Intrinsic value of Proofpoint - PFPT

Previous Close

$87.86

  Intrinsic Value

$71.65

stock screener

  Rating & Target

hold

-18%

  Value-price divergence*

+51%

Previous close

$87.86

 
Intrinsic value

$71.65

 
Up/down potential

-18%

 
Rating

hold

 
Value-price divergence*

+51%

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

We calculate the intrinsic value of PFPT 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 3.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  41.89
  43.00
  39.20
  35.78
  32.70
  29.93
  27.44
  25.19
  23.18
  21.36
  19.72
  18.25
  16.92
  15.73
  14.66
  13.69
  12.82
  12.04
  11.34
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.46
  7.21
  6.99
  6.79
Revenue, $m
  376
  538
  748
  1,016
  1,349
  1,752
  2,233
  2,796
  3,444
  4,179
  5,003
  5,916
  6,918
  8,006
  9,179
  10,436
  11,775
  13,193
  14,688
  16,260
  17,908
  19,631
  21,429
  23,302
  25,252
  27,280
  29,388
  31,579
  33,856
  36,222
  38,681
Variable operating expenses, $m
 
  559
  772
  1,042
  1,377
  1,784
  2,269
  2,836
  3,490
  4,232
  5,063
  5,967
  6,977
  8,075
  9,258
  10,526
  11,876
  13,306
  14,814
  16,400
  18,062
  19,799
  21,613
  23,502
  25,469
  27,514
  29,640
  31,850
  34,146
  36,533
  39,013
Fixed operating expenses, $m
 
  69
  70
  72
  74
  76
  78
  80
  82
  84
  86
  88
  90
  92
  95
  97
  99
  102
  104
  107
  110
  113
  115
  118
  121
  124
  127
  131
  134
  137
  141
Total operating expenses, $m
  461
  628
  842
  1,114
  1,451
  1,860
  2,347
  2,916
  3,572
  4,316
  5,149
  6,055
  7,067
  8,167
  9,353
  10,623
  11,975
  13,408
  14,918
  16,507
  18,172
  19,912
  21,728
  23,620
  25,590
  27,638
  29,767
  31,981
  34,280
  36,670
  39,154
Operating income, $m
  -86
  -90
  -94
  -98
  -102
  -108
  -114
  -120
  -128
  -136
  -145
  -139
  -149
  -161
  -173
  -187
  -201
  -215
  -231
  -247
  -264
  -281
  -299
  -318
  -338
  -358
  -380
  -402
  -424
  -448
  -473
EBITDA, $m
  -54
  -62
  -61
  -60
  -58
  -55
  -51
  -46
  -40
  -33
  -26
  -17
  -7
  4
  16
  28
  42
  57
  72
  88
  105
  123
  142
  162
  182
  204
  226
  249
  273
  298
  324
Interest expense (income), $m
  4
  13
  22
  37
  55
  77
  104
  136
  174
  218
  267
  322
  384
  451
  524
  603
  687
  777
  872
  973
  1,078
  1,189
  1,305
  1,426
  1,551
  1,682
  1,819
  1,960
  2,107
  2,260
  2,419
Earnings before tax, $m
  -110
  -103
  -116
  -134
  -157
  -184
  -218
  -257
  -302
  -354
  -412
  -461
  -533
  -612
  -698
  -790
  -888
  -992
  -1,103
  -1,220
  -1,342
  -1,470
  -1,604
  -1,744
  -1,889
  -2,041
  -2,198
  -2,362
  -2,532
  -2,708
  -2,892
Tax expense, $m
  1
  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
  -111
  -103
  -116
  -134
  -157
  -184
  -218
  -257
  -302
  -354
  -412
  -461
  -533
  -612
  -698
  -790
  -888
  -992
  -1,103
  -1,220
  -1,342
  -1,470
  -1,604
  -1,744
  -1,889
  -2,041
  -2,198
  -2,362
  -2,532
  -2,708
  -2,892

