Intrinsic value of LogMeIn - LOGM

Previous Close

$113.45

  Intrinsic Value

$614.53

stock screener

  Rating & Target

str. buy

+442%

  Value-price divergence*

-82%

Previous close

$113.45

 
Intrinsic value

$614.53

 
Up/down potential

+442%

 
Rating

str. buy

 
Value-price divergence*

-82%

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

We calculate the intrinsic value of LOGM 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 2.8

 

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, %
  23.53
  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
  336
  538
  831
  1,242
  1,802
  2,543
  3,496
  4,692
  6,161
  7,928
  10,014
  12,435
  15,203
  18,325
  21,803
  25,636
  29,821
  34,351
  39,219
  44,418
  49,939
  55,775
  61,921
  68,370
  75,122
  82,174
  89,527
  97,185
  105,152
  113,436
  122,047
Variable operating expenses, $m
 
  498
  763
  1,135
  1,641
  2,310
  3,171
  4,253
  5,580
  7,177
  9,062
  11,237
  13,739
  16,560
  19,703
  23,167
  26,949
  31,043
  35,442
  40,140
  45,129
  50,404
  55,957
  61,786
  67,887
  74,259
  80,905
  87,825
  95,025
  102,511
  110,292
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  332
  498
  763
  1,135
  1,641
  2,310
  3,171
  4,253
  5,580
  7,177
  9,062
  11,237
  13,739
  16,560
  19,703
  23,167
  26,949
  31,043
  35,442
  40,140
  45,129
  50,404
  55,957
  61,786
  67,887
  74,259
  80,905
  87,825
  95,025
  102,511
  110,292
Operating income, $m
  4
  40
  68
  107
  161
  233
  324
  440
  581
  751
  952
  1,198
  1,464
  1,765
  2,100
  2,469
  2,872
  3,308
  3,777
  4,278
  4,810
  5,372
  5,964
  6,585
  7,235
  7,914
  8,622
  9,360
  10,127
  10,925
  11,754
EBITDA, $m
  26
  66
  102
  153
  222
  313
  431
  578
  759
  977
  1,234
  1,532
  1,873
  2,258
  2,686
  3,159
  3,674
  4,232
  4,832
  5,473
  6,153
  6,872
  7,629
  8,424
  9,256
  10,125
  11,031
  11,974
  12,956
  13,976
  15,037
Interest expense (income), $m
  1
  1
  5
  12
  22
  35
  53
  76
  104
  139
  182
  231
  289
  355
  430
  513
  604
  704
  812
  928
  1,052
  1,184
  1,323
  1,470
  1,624
  1,785
  1,953
  2,129
  2,312
  2,502
  2,699
Earnings before tax, $m
  3
  39
  63
  95
  139
  197
  271
  364
  477
  612
  771
  966
  1,175
  1,410
  1,670
  1,956
  2,268
  2,604
  2,965
  3,350
  3,757
  4,188
  4,640
  5,115
  5,611
  6,129
  6,669
  7,231
  7,816
  8,423
  9,055
Tax expense, $m
  0
  10
  17
  26
  38
  53
  73
  98
  129
  165
  208
  261
  317
  381
  451
  528
  612
  703
  801
  904
  1,014
  1,131
  1,253
  1,381
  1,515
  1,655
  1,801
  1,952
  2,110
  2,274
  2,445
Net income, $m
  3
  28
  46
  69
  102
  144
  198
  266
  348
  447
  563
  705
  858
  1,029
  1,219
  1,428
  1,656
  1,901
  2,164
  2,445
  2,743
  3,057
  3,387
  3,734
  4,096
  4,474
  4,868
  5,279
  5,705
  6,149
  6,610

