Intrinsic value of Newtek Business Services - NEWT

Previous Close

$17.00

  Intrinsic Value

$32.32

stock screener

  Rating & Target

str. buy

+90%

  Value-price divergence*

-76%

Previous close

$17.00

 
Intrinsic value

$32.32

 
Up/down potential

+90%

 
Rating

str. buy

 
Value-price divergence*

-76%

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

We calculate the intrinsic value of NEWT 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 0.2

 

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, %
  19.23
  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
  31
  50
  77
  115
  166
  235
  323
  433
  568
  731
  924
  1,147
  1,403
  1,691
  2,012
  2,365
  2,751
  3,169
  3,618
  4,098
  4,607
  5,146
  5,713
  6,308
  6,931
  7,581
  8,260
  8,966
  9,702
  10,466
  11,260
Variable operating expenses, $m
 
  30
  47
  70
  102
  144
  198
  265
  348
  448
  566
  703
  860
  1,036
  1,233
  1,450
  1,687
  1,943
  2,218
  2,512
  2,824
  3,154
  3,502
  3,867
  4,249
  4,647
  5,063
  5,496
  5,947
  6,416
  6,903
Fixed operating expenses, $m
 
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  6
  6
  6
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
Total operating expenses, $m
  23
  34
  51
  74
  106
  149
  203
  270
  353
  453
  571
  708
  865
  1,042
  1,239
  1,456
  1,693
  1,949
  2,224
  2,518
  2,831
  3,161
  3,509
  3,874
  4,256
  4,654
  5,071
  5,504
  5,955
  6,424
  6,911
Operating income, $m
  8
  15
  25
  40
  60
  86
  120
  163
  215
  278
  352
  439
  537
  649
  773
  910
  1,059
  1,220
  1,394
  1,580
  1,777
  1,985
  2,204
  2,434
  2,675
  2,927
  3,189
  3,462
  3,747
  4,042
  4,349
EBITDA, $m
  8
  17
  29
  45
  68
  97
  135
  183
  242
  312
  396
  492
  603
  728
  867
  1,020
  1,188
  1,369
  1,563
  1,771
  1,992
  2,226
  2,471
  2,729
  2,999
  3,281
  3,576
  3,882
  4,201
  4,532
  4,876
Interest expense (income), $m
  7
  8
  13
  21
  32
  47
  67
  92
  124
  164
  211
  267
  332
  406
  489
  582
  685
  796
  918
  1,048
  1,187
  1,334
  1,490
  1,655
  1,827
  2,008
  2,196
  2,393
  2,598
  2,811
  3,032
Earnings before tax, $m
  0
  7
  12
  19
  28
  39
  53
  70
  91
  114
  141
  172
  206
  243
  284
  328
  374
  424
  477
  532
  590
  650
  714
  779
  848
  919
  993
  1,069
  1,149
  1,231
  1,317
Tax expense, $m
  0
  2
  3
  5
  7
  11
  14
  19
  24
  31
  38
  46
  56
  66
  77
  88
  101
  114
  129
  144
  159
  176
  193
  210
  229
  248
  268
  289
  310
  332
  356
Net income, $m
  0
  5
  9
  14
  20
  29
  39
  51
  66
  83
  103
  126
  150
  178
  207
  239
  273
  310
  348
  388
  431
  475
  521
  569
  619
  671
  725
  781
  839
  899
  961