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  397
  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
  802
  1,146
  1,596
  2,167
  2,875
  3,736
  4,761
  5,961
  7,342
  8,910
  10,668
  12,615
  14,750
  17,070
  19,572
  22,252
  25,106
  28,129
  31,318
  34,670
  38,184
  41,857
  45,690
  49,684
  53,842
  58,166
  62,661
  67,333
  72,187
  77,232
  82,476
Adjusted assets (=assets-cash), $m
  405
  1,146
  1,596
  2,167
  2,875
  3,736
  4,761
  5,961
  7,342
  8,910
  10,668
  12,615
  14,750
  17,070
  19,572
  22,252
  25,106
  28,129
  31,318
  34,670
  38,184
  41,857
  45,690
  49,684
  53,842
  58,166
  62,661
  67,333
  72,187
  77,232
  82,476
Revenue / Adjusted assets
  0.928
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
Average production assets, $m
  78
  111
  154
  209
  278
  361
  460
  576
  709
  861
  1,031
  1,219
  1,425
  1,649
  1,891
  2,150
  2,426
  2,718
  3,026
  3,350
  3,689
  4,044
  4,414
  4,800
  5,202
  5,620
  6,054
  6,505
  6,974
  7,462
  7,968
Working capital, $m
  185
  -54
  -75
  -102
  -135
  -175
  -223
  -280
  -344
  -418
  -500
  -592
  -692
  -801
  -918
  -1,044
  -1,177
  -1,319
  -1,469
  -1,626
  -1,791
  -1,963
  -2,143
  -2,330
  -2,525
  -2,728
  -2,939
  -3,158
  -3,386
  -3,622
  -3,868
Total debt, $m
  367
  642
  1,046
  1,560
  2,198
  2,972
  3,895
  4,975
  6,218
  7,629
  9,211
  10,963
  12,885
  14,973
  17,225
  19,637
  22,205
  24,926
  27,796
  30,813
  33,975
  37,281
  40,731
  44,326
  48,068
  51,959
  56,005
  60,209
  64,578
  69,119
  73,838
Total liabilities, $m
  757
  1,032
  1,436
  1,950
  2,588
  3,362
  4,285
  5,365
  6,608
  8,019
  9,601
  11,353
  13,275
  15,363
  17,615
  20,027
  22,595
  25,316
  28,186
  31,203
  34,365
  37,671
  41,121
  44,716
  48,458
  52,349
  56,395
  60,599
  64,968
  69,509
  74,228
Total equity, $m
  45
  115
  160
  217
  288
  374
  476
  596
  734
  891
  1,067
  1,261
  1,475
  1,707
  1,957
  2,225
  2,511
  2,813
  3,132
  3,467
  3,818
  4,186
  4,569
  4,968
  5,384
  5,817
  6,266
  6,733
  7,219
  7,723
  8,248
Total liabilities and equity, $m
  802
  1,147
  1,596
  2,167
  2,876
  3,736
  4,761
  5,961
  7,342
  8,910
  10,668
  12,614
  14,750
  17,070
  19,572
  22,252
  25,106
  28,129
  31,318
  34,670
  38,183
  41,857
  45,690
  49,684
  53,842
  58,166
  62,661
  67,332
  72,187
  77,232
  82,476
Debt-to-equity ratio
  8.156
  5.600
  6.560
  7.200
  7.640
  7.960
  8.180
  8.350
  8.470
  8.560
  8.630
  8.690
  8.740
  8.770
  8.800
  8.820
  8.840
  8.860
  8.880
  8.890
  8.900
  8.910
  8.910
  8.920
  8.930
  8.930
  8.940
  8.940
  8.950
  8.950
  8.950
Adjusted equity ratio
  -0.869
  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
  -111
  -103
  -116
  -134
  -157
  -184
  -218
  -257
  -302
  -354
  -412
  -461
  -533
  -612
  -698
  -790
  -888
  -992
  -1,103
  -1,220
  -1,342
  -1,470
  -1,604
  -1,744
  -1,889
  -2,041
  -2,198
  -2,362
  -2,532
  -2,708
  -2,892
Depreciation, amort., depletion, $m
  32
  28
  32
  38
  44
  53
  63
  74
  88
  103
  120
  122
  143
  165
  189
  215
  243
  272
  303
  335
  369
  404
