Intrinsic value of Las Vegas Sands - LVS

Previous Close

$60.01

  Intrinsic Value

$39.75

stock screener

  Rating & Target

sell

-34%

  Value-price divergence*

-78%

Previous close

$60.01

 
Intrinsic value

$39.75

 
Up/down potential

-34%

 
Rating

sell

 
Value-price divergence*

-78%

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

We calculate the intrinsic value of LVS 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 47.7

 

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, %
  -2.38
  14.40
  13.46
  12.61
  11.85
  11.17
  10.55
  10.00
  9.50
  9.05
  8.64
  8.28
  7.95
  7.65
  7.39
  7.15
  6.94
  6.74
  6.57
  6.41
  6.27
  6.14
  6.03
  5.93
  5.83
  5.75
  5.67
  5.61
  5.55
  5.49
  5.44
Revenue, $m
  11,410
  13,053
  14,810
  16,678
  18,655
  20,738
  22,926
  25,218
  27,612
  30,110
  32,712
  35,420
  38,236
  41,163
  44,205
  47,365
  50,650
  54,065
  57,616
  61,310
  65,154
  69,156
  73,325
  77,670
  82,201
  86,927
  91,860
  97,011
  102,392
  108,015
  113,894
Variable operating expenses, $m
 
  9,881
  11,211
  12,625
  14,122
  15,699
  17,355
  19,090
  20,903
  22,794
  24,763
  26,813
  28,945
  31,160
  33,463
  35,856
  38,342
  40,927
  43,615
  46,411
  49,321
  52,351
  55,507
  58,796
  62,226
  65,804
  69,538
  73,437
  77,511
  81,767
  86,218
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
  8,922
  9,881
  11,211
  12,625
  14,122
  15,699
  17,355
  19,090
  20,903
  22,794
  24,763
  26,813
  28,945
  31,160
  33,463
  35,856
  38,342
  40,927
  43,615
  46,411
  49,321
  52,351
  55,507
  58,796
  62,226
  65,804
  69,538
  73,437
  77,511
  81,767
  86,218
Operating income, $m
  2,488
  3,172
  3,599
  4,053
  4,533
  5,039
  5,571
  6,128
  6,710
  7,317
  7,949
  8,607
  9,291
  10,003
  10,742
  11,510
  12,308
  13,138
  14,001
  14,898
  15,832
  16,805
  17,818
  18,874
  19,975
  21,123
  22,322
  23,574
  24,881
  26,248
  27,676
EBITDA, $m
  3,637
  4,490
  5,095
  5,738
  6,418
  7,134
  7,887
  8,675
  9,499
  10,358
  11,254
  12,185
  13,154
  14,161
  15,207
  16,294
  17,424
  18,599
  19,821
  21,091
  22,414
  23,791
  25,225
  26,720
  28,278
  29,904
  31,601
  33,373
  35,224
  37,159
  39,181
Interest expense (income), $m
  214
  330
  401
  477
  558
  644
  734
  829
  928
  1,032
  1,140
  1,253
  1,370
  1,492
  1,619
  1,751
  1,888
  2,030
  2,178
  2,332
  2,492
  2,659
  2,832
  3,013
  3,201
  3,397
  3,602
  3,816
  4,039
  4,272
  4,516
Earnings before tax, $m
  2,255
  2,842
  3,198
  3,575
  3,975
  4,395
  4,837
  5,299
  5,782
  6,285
  6,809
  7,354
  7,921
  8,510
  9,123
  9,759
  10,420
  11,108
  11,823
  12,566
  13,340
  14,146
  14,986
  15,861
  16,774
  17,726
  18,720
  19,758
  20,842
  21,976
  23,161
Tax expense, $m
  239
  767
  863
  965
  1,073
  1,187
  1,306
  1,431
  1,561
  1,697
  1,838
  1,986
  2,139
  2,298
  2,463
  2,635
  2,813
  2,999
  3,192
  3,393
  3,602
  3,820
  4,046
  4,283
  4,529
  4,786
  5,054
  5,335
  5,627
  5,933
  6,253
Net income, $m
  1,670
  2,075
  2,334
  2,610
  2,902
  3,209
  3,531
  3,868
  4,221
  4,588
  4,970
  5,369
  5,782
  6,213
  6,660
  7,124
  7,607
  8,109
  8,630
  9,173
  9,738
  10,327
  10,940
  11,579
  12,245
  12,940
  13,666
  14,423
  15,215
  16,042
  16,907

