Intrinsic value of Insight Enterprises - NSIT

Previous Close

$41.06

  Intrinsic Value

$1,091

stock screener

  Rating & Target

str. buy

+999%

  Value-price divergence*

+43%

Previous close

$41.06

 
Intrinsic value

$1,091

 
Up/down potential

+999%

 
Rating

str. buy

 
Value-price divergence*

+43%

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

We calculate the intrinsic value of NSIT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 1.4

 

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, %
  2.10
  26.40
  24.26
  22.33
  20.60
  19.04
  17.64
  16.37
  15.24
  14.21
  13.29
  12.46
  11.72
  11.04
  10.44
  9.90
  9.41
  8.97
  8.57
  8.21
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.24
  6.12
  6.01
Revenue, $m
  5,486
  6,934
  8,617
  10,541
  12,712
  15,133
  17,802
  20,717
  23,873
  27,266
  30,890
  34,739
  38,809
  43,095
  47,594
  52,304
  57,223
  62,354
  67,697
  73,256
  79,036
  85,044
  91,288
  97,776
  104,520
  111,530
  118,820
  126,403
  134,297
  142,516
  151,078
Variable operating expenses, $m
 
  5,518
  6,855
  8,385
  10,111
  12,035
  14,156
  16,473
  18,982
  21,679
  24,559
  27,612
  30,847
  34,254
  37,830
  41,574
  45,484
  49,562
  53,809
  58,228
  62,822
  67,598
  72,560
  77,718
  83,078
  88,650
  94,444
  100,472
  106,746
  113,279
  120,084
Fixed operating expenses, $m
 
  1,017
  1,042
  1,068
  1,095
  1,122
  1,150
  1,179
  1,209
  1,239
  1,270
  1,302
  1,334
  1,367
  1,402
  1,437
  1,473
  1,509
  1,547
  1,586
  1,626
  1,666
  1,708
  1,750
  1,794
  1,839
  1,885
  1,932
  1,981
  2,030
  2,081
Total operating expenses, $m
  5,337
  6,535
  7,897
  9,453
  11,206
  13,157
  15,306
  17,652
  20,191
  22,918
  25,829
  28,914
  32,181
  35,621
  39,232
  43,011
  46,957
  51,071
  55,356
  59,814
  64,448
  69,264
  74,268
  79,468
  84,872
  90,489
  96,329
  102,404
  108,727
  115,309
  122,165
Operating income, $m
  149
  399
  719
  1,088
  1,507
  1,976
  2,495
  3,065
  3,683
  4,348
  5,061
  5,825
  6,627
  7,473
  8,362
  9,293
  10,267
  11,282
  12,341
  13,442
  14,589
  15,781
  17,020
  18,308
  19,648
  21,041
  22,491
  23,999
  25,570
  27,207
  28,913
EBITDA, $m
  187
  419
  742
  1,114
  1,537
  2,011
  2,535
  3,110
  3,734
  4,406
  5,126
  5,891
  6,701
  7,555
  8,453
  9,393
  10,375
  11,401
  12,469
  13,582
  14,739
  15,942
  17,193
  18,494
  19,846
  21,253
  22,716
  24,239
  25,825
  27,478
  29,200
Interest expense (income), $m
  4
  3
  27
  55
  87
  124
  164
  209
  258
  310
  367
  428
  492
  561
  632
  708
  787
  869
  955
  1,044
  1,137
  1,234
  1,335
  1,439
  1,548
  1,661
  1,778
  1,900
  2,027
  2,160
  2,297
Earnings before tax, $m
  139
  397
  692
  1,033
  1,420
  1,852
  2,331
  2,856
  3,425
  4,038
  4,694
  5,397
  6,135
  6,913
  7,730
  8,586
  9,480
  10,413
  11,386
  12,398
  13,451
  14,546
  15,685
  16,869
  18,100
  19,380
  20,712
  22,099
  23,543
  25,047
  26,615
Tax expense, $m
  54
  107
  187
  279
  383
  500
  629
  771
  925
  1,090
  1,267
  1,457
  1,656
  1,866
  2,087
  2,318
  2,560
  2,812
  3,074
  3,347
  3,632
  3,928
  4,235
  4,555
  4,887
  5,233
  5,592
  5,967
  6,357
  6,763
  7,186
Net income, $m
  85
  290
  505
  754
  1,036
  1,352
  1,702
  2,085
  2,500
  2,948
  3,426
  3,940
  4,479
  5,046
  5,643
  6,267
  6,920
  7,602
  8,312
  9,051
  9,819
  10,619
  11,450
  12,314
  13,213
  14,147
  15,120
  16,132
  17,186
  18,284
  19,429