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  196
  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
  443
  407
  629
  941
  1,365
  1,926
  2,648
  3,555
  4,668
  6,006
  7,586
  9,420
  11,517
  13,882
  16,517
  19,421
  22,591
  26,024
  29,712
  33,650
  37,833
  42,254
  46,910
  51,796
  56,910
  62,253
  67,823
  73,625
  79,661
  85,937
  92,460
Adjusted assets (=assets-cash), $m
  247
  407
  629
  941
  1,365
  1,926
  2,648
  3,555
  4,668
  6,006
  7,586
  9,420
  11,517
  13,882
  16,517
  19,421
  22,591
  26,024
  29,712
  33,650
  37,833
  42,254
  46,910
  51,796
  56,910
  62,253
  67,823
  73,625
  79,661
  85,937
  92,460
Revenue / Adjusted assets
  1.360
  1.322
  1.321
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
  1.320
Average production assets, $m
  91
  145
  223
  334
  485
  684
  940
  1,262
  1,657
  2,133
  2,694
  3,345
  4,090
  4,929
  5,865
  6,896
  8,022
  9,240
  10,550
  11,948
  13,434
  15,004
  16,657
  18,392
  20,208
  22,105
  24,083
  26,143
  28,286
  30,514
  32,831
Working capital, $m
  21
  -54
  -83
  -124
  -180
  -254
  -350
  -469
  -616
  -793
  -1,001
  -1,243
  -1,520
  -1,832
  -2,180
  -2,564
  -2,982
  -3,435
  -3,922
  -4,442
  -4,994
  -5,578
  -6,192
  -6,837
  -7,512
  -8,217
  -8,953
  -9,718
  -10,515
  -11,344
  -12,205
Total debt, $m
  30
  150
  349
  630
  1,012
  1,517
  2,166
  2,982
  3,984
  5,189
  6,611
  8,261
  10,149
  12,277
  14,648
  17,262
  20,115
  23,204
  26,524
  30,068
  33,832
  37,812
  42,002
  46,399
  51,002
  55,810
  60,824
  66,045
  71,478
  77,126
  82,997
Total liabilities, $m
  247
  367
  566
  847
  1,229
  1,734
  2,383
  3,199
  4,201
  5,406
  6,828
  8,478
  10,366
  12,494
  14,865
  17,479
  20,332
  23,421
  26,741
  30,285
  34,049
  38,029
  42,219
  46,616
  51,219
  56,027
  61,041
  66,262
  71,695
  77,343
  83,214
Total equity, $m
  196
  41
  63
  94
  137
  193
  265
  355
  467
  601
  759
  942
  1,152
  1,388
  1,652
  1,942
  2,259
  2,602
  2,971
  3,365
  3,783
  4,225
  4,691
  5,180
  5,691
  6,225
  6,782
  7,362
  7,966
  8,594
  9,246
Total liabilities and equity, $m
  443
  408
  629
  941
  1,366
  1,927
  2,648
  3,554
  4,668
  6,007
  7,587
  9,420
  11,518
  13,882
  16,517
  19,421
  22,591
  26,023
  29,712
  33,650
  37,832
  42,254
  46,910
  51,796
  56,910
  62,252
  67,823
  73,624
  79,661
  85,937
  92,460
Debt-to-equity ratio
  0.153
  3.670
  5.550
  6.690
  7.410
  7.870
  8.180
  8.390
  8.540
  8.640
  8.710
  8.770
  8.810
  8.840
  8.870
  8.890
  8.900
  8.920
  8.930
  8.940
  8.940
  8.950
  8.950
  8.960
  8.960
  8.970
  8.970
  8.970
  8.970
  8.970
  8.980
Adjusted equity ratio
  0.000
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100
  0.100