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2,128
  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
  20,469
  20,986
  23,810
  26,814
  29,992
  33,341
  36,859
  40,543
  44,393
  48,409
  52,592
  56,946
  61,473
  66,178
  71,069
  76,150
  81,432
  86,922
  92,630
  98,569
  104,749
  111,183
  117,886
  124,872
  132,155
  139,754
  147,685
  155,966
  164,617
  173,658
  183,109
Adjusted assets (=assets-cash), $m
  18,341
  20,986
  23,810
  26,814
  29,992
  33,341
  36,859
  40,543
  44,393
  48,409
  52,592
  56,946
  61,473
  66,178
  71,069
  76,150
  81,432
  86,922
  92,630
  98,569
  104,749
  111,183
  117,886
  124,872
  132,155
  139,754
  147,685
  155,966
  164,617
  173,658
  183,109
Revenue / Adjusted assets
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
  0.622
Average production assets, $m
  15,905
  18,196
  20,645
  23,249
  26,005
  28,909
  31,959
  35,154
  38,492
  41,974
  45,601
  49,376
  53,301
  57,381
  61,621
  66,027
  70,607
  75,367
  80,317
  85,466
  90,824
  96,403
  102,215
  108,272
  114,588
  121,176
  128,053
  135,233
  142,734
  150,573
  158,768
Working capital, $m
  292
  -1,305
  -1,481
  -1,668
  -1,865
  -2,074
  -2,293
  -2,522
  -2,761
  -3,011
  -3,271
  -3,542
  -3,824
  -4,116
  -4,420
  -4,737
  -5,065
  -5,407
  -5,762
  -6,131
  -6,515
  -6,916
  -7,333
  -7,767
  -8,220
  -8,693
  -9,186
  -9,701
  -10,239
  -10,802
  -11,389
Total debt, $m
  9,595
  11,462
  13,637
  15,950
  18,397
  20,976
  23,684
  26,521
  29,486
  32,578
  35,799
  39,151
  42,637
  46,260
  50,026
  53,939
  58,005
  62,233
  66,628
  71,201
  75,960
  80,914
  86,075
  91,454
  97,063
  102,914
  109,020
  115,397
  122,058
  129,019
  136,297
Total liabilities, $m
  14,292
  16,159
  18,334
  20,647
  23,094
  25,673
  28,381
  31,218
  34,183
  37,275
  40,496
  43,848
  47,334
  50,957
  54,723
  58,636
  62,702
  66,930
  71,325
  75,898
  80,657
  85,611
  90,772
  96,151
  101,760
  107,611
  113,717
  120,094
  126,755
  133,716
  140,994
Total equity, $m
  6,177
  4,827
  5,476
  6,167
  6,898
  7,668
  8,478
  9,325
  10,210
  11,134
  12,096
  13,098
  14,139
  15,221
  16,346
  17,515
  18,729
  19,992
  21,305
  22,671
  24,092
  25,572
  27,114
  28,720
  30,396
  32,143
  33,968
  35,872
  37,862
  39,941
  42,115
Total liabilities and equity, $m
  20,469
  20,986
  23,810
  26,814
  29,992
  33,341
  36,859
  40,543
  44,393
  48,409
  52,592
  56,946
  61,473
  66,178
  71,069
  76,151
  81,431
  86,922
  92,630
  98,569
  104,749
  111,183
  117,886
  124,871
  132,156
  139,754
  147,685
  155,966
  164,617
  173,657
  183,109
Debt-to-equity ratio
  1.553
  2.370
  2.490
  2.590
  2.670
  2.740
  2.790
  2.840
  2.890
  2.930
  2.960
  2.990
  3.020
  3.040
  3.060
  3.080
  3.100
  3.110
  3.130
  3.140
  3.150
  3.160
  3.170
  3.180
  3.190
  3.200
  3.210
  3.220
  3.220
  3.230
  3.240
Adjusted equity ratio
  0.221
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230
  0.230