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  2
  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
  401
  636
  982
  1,469
  2,132
  3,008
  4,135
  5,550
  7,288
  9,378
  11,845
  14,709
  17,983
  21,675
  25,789
  30,323
  35,273
  40,632
  46,390
  52,540
  59,070
  65,974
  73,243
  80,872
  88,857
  97,199
  105,896
  114,954
  124,378
  134,178
  144,362
Adjusted assets (=assets-cash), $m
  399
  636
  982
  1,469
  2,132
  3,008
  4,135
  5,550
  7,288
  9,378
  11,845
  14,709
  17,983
  21,675
  25,789
  30,323
  35,273
  40,632
  46,390
  52,540
  59,070
  65,974
  73,243
  80,872
  88,857
  97,199
  105,896
  114,954
  124,378
  134,178
  144,362
Revenue / Adjusted assets
  0.078
  0.079
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
  0.078
Average production assets, $m
  15
  23
  36
  54
  78
  110
  151
  203
  266
  342
  432
  537
  656
  791
  941
  1,107
  1,288
  1,483
  1,693
  1,918
  2,156
  2,408
  2,674
  2,952
  3,244
  3,548
  3,866
  4,196
  4,540
  4,898
  5,270
Working capital, $m
  0
  -3
  -5
  -7
  -11
  -15
  -21
  -28
  -37
  -48
  -60
  -75
  -91
  -110
  -131
  -154
  -179
  -206
  -235
  -266
  -299
  -334
  -371
  -410
  -451
  -493
  -537
  -583
  -631
  -680
  -732
Total debt, $m
  171
  285
  452
  686
  1,004
  1,426
  1,968
  2,649
  3,484
  4,490
  5,676
  7,054
  8,629
  10,405
  12,384
  14,565
  16,945
  19,523
  22,293
  25,251
  28,392
  31,712
  35,209
  38,878
  42,719
  46,732
  50,915
  55,272
  59,805
  64,518
  69,417
Total liabilities, $m
  192
  306
  473
  707
  1,025
  1,447
  1,989
  2,670
  3,505
  4,511
  5,697
  7,075
  8,650
  10,426
  12,405
  14,586
  16,966
  19,544
  22,314
  25,272
  28,413
  31,733
  35,230
  38,899
  42,740
  46,753
  50,936
  55,293
  59,826
  64,539
  69,438
Total equity, $m
  209
  330
  510
  763
  1,106
  1,561
  2,146
  2,881
  3,782
  4,867
  6,147
  7,634
  9,333
  11,249
  13,385
  15,738
  18,307
  21,088
  24,077
  27,268
  30,657
  34,240
  38,013
  41,972
  46,117
  50,446
  54,960
  59,661
  64,552
  69,638
  74,924
Total liabilities and equity, $m
  401
  636
  983
  1,470
  2,131
  3,008
  4,135
  5,551
  7,287
  9,378
  11,844
  14,709
  17,983
  21,675
  25,790
  30,324
  35,273
  40,632
  46,391
  52,540
  59,070
  65,973
  73,243
  80,871
  88,857
  97,199
  105,896
  114,954
  124,378
  134,177
  144,362
Debt-to-equity ratio
  0.818
  0.860
  0.890
  0.900
  0.910
  0.910
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.920
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
  0.930
Adjusted equity ratio
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519
  0.519

