Intrinsic value of Nomura Holdings ADR - NMR

Previous Close

$6.04

  Intrinsic Value

$6.72

stock screener

  Rating & Target

hold

+11%

Previous close

$6.04

 
Intrinsic value

$6.72

 
Up/down potential

+11%

 
Rating

hold

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

We calculate the intrinsic value of NMR 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

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   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
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -0.44
  8.50
  8.15
  7.83
  7.55
  7.30
  7.07
  6.86
  6.67
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.34
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.16
Revenue, $m
  14,934
  16,203
  17,524
  18,897
  20,324
  21,807
  23,348
  24,950
  26,615
  28,346
  30,148
  32,023
  33,976
  36,011
  38,132
  40,344
  42,652
  45,061
  47,577
  50,206
  52,954
  55,827
  58,832
  61,976
  65,267
  68,713
  72,321
  76,101
  80,060
  84,210
  88,559
Variable operating expenses, $m
 
  14,648
  15,842
  17,083
  18,373
  19,713
  21,107
  22,554
  24,060
  25,625
  27,254
  28,949
  30,715
  32,554
  34,471
  36,471
  38,557
  40,735
  43,010
  45,386
  47,870
  50,467
  53,184
  56,026
  59,001
  62,116
  65,378
  68,795
  72,375
  76,126
  80,058
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
  12,124
  14,648
  15,842
  17,083
  18,373
  19,713
  21,107
  22,554
  24,060
  25,625
  27,254
  28,949
  30,715
  32,554
  34,471
  36,471
  38,557
  40,735
  43,010
  45,386
  47,870
  50,467
  53,184
  56,026
  59,001
  62,116
  65,378
  68,795
  72,375
  76,126
  80,058
Operating income, $m
  2,810
  1,556
  1,682
  1,814
  1,951
  2,093
  2,241
  2,395
  2,555
  2,721
  2,894
  3,074
  3,262
  3,457
  3,661
  3,873
  4,095
  4,326
  4,567
  4,820
  5,084
  5,359
  5,648
  5,950
  6,266
  6,596
  6,943
  7,306
  7,686
  8,084
  8,502
EBITDA, $m
  3,427
  1,760
  1,903
  2,052
  2,207
  2,368
  2,536
  2,710
  2,890
  3,078
  3,274
  3,478
  3,690
  3,911
  4,141
  4,381
  4,632
  4,894
  5,167
  5,452
  5,751
  6,063
  6,389
  6,731
  7,088
  7,462
  7,854
  8,265
  8,695
  9,145
  9,618
Interest expense (income), $m
  2,678
  7,226
  7,726
  8,693
  9,699
  10,744
  11,831
  12,960
  14,133
  15,353
  16,621
  17,941
  19,315
  20,746
  22,236
  23,790
  25,410
  27,101
  28,866
  30,709
  32,635
  34,648
  36,752
  38,954
  41,257
  43,668
  46,192
  48,835
  51,604
  54,505
  57,545
Earnings before tax, $m
  2,810
  -5,671
  -6,044
  -6,879
  -7,748
  -8,651
  -9,589
  -10,565
  -11,578
  -12,632
  -13,727
  -14,867
  -16,053
  -17,289
  -18,576
  -19,917
  -21,316
  -22,775
  -24,298
  -25,889
  -27,551
  -29,288
  -31,104
  -33,004
  -34,991
  -37,072
  -39,249
  -41,530
  -43,918
  -46,421
  -49,043
Tax expense, $m
  698
  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
Net income, $m
  2,086
  -5,671
  -6,044
  -6,879
  -7,748
  -8,651
  -9,589
  -10,565
  -11,578
  -12,632
  -13,727
  -14,867
  -16,053
  -17,289
  -18,576
  -19,917
  -21,316
  -22,775
  -24,298
  -25,889
  -27,551
  -29,288
  -31,104
  -33,004
  -34,991
  -37,072
  -39,249
  -41,530
  -43,918
  -46,421
  -49,043