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,670
  2,075
  2,334
  2,610
  2,902
  3,209
  3,531
  3,868
  4,221
  4,588
  4,970
  5,369
  5,782
  6,213
  6,660
  7,124
  7,607
  8,109
  8,630
  9,173
  9,738
  10,327
  10,940
  11,579
  12,245
  12,940
  13,666
  14,423
  15,215
  16,042
  16,907
Depreciation, amort., depletion, $m
  1,149
  1,319
  1,496
  1,685
  1,884
  2,095
  2,316
  2,547
  2,789
  3,042
  3,304
  3,578
  3,862
  4,158
  4,465
  4,785
  5,116
  5,461
  5,820
  6,193
  6,581
  6,986
  7,407
  7,846
  8,303
  8,781
  9,279
  9,800
  10,343
  10,911
  11,505
Funds from operations, $m
  4,591
  3,393
  3,830
  4,295
  4,786
  5,304
  5,847
  6,416
  7,010
  7,630
  8,275
  8,946
  9,645
  10,371
  11,125
  11,909
  12,723
  13,570
  14,451
  15,367
  16,320
  17,313
  18,347
  19,424
  20,548
  21,721
  22,945
  24,223
  25,558
  26,953
  28,412
Change in working capital, $m
  548
  -164
  -176
  -187
  -198
  -208
  -219
  -229
  -239
  -250
  -260
  -271
  -282
  -293
  -304
  -316
  -328
  -341
  -355
  -369
  -384
  -400
  -417
  -435
  -453
  -473
  -493
  -515
  -538
  -562
  -588
Cash from operations, $m
  4,043
  3,557
  4,006
  4,482
  4,984
  5,512
  6,066
  6,645
  7,249
  7,879
  8,535
  9,217
  9,926
  10,663
  11,429
  12,225
  13,052
  13,911
  14,806
  15,736
  16,704
  17,713
  18,764
  19,859
  21,001
  22,194
  23,438
  24,738
  26,096
  27,516
  29,000
Maintenance CAPEX, $m
  0
  -1,153
  -1,319
  -1,496
  -1,685
  -1,884
  -2,095
  -2,316
  -2,547
  -2,789
  -3,042
  -3,304
  -3,578
  -3,862
  -4,158
  -4,465
  -4,785
  -5,116
  -5,461
  -5,820
  -6,193
  -6,581
  -6,986
  -7,407
  -7,846
  -8,303
  -8,781
  -9,279
  -9,800
  -10,343
  -10,911
New CAPEX, $m
  -1,445
  -2,291
  -2,449
  -2,604
  -2,756
  -2,904
  -3,050
  -3,194
  -3,338
  -3,482
  -3,627
  -3,775
  -3,925
  -4,080
  -4,240
  -4,406
  -4,579
  -4,760
  -4,950
  -5,149
  -5,359
  -5,579
  -5,812
  -6,057
  -6,316
  -6,589
  -6,877
  -7,180
  -7,501
  -7,839
  -8,195
Cash from investing activities, $m
  -1,442
  -3,444
  -3,768
  -4,100
  -4,441
  -4,788
  -5,145
  -5,510
  -5,885
  -6,271
  -6,669
  -7,079
  -7,503
  -7,942
  -8,398
  -8,871
  -9,364
  -9,876
  -10,411
  -10,969
  -11,552
  -12,160
  -12,798
  -13,464
  -14,162
  -14,892
  -15,658
  -16,459
  -17,301
  -18,182
  -19,106
Free cash flow, $m
  2,601
  114
  238
  381
  543
  723
  921
  1,134
  1,364
  1,608
  1,866
  2,138
  2,423
  2,721
  3,031
  3,353
  3,688
  4,035
  4,394
  4,767
  5,153
  5,552
  5,966
  6,395
  6,840
  7,302
  7,781
  8,278
  8,796
  9,334
  9,894
Issuance/(repayment) of debt, $m
  309
  2,034
  2,175
  2,313
  2,447
  2,579
  2,709
  2,837
  2,964
  3,092
  3,221
  3,352
  3,486
  3,623
  3,765
  3,913
  4,067
  4,227
  4,396
  4,573
  4,759
  4,955
  5,161
  5,379
  5,609
  5,851
  6,107
  6,377
  6,661
  6,961
  7,278
Issuance/(repurchase) of shares, $m
  17
  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 from financing (excl. dividends), $m  
  279
  2,034
  2,175
  2,313
  2,447
  2,579
  2,709
  2,837
  2,964
  3,092
  3,221
  3,352
  3,486
  3,623
  3,765
  3,913
  4,067
  4,227
  4,396
  4,573
  4,759
  4,955
  5,161
  5,379
  5,609
  5,851
  6,107
  6,377
  6,661
  6,961
  7,278
Total cash flow (excl. dividends), $m
  2,858
  2,147
  2,413
  2,694
  2,991
  3,302
  3,629
  3,971
  4,328
  4,700
  5,087
  5,490
  5,909
  6,344
  6,796
  7,266
  7,754
  8,262
  8,790
  9,339
  9,911
  10,507
  11,127
  11,774
  12,449
  13,153
  13,887
  14,655
  15,457
  16,295
  17,172
Retained Cash Flow (-), $m
  640
  -611
  -650
  -691
  -731
  -770
  -809
  -847
  -885
  -924
  -962
  -1,001
  -1,041
  -1,082
  -1,125
  -1,169
  -1,215
  -1,263
  -1,313
  -1,366
  -1,421
  -1,480
  -1,542
  -1,607
  -1,675
  -1,748
  -1,824
  -1,905
  -1,990
  -2,079
  -2,174
Prev. year cash balance distribution, $m
 