  441
  480
  520
  562
  605
  651
  697
  746
  797
Funds from operations, $m
  171
  -75
  -84
  -97
  -112
  -132
  -155
  -182
  -214
  -251
  -293
  -339
  -391
  -447
  -508
  -575
  -645
  -721
  -800
  -885
  -973
  -1,066
  -1,163
  -1,264
  -1,369
  -1,479
  -1,593
  -1,711
  -1,834
  -1,962
  -2,095
Change in working capital, $m
  77
  -16
  -21
  -27
  -33
  -40
  -48
  -56
  -65
  -74
  -82
  -91
  -100
  -109
  -117
  -126
  -134
  -142
  -150
  -157
  -165
  -172
  -180
  -187
  -195
  -203
  -211
  -219
  -228
  -237
  -246
Cash from operations, $m
  94
  -59
  -63
  -70
  -79
  -91
  -107
  -126
  -150
  -178
  -210
  -248
  -291
  -338
  -391
  -449
  -511
  -579
  -651
  -727
  -808
  -894
  -983
  -1,077
  -1,174
  -1,276
  -1,382
  -1,492
  -1,607
  -1,726
  -1,849
Maintenance CAPEX, $m
  0
  -8
  -11
  -15
  -21
  -28
  -36
  -46
  -58
  -71
  -86
  -103
  -122
  -143
  -165
  -189
  -215
  -243
  -272
  -303
  -335
  -369
  -404
  -441
  -480
  -520
  -562
  -605
  -651
  -697
  -746
New CAPEX, $m
  -34
  -33
  -43
  -55
  -68
  -83
  -99
  -116
  -133
  -152
  -170
  -188
  -206
  -224
  -242
  -259
  -276
  -292
  -308
  -324
  -339
  -355
  -370
  -386
  -402
  -418
  -434
  -451
  -469
  -487
  -507
Cash from investing activities, $m
  -89
  -41
  -54
  -70
  -89
  -111
  -135
  -162
  -191
  -223
  -256
  -291
  -328
  -367
  -407
  -448
  -491
  -535
  -580
  -627
  -674
  -724
  -774
  -827
  -882
  -938
  -996
  -1,056
  -1,120
  -1,184
  -1,253
Free cash flow, $m
  5
  -100
  -117
  -140
  -169
  -202
  -242
  -288
  -341
  -400
  -466
  -539
  -619
  -705
  -798
  -897
  -1,002
  -1,113
  -1,231
  -1,354
  -1,483
  -1,617
  -1,758
  -1,904
  -2,056
  -2,214
  -2,378
  -2,549
  -2,726
  -2,910
  -3,102
Issuance/(repayment) of debt, $m
  0
  275
  404
  514
  638
  775
  923
  1,080
  1,243
  1,411
  1,582
  1,752
  1,921
  2,088
  2,252
  2,412
  2,568
  2,721
  2,870
  3,017
  3,162
  3,306
  3,450
  3,595
  3,742
  3,892
  4,046
  4,204
  4,369
  4,540
  4,720
Issuance/(repurchase) of shares, $m
  22
  172
  161
  191
  228
  271
  320
  377
  440
  511
  588
  656
  747
  844
  948
  1,058
  1,173
  1,295
  1,422
  1,555
  1,693
  1,838
  1,987
  2,143
  2,305
  2,473
  2,648
  2,829
  3,017
  3,213
  3,416
Cash from financing (excl. dividends), $m  
  -5
  447
  565
  705
  866
  1,046
  1,243
  1,457
  1,683
  1,922
  2,170
  2,408
  2,668
  2,932
  3,200
  3,470
  3,741
  4,016
  4,292
  4,572
  4,855
  5,144
  5,437
  5,738
  6,047
  6,365
  6,694
  7,033
  7,386
  7,753
  8,136
Total cash flow (excl. dividends), $m
  -1
  347
  448
  565
  697
  843
  1,001
  1,168
  1,343
  1,522
  1,704
  1,869
  2,049
  2,228
  2,402
  2,573
  2,739
  2,902
  3,061
  3,218
  3,373
  3,526
  3,680
  3,834
  3,991
  4,151
  4,315
  4,484
  4,660
  4,843
  5,034
Retained Cash Flow (-), $m
  38
  -172
  -161
  -191
  -228
  -271
  -320
  -377
  -440
  -511
  -588
  -656
  -747
  -844
  -948
  -1,058
  -1,173
  -1,295
  -1,422
  -1,555
  -1,693
  -1,838
  -1,987
  -2,143
  -2,305
  -2,473
  -2,648
  -2,829
  -3,017
  -3,213
  -3,416
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
 