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  23,893
  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
  373,048
  376,823
  407,534
  439,464
  472,651
  507,137
  542,975
  580,223
  618,947
  659,220
  701,120
  744,732
  790,148
  837,466
  886,790
  938,230
  991,903
  1,047,931
  1,106,444
  1,167,579
  1,231,478
  1,298,292
  1,368,179
  1,441,304
  1,517,840
  1,597,969
  1,681,883
  1,769,780
  1,861,871
  1,958,375
  2,059,523
Adjusted assets (=assets-cash), $m
  349,155
  376,823
  407,534
  439,464
  472,651
  507,137
  542,975
  580,223
  618,947
  659,220
  701,120
  744,732
  790,148
  837,466
  886,790
  938,230
  991,903
  1,047,931
  1,106,444
  1,167,579
  1,231,478
  1,298,292
  1,368,179
  1,441,304
  1,517,840
  1,597,969
  1,681,883
  1,769,780
  1,861,871
  1,958,375
  2,059,523
Revenue / Adjusted assets
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
  0.043
Average production assets, $m
  938
  1,021
  1,104
  1,191
  1,280
  1,374
  1,471
  1,572
  1,677
  1,786
  1,899
  2,017
  2,141
  2,269
  2,402
  2,542
  2,687
  2,839
  2,997
  3,163
  3,336
  3,517
  3,706
  3,904
  4,112
  4,329
  4,556
  4,794
  5,044
  5,305
  5,579
Working capital, $m
  0
  8,102
  8,762
  9,448
  10,162
  10,903
  11,674
  12,475
  13,307
  14,173
  15,074
  16,012
  16,988
  18,006
  19,066
  20,172
  21,326
  22,531
  23,789
  25,103
  26,477
  27,913
  29,416
  30,988
  32,634
  34,356
  36,160
  38,050
  40,030
  42,105
  44,280
Total debt, $m
  230,360
  220,741
  248,381
  277,118
  306,985
  338,023
  370,277
  403,801
  438,653
  474,898
  512,608
  551,859
  592,734
  635,320
  679,711
  726,007
  774,312
  824,738
  877,400
  932,421
  989,930
  1,050,063
  1,112,961
  1,178,773
  1,247,656
  1,319,772
  1,395,295
  1,474,402
  1,557,284
  1,644,138
  1,735,170
Total liabilities, $m
  348,761
  339,141
  366,781
  395,518
  425,385
  456,423
  488,677
  522,201
  557,053
  593,298
  631,008
  670,259
  711,134
  753,720
  798,111
  844,407
  892,712
  943,138
  995,800
  1,050,821
  1,108,330
  1,168,463
  1,231,361
  1,297,173
  1,366,056
  1,438,172
  1,513,695
  1,592,802
  1,675,684
  1,762,538
  1,853,570
Total equity, $m
  24,288
  37,682
  40,753
  43,946
  47,265
  50,714
  54,297
  58,022
  61,895
  65,922
  70,112
  74,473
  79,015
  83,747
  88,679
  93,823
  99,190
  104,793
  110,644
  116,758
  123,148
  129,829
  136,818
  144,130
  151,784
  159,797
  168,188
  176,978
  186,187
  195,838
  205,952
Total liabilities and equity, $m
  373,049
  376,823
  407,534
  439,464
  472,650
  507,137
  542,974
  580,223
  618,948
  659,220
  701,120
  744,732
  790,149
  837,467
  886,790
  938,230
  991,902
  1,047,931
  1,106,444
  1,167,579
  1,231,478
  1,298,292
  1,368,179
  1,441,303
  1,517,840
  1,597,969
  1,681,883
  1,769,780
  1,861,871
  1,958,376
  2,059,522
Debt-to-equity ratio
  9.485
  5.860
  6.090
  6.310
  6.490
  6.670
  6.820
  6.960
  7.090
  7.200
  7.310
  7.410
  7.500
  7.590
  7.660
  7.740
  7.810
  7.870
  7.930
  7.990
  8.040
  8.090
  8.130
  8.180
  8.220
  8.260
  8.300
  8.330
  8.360
  8.400
  8.430
Adjusted equity ratio
  0.070
  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
  2,086
  -5,671
  -6,044
  -6,879
  -7,748
  -8,651
  -9,589
  -10,565
  -11,578
  -12,632
  -13,727
  -14,867
  -16,053
  -17,289
  -18,576
  -19,917
  -21,316
  -22,775
  -24,298
  -25,889
  -27,551
  -29,288
  -31,104
  -33,004
  -34,991
  -37,072
  -39,249
  -41,530
  -43,918
  -46,421
  -49,043
Depreciation, amort., depletion, $m
  617
  204
  221
  238
  256
  275
  294
  314
  335
  357
  380
  403
  428
  454
  480
  508
  537
  568
  599
  633
  667
  703
