Intrinsic value of Ladder Capital Cl A - LADR

Previous Close

$13.54

  Intrinsic Value

$178.92

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+143%

Previous close

$13.54

 
Intrinsic value

$178.92

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+143%

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

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

We calculate the intrinsic value of LADR 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 1.5

 

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, %
  -10.86
  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
  394
  630
  974
  1,457
  2,113
  2,982
  4,099
  5,502
  7,225
  9,297
  11,742
  14,581
  17,827
  21,488
  25,566
  30,061
  34,968
  40,281
  45,989
  52,085
  58,559
  65,403
  72,609
  80,172
  88,089
  96,358
  104,981
  113,960
  123,303
  133,018
  143,114
Variable operating expenses, $m
 
  106
  164
  245
  355
  501
  689
  924
  1,214
  1,562
  1,973
  2,450
  2,995
  3,610
  4,295
  5,050
  5,875
  6,767
  7,726
  8,750
  9,838
  10,988
  12,198
  13,469
  14,799
  16,188
  17,637
  19,145
  20,715
  22,347
  24,043
Fixed operating expenses, $m
 
  218
  224
  229
  235
  241
  247
  253
  260
  266
  273
  279
  286
  294
  301
  308
  316
  324
  332
  341
  349
  358
  367
  376
  385
  395
  405
  415
  425
  436
  447
Total operating expenses, $m
  274
  324
  388
  474
  590
  742
  936
  1,177
  1,474
  1,828
  2,246
  2,729
  3,281
  3,904
  4,596
  5,358
  6,191
  7,091
  8,058
  9,091
  10,187
  11,346
  12,565
  13,845
  15,184
  16,583
  18,042
  19,560
  21,140
  22,783
  24,490
Operating income, $m
  120
  306
  587
  982
  1,523
  2,240
  3,163
  4,325
  5,752
  7,469
  9,497
  11,852
  14,546
  17,584
  20,970
  24,702
  28,778
  33,189
  37,931
  42,995
  48,372
  54,058
  60,044
  66,328
  72,905
  79,775
  86,939
  94,400
  102,163
  110,235
  118,624
EBITDA, $m
  159
  369
  683
  1,127
  1,733
  2,536
  3,570
  4,871
  6,468
  8,391
  10,662
  13,299
  16,314
  19,716
  23,506
  27,684
  32,246
  37,185
  42,493
  48,161
  54,181
  60,546
  67,247
  74,281
  81,643
  89,334
  97,353
  105,705
  114,394
  123,430
  132,821
Interest expense (income), $m
  115
  138
  233
  373
  570
  837
  1,191
  1,646
  2,217
  2,919
  3,762
  4,758
  5,914
  7,236
  8,726
  10,387
  12,217
  14,215
  16,378
  18,703
  21,185
  23,821
  26,608
  29,542
  32,622
  35,845
  39,212
  42,723
  46,379
  50,184
  54,139
Earnings before tax, $m
  120
  168
  353
  609
  953
  1,403
  1,973
  2,679
  3,534
  4,550
  5,735
  7,094
  8,632
  10,349
  12,244
  14,316
  16,560
  18,974
  21,553
  24,292
  27,187
  30,237
  33,436
  36,786
  40,283
  43,930
  47,727
  51,677
  55,784
  60,051
  64,485
Tax expense, $m
  6
  45
  95
  164
  257
  379
  533
  723
  954
  1,229
  1,548
  1,915
  2,331
  2,794
  3,306
  3,865
  4,471
  5,123
  5,819
  6,559
  7,341
  8,164
  9,028
  9,932
  10,877
  11,861
  12,886
  13,953
  15,062
  16,214
  17,411
Net income, $m
  67
  123
  258
  445
  696
  1,024
  1,440
  1,956
  2,580
  3,322
  4,186
  5,179
  6,301
  7,554
  8,938
  10,450
  12,089
  13,851
  15,733
  17,733
  19,847
  22,073
  24,409
  26,854
  29,407
  32,069
  34,841
  37,724
  40,722
  43,837
  47,074