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  203
  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
  2,219
  2,548
  3,167
  3,874
  4,672
  5,562
  6,542
  7,614
  8,774
  10,020
  11,352
  12,767
  14,263
  15,838
  17,491
  19,222
  21,030
  22,916
  24,879
  26,922
  29,047
  31,255
  33,549
  35,934
  38,412
  40,989
  43,668
  46,455
  49,356
  52,376
  55,523
Adjusted assets (=assets-cash), $m
  2,016
  2,548
  3,167
  3,874
  4,672
  5,562
  6,542
  7,614
  8,774
  10,020
  11,352
  12,767
  14,263
  15,838
  17,491
  19,222
  21,030
  22,916
  24,879
  26,922
  29,047
  31,255
  33,549
  35,934
  38,412
  40,989
  43,668
  46,455
  49,356
  52,376
  55,523
Revenue / Adjusted assets
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
  2.721
Average production assets, $m
  104
  132
  164
  200
  242
  288
  338
  394
  454
  518
  587
  660
  737
  819
  904
  994
  1,087
  1,185
  1,286
  1,392
  1,502
  1,616
  1,734
  1,858
  1,986
  2,119
  2,258
  2,402
  2,552
  2,708
  2,870
Working capital, $m
  545
  430
  534
  654
  788
  938
  1,104
  1,284
  1,480
  1,690
  1,915
  2,154
  2,406
  2,672
  2,951
  3,243
  3,548
  3,866
  4,197
  4,542
  4,900
  5,273
  5,660
  6,062
  6,480
  6,915
  7,367
  7,837
  8,326
  8,836
  9,367
Total debt, $m
  41
  439
  901
  1,429
  2,025
  2,689
  3,422
  4,222
  5,089
  6,020
  7,015
  8,072
  9,189
  10,366
  11,601
  12,894
  14,245
  15,653
  17,120
  18,646
  20,233
  21,882
  23,596
  25,378
  27,229
  29,153
  31,155
  33,237
  35,404
  37,660
  40,011
Total liabilities, $m
  1,506
  1,904
  2,366
  2,894
  3,490
  4,154
  4,887
  5,687
  6,554
  7,485
  8,480
  9,537
  10,654
  11,831
  13,066
  14,359
  15,710
  17,118
  18,585
  20,111
  21,698
  23,347
  25,061
  26,843
  28,694
  30,618
  32,620
  34,702
  36,869
  39,125
  41,476
Total equity, $m
  713
  645
  801
  980
  1,182
  1,407
  1,655
  1,926
  2,220
  2,535
  2,872
  3,230
  3,608
  4,007
  4,425
  4,863
  5,321
  5,798
  6,294
  6,811
  7,349
  7,907
  8,488
  9,091
  9,718
  10,370
  11,048
  11,753
  12,487
  13,251
  14,047
Total liabilities and equity, $m
  2,219
  2,549
  3,167
  3,874
  4,672
  5,561
  6,542
  7,613
  8,774
  10,020
  11,352
  12,767
  14,262
  15,838
  17,491
  19,222
  21,031
  22,916
  24,879
  26,922
  29,047
  31,254
  33,549
  35,934
  38,412
  40,988
  43,668
  46,455
  49,356
  52,376
  55,523
Debt-to-equity ratio
  0.058
  0.680
  1.120
  1.460
  1.710
  1.910
  2.070
  2.190
  2.290
  2.370
  2.440
  2.500
  2.550
  2.590
  2.620
  2.650
  2.680
  2.700
  2.720
  2.740
  2.750
  2.770
  2.780
  2.790
  2.800
  2.810
  2.820
  2.830
  2.840
  2.840
  2.850
Adjusted equity ratio
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253
  0.253