  741
  781
  822
  866
  911
  959
  1,009
  1,061
  1,116
Funds from operations, $m
  9,599
  -5,467
  -5,823
  -6,641
  -7,492
  -8,376
  -9,295
  -10,250
  -11,243
  -12,274
  -13,347
  -14,464
  -15,625
  -16,835
  -18,095
  -19,409
  -20,778
  -22,207
  -23,699
  -25,257
  -26,884
  -28,585
  -30,363
  -32,223
  -34,169
  -36,206
  -38,338
  -40,571
  -42,910
  -45,360
  -47,927
Change in working capital, $m
  -1,762
  635
  660
  687
  714
  741
  771
  801
  833
  866
  901
  938
  976
  1,017
  1,060
  1,106
  1,154
  1,205
  1,258
  1,314
  1,374
  1,437
  1,503
  1,572
  1,646
  1,723
  1,804
  1,890
  1,980
  2,075
  2,175
Cash from operations, $m
  11,361
  -6,101
  -6,483
  -7,328
  -8,205
  -9,118
  -10,066
  -11,051
  -12,075
  -13,140
  -14,248
  -15,401
  -16,602
  -17,852
  -19,156
  -20,515
  -21,932
  -23,412
  -24,957
  -26,571
  -28,258
  -30,021
  -31,866
  -33,795
  -35,815
  -37,929
  -40,142
  -42,461
  -44,889
  -47,435
  -50,102
Maintenance CAPEX, $m
  0
  -188
  -204
  -221
  -238
  -256
  -275
  -294
  -314
  -335
  -357
  -380
  -403
  -428
  -454
  -480
  -508
  -537
  -568
  -599
  -633
  -667
  -703
  -741
  -781
  -822
  -866
  -911
  -959
  -1,009
  -1,061
New CAPEX, $m
  -2,724
  -83
  -83
  -86
  -90
  -93
  -97
  -101
  -105
  -109
  -114
  -118
  -123
  -128
  -134
  -139
  -145
  -152
  -159
  -166
  -173
  -181
  -189
  -198
  -207
  -217
  -227
  -238
  -249
  -261
  -274
Cash from investing activities, $m
  -1,028
  -271
  -287
  -307
  -328
  -349
  -372
  -395
  -419
  -444
  -471
  -498
  -526
  -556
  -588
  -619
  -653
  -689
  -727
  -765
  -806
  -848
  -892
  -939
  -988
  -1,039
  -1,093
  -1,149
  -1,208
  -1,270
  -1,335
Free cash flow, $m
  10,333
  -6,372
  -6,770
  -7,635
  -8,533
  -9,467
  -10,438
  -11,446
  -12,495
  -13,585
  -14,719
  -15,899
  -17,128
  -18,408
  -19,743
  -21,134
  -22,586
  -24,101
  -25,683
  -27,336
  -29,064
  -30,870
  -32,758
  -34,735
  -36,803
  -38,968
  -41,235
  -43,610
  -46,098
  -48,705
  -51,437
Issuance/(repayment) of debt, $m
  -8,346
  14,274
  27,640
  28,737
  29,868
  31,038
  32,254
  33,523
  34,852
  36,245
  37,710
  39,251
  40,875
  42,586
  44,391
  46,296
  48,305
  50,425
  52,662
  55,021
  57,509
  60,133
  62,898
  65,812
  68,883
  72,117
  75,522
  79,108
  82,882
  86,854
  91,033
Issuance/(repurchase) of shares, $m
  -530
  19,065
  9,115
  10,072
  11,067
  12,100
  13,173
  14,289
  15,450
  16,659
  17,917
  19,228
  20,595
  22,020
  23,508
  25,061
  26,683
  28,378
  30,150
  32,003
  33,941
  35,970
  38,093
  40,316
  42,645
  45,084
  47,641
  50,319
  53,127
  56,071
  59,158
Cash from financing (excl. dividends), $m  
  -18,175
  33,339
  36,755
  38,809
  40,935
  43,138
  45,427
  47,812
  50,302
  52,904
  55,627
  58,479
  61,470
  64,606
  67,899
  71,357
  74,988
  78,803
  82,812
  87,024
  91,450
  96,103
  100,991
  106,128
  111,528
  117,201
  123,163
  129,427
  136,009
  142,925
  150,191
Total cash flow (excl. dividends), $m
  -7,805
  26,967
  29,984
  31,175
  32,401
  33,670
  34,990
  36,367
  37,808
  39,320
  40,908
  42,580
  44,341
  46,198
  48,157
  50,222
  52,402
  54,702
  57,128
  59,688
  62,387
  65,233
  68,233
  71,394
  74,725
  78,233
  81,928
  85,817
  89,911
  94,220
  98,753
Retained Cash Flow (-), $m
  -781
  -19,065
  -9,115
  -10,072
  -11,067
  -12,100
  -13,173
  -14,289
  -15,450
  -16,659
  -17,917
  -19,228
  -20,595
  -22,020
  -23,508
  -25,061
  -26,683
  -28,378
  -30,150
  -32,003
  -33,941
  -35,970
  -38,093
  -40,316
  -42,645
  -45,084
  -47,641
  -50,319
  -53,127
  -56,071
  -59,158
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
 