  1,961
  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
 
  3,498
  1,764
  2,003
  2,260
  2,532
  2,820
  3,124
  3,443
  3,777
  4,125
  4,489
  4,868
  5,262
  5,672
  6,097
  6,540
  6,999
  7,477
  7,974
  8,490
  9,027
  9,586
  10,167
  10,773
  11,405
  12,063
  12,750
  13,467
  14,216
  14,998
Discount rate, %
 
  5.90
  6.20
  6.50
  6.83
  7.17
  7.53
  7.91
  8.30
  8.72
  9.15
  9.61
  10.09
  10.60
  11.13
  11.68
  12.27
  12.88
  13.52
  14.20
  14.91
  15.65
  16.44
  17.26
  18.12
  19.03
  19.98
  20.98
  22.03
  23.13
  24.29
PV of cash for distribution, $m
 
  3,303
  1,564
  1,658
  1,735
  1,791
  1,824
  1,834
  1,819
  1,780
  1,718
  1,636
  1,536
  1,421
  1,295
  1,163
  1,027
  893
  762
  640
  527
  426
  337
  261
  198
  147
  106
  75
  51
  34
  22
Current shareholders' claim on cash, %
  100
  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
  100.0

Las Vegas Sands Corp., together with its subsidiaries, develops, owns, and operates integrated resorts in Asia and the United States. It owns and operates The Venetian Macao Resort Hotel, Sands Cotai Central, the Four Seasons Hotel Macao, Cotai Strip, the Plaza Casino, and the Sands Macao in Macao, the People’s Republic of China; and iconic Marina Bay Sands in Singapore. The company also owns and operates The Venetian Resort Hotel Casino, The Palazzo Resort Hotel Casino, and Five-Diamond luxury resorts on the Las Vegas Strip; Sands Expo and Convention Center in Las Vegas, Nevada; and the Sands Casino Resort Bethlehem in Bethlehem, Pennsylvania. Its integrated resorts include accommodations, gaming, entertainment and retail, convention and exhibition facilities, celebrity chef restaurants, and other amenities. Las Vegas Sands Corp. was founded in 1988 and is based in Las Vegas, Nevada.

FINANCIAL RATIOS  of  Las Vegas Sands (LVS)

Valuation Ratios
P/E Ratio 28.6
Price to Sales 4.2
Price to Book 7.7
Price to Tangible Book
Price to Cash Flow 11.8
Price to Free Cash Flow 18.4
Growth Rates
Sales Growth Rate -2.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -5.5%
Cap. Spend. - 3 Yr. Gr. Rate 8.9%
Financial Strength
Quick Ratio 13
Current Ratio 0
LT Debt to Equity 152.6%
Total Debt to Equity 155.3%
Interest Coverage 12
Management Effectiveness
Return On Assets 9%
Ret/ On Assets - 3 Yr. Avg. 10.8%
Return On Total Capital 10.5%
Ret/ On T. Cap. - 3 Yr. Avg. 12.9%
Return On Equity 25.7%
Return On Equity - 3 Yr. Avg. 30.6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 48.8%
Gross Margin - 3 Yr. Avg. 47.8%
EBITDA Margin 31.7%
EBITDA Margin - 3 Yr. Avg. 33.3%
Operating Margin 21.8%
Oper. Margin - 3 Yr. Avg. 24.7%
Pre-Tax Margin 19.8%
Pre-Tax Margin - 3 Yr. Avg. 22.8%
Net Profit Margin 14.6%
Net Profit Margin - 3 Yr. Avg. 17%
Effective Tax Rate 10.6%
Eff/ Tax Rate - 3 Yr. Avg. 8.7%
Payout Ratio 174.2%

LVS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the LVS stock intrinsic value calculation we used $11410 million for the last fiscal year's total revenue generated by Las Vegas Sands. The default revenue input number comes from 2016 income statement of Las Vegas Sands. 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 LVS stock valuation model: a) initial revenue growth rate of 14.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 5.9%, whose default value for LVS is calculated based on our internal credit rating of Las Vegas Sands, 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 Las Vegas Sands.
    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 LVS stock the variable cost ratio is equal to 75.7%.