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  85
  290
  505
  754
  1,036
  1,352
  1,702
  2,085
  2,500
  2,948
  3,426
  3,940
  4,479
  5,046
  5,643
  6,267
  6,920
  7,602
  8,312
  9,051
  9,819
  10,619
  11,450
  12,314
  13,213
  14,147
  15,120
  16,132
  17,186
  18,284
  19,429
Depreciation, amort., depletion, $m
  38
  19
  23
  26
  30
  35
  40
  46
  52
  58
  65
  66
  74
  82
  90
  99
  109
  118
  129
  139
  150
  162
  173
  186
  199
  212
  226
  240
  255
  271
  287
Funds from operations, $m
  46
  309
  528
  780
  1,067
  1,387
  1,742
  2,130
  2,552
  3,006
  3,491
  4,006
  4,552
  5,128
  5,733
  6,367
  7,029
  7,720
  8,440
  9,190
  9,970
  10,780
  11,623
  12,500
  13,411
  14,359
  15,346
  16,372
  17,441
  18,555
  19,716
Change in working capital, $m
  -50
  90
  104
  119
  135
  150
  165
  181
  196
  210
  225
  239
  252
  266
  279
  292
  305
  318
  331
  345
  358
  373
  387
  402
  418
  435
  452
  470
  489
  510
  531
Cash from operations, $m
  96
  219
  424
  661
  932
  1,237
  1,576
  1,950
  2,356
  2,795
  3,267
  3,767
  4,300
  4,863
  5,454
  6,075
  6,724
  7,402
  8,109
  8,845
  9,611
  10,408
  11,236
  12,098
  12,993
  13,925
  14,894
  15,902
  16,952
  18,046
  19,185
Maintenance CAPEX, $m
  0
  -10
  -13
  -16
  -20
  -24
  -29
  -34
  -39
  -45
  -52
  -59
  -66
  -74
  -82
  -90
  -99
  -109
  -118
  -129
  -139
  -150
  -162
  -173
  -186
  -199
  -212
  -226
  -240
  -255
  -271
New CAPEX, $m
  -12
  -28
  -32
  -37
  -41
  -46
  -51
  -55
  -60
  -64
  -69
  -73
  -77
  -81
  -85
  -89
  -93
  -97
  -102
  -106
  -110
  -114
  -119
  -123
  -128
  -133
  -139
  -144
  -150
  -156
  -163
Cash from investing activities, $m
  -21
  -38
  -45
  -53
  -61
  -70
  -80
  -89
  -99
  -109
  -121
  -132
  -143
  -155
  -167
  -179
  -192
  -206
  -220
  -235
  -249
  -264
  -281
  -296
  -314
  -332
  -351
  -370
  -390
  -411
  -434
Free cash flow, $m
  75
  181
  379
  608
  871
  1,167
  1,497
  1,860
  2,257
  2,686
  3,146
  3,635
  4,157
  4,707
  5,287
  5,895
  6,531
  7,196
  7,889
  8,611
  9,362
  10,144
  10,956
  11,801
  12,679
  13,593
  14,543
  15,532
  16,562
  17,634
  18,752
Issuance/(repayment) of debt, $m
  -3
  398
  462
  528
  596
  665
  733
  800
  867
  931
  995
  1,057
  1,117
  1,177
  1,235
  1,293
  1,351
  1,408
  1,467
  1,526
  1,587
  1,649
  1,714
  1,781
  1,851
  1,925
  2,001
  2,082
  2,167
  2,256
  2,351
Issuance/(repurchase) of shares, $m
  -50
  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  
  -58
  398
  462
  528
  596
  665
  733
  800
  867
  931
  995
  1,057
  1,117
  1,177
  1,235
  1,293
  1,351
  1,408
  1,467
  1,526
  1,587
  1,649
  1,714
  1,781
  1,851
  1,925
  2,001
  2,082
  2,167
  2,256
  2,351
Total cash flow (excl. dividends), $m
  15
  579
  841
  1,136
  1,467
  1,832
  2,230
  2,661
  3,123
  3,617
  4,141
  4,692
  5,274
  5,884
  6,522
  7,188
  7,882
  8,604
  9,356
  10,137
  10,949
  11,793
  12,670
  13,582
  14,531
  15,517
  16,545
  17,614
  18,729
  19,891
  21,103
Retained Cash Flow (-), $m
  -27
  -135
  -156
  -179
  -202
  -225
  -248
  -271
  -293
  -315
  -337
  -358
  -378
  -399
  -418
  -438
  -457
  -477
  -497
  -517
  -537
  -559
  -581
  -603
  -627
  -652
  -678
  -705
  -734
  -764
  -796
Prev. year cash balance distribution, $m
 