  7,902
  20,869
  21,102
  21,334
  21,570
  21,817
  22,077
  22,357
  22,661
  22,991
  23,352
  23,746
  24,178
  24,649
  25,162
  25,719
  26,324
  26,979
  27,685
  28,446
  29,263
  30,140
  31,078
  32,080
  33,149
  34,287
  35,498
  36,784
  38,149
  39,596
Discount rate, %
 
  12.60
  13.23
  13.89
  14.59
  15.32
  16.08
  16.89
  17.73
  18.62
  19.55
  20.52
  21.55
  22.63
  23.76
  24.95
  26.19
  27.50
  28.88
  30.32
  31.84
  33.43
  35.10
  36.86
  38.70
  40.64
  42.67
  44.80
  47.04
  49.39
  51.86
PV of cash for distribution, $m
 
  7,017
  16,278
  14,284
  12,375
  10,578
  8,917
  7,407
  6,058
  4,875
  3,856
  2,996
  2,283
  1,705
  1,247
  891
  622
  423
  280
  181
  113
  69
  40
  23
  12
  7
  3
  2
  1
  0
  0
Current shareholders' claim on cash, %
  100
  53.9
  42.6
  33.6
  26.4
  20.6
  16.1
  12.5
  9.7
  7.5
  5.8
  4.4
  3.4
  2.6
  2.0
  1.5
  1.2
  0.9
  0.7
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0

Nomura Holdings, Inc. (Nomura) is a financial services company. The Company, through its broker-dealer, banking and other financial services subsidiaries, provide investment, financing and related services to individual, institutional and government clients across the world. The Company's segments include Retail, Asset Management and Wholesale. Its clients include individuals, corporations, financial institutions, governments and governmental agencies. The Company's Retail segment provides investment consultation services to individual clients in Japan. The Company's Asset Management segment develops and manages investment trusts, and provides investment advisory services. The Company's Wholesale segment is engaged in the sales and trading of debt and equity securities, derivatives, and currencies on a global basis, and provides investment banking services, such as the underwriting of debt and equity securities, as well as mergers and acquisitions and financial advice.

FINANCIAL RATIOS  of  Nomura Holdings ADR (NMR)

Valuation Ratios
P/E Ratio 10.2
Price to Sales 1.4
Price to Book 0.9
Price to Tangible Book
Price to Cash Flow 1.9
Price to Free Cash Flow 2.5
Growth Rates
Sales Growth Rate -0.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -3.6%
Cap. Spend. - 3 Yr. Gr. Rate 7.9%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 257.9%
Total Debt to Equity 948.5%
Interest Coverage 2
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 1.1%
Return On Total Capital 0.8%
Ret/ On T. Cap. - 3 Yr. Avg. 0.7%
Return On Equity 8.7%
Return On Equity - 3 Yr. Avg. 7.4%
Asset Turnover 0
Profitability Ratios
Gross Margin 81.8%
Gross Margin - 3 Yr. Avg. 82%
EBITDA Margin 40.9%
EBITDA Margin - 3 Yr. Avg. 38.8%
Operating Margin 18.8%
Oper. Margin - 3 Yr. Avg. 15.5%
Pre-Tax Margin 18.8%
Pre-Tax Margin - 3 Yr. Avg. 15.5%
Net Profit Margin 14%
Net Profit Margin - 3 Yr. Avg. 11.1%
Effective Tax Rate 24.8%
Eff/ Tax Rate - 3 Yr. Avg. 24.5%
Payout Ratio 17.9%

NMR stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NMR stock intrinsic value calculation we used $14934 million for the last fiscal year's total revenue generated by Nomura Holdings ADR. The default revenue input number comes from 2017 income statement of Nomura Holdings ADR. 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 NMR stock valuation model: a) initial revenue growth rate of 8.5% 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 12.6%, whose default value for NMR is calculated based on our internal credit rating of Nomura Holdings ADR, 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 Nomura Holdings ADR.
    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 NMR stock the variable cost ratio is equal to 90.4%.

