
  344
  353
  362
  371
  380
  390
  399
  409
  419
  430
  441
  452
  463
  475
  486
  499
  511
  524
  537
Total operating expenses, $m
  348
  414
  499
  617
  774
  979
  1,242
  1,570
  1,972
  2,454
  3,021
  3,671
  4,421
  5,267
  6,209
  7,246
  8,377
  9,602
  10,916
  12,320
  13,811
  15,387
  17,046
  18,787
  20,608
  22,511
  24,494
  26,561
  28,709
  30,944
  33,266
Operating income, $m
  481
  911
  1,548
  2,445
  3,668
  5,287
  7,373
  9,993
  13,211
  17,084
  21,656
  26,973
  33,043
  39,890
  47,519
  55,929
  65,110
  75,049
  85,731
  97,138
  109,253
  122,059
  135,544
  149,698
  164,513
  179,988
  196,125
  212,930
  230,415
  248,596
  267,492
EBITDA, $m
  597
  1,100
  1,835
  2,871
  4,284
  6,153
  8,560
  11,584
  15,298
  19,766
  25,042
  31,168
  38,172
  46,073
  54,875
  64,578
  75,171
  86,639
  98,964
  112,125
  126,102
  140,878
  156,436
  172,766
  189,859
  207,713
  226,331
  245,720
  265,893
  286,869
  308,671
Interest expense (income), $m
  155
  201
  328
  513
  772
  1,126
  1,593
  2,195
  2,950
  3,877
  4,992
  6,308
  7,836
  9,583
  11,553
  13,748
  16,167
  18,808
  21,667
  24,740
  28,020
  31,505
  35,188
  39,066
  43,137
  47,398
  51,848
  56,488
  61,321
  66,349
  71,578
Earnings before tax, $m
  297
  710
  1,220
  1,932
  2,896
  4,161
  5,779
  7,798
  10,262
  13,207
  16,664
  20,665
  25,207
  30,307
  35,966
  42,181
  48,943
  56,241
  64,064
  72,398
  81,232
  90,554
  100,356
  110,632
  121,377
  132,591
  144,277
  156,442
  169,094
  182,246
  195,915
Tax expense, $m
  8
  192
  329
  522
  782
  1,124
  1,560
  2,106
  2,771
  3,566
  4,499
  5,579
  6,806
  8,183
  9,711
  11,389
  13,215
  15,185
  17,297
  19,548
  21,933
  24,450
  27,096
  29,871
  32,772
  35,800
  38,955
  42,239
  45,655
  49,206
  52,897
Net income, $m
  289
  518
  890
  1,410
  2,114
  3,038
  4,219
  5,693
  7,491
  9,641
  12,165
  15,085
  18,401
  22,124
  26,255
  30,792
  35,728
  41,056
  46,767
  52,851
  59,299
  66,105
  73,260
  80,761
  88,605
  96,791
  105,322
  114,202
  123,439
  133,040
  143,018