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  45
  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
  5,578
  8,879
  13,718
  20,515
  29,766
  41,996
  57,735
  77,497
  101,758
  130,938
  165,386
  205,372
  251,086
  302,644
  360,086
  423,397
  492,513
  567,333
  647,738
  733,598
  824,781
  921,171
  1,022,666
  1,129,190
  1,240,693
  1,357,159
  1,478,603
  1,605,077
  1,736,665
  1,873,486
  2,015,695
Adjusted assets (=assets-cash), $m
  5,533
  8,879
  13,718
  20,515
  29,766
  41,996
  57,735
  77,497
  101,758
  130,938
  165,386
  205,372
  251,086
  302,644
  360,086
  423,397
  492,513
  567,333
  647,738
  733,598
  824,781
  921,171
  1,022,666
  1,129,190
  1,240,693
  1,357,159
  1,478,603
  1,605,077
  1,736,665
  1,873,486
  2,015,695
Revenue / Adjusted assets
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
  0.071
Average production assets, $m
  829
  1,326
  2,048
  3,063
  4,444
  6,271
  8,621
  11,571
  15,194
  19,551
  24,694
  30,665
  37,490
  45,189
  53,766
  63,219
  73,539
  84,710
  96,716
  109,536
  123,151
  137,543
  152,697
  168,603
  185,252
  202,641
  220,775
  239,659
  259,307
  279,736
  300,969
Working capital, $m
  0
  -63
  -97
  -146
  -211
  -298
  -410
  -550
  -722
  -930
  -1,174
  -1,458
  -1,783
  -2,149
  -2,557
  -3,006
  -3,497
  -4,028
  -4,599
  -5,209
  -5,856
  -6,540
  -7,261
  -8,017
  -8,809
  -9,636
  -10,498
  -11,396
  -12,330
  -13,302
  -14,311
Total debt, $m
  3,942
  6,669
  10,666
  16,280
  23,922
  34,024
  47,024
  63,347
  83,387
  107,490
  135,944
  168,972
  206,732
  249,319
  296,766
  349,061
  406,151
  467,952
  534,367
  605,287
  680,604
  760,222
  844,057
  932,046
  1,024,147
  1,120,348
  1,220,661
  1,325,128
  1,433,820
  1,546,835
  1,664,299
Total liabilities, $m
  4,607
  7,334
  11,331
  16,945
  24,587
  34,689
  47,689
  64,012
  84,052
  108,155
  136,609
  169,637
  207,397
  249,984
  297,431
  349,726
  406,816
  468,617
  535,032
  605,952
  681,269
  760,887
  844,722
  932,711
  1,024,812
  1,121,013
  1,221,326
  1,325,793
  1,434,485
  1,547,500
  1,664,964
Total equity, $m
  971
  1,545
  2,387
  3,570
  5,179
  7,307
  10,046
  13,484
  17,706
  22,783
  28,777
  35,735
  43,689
  52,660
  62,655
  73,671
  85,697
  98,716
  112,706
  127,646
  143,512
  160,284
  177,944
  196,479
  215,881
  236,146
  257,277
  279,283
  302,180
  325,987
  350,731
Total liabilities and equity, $m
  5,578
  8,879
  13,718
  20,515
  29,766
  41,996
  57,735
  77,496
  101,758
  130,938
  165,386
  205,372
  251,086
  302,644
  360,086
  423,397
  492,513
  567,333
  647,738
  733,598
  824,781
  921,171
  1,022,666
  1,129,190
  1,240,693
  1,357,159
  1,478,603
  1,605,076
  1,736,665
  1,873,487
  2,015,695
Debt-to-equity ratio
  4.060
  4.320
  4.470
  4.560
  4.620
  4.660
  4.680
  4.700
  4.710
  4.720
  4.720
  4.730
  4.730
  4.730
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.740
  4.750
  4.750
Adjusted equity ratio
  0.167
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174
  0.174