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 NMR 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 Nomura Holdings ADR.

Corporate tax rate of 27% is the nominal tax rate for Nomura Holdings ADR. 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 NMR 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 NMR are equal to 6.3%.

Life of production assets of 1.5 years is the average useful life of capital assets used in Nomura Holdings ADR 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 NMR is equal to 50%. 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 - $24288 million for Nomura Holdings ADR - 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 3689 million for Nomura Holdings ADR 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 Nomura Holdings ADR at the current share price and the inputted number of shares is $22.3 billion.

RELATED COMPANIES Price Int.Val. Rating
GS Goldman Sachs 261.43 601.17  str.buy

COMPANY NEWS

▶ [$$] Era of Calm Ends as Volatility Returns to Markets   [Feb-07-18 12:28AM  The Wall Street Journal]
▶ [$$] Investors Suffer Losses on Bets Against Volatility   [07:40PM  The Wall Street Journal]
▶ Nomura's Profit Jumps to Highest in Over 11 Years   [Feb-01-18 07:56PM  Bloomberg Video]
▶ Nomura posts 3Q profit   [05:02AM  Associated Press]
▶ Nomura's Tricky Translation   [02:09AM  Bloomberg]
▶ Nomura's Kwon on U.S., South Korea Trade, Economy   [Jan-04-18 08:52PM  Bloomberg Video]
▶ Nomura's Zhao Sees China's 2018 Growth Slowing   [Jan-03-18 08:35PM  Bloomberg Video]
▶ Nomura's China 2018 Equity Strategy   [Dec-21-17 10:35PM  Bloomberg Video]
▶ Nomura Suspends Two Junk-Bond Traders in London   [Dec-20-17 01:08PM  Bloomberg]
▶ Nomura's Varma Sees Indian Inflation Rising Above 5%   [Dec-13-17 12:42AM  Bloomberg Video]
▶ Japan's Nomura to return to private equity   [Nov-28-17 09:16PM  Reuters]
▶ Nomura's Kinoshita Says Japan Growth Is on Track   [Nov-14-17 10:57PM  Bloomberg Video]
▶ Nomura's Overseas Blip   [Oct-30-17 05:44AM  Bloomberg]
▶ Nomura's Shah Responds to Tesla Bears: Talk Is Cheap   [Oct-06-17 12:36PM  Bloomberg Video]
▶ Nomura's Dragicevich Sees More U.S. Dollar Weakness Ahead   [Sep-11-17 10:57PM  Bloomberg Video]
▶ Nomura's Kwon Sees S. Korea GDP Slowing in 2H   [Aug-31-17 08:45PM  Bloomberg Video]
▶ Nomura's Sakaki Sees Yen Rising to 100 Against Dollar   [Aug-08-17 09:23PM  Bloomberg Video]
▶ Nomura posts 1Q profit   [Jul-28-17 08:05PM  Associated Press]
▶ Nomura's Rochester Sees More Downside for U.S. Dollar   [Jul-18-17 03:11AM  Bloomberg Video]
▶ [$$] Nomura is back in expansion mode   [Jul-02-17 10:55AM  Financial Times]
▶ Nomura Chooses Frankfurt as EU Base After Brexit   [Jun-21-17 11:05PM  Bloomberg]
▶ A Profitable Play on Southeast Asia's Convenience Stores   [Jun-20-17 10:00AM  TheStreet.com]
▶ Nomura's Zhao Says China's Growth Momentum Peaked in 1Q   [Jun-07-17 10:59PM  Bloomberg Video]
▶ Nomura's Overseas Revival Has Legs   [Apr-27-17 06:31AM  Bloomberg]
▶ [$$] Czech koruna set to strengthen as CNB removes floor   [Mar-29-17 07:41AM  at Financial Times]
▶ Nomura posts 3Q profit   [Jan-31-17 05:01AM  Associated Press]
Financial statements of NMR
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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