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  37
  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
  7,369
  11,724
  18,113
  27,089
  39,304
  55,453
  76,234
  102,329
  134,364
  172,894
  218,380
  271,178
  331,541
  399,618
  475,467
  559,065
  650,327
  749,122
  855,291
  968,661
  1,089,063
  1,216,338
  1,350,355
  1,491,011
  1,638,243
  1,792,027
  1,952,386
  2,119,385
  2,293,137
  2,473,800
  2,661,575
Adjusted assets (=assets-cash), $m
  7,332
  11,724
  18,113
  27,089
  39,304
  55,453
  76,234
  102,329
  134,364
  172,894
  218,380
  271,178
  331,541
  399,618
  475,467
  559,065
  650,327
  749,122
  855,291
  968,661
  1,089,063
  1,216,338
  1,350,355
  1,491,011
  1,638,243
  1,792,027
  1,952,386
  2,119,385
  2,293,137
  2,473,800
  2,661,575
Revenue / Adjusted assets
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
  0.113
Average production assets, $m
  3,345
  5,351
  8,267
  12,363
  17,939
  25,309
  34,794
  46,704
  61,325
  78,910
  99,670
  123,768
  151,318
  182,389
  217,007
  255,161
  296,814
  341,904
  390,361
  442,104
  497,056
  555,145
  616,312
  680,508
  747,706
  817,894
  891,083
  967,302
  1,046,604
  1,129,060
  1,214,762
Working capital, $m
  0
  -60
  -92
  -138
  -200
  -282
  -388
  -520
  -683
  -879
  -1,110
  -1,379
  -1,686
  -2,032
  -2,418
  -2,843
  -3,307
  -3,809
  -4,349
  -4,926
  -5,538
  -6,185
  -6,867
  -7,582
  -8,330
  -9,112
  -9,928
  -10,777
  -11,661
  -12,579
  -13,534
Total debt, $m
  4,665
  7,620
  11,920
  17,961
  26,182
  37,050
  51,036
  68,597
  90,157
  116,088
  146,700
  182,233
  222,857
  268,673
  319,719
  375,981
  437,400
  503,889
  575,341
  651,639
  732,669
  818,326
  908,519
  1,003,181
  1,102,268
  1,205,764
  1,313,686
  1,426,076
  1,543,011
  1,664,597
  1,790,970
Total liabilities, $m
  4,935
  7,890
  12,190
  18,231
  26,452
  37,320
  51,306
  68,867
  90,427
  116,358
  146,970
  182,503
  223,127
  268,943
  319,989
  376,251
  437,670
  504,159
  575,611
  651,909
  732,939
  818,596
  908,789
  1,003,451
  1,102,538
  1,206,034
  1,313,956
  1,426,346
  1,543,281
  1,664,867
  1,791,240
Total equity, $m
  2,434
  3,834
  5,923
  8,858
  12,852
  18,133
  24,929
  33,462
  43,937
  56,536
  71,410
  88,675
  108,414
  130,675
  155,478
  182,814
  212,657
  244,963
  279,680
  316,752
  356,124
  397,743
  441,566
  487,561
  535,705
  585,993
  638,430
  693,039
  749,856
  808,933
  870,335
Total liabilities and equity, $m
  7,369
  11,724
  18,113
  27,089
  39,304
  55,453
  76,235
  102,329
  134,364
  172,894
  218,380
  271,178
  331,541
  399,618
  475,467
  559,065
  650,327
  749,122
  855,291
  968,661
  1,089,063
  1,216,339
  1,350,355
  1,491,012
  1,638,243
  1,792,027
  1,952,386
  2,119,385
  2,293,137
  2,473,800
  2,661,575
Debt-to-equity ratio
  1.917
  1.990
  2.010
  2.030
  2.040
  2.040
  2.050
  2.050
  2.050
  2.050
  2.050
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
  2.060
Adjusted equity ratio
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327
  0.327