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  3
  28
  46
  69
  102
  144
  198
  266
  348
  447
  563
  705
  858
  1,029
  1,219
  1,428
  1,656
  1,901
  2,164
  2,445
  2,743
  3,057
  3,387
  3,734
  4,096
  4,474
  4,868
  5,279
  5,705
  6,149
  6,610
Depreciation, amort., depletion, $m
  22
  27
  35
  46
  61
  81
  106
  138
  178
  225
  282
  334
  409
  493
  586
  690
  802
  924
  1,055
  1,195
  1,343
  1,500
  1,666
  1,839
  2,021
  2,210
  2,408
  2,614
  2,829
  3,051
  3,283
Funds from operations, $m
  130
  55
  80
  115
  162
  225
  304
  404
  526
  672
  844
  1,040
  1,267
  1,522
  1,806
  2,118
  2,458
  2,825
  3,219
  3,640
  4,086
  4,557
  5,053
  5,573
  6,117
  6,685
  7,277
  7,893
  8,534
  9,200
  9,893
Change in working capital, $m
  38
  -20
  -29
  -41
  -56
  -74
  -95
  -120
  -147
  -177
  -209
  -242
  -277
  -312
  -348
  -383
  -418
  -453
  -487
  -520
  -552
  -584
  -615
  -645
  -675
  -705
  -735
  -766
  -797
  -828
  -861
Cash from operations, $m
  92
  75
  110
  156
  218
  299
  400
  524
  673
  849
  1,053
  1,282
  1,544
  1,834
  2,153
  2,501
  2,876
  3,278
  3,706
  4,160
  4,638
  5,141
  5,668
  6,218
  6,792
  7,390
  8,012
  8,659
  9,331
  10,029
  10,754
Maintenance CAPEX, $m
  0
  -9
  -14
  -22
  -33
  -48
  -68
  -94
  -126
  -166
  -213
  -269
  -334
  -409
  -493
  -586
  -690
  -802
  -924
  -1,055
  -1,195
  -1,343
  -1,500
  -1,666
  -1,839
  -2,021
  -2,210
  -2,408
  -2,614
  -2,829
  -3,051
New CAPEX, $m
  -16
  -54
  -79
  -111
  -151
  -199
  -256
  -322
  -395
  -475
  -561
  -651
  -745
  -840
  -936
  -1,031
  -1,126
  -1,219
  -1,310
  -1,398
  -1,485
  -1,570
  -1,653
  -1,735
  -1,816
  -1,897
  -1,978
  -2,060
  -2,143
  -2,228
  -2,316
Cash from investing activities, $m
  7
  -63
  -93
  -133
  -184
  -247
  -324
  -416
  -521
  -641
  -774
  -920
  -1,079
  -1,249
  -1,429
  -1,617
  -1,816
  -2,021
  -2,234
  -2,453
  -2,680
  -2,913
  -3,153
  -3,401
  -3,655
  -3,918
  -4,188
  -4,468
  -4,757
  -5,057
  -5,367
Free cash flow, $m
  99
  12
  16
  23
  34
  51
  75
  108
  152
  208
  278
  361
  464
  585
  725
  883
  1,061
  1,257
  1,473
  1,706
  1,958
  2,228
  2,514
  2,817
  3,137
  3,472
  3,823
  4,190
  4,573
  4,972
  5,386
Issuance/(repayment) of debt, $m
  -30
  120
  200
  281
  382
  505
  650
  816
  1,002
  1,205
  1,422
  1,651
  1,887
  2,128
  2,371
  2,614
  2,853
  3,089
  3,319
  3,545
  3,764
  3,979
  4,190
  4,398
  4,603
  4,808
  5,014
  5,221
  5,432
  5,648
  5,871
Issuance/(repurchase) of shares, $m
  -14
  5
  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  
  -54
  125
  200
  281
  382
  505
  650
  816
  1,002
  1,205
  1,422
  1,651
  1,887
  2,128
  2,371
  2,614
  2,853
  3,089
  3,319
  3,545
  3,764
  3,979
  4,190
  4,398
  4,603
  4,808
  5,014
  5,221
  5,432
  5,648
  5,871
Total cash flow (excl. dividends), $m
  43
  137
  216
  304
  416
  556
  725
  924
  1,153
  1,412
  1,700
  2,012
  2,352
  2,714
  3,096
  3,497
  3,914
  4,346
  4,792
  5,251
  5,723
  6,207
  6,704
  7,215
  7,740
  8,280
  8,837
  9,412
  10,006
  10,620
  11,257
Retained Cash Flow (-), $m
  12
  -33
  -22
  -31
  -42
  -56
  -72
  -91
  -111
  -134
  -158
  -183
  -210
  -236
  -263
  -290
  -317
  -343
  -369
  -394
  -418
  -442
  -466
  -489
  -511
  -534
  -557
  -580
  -604
  -628
  -652
Prev. year cash balance distribution, $m
 