  203
  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
 
  647
  684
  958
  1,265
  1,606
  1,982
  2,390
  2,830
  3,302
  3,804
  4,334
  4,896
  5,485
  6,104
  6,750
  7,424
  8,127
  8,859
  9,620
  10,412
  11,234
  12,090
  12,979
  13,904
  14,866
  15,867
  16,909
  17,995
  19,126
  20,306
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
 
  620
  626
  833
  1,042
  1,245
  1,438
  1,614
  1,769
  1,897
  1,994
  2,058
  2,089
  2,086
  2,049
  1,982
  1,887
  1,768
  1,631
  1,481
  1,323
  1,162
  1,003
  851
  708
  578
  463
  363
  278
  209
  153
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

Insight Enterprises, Inc. provides information technology (IT) hardware, software, cloud, and service solutions for business, government, healthcare, and educational clients in the United States, Canada, Europe, the Middle East, Africa, and the Asia-Pacific. Its customer engagement solutions include digital signage, kiosk, tablet, and smartphone endpoints integrated with off-the-shelf software applications; and cloud-based and mobile-centric custom-developed applications. The company’s workforce enablement solutions include desktop, notebook, tablet, and smartphone devices coupled with calendar, email, messaging, and collaboration software; and mobile, cloud, and Internet-of-things applications for healthcare, financial services, and retail markets. Its infrastructure optimization solutions include an on-premise converged infrastructure augmented by off-premise public cloud IaaS integrated and managed via orchestration software; a branch infrastructure that include connectivity, computing, voice, and wireless solutions; and a WAN, LAN, wireless, and security solution to connect hybrid cloud, branch infrastructure, and end users. The company also sources, procures, stages, configures, integrates, tests, deploys, and maintains IT products spanning endpoints to infrastructure; provides outsourcing and infrastructure management services; and offers mobility, big data, and security solutions. In addition, it distributes hardware technology products, such as desktops, notebooks, tablets, networking and communication products, servers and power products, and storage products; offers software licensing optimization and implementation consulting services in the areas of office productivity, virtualization, creativity, and data protection; and provides enterprise data center services and solutions. Insight Enterprises, Inc. was founded in 1988 and is headquartered in Tempe, Arizona.

FINANCIAL RATIOS  of  Insight Enterprises (NSIT)