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  289
  518
  890
  1,410
  2,114
  3,038
  4,219
  5,693
  7,491
  9,641
  12,165
  15,085
  18,401
  22,124
  26,255
  30,792
  35,728
  41,056
  46,767
  52,851
  59,299
  66,105
  73,260
  80,761
  88,605
  96,791
  105,322
  114,202
  123,439
  133,040
  143,018
Depreciation, amort., depletion, $m
  116
  189
  288
  427
  616
  866
  1,187
  1,591
  2,086
  2,683
  3,386
  4,196
  5,129
  6,183
  7,356
  8,650
  10,061
  11,590
  13,233
  14,987
  16,849
  18,818
  20,892
  23,068
  25,346
  27,725
  30,206
  32,790
  35,478
  38,273
  41,178
Funds from operations, $m
  533
  707
  1,178
  1,837
  2,729
  3,903
  5,406
  7,284
  9,577
  12,324
  15,551
  19,281
  23,530
  28,307
  33,612
  39,442
  45,790
  52,646
  59,999
  67,837
  76,149
  84,923
  94,152
  103,829
  113,951
  124,516
  135,529
  146,992
  158,917
  171,313
  184,196
Change in working capital, $m
  19
  -22
  -32
  -46
  -62
  -82
  -106
  -133
  -163
  -196
  -231
  -268
  -307
  -346
  -386
  -425
  -464
  -502
  -540
  -576
  -612
  -647
  -681
  -715
  -749
  -782
  -815
  -849
  -884
  -919
  -955
Cash from operations, $m
  514
  730
  1,211
  1,883
  2,792
  3,985
  5,512
  7,416
  9,740
  12,520
  15,783
  19,549
  23,837
  28,653
  33,997
  39,867
  46,254
  53,148
  60,539
  68,414
  76,761
  85,570
  94,834
  104,544
  114,699
  125,298
  136,344
  147,842
  159,800
  172,232
  185,151
Maintenance CAPEX, $m
  0
  -113
  -181
  -280
  -419
  -608
  -858
  -1,179
  -1,583
  -2,079
  -2,675
  -3,379
  -4,196
  -5,129
  -6,183
  -7,356
  -8,650
  -10,061
  -11,590
  -13,233
  -14,987
  -16,849
  -18,818
  -20,892
  -23,068
  -25,346
  -27,725
  -30,206
  -32,790
  -35,478
  -38,273
New CAPEX, $m
  -3,271
  -2,006
  -2,916
  -4,096
  -5,575
  -7,370
  -9,485
  -11,910
  -14,621
  -17,585
  -20,760
  -24,098
  -27,550
  -31,071
  -34,618
  -38,155
  -41,653
  -45,091
  -48,456
  -51,743
  -54,952
  -58,090
  -61,166
  -64,196
  -67,198
  -70,188
  -73,189
  -76,220
  -79,302
  -82,456
  -85,702
Cash from investing activities, $m
  -3,219
  -2,119
  -3,097
  -4,376
  -5,994
  -7,978
  -10,343
  -13,089
  -16,204
  -19,664
  -23,435
  -27,477
  -31,746
  -36,200
  -40,801
  -45,511
  -50,303
  -55,152
  -60,046
  -64,976
  -69,939
  -74,939
  -79,984
  -85,088
  -90,266
  -95,534
  -100,914
  -106,426
  -112,092
  -117,934
  -123,975
Free cash flow, $m
  -2,705
  -1,390
  -1,887
  -2,494
  -3,203
  -3,993
  -4,831
  -5,673
  -6,464
  -7,145
  -7,652
  -7,927
  -7,908
  -7,547
  -6,803
  -5,644
  -4,048
  -2,004
  493
  3,438
  6,822
  10,632
  14,849
  19,456
  24,434
  29,764
  35,430
  41,416
  47,709
  54,298
  61,176
Issuance/(repayment) of debt, $m
  2,175
  2,955
  4,300
  6,040
  8,221
  10,868
  13,986
  17,562
  21,560
  25,931
  30,612
  35,533
  40,624
  45,816
  51,046
  56,261
  61,419
  66,489
  71,452
  76,298
  81,030
  85,657
  90,193
  94,662
  99,087
  103,497
  107,921
  112,390
  116,935
  121,586
  126,373
Issuance/(repurchase) of shares, $m
  984
  918
  1,199
  1,524
  1,881
  2,243
  2,577
  2,840
  2,985
  2,958
  2,709
  2,180
  1,338
  137
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  3,127
  3,873
  5,499
  7,564
  10,102
  13,111
  16,563
  20,402
  24,545
  28,889
  33,321
  37,713
  41,962
  45,953
  51,046
  56,261
  61,419
  66,489
  71,452
  76,298
  81,030
  85,657
  90,193
  94,662
  99,087
  103,497
  107,921
  112,390
  116,935
  121,586
  126,373
Total cash flow (excl. dividends), $m
  423
  2,483
  3,612
  5,071
  6,899
  9,118
  11,732
  14,729
  18,080
  21,744
  25,668
  29,786
  34,054
  38,406
  44,243
  50,617
  57,371
  64,485
  71,945
  79,737
  87,853
  96,288
  105,042
  114,118
  123,521
  133,261
  143,351
  153,806
  164,644
  175,884
  187,548
Retained Cash Flow (-), $m
  -2,688
  -1,437
  -2,089
  -2,935
  -3,995
  -5,281
  -6,796
  -8,533
  -10,476
  -12,599
  -14,874
  -17,265
  -19,739
  -22,261
  -24,803
  -27,336
  -29,843
  -32,306
  -34,717
  -37,072
  -39,371
  -41,619
  -43,823
  -45,995
  -48,145
  -50,287
  -52,437
  -54,609
  -56,817
  -59,077
  -61,403
Prev. year cash balance distribution, $m
 
  37
  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
 
  1,084
  1,523
  2,136
  2,905
  3,837
  4,936
  6,196
  7,605
  9,145
  10,794
  12,521
  14,315
  16,145
  19,440
  23,281
  27,528
  32,179
  37,227
  42,664
  48,481
  54,669
  61,219
  68,123
  75,376
  82,974
  90,914
  99,197
  107,827
  116,807
  126,146
Discount rate, %
 