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  0
  5
  9
  14
  20
  29
  39
  51
  66
  83
  103
  126
  150
  178
  207
  239
  273
  310
  348
  388
  431
  475
  521
  569
  619
  671
  725
  781
  839
  899
  961
Depreciation, amort., depletion, $m
  0
  2
  4
  5
  8
  11
  15
  20
  27
  34
  43
  54
  66
  79
  94
  111
  129
  148
  169
  192
  216
  241
  267
  295
  324
  355
  387
  420
  454
  490
  527
Funds from operations, $m
  20
  7
  12
  19
  28
  39
  54
  72
  93
  118
  146
  179
  216
  257
  301
  350
  402
  458
  517
  580
  646
  716
  788
  864
  943
  1,026
  1,111
  1,200
  1,293
  1,389
  1,488
Change in working capital, $m
  31
  -1
  -2
  -2
  -3
  -4
  -6
  -7
  -9
  -11
  -13
  -15
  -17
  -19
  -21
  -23
  -25
  -27
  -29
  -31
  -33
  -35
  -37
  -39
  -40
  -42
  -44
  -46
  -48
  -50
  -52
Cash from operations, $m
  -11
  9
  14
  22
  31
  44
  60
  79
  102
  128
  159
  194
  233
  275
  322
  373
  427
  485
  546
  611
  679
  751
  825
  903
  984
  1,068
  1,155
  1,246
  1,340
  1,438
  1,540
Maintenance CAPEX, $m
  0
  -1
  -2
  -4
  -5
  -8
  -11
  -15
  -20
  -27
  -34
  -43
  -54
  -66
  -79
  -94
  -111
  -129
  -148
  -169
  -192
  -216
  -241
  -267
  -295
  -324
  -355
  -387
  -420
  -454
  -490
New CAPEX, $m
  0
  -9
  -13
  -18
  -24
  -32
  -41
  -52
  -63
  -76
  -90
  -105
  -120
  -135
  -150
  -166
  -181
  -196
  -210
  -224
  -238
  -252
  -265
  -278
  -292
  -304
  -318
  -331
  -344
  -358
  -372
Cash from investing activities, $m
  0
  -10
  -15
  -22
  -29
  -40
  -52
  -67
  -83
  -103
  -124
  -148
  -174
  -201
  -229
  -260
  -292
  -325
  -358
  -393
  -430
  -468
  -506
  -545
  -587
  -628
  -673
  -718
  -764
  -812
  -862
Free cash flow, $m
  -11
  -1
  -1
  0
  2
  4
  7
  12
  18
  25
  35
  46
  59
  75
  93
  113
  136
  161
  188
  217
  249
  283
  319
  357
  397
  439
  483
  529
  577
  627
  678
Issuance/(repayment) of debt, $m
  41
  114
  167
  234
  319
  421
  542
  681
  836
  1,005
  1,187
  1,377
  1,575
  1,776
  1,979
  2,181
  2,381
  2,577
  2,770
  2,958
  3,141
  3,321
  3,496
  3,670
  3,841
  4,012
  4,184
  4,357
  4,533
  4,713
  4,899
Issuance/(repurchase) of shares, $m
  -1
  118
  171
  239
  324
  426
  546
  683
  836
  1,001
  1,177
  1,361
  1,549
  1,739
  1,928
  2,114
  2,296
  2,472
  2,641
  2,803
  2,959
  3,108
  3,252
  3,391
  3,526
  3,658
  3,790
  3,921
  4,053
  4,187
  4,325
Cash from financing (excl. dividends), $m  
  36
  232
  338
  473
  643
  847
  1,088
  1,364
  1,672
  2,006
  2,364
  2,738
  3,124
  3,515
  3,907
  4,295
  4,677
  5,049
  5,411
  5,761
  6,100
  6,429
  6,748
  7,061
  7,367
  7,670
  7,974
  8,278
  8,586
  8,900
  9,224
Total cash flow (excl. dividends), $m
  25
  230
  337
  473
  644
  852
  1,096
  1,376
  1,689
  2,032
  2,399
  2,784
  3,183
  3,590
  4,000
  4,408
  4,812
  5,210
  5,599
  5,978
  6,349
  6,712
  7,067
  7,417
  7,764
  8,109
  8,456
  8,806
  9,162
  9,527
  9,902
Retained Cash Flow (-), $m
  -5
  -123
  -180
  -253
  -344
  -455
  -585
  -735
  -902
  -1,085
  -1,280
  -1,486
  -1,699
  -1,916
  -2,135
  -2,353
  -2,569
  -2,781
  -2,989
  -3,191
  -3,389
  -3,583
  -3,773
  -3,960
  -4,145
  -4,329
  -4,514
  -4,701
  -4,891
  -5,086
  -5,286
Prev. year cash balance distribution, $m
 
  2
  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
 
  109
  157
  221
  300
  397
  511
  641
  788
  947
  1,118
  1,298
  1,484
  1,673
  1,865
  2,055
  2,243
  2,429
  2,610
  2,787
  2,960
  3,129
  3,294
  3,458
  3,619
  3,780
  3,942
  4,105
  4,271
  4,441
  4,616
Discount rate, %
 