Valuation Ratios
P/E Ratio 17.1
Price to Sales 0.3
Price to Book 2
Price to Tangible Book
Price to Cash Flow 15.2
Price to Free Cash Flow 17.3
Growth Rates
Sales Growth Rate 2.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -7.7%
Cap. Spend. - 3 Yr. Gr. Rate -8.8%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 5.8%
Total Debt to Equity 5.8%
Interest Coverage 36
Management Effectiveness
Return On Assets 4.1%
Ret/ On Assets - 3 Yr. Avg. 4%
Return On Total Capital 11.1%
Ret/ On T. Cap. - 3 Yr. Avg. 10.2%
Return On Equity 12.2%
Return On Equity - 3 Yr. Avg. 11.2%
Asset Turnover 2.6
Profitability Ratios
Gross Margin 13.5%
Gross Margin - 3 Yr. Avg. 13.4%
EBITDA Margin 3.3%
EBITDA Margin - 3 Yr. Avg. 3.1%
Operating Margin 2.7%
Oper. Margin - 3 Yr. Avg. 2.5%
Pre-Tax Margin 2.5%
Pre-Tax Margin - 3 Yr. Avg. 2.4%
Net Profit Margin 1.5%
Net Profit Margin - 3 Yr. Avg. 1.5%
Effective Tax Rate 38.8%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 0%

NSIT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NSIT stock intrinsic value calculation we used $5486 million for the last fiscal year's total revenue generated by Insight Enterprises. The default revenue input number comes from 2016 income statement of Insight Enterprises. 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 NSIT stock valuation model: a) initial revenue growth rate of 26.4% 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 4.3%, whose default value for NSIT is calculated based on our internal credit rating of Insight Enterprises, 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 Insight Enterprises.
    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 NSIT stock the variable cost ratio is equal to 79.6%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $992 million in the base year in the intrinsic value calculation for NSIT 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 6.1% for Insight Enterprises.

Corporate tax rate of 27% is the nominal tax rate for Insight Enterprises. 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 NSIT 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 NSIT are equal to 1.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Insight Enterprises 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 NSIT is equal to 6.2%. 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 - $713 million for Insight Enterprises - 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 34.388 million for Insight Enterprises 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 Insight Enterprises at the current share price and the inputted number of shares is $1.4 billion.

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COMPANY NEWS

▶ Stocks To Watch: Insight Enterprises Sees Relative Strength Rating Rise To 83   [Jul-14-17 03:00AM  Investor's Business Daily]
▶ Media Alert: Livestream on Next-Generation Mobility   [Jul-12-17 10:01AM  GlobeNewswire]
▶ Insight Featured in 2017 Fortune 500 List   [Jun-21-17 08:30AM  GlobeNewswire]
▶ Buck the Retail Slump with These 5 Solid Picks   [Jun-15-17 02:52PM  Zacks]
▶ Insight Enterprises to Present at Investor Conference   [May-24-17 04:14PM  GlobeNewswire]
▶ Insight Enterprises to Present at Investor Conference   [May-22-17 04:14PM  GlobeNewswire]
▶ Insight Enterprises to Present at Investor Conference   [May-10-17 06:30PM  GlobeNewswire]
▶ Stocks With Rising Composite Ratings: Insight Enterprises   [May-09-17 10:51AM  Investor's Business Daily]
▶ Why Shares of Insight Enterprises Jumped Today   [May-04-17 01:41PM  Motley Fool]
▶ Insight Enterprises beats Street 1Q forecasts   [05:02AM  Associated Press]
▶ Insight reports 100 percent profit boost on organic growth, acquisition   [May-03-17 09:08PM  American City Business Journals]
▶ Insight Named Corporate Reseller of the Year by Veeam   [Feb-28-17 08:30AM  GlobeNewswire]
▶ Insight Named a Dell EMC Titanium Black Channel Partner   [Jan-23-17 08:30AM  GlobeNewswire]
▶ Insight Enterprises to Present at Investor Conference   [Jan-09-17 05:04PM  GlobeNewswire]
▶ Insight Closes Acquisition of Datalink   [12:14PM  GlobeNewswire]
▶ Hedge Funds Are Betting On Insight Enterprises, Inc. (NSIT)   [Dec-02-16 03:06AM  at Insider Monkey]
▶ Insight Enterprises to Present at Investor Conference   [Nov-28-16 04:50PM  GlobeNewswire]
▶ Insight Enterprises buys Minnesota public company for $258M   [Nov-07-16 02:53PM  at bizjournals.com]
Stock chart of NSIT Financial statements of NSIT Annual reports of NSIT
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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