  10.30
  10.82
  11.36
  11.92
  12.52
  13.15
  13.80
  14.49
  15.22
  15.98
  16.78
  17.62
  18.50
  19.42
  20.39
  21.41
  22.48
  23.61
  24.79
  26.03
  27.33
  28.70
  30.13
  31.64
  33.22
  34.88
  36.62
  38.45
  40.38
  42.40
PV of cash for distribution, $m
 
  983
  1,240
  1,547
  1,851
  2,127
  2,353
  2,506
  2,575
  2,556
  2,451
  2,273
  2,043
  1,778
  1,620
  1,439
  1,235
  1,024
  820
  635
  475
  342
  238
  159
  103
  64
  38
  22
  12
  6
  3
Current shareholders' claim on cash, %
  100
  89.4
  81.5
  75.5
  70.8
  67.2
  64.4
  62.2
  60.5
  59.3
  58.4
  57.8
  57.6
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5
  57.5

Gaming and Leisure Properties, Inc. comprises real estate properties including casino facilities and other assets. Gaming and Leisure Properties, Inc (NasdaqGS:GLPI) operates independently of Penn National Gaming Inc. as of November 01, 2013.

FINANCIAL RATIOS  of  Gaming&Leisure Properties (GLPI)

Valuation Ratios
P/E Ratio 27.4
Price to Sales 9.6
Price to Book 3.3
Price to Tangible Book
Price to Cash Flow 15.4
Price to Free Cash Flow -2.9
Growth Rates
Sales Growth Rate 44%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 17115.8%
Cap. Spend. - 3 Yr. Gr. Rate 189.8%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 191.7%
Total Debt to Equity 191.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 9%
Ret/ On Assets - 3 Yr. Avg. 9.3%
Return On Total Capital 6.2%
Ret/ On T. Cap. - 3 Yr. Avg. 5.8%
Return On Equity 26.5%
Return On Equity - 3 Yr. Avg. -283.6%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 90.1%
Gross Margin - 3 Yr. Avg. 86.5%
EBITDA Margin 68.6%
EBITDA Margin - 3 Yr. Avg. 63.8%
Operating Margin 58%
Oper. Margin - 3 Yr. Avg. 48.8%
Pre-Tax Margin 35.9%
Pre-Tax Margin - 3 Yr. Avg. 28%
Net Profit Margin 34.9%
Net Profit Margin - 3 Yr. Avg. 26.9%
Effective Tax Rate 2.7%
Eff/ Tax Rate - 3 Yr. Avg. 4%
Payout Ratio 148.1%

GLPI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GLPI stock intrinsic value calculation we used $828 million for the last fiscal year's total revenue generated by Gaming&Leisure Properties. The default revenue input number comes from 2016 income statement of Gaming&Leisure Properties. 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 GLPI stock valuation model: a) initial revenue growth rate of 60% 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 10.3%, whose default value for GLPI is calculated based on our internal credit rating of Gaming&Leisure Properties, 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 Gaming&Leisure Properties.
    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 GLPI stock the variable cost ratio is equal to 11.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $256 million in the base year in the intrinsic value calculation for GLPI 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 4.3% for Gaming&Leisure Properties.

Corporate tax rate of 27% is the nominal tax rate for Gaming&Leisure Properties. 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 GLPI 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 GLPI are equal to 403.9%.

Life of production assets of 29.5 years is the average useful life of capital assets used in Gaming&Leisure Properties 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 GLPI is equal to -4.5%. 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 - $2434 million for Gaming&Leisure Properties - 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 205.956 million for Gaming&Leisure Properties 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 Gaming&Leisure Properties at the current share price and the inputted number of shares is $7.9 billion.

RELATED COMPANIES Price Int.Val. Rating
PENN Penn National 20.38 0.04  str.sell
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PEB Pebblebrook Ho 31.58 5.55  str.sell
RLJ RLJ Lodging Tr 19.61 5.83  str.sell
DRH Diamondrock Ho 10.74 2.36  str.sell
SOHO Sotherly Hotel 6.00 1.61  str.sell
HPT Hospitality Pr 27.33 4.84  str.sell
CHSP Chesapeake Lod 24.61 5.02  str.sell
FCH Felcor Lodging 7.02 0.41  str.sell
AHP Ashford Hospit 9.27 5.16  str.sell

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Stock chart of GLPI Financial statements of GLPI
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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