  9.30
  9.77
  10.25
  10.77
  11.30
  11.87
  12.46
  13.09
  13.74
  14.43
  15.15
  15.91
  16.70
  17.54
  18.41
  19.33
  20.30
  21.32
  22.38
  23.50
  24.68
  25.91
  27.20
  28.57
  29.99
  31.49
  33.07
  34.72
  36.46
  38.28
PV of cash for distribution, $m
 
  100
  130
  165
  199
  232
  261
  282
  294
  297
  291
  275
  252
  225
  194
  163
  133
  105
  81
  60
  43
  30
  21
  14
  9
  5
  3
  2
  1
  1
  0
Current shareholders' claim on cash, %
  100
  67.5
  47.0
  33.7
  24.8
  18.7
  14.4
  11.4
  9.1
  7.5
  6.2
  5.2
  4.5
  3.9
  3.4
  3.0
  2.7
  2.4
  2.2
  2.0
  1.8
  1.7
  1.5
  1.4
  1.3
  1.2
  1.2
  1.1
  1.0
  1.0
  0.9

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp., formerly known as Newtek Business Services Inc., was founded in 1998 and is headquartered in Lake Success, New York with additional offices in Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

FINANCIAL RATIOS  of  Newtek Business Services (NEWT)

Valuation Ratios
P/E Ratio 0
Price to Sales 8
Price to Book 1.2
Price to Tangible Book
Price to Cash Flow -22.6
Price to Free Cash Flow -22.6
Growth Rates
Sales Growth Rate 19.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate -100%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 81.8%
Total Debt to Equity 81.8%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 2%
Return On Total Capital 0%
Ret/ On T. Cap. - 3 Yr. Avg. 0.6%
Return On Equity 0%
Return On Equity - 3 Yr. Avg. 1.1%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 50%
EBITDA Margin 22.6%
EBITDA Margin - 3 Yr. Avg. 17.2%
Operating Margin 25.8%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 2%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 1%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 16.7%
Payout Ratio 0%

NEWT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NEWT stock intrinsic value calculation we used $31 million for the last fiscal year's total revenue generated by Newtek Business Services. The default revenue input number comes from 2016 income statement of Newtek Business Services. 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 NEWT 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 9.3%, whose default value for NEWT is calculated based on our internal credit rating of Newtek Business Services, 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 Newtek Business Services.
    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 NEWT stock the variable cost ratio is equal to 61.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $4 million in the base year in the intrinsic value calculation for NEWT 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 4.7% for Newtek Business Services.

Corporate tax rate of 27% is the nominal tax rate for Newtek Business Services. 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 NEWT 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 NEWT are equal to 46.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Newtek Business Services 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 NEWT is equal to -6.5%. 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 - $209 million for Newtek Business Services - 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 14.569 million for Newtek Business Services 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 Newtek Business Services at the current share price and the inputted number of shares is $0.2 billion.

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COMPANY NEWS

▶ Newtek posts 2Q profit   [Aug-02-17 09:43PM  Associated Press]
▶ New Strong Buy Stocks for July 6th   [Jul-06-17 10:31AM  Zacks]
▶ Newtek posts 1Q profit   [May-04-17 09:51AM  Associated Press]
▶ Newtek Declares First Quarter Dividend of $0.36 Per Share   [Mar-06-17 04:10PM  GlobeNewswire]
▶ LD Micro Index Reconstitution as of February 1, 2017   [Feb-01-17 09:45AM  Accesswire]
▶ Newtek Declares Fourth Quarter Dividend of $0.40 Per Share   [Nov-16-16 01:31PM  GlobeNewswire]
▶ Newtek to Host Analyst and Investor Day   [Sep-20-16 02:38PM  GlobeNewswire]
▶ Newtek Declares Third Quarter Dividend of $0.43 Per Share   [Sep-07-16 10:08AM  GlobeNewswire]
Stock chart of NEWT Financial statements of NEWT
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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