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  67
  123
  258
  445
  696
  1,024
  1,440
  1,956
  2,580
  3,322
  4,186
  5,179
  6,301
  7,554
  8,938
  10,450
  12,089
  13,851
  15,733
  17,733
  19,847
  22,073
  24,409
  26,854
  29,407
  32,069
  34,841
  37,724
  40,722
  43,837
  47,074
Depreciation, amort., depletion, $m
  39
  63
  97
  144
  210
  296
  407
  546
  717
  922
  1,165
  1,446
  1,768
  2,132
  2,536
  2,982
  3,469
  3,996
  4,562
  5,167
  5,809
  6,488
  7,203
  7,953
  8,738
  9,559
  10,414
  11,305
  12,231
  13,195
  14,197
Funds from operations, $m
  396
  185
  354
  589
  906
  1,320
  1,847
  2,501
  3,297
  4,244
  5,351
  6,625
  8,070
  9,686
  11,474
  13,432
  15,558
  17,847
  20,296
  22,900
  25,656
  28,561
  31,611
  34,806
  38,145
  41,627
  45,255
  49,029
  52,953
  57,032
  61,271
Change in working capital, $m
  -13
  -24
  -34
  -48
  -66
  -87
  -112
  -140
  -172
  -207
  -245
  -284
  -325
  -366
  -408
  -450
  -491
  -531
  -571
  -610
  -647
  -684
  -721
  -756
  -792
  -827
  -862
  -898
  -934
  -971
  -1,010
Cash from operations, $m
  409
  209
  389
  637
  971
  1,406
  1,958
  2,642
  3,469
  4,451
  5,596
  6,909
  8,394
  10,052
  11,882
  13,882
  16,049
  18,378
  20,866
  23,509
  26,303
  29,245
  32,332
  35,563
  38,937
  42,454
  46,117
  49,927
  53,888
  58,004
  62,280
Maintenance CAPEX, $m
  0
  -39
  -63
  -97
  -144
  -210
  -296
  -407
  -546
  -717
  -922
  -1,165
  -1,446
  -1,768
  -2,132
  -2,536
  -2,982
  -3,469
  -3,996
  -4,562
  -5,167
  -5,809
  -6,488
  -7,203
  -7,953
  -8,738
  -9,559
  -10,414
  -11,305
  -12,231
  -13,195
New CAPEX, $m
  -1,040
  -497
  -723
  -1,015
  -1,381
  -1,826
  -2,350
  -2,951
  -3,623
  -4,357
  -5,143
  -5,970
  -6,826
  -7,698
  -8,577
  -9,453
  -10,320
  -11,172
  -12,006
  -12,820
  -13,615
  -14,392
  -15,155
  -15,905
  -16,649
  -17,390
  -18,133
  -18,884
  -19,648
  -20,429
  -21,234
Cash from investing activities, $m
  -25
  -536
  -786
  -1,112
  -1,525
  -2,036
  -2,646
  -3,358
  -4,169
  -5,074
  -6,065
  -7,135
  -8,272
  -9,466
  -10,709
  -11,989
  -13,302
  -14,641
  -16,002
  -17,382
  -18,782
  -20,201
  -21,643
  -23,108
  -24,602
  -26,128
  -27,692
  -29,298
  -30,953
  -32,660
  -34,429
Free cash flow, $m
  384
  -327
  -396
  -474
  -554
  -629
  -687
  -716
  -699
  -623
  -470
  -226
  122
  585
  1,174
  1,893
  2,747
  3,738
  4,865
  6,127
  7,522
  9,044
  10,690
  12,455
  14,335
  16,326
  18,425
  20,629
  22,935
  25,343
  27,852
Issuance/(repayment) of debt, $m
  -329
  2,727
  3,997
  5,614
  7,642
  10,102
  13,000
  16,324
  20,040
  24,103
  28,454
  33,028
  37,760
  42,586
  47,448
  52,295
  57,089
  61,802
  66,415
  70,920
  75,318
  79,618
  83,835
  87,988
  92,102
  96,201
  100,313
  104,467
  108,692
  113,015
  117,464
Issuance/(repurchase) of shares, $m
  -5
  451
  584
  738
  914
  1,104
  1,299
  1,483
  1,641
  1,756
  1,807
  1,779
  1,653
  1,417
  1,057
  566
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -381
  3,178
  4,581
  6,352
  8,556
  11,206
  14,299
  17,807
  21,681
  25,859
  30,261
  34,807
  39,413
  44,003
  48,505
  52,861
  57,089
  61,802
  66,415
  70,920
  75,318
  79,618
  83,835
  87,988
  92,102
  96,201
  100,313
  104,467
  108,692
  113,015
  117,464
Total cash flow (excl. dividends), $m
  3
  2,851
  4,185
  5,878
  8,001
  10,577
  13,611
  17,091
  20,982
  25,236
  29,791
  34,581
  39,536
  44,588
  49,678
  54,753
  59,836
  65,539
  71,280
  77,047
  82,839
  88,662
  94,524
  100,443
  106,437
  112,527
  118,738
  125,096
  131,627
  138,358
  145,316
Retained Cash Flow (-), $m
  -143
  -574
  -842
  -1,183
  -1,610
  -2,128
  -2,739
  -3,439
  -4,221
  -5,077
  -5,994
  -6,958
  -7,954
  -8,971
  -9,995
  -11,016
  -12,026
  -13,019
  -13,990
  -14,939
  -15,866
  -16,772
  -17,660
  -18,535
  -19,402
  -20,265
  -21,131
  -22,006
  -22,896
  -23,807
  -24,744
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
 
