Intrinsic value of Pacific Mercantile Bancorp - PMBC

Previous Close

$9.80

  Intrinsic Value

$36.98

stock screener

  Rating & Target

str. buy

+277%

Previous close

$9.80

 
Intrinsic value

$36.98

 
Up/down potential

+277%

 
Rating

str. buy

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

We calculate the intrinsic value of PMBC 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
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, %
  -100.00
  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
  0
  77
  119
  177
  257
  363
  499
  670
  880
  1,133
  1,431
  1,776
  2,172
  2,618
  3,115
  3,662
  4,260
  4,907
  5,603
  6,345
  7,134
  7,968
  8,846
  9,767
  10,732
  11,739
  12,790
  13,884
  15,022
  16,205
  17,435
Variable operating expenses, $m
 
  30
  47
  70
  102
  143
  197
  265
  348
  447
  565
  702
  858
  1,034
  1,230
  1,447
  1,683
  1,938
  2,213
  2,506
  2,818
  3,147
  3,494
  3,858
  4,239
  4,637
  5,052
  5,484
  5,934
  6,401
  6,887
Fixed operating expenses, $m
 
  31
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  41
  42
  42
  43
  44
  45
  46
  47
  48
  49
  51
  52
  53
  54
  55
  56
  58
Total operating expenses, $m
  0
  61
  78
  102
  135
  176
  231
  300
  384
  483
  602
  740
  897
  1,074
  1,271
  1,489
  1,725
  1,981
  2,257
  2,551
  2,864
  3,194
  3,542
  3,907
  4,290
  4,689
  5,105
  5,538
  5,989
  6,457
  6,945
Operating income, $m
  0
  16
  40
  75
  123
  186
  268
  371
  497
  649
  828
  1,037
  1,275
  1,544
  1,844
  2,174
  2,535
  2,925
  3,345
  3,794
  4,270
  4,773
  5,303
  5,860
  6,442
  7,050
  7,685
  8,346
  9,033
  9,748
  10,491
EBITDA, $m
  0
  212
  344
  530
  782
  1,116
  1,546
  2,086
  2,750
  3,548
  4,490
  5,584
  6,834
  8,245
  9,816
  11,548
  13,439
  15,487
  17,687
  20,036
  22,531
  25,169
  27,946
  30,861
  33,912
  37,099
  40,422
  43,883
  47,484
  51,228
  55,120
Interest expense (income), $m
  6
  60
  83
  129
  194
  282
  399
  550
  738
  970
  1,249
  1,578
  1,960
  2,397
  2,889
  3,438
  4,043
  4,703
  5,418
  6,186
  7,007
  7,878
  8,799
  9,769
  10,786
  11,852
  12,964
  14,125
  15,333
  16,590
  17,897
Earnings before tax, $m
  -18
  -44
  -42
  -54
  -71
  -96
  -131
  -179
  -242
  -321
  -421
  -541
  -685
  -853
  -1,046
  -1,264
  -1,508
  -1,778
  -2,073
  -2,393
  -2,737
  -3,105
  -3,496
  -3,909
  -4,344
  -4,801
  -5,279
  -5,779
  -6,300
  -6,842
  -7,407
Tax expense, $m
  17
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -35
  -44
  -42
  -54
  -71
  -96
  -131
  -179
  -242
  -321
  -421
  -541
  -685
  -853
  -1,046
  -1,264
  -1,508
  -1,778
  -2,073
  -2,393
  -2,737
  -3,105
  -3,496
  -3,909
  -4,344
  -4,801
  -5,279
  -5,779
  -6,300
  -6,842
  -7,407