  189
  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
 
  292
  194
  273
  374
  500
  652
  833
  1,042
  1,279
  1,542
  1,829
  2,142
  2,477
  2,833
  3,207
  3,597
  4,003
  4,423
  4,857
  5,304
  5,765
  6,239
  6,726
  7,228
  7,746
  8,280
  8,831
  9,402
  9,993
  10,605
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  280
  177
  237
  308
  387
  474
  563
  651
  734
  809
  868
  914
  942
  951
  941
  914
  871
  815
  748
  674
  596
  518
  441
  368
  301
  242
  190
  145
  109
  80
Current shareholders' claim on cash, %
  100
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6
  93.6

LogMeIn, Inc. provides cloud-based services for individuals and businesses to securely connect to their workplace, colleagues, and customers. Its services include join.me, join.me pro, and join.me enterprise that are browser-based online meeting and screen sharing services; Cubby Basic, Cubby Pro, and Cubby Enterprise that are cloud-based file syncing, storage, and sharing services; and LogMeIn Pro, a remote access service. The company also provides support services, including LogMeIn Rescue, Rescue Lens, and LogMeIn Rescue+Mobile, which are Web-based remote support and customer care services offering remote support through the Internet; and BoldChat, a Web-based live chat service that helps customer service staff to directly engage and provide assistance to visitors to their organization’s Website. In addition, it offers IT management services, such as LogMeIn Central, a Web-based management console; Meldium, a password and identity management product to manage, store, and share login credentials; and AppGuru, an application management product, as well as connected products comprising Xively, a platform, which provides the infrastructure services to help businesses. Further, the company provides RemotelyAnywhere, a LAN-based systems administration product used to manage personal computers and servers from within the IT system of an enterprise; LogMeIn Backup, a service that subscribers install on two or more computers to create a backup network; LogMeIn Hamachi, a hosted virtual private network service; and LogMeIn for iOS services. It serves SMBs, IT service providers, mobile carriers, customer service centers, original equipment manufacturers, enterprise customers, and consumers. The company was formerly known as 3am Labs, Inc. and changed its name to LogMeIn, Inc. in March 2006. LogMeIn, Inc. was founded in 2003 and is headquartered in Boston, Massachusetts.

FINANCIAL RATIOS  of  LogMeIn (LOGM)

Valuation Ratios
P/E Ratio 966.2
Price to Sales 8.6
Price to Book 14.8
Price to Tangible Book
Price to Cash Flow 31.5
Price to Free Cash Flow 38.1
Growth Rates
Sales Growth Rate 23.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -5.9%
Cap. Spend. - 3 Yr. Gr. Rate -7.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 15.3%
Total Debt to Equity 15.3%
Interest Coverage 4
Management Effectiveness
Return On Assets 0.9%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 1.2%
Ret/ On T. Cap. - 3 Yr. Avg. 4.2%
Return On Equity 1.5%
Return On Equity - 3 Yr. Avg. 4.7%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 86.6%
Gross Margin - 3 Yr. Avg. 86.8%
EBITDA Margin 7.7%
EBITDA Margin - 3 Yr. Avg. 9.6%
Operating Margin 1.2%
Oper. Margin - 3 Yr. Avg. 3.7%
Pre-Tax Margin 0.9%
Pre-Tax Margin - 3 Yr. Avg. 3.9%
Net Profit Margin 0.9%
Net Profit Margin - 3 Yr. Avg. 3.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 9.3%
Payout Ratio 833.3%

LOGM stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LOGM stock intrinsic value calculation we used $336 million for the last fiscal year's total revenue generated by LogMeIn. The default revenue input number comes from 2016 income statement of LogMeIn. 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 LOGM 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 4.3%, whose default value for LOGM is calculated based on our internal credit rating of LogMeIn, 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 LogMeIn.
    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 LOGM stock the variable cost ratio is equal to 94%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for LOGM 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 LogMeIn.

Corporate tax rate of 27% is the nominal tax rate for LogMeIn. 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 LOGM 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 LOGM are equal to 26.9%.

Life of production assets of 10 years is the average useful life of capital assets used in LogMeIn 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 LOGM 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 - $196 million for LogMeIn - 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 25.013 million for LogMeIn 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 LogMeIn at the current share price and the inputted number of shares is $2.8 billion.

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Stock chart of LOGM Financial statements of LOGM
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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