  2,277
  3,343
  4,696
  6,391
  8,449
  10,873
  13,652
  16,761
  20,158
  23,797
  27,623
  31,581
  35,617
  39,683
  43,737
  47,810
  52,521
  57,289
  62,108
  66,973
  71,890
  76,864
  81,908
  87,035
  92,262
  97,607
  103,090
  108,731
  114,551
  120,572
Discount rate, %
 
  11.90
  12.50
  13.12
  13.78
  14.46
  15.19
  15.95
  16.74
  17.58
  18.46
  19.38
  20.35
  21.37
  22.44
  23.56
  24.74
  25.98
  27.28
  28.64
  30.07
  31.57
  33.15
  34.81
  36.55
  38.38
  40.30
  42.31
  44.43
  46.65
  48.98
PV of cash for distribution, $m
 
  2,035
  2,642
  3,244
  3,814
  4,300
  4,655
  4,846
  4,857
  4,692
  4,373
  3,934
  3,419
  2,872
  2,332
  1,831
  1,391
  1,036
  746
  519
  349
  226
  141
  85
  49
  27
  15
  8
  4
  2
  1
Current shareholders' claim on cash, %
  100
  77.2
  62.3
  52.1
  44.8
  39.4
  35.5
  32.4
  30.1
  28.3
  27.0
  25.9
  25.2
  24.7
  24.4
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2
  24.2

Ladder Capital Corp operates as a real estate investment trust in the United States. The company operates through three segments: Loans, Securities, and Real Estate. The Loans segment originates conduit first mortgage loans that are secured by cash-flowing commercial real estate; and originates and invests in balance sheet first mortgage loans secured by commercial real estate properties that are undergoing transition, including lease-up, sell-out, and renovation or repositioning. It also invests in note purchase financings, subordinated debt, mezzanine debt, and other structured finance products related to commercial real estate. The Securities segment invests in commercial mortgage-backed securities and the U.S. Agency Securities. The Real Estate segment owns a portfolio of commercial and residential real estate properties, including leased properties, office buildings, a warehouse, and condominium units. The company qualifies as a real estate investment trust for federal income tax purposes. It generally would not be subject to federal corporate income taxes if it distributes at least 90% of its taxable income to its stockholders. Ladder Capital Corp was founded in 2008 and is headquartered in New York, New York.