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 LVS 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 Las Vegas Sands.

Corporate tax rate of 27% is the nominal tax rate for Las Vegas Sands. 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 LVS 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 LVS are equal to 139.4%.

Life of production assets of 13.8 years is the average useful life of capital assets used in Las Vegas Sands 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 LVS 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 - $6177 million for Las Vegas Sands - 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 795.306 million for Las Vegas Sands 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 Las Vegas Sands at the current share price and the inputted number of shares is $47.7 billion.

RELATED COMPANIES Price Int.Val. Rating
WYNN Wynn Resorts 134.90 165.32  buy
MGM MGM Resorts In 30.71 1.93  str.sell
MCRI Monarch Casino 34.13 25.38  hold
RRR Red Rock Resor 21.65 19.43  hold
BYD Boyd Gaming 25.56 30.80  buy

COMPANY NEWS

▶ 4 Reasons Why I Love Las Vegas Sands Corp.   [Aug-17-17 08:23PM  Motley Fool]
▶ U.S. Casinos With Macau Operations Headed For A Rebound   [Aug-16-17 01:46PM  Barrons.com]
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▶ 3 High-Yield Stocks for Aggressive Investors   [Aug-07-17 02:15PM  Motley Fool]
▶ Trump adds trademarks in casino hub Macau   [Aug-06-17 11:26PM  Reuters]
▶ Macau July Gaming Revenue Booms, But It's A Push On Wall Street   [Aug-01-17 04:08PM  Investor's Business Daily]
▶ Macau Strength Helps Las Vegas Sands Earnings   [Jul-28-17 01:56PM  Barrons.com]
▶ Las Vegas Sands tops Street 2Q forecasts   [Jul-26-17 09:53PM  Associated Press]
▶ Las Vegas Sands Beat Wall Street Projections   [08:54PM  Bloomberg Video]
▶ Whole Foods, Las Vegas Sands, Nutrisystem Earnings Top   [06:00PM  Investor's Business Daily]
▶ Wynn sinks after hours: 4 trades   [Jul-25-17 05:00PM  CNBC Videos]
▶ These 3 Casino Stocks Are Near Buy Zones Ahead Of Earnings   [01:06PM  Investor's Business Daily]
▶ The Best Stock in Nevada: Las Vegas Sands   [Jul-20-17 08:50AM  Kiplinger]
▶ Casino Stocks 101: What Is A Junket?   [Jul-15-17 10:47AM  Benzinga]
▶ Here's Why Casino Stocks Tumbled On A Trial In Macau   [04:09PM  Investor's Business Daily]
▶ Better Buy: Las Vegas Sands Corp. vs. MGM Resorts   [Jul-11-17 03:37PM  Motley Fool]
▶ 3 Casino Stocks to Buy Now   [Jul-07-17 02:08PM  Zacks]
▶ What To Expect Out Of Macau From Q2   [01:49PM  Benzinga]
▶ What Analysts Recommend for Major Casino Stock   [Jul-04-17 07:35AM  Market Realist]
▶ Stocks to Watch: Tesla, Chesapeake Energy, EQT, Caterpillar   [Jul-03-17 09:28AM  The Wall Street Journal]
▶ Macao to See High Growth In Hotel Room Supply   [10:36AM  Market Realist]
▶ Downtown Las Vegas Continues To Outshine The Strip   [Jun-29-17 12:00PM  Benzinga]
▶ Macao Gaming Stock Continues Recovery In June   [Jun-28-17 04:42PM  Market Realist]
▶ Why Casinos Are the Perfect Dividend Stocks   [Jun-23-17 01:00PM  Motley Fool]
▶ 3 Dividend Stocks for Daring Investors   [09:26AM  Motley Fool]
▶ 3 Value Stocks for Smart Investors   [Jun-22-17 08:05AM  Motley Fool]
▶ 3 Growth Stocks for Smart Investors   [Jun-15-17 03:31PM  Motley Fool]
▶ Macau Casinos Rock With a 24% Gain in May   [11:05AM  Motley Fool]
▶ 4 Signs Las Vegas Sands Corp's Best Days Are Ahead   [Jun-02-17 10:48AM  Motley Fool]
▶ Casino Giant Soars Into Buy Range On Macau's Gaming Revival   [04:33PM  Investor's Business Daily]
▶ Casino stocks, retail & more in the blitz   [01:33PM  CNBC Videos]
Stock chart of LVS Financial statements of LVS
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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