  175
  287
  374
  469
  572
  681
  792
  903
  1,011
  1,115
  1,213
  1,303
  1,383
  1,454
  1,515
  1,566
  1,607
  1,639
  1,663
  1,679
  1,689
  1,692
  1,691
  1,686
  1,678
  1,667
  1,655
  1,643
  1,630
  1,618
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
 
  168
  263
  325
  386
  444
  494
  535
  564
  581
  585
  576
  556
  526
  488
  445
  398
  350
  302
  256
  213
  175
  140
  111
  86
  65
  49
  36
  25
  18
  12
Current shareholders' claim on cash, %
  100
  72.3
  63.4
  56.6
  51.2
  46.8
  43.1
  40.0
  37.2
  34.8
  32.6
  30.8
  29.0
  27.5
  26.0
  24.7
  23.4
  22.3
  21.2
  20.2
  19.3
  18.4
  17.6
  16.8
  16.0
  15.3
  14.7
  14.0
  13.4
  12.9
  12.3

Proofpoint, Inc. operates as a security-as-a-service (SaaS) provider that enables large and mid-sized organizations to defend, protect, archive, and govern their sensitive data worldwide. It offers threat protection, incident response, regulatory compliance, archiving, governance, eDiscovery, and secure communication solutions. The company provides email security products that include Enterprise Protection secure email gateway, Email Fraud Defense, Email Continuity, and Proofpoint Essentials, which are design to protect customers' mission-critical messaging infrastructure from outside threats, enable enterprises to authenticate their email to reduce consumer phishing, fight business email compromise attacks, and keep email operational in the event of a service provider outage. It also offers threat protection products that detect and prevent threats across email, social media, mobile apps, and SaaS applications, as well as enable enterprises to understand about the attacks they are seeing and the adversaries behind them; and information protection and archiving products, which ensure the enforcement of data governance, data retention, and supervision policies and mandates; cost-effective litigation support through efficient discovery; and active legal-hold management. In addition, the company provides digital risk protection products to deliver real-time, omnichannel digital risk discovery, and protection from brand fraud, data loss, physical threats, and cyber threats. Further, it offers platform services comprising threat detection, threat intel extraction, Nexus threat graph, real-time detection, information classification, and intelligent policy. The company serves organizations in verticals, such as aerospace and defense, education, financial services, government, healthcare, manufacturing, and retail. Proofpoint, Inc. was founded in 2002 and is headquartered in Sunnyvale, California.

FINANCIAL RATIOS  of  Proofpoint (PFPT)

Valuation Ratios
P/E Ratio -34.1
Price to Sales 10.1
Price to Book 84
Price to Tangible Book
Price to Cash Flow 40.2
Price to Free Cash Flow 63
Growth Rates
Sales Growth Rate 41.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 30.8%
Cap. Spend. - 3 Yr. Gr. Rate 33.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 815.6%
Total Debt to Equity 815.6%
Interest Coverage -27
Management Effectiveness
Return On Assets -14.2%
Ret/ On Assets - 3 Yr. Avg. -15.1%
Return On Total Capital -26.4%
Ret/ On T. Cap. - 3 Yr. Avg. -27.9%
Return On Equity -173.4%
Return On Equity - 3 Yr. Avg. -135.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 71%
Gross Margin - 3 Yr. Avg. 68.5%
EBITDA Margin -19.7%
EBITDA Margin - 3 Yr. Avg. -22%
Operating Margin -22.6%
Oper. Margin - 3 Yr. Avg. -25.5%
Pre-Tax Margin -29.3%
Pre-Tax Margin - 3 Yr. Avg. -32.3%
Net Profit Margin -29.5%
Net Profit Margin - 3 Yr. Avg. -32.5%
Effective Tax Rate -0.9%
Eff/ Tax Rate - 3 Yr. Avg. -0.6%
Payout Ratio 0%

PFPT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PFPT stock intrinsic value calculation we used $376 million for the last fiscal year's total revenue generated by Proofpoint. The default revenue input number comes from 2016 income statement of Proofpoint. 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 PFPT stock valuation model: a) initial revenue growth rate of 43% 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 PFPT is calculated based on our internal credit rating of Proofpoint, 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 Proofpoint.
    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 PFPT stock the variable cost ratio is equal to 105.3%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $67 million in the base year in the intrinsic value calculation for PFPT 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 Proofpoint.