FINANCIAL RATIOS  of  Ladder Capital Cl A (LADR)

Valuation Ratios
P/E Ratio 22.1
Price to Sales 3.8
Price to Book 1.5
Price to Tangible Book
Price to Cash Flow 3.6
Price to Free Cash Flow -2.4
Growth Rates
Sales Growth Rate -10.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 12.7%
Cap. Spend. - 3 Yr. Gr. Rate -6.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 406%
Total Debt to Equity 406%
Interest Coverage 2
Management Effectiveness
Return On Assets 3.1%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 1.3%
Ret/ On T. Cap. - 3 Yr. Avg. 1.2%
Return On Equity 7.4%
Return On Equity - 3 Yr. Avg. 6.6%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 69.3%
Gross Margin - 3 Yr. Avg. 74.3%
EBITDA Margin 69.5%
EBITDA Margin - 3 Yr. Avg. 65.4%
Operating Margin 30.5%
Oper. Margin - 3 Yr. Avg. 33.2%
Pre-Tax Margin 30.5%
Pre-Tax Margin - 3 Yr. Avg. 33.3%
Net Profit Margin 17%
Net Profit Margin - 3 Yr. Avg. 14.1%
Effective Tax Rate 5%
Eff/ Tax Rate - 3 Yr. Avg. 11.8%
Payout Ratio 100%

LADR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LADR stock intrinsic value calculation we used $394 million for the last fiscal year's total revenue generated by Ladder Capital Cl A. The default revenue input number comes from 2016 income statement of Ladder Capital Cl A. 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 LADR 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 11.9%, whose default value for LADR is calculated based on our internal credit rating of Ladder Capital Cl A, 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 Ladder Capital Cl A.
    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 LADR stock the variable cost ratio is equal to 16.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $213 million in the base year in the intrinsic value calculation for LADR 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 Ladder Capital Cl A.

Corporate tax rate of 27% is the nominal tax rate for Ladder Capital Cl A. 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 LADR 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 LADR are equal to 210.3%.

Life of production assets of 21.2 years is the average useful life of capital assets used in Ladder Capital Cl A 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 LADR is equal to -10%. 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 - $971 million for Ladder Capital Cl A - 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 112.991 million for Ladder Capital Cl A 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 Ladder Capital Cl A at the current share price and the inputted number of shares is $1.5 billion.

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COMPANY NEWS

▶ Ladder Capital beats 2Q profit forecasts   [Aug-03-17 02:12AM  Associated Press]
▶ Ladder Capital Corp Reports Second Quarter 2017 Results   [Aug-02-17 04:15PM  Business Wire]
▶ 5 High Yielding REITs To Buy   [Jul-31-17 07:14PM  Forbes]
▶ Ladder Capital Corp to Report Second Quarter 2017 Results   [Jul-19-17 04:15PM  Business Wire]
▶ [$$] President Trump Has No Problem Getting Loans at Good Terms   [Jun-23-17 11:13AM  The Wall Street Journal]
▶ Ladder Capital misses 1Q profit forecasts   [May-09-17 04:30PM  Associated Press]
▶ Ladder Capital Corp to Report First Quarter 2017 Results   [Apr-19-17 04:15PM  Business Wire]
▶ Is Ladder Capital Corp a Good Investment?   [Mar-13-17 06:13PM  Insider Monkey]
▶ Is Ladder Capital Corp a Good Investment?   [06:13PM  at Insider Monkey]
▶ Is Real Estate the 'Sleeper Buy' for 2017?   [Mar-06-17 05:48PM  GuruFocus.com]
▶ [$$] Related Cos. Takes Stake in Ladder Capital   [Feb-28-17 07:30PM  at The Wall Street Journal]
▶ Do Hedge Funds Love Ladder Capital Corp (LADR)?   [Dec-15-16 02:56PM  at Insider Monkey]
▶ [$$] Ladder Capital Prices Secondary Offering   [Dec-07-16 11:00AM  at The Wall Street Journal]
▶ Ladder Capital Corp to Report Third Quarter 2016 Results   [Oct-27-16 04:15PM  Business Wire]
▶ It's Time To Be A Tactical REIT Investor   [Sep-12-16 07:00AM  at Forbes]
▶ Ladder Capital Corp to Report Second Quarter 2016 Results   [Jul-28-16 05:44PM  Business Wire]
Stock chart of LADR Financial statements of LADR
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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