Corporate tax rate of 27% is the nominal tax rate for Proofpoint. 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 PFPT 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 PFPT are equal to 20.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Proofpoint 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 PFPT 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 - $45 million for Proofpoint - 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 42.932 million for Proofpoint 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 Proofpoint at the current share price and the inputted number of shares is $3.8 billion.

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COMPANY NEWS

▶ Proofpoint to Host Financial Analyst and Investor Day   [Aug-08-17 08:00AM  GlobeNewswire]
▶ Proofpoint reports 2Q loss   [Jul-27-17 06:23PM  Associated Press]
▶ ETFs with exposure to Proofpoint, Inc. : July 24, 2017   [Jul-24-17 06:02PM  Capital Cube]
▶ Cybersecurity Stocks Near Buy Points Are Selling Off Today: Here's Why   [Jul-20-17 12:13PM  Investor's Business Daily]
▶ ETFs with exposure to Proofpoint, Inc. : July 14, 2017   [Jul-14-17 04:12PM  Capital Cube]
▶ Proofpoint May Be Headed for a Sideways Trading Range   [Jul-07-17 11:01AM  TheStreet.com]
▶ Proofpoint to Report Second Quarter 2017 Financial Results   [Jul-05-17 08:00AM  GlobeNewswire]
▶ Ignore FireEye Inc -- Here Are 3 Better Stocks   [Jun-25-17 02:18PM  Motley Fool]
▶ Futures: 3 Top Tech Stocks In Buy Range As Apple, FANGs Falter   [Jun-13-17 06:43AM  Investor's Business Daily]
▶ Apple Gets Price-Target Hike; Video Game Makers Touted Before E3   [Jun-07-17 04:15PM  Investor's Business Daily]
▶ Jim Cramer Prefers Proofpoint Over Palo Alto Networks   [May-31-17 12:48PM  TheStreet.com]
▶ 3 Stocks That Look a Lot Like Intel 30 Years Ago   [May-30-17 06:24PM  Motley Fool]
▶ Can Proofpoint Unlock the Upside?   [May-19-17 10:12AM  TheStreet.com]
▶ Huge cyberattack ebbs as investigators work to find culprits   [May-15-17 10:18PM  Associated Press]
▶ 'WannaCry' attack: More to come?   [May-14-17 10:49PM  CNBC Videos]
▶ How Did Security Stocks Do This Quarter?   [May-03-17 04:48PM  Zacks]
▶ ETFs with exposure to Proofpoint, Inc. : May 2, 2017   [May-02-17 04:28PM  Capital Cube]
▶ [$$] Proofpoint Stock Seen Reaching $93   [Apr-24-17 12:35PM  Barrons.com]
▶ Cyberattackers are now targeting individuals   [Apr-21-17 06:46PM  CNBC Videos]
▶ Visa, Hawaiian Holdings, Proofpoint, E-Trade Beat Views Late   [04:41PM  Investor's Business Daily]
▶ Proofpoint rebounds after earnings beat   [04:32PM  MarketWatch]
▶ Proofpoint reports 1Q loss   [04:28PM  Associated Press]
▶ Proofpoint Q1 Profit, Revenue Beat; Stock Claws Back   [04:22PM  Investor's Business Daily]
▶ 5 Earnings Short-Squeeze Plays: Yahoo!, IMAX Included   [Apr-18-17 01:24PM  TheStreet.com]
▶ Fortinet Stock Rises, Palo Alto Downgraded, Barracuda Earnings Due   [Apr-17-17 03:27PM  Investor's Business Daily]
▶ Mimecast's Enterprise Potential Is Underappreciated   [Apr-13-17 09:57AM  Benzinga]
▶ How To Trade Proofpoint's Q1 Earnings Report   [Apr-12-17 09:30AM  Benzinga]
▶ Proofpoint to Report First Quarter 2017 Financial Results   [Apr-04-17 08:00AM  GlobeNewswire]
▶ ETFs with exposure to Proofpoint, Inc. : March 27, 2017   [Mar-27-17 04:03PM  Capital Cube]
▶ This Struggling Security Firm Could Be Bought: Goldman Sachs   [04:55PM  Investor's Business Daily]
▶ Alibaba, JD.com, FireEye Get Buy Ratings; Proofpoint A Sell   [04:08PM  Investor's Business Daily]
Stock chart of PFPT Financial statements of PFPT
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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