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $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
  0
Total assets, $m
  1,141
  1,745
  2,697
  4,033
  5,852
  8,256
  11,350
  15,235
  20,004
  25,741
  32,512
  40,373
  49,360
  59,495
  70,788
  83,234
  96,821
  111,529
  127,336
  144,214
  162,140
  181,089
  201,041
  221,982
  243,902
  266,797
  290,671
  315,534
  341,403
  368,300
  396,256
Adjusted assets (=assets-cash), $m
  1,141
  1,745
  2,697
  4,033
  5,852
  8,256
  11,350
  15,235
  20,004
  25,741
  32,512
  40,373
  49,360
  59,495
  70,788
  83,234
  96,821
  111,529
  127,336
  144,214
  162,140
  181,089
  201,041
  221,982
  243,902
  266,797
  290,671
  315,534
  341,403
  368,300
  396,256
Revenue / Adjusted assets
  0.000
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
  0.044
Average production assets, $m
  1
  1,966
  3,037
  4,542
  6,590
  9,298
  12,783
  17,158
  22,530
  28,991
  36,618
  45,471
  55,592
  67,008
  79,726
  93,743
  109,046
  125,612
  143,414
  162,424
  182,613
  203,954
  226,426
  250,011
  274,699
  300,485
  327,374
  355,376
  384,511
  414,804
  446,290
Working capital, $m
  0
  -1,931
  -2,983
  -4,461
  -6,473
  -9,133
  -12,556
  -16,853
  -22,130
  -28,475
  -35,967
  -44,663
  -54,604
  -65,816
  -78,309
  -92,077
  -107,108
  -123,379
  -140,865
  -159,537
  -179,367
  -200,329
  -222,401
  -245,567
  -269,816
  -295,144
  -321,555
  -349,059
  -377,676
  -407,431
  -438,357
Total debt, $m
  33
  1,533
  2,389
  3,591
  5,228
  7,392
  10,176
  13,673
  17,965
  23,128
  29,223
  36,297
  44,386
  53,507
  63,670
  74,872
  87,100
  100,338
  114,564
  129,755
  145,887
  162,941
  180,899
  199,745
  219,473
  240,079
  261,566
  283,942
  307,224
  331,431
  356,592
Total liabilities, $m
  1,041
  1,571
  2,427
  3,630
  5,266
  7,430
  10,215
  13,711
  18,004
  23,166
  29,261
  36,336
  44,424
  53,546
  63,709
  74,910
  87,139
  100,376
  114,602
  129,793
  145,926
  162,980
  180,937
  199,784
  219,512
  240,117
  261,604
  283,981
  307,262
  331,470
  356,630
Total equity, $m
  100
  175
  270
  403
  585
  826
  1,135
  1,523
  2,000
  2,574
  3,251
  4,037
  4,936
  5,950
  7,079
  8,323
  9,682
  11,153
  12,734
  14,421
  16,214
  18,109
  20,104
  22,198
  24,390
  26,680
  29,067
  31,553
  34,140
  36,830
  39,626
Total liabilities and equity, $m
  1,141
  1,746
  2,697
  4,033
  5,851
  8,256
  11,350
  15,234
  20,004
  25,740
  32,512
  40,373
  49,360
  59,496
  70,788
  83,233
  96,821
  111,529
  127,336
  144,214
  162,140
  181,089
  201,041
  221,982
  243,902
  266,797
  290,671
  315,534
  341,402
  368,300
  396,256
Debt-to-equity ratio
  0.330
  8.780
  8.860
  8.900
  8.930
  8.950
  8.970
  8.970
  8.980
  8.990
  8.990
  8.990
  8.990
  8.990
  8.990
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
  9.000
Adjusted equity ratio
  0.088
  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
  -35
  -44
  -42
  -54
  -71
  -96
  -131
  -179
  -242
  -321
  -421
  -541
  -685
  -853
  -1,046
  -1,264
  -1,508
  -1,778
  -2,073
  -2,393
  -2,737
  -3,105
  -3,496
  -3,909
  -4,344
  -4,801
  -5,279
  -5,779
  -6,300
  -6,842
  -7,407
Depreciation, amort., depletion, $m
  0
  197
  304
  454
  659
  930
  1,278
  1,716
  2,253
  2,899
  3,662
  4,547
  5,559
  6,701
  7,973
  9,374
  10,905
  12,561
  14,341
  16,242
  18,261
  20,395
  22,643
  25,001
  27,470
  30,049
  32,737
  35,538
  38,451
  41,480
  44,629
Funds from operations, $m
  24
  153
  261
  401
  588
  834
  1,147
  1,537
  2,011
  2,578
  3,241
  4,006
  4,874
  5,848
  6,927
  8,110
  9,396
  10,783
  12,268
  13,850
  15,524
  17,291
  19,147
  21,092
  23,126
  25,247
  27,458
  29,759
  32,151
  34,638
  37,222
Change in working capital, $m
  20
  -724
  -1,052
  -1,478
  -2,012
  -2,660
  -3,423
  -4,298
  -5,276
  -6,346
  -7,491
  -8,696
  -9,942
  -11,212
  -12,492
  -13,768
  -15,031
  -16,271
  -17,486
  -18,672
  -19,830
  -20,962
  -22,072
  -23,166
  -24,249
  -25,328
  -26,411
  -27,504
  -28,617
  -29,755
  -30,926
Cash from operations, $m
  4
  877
  1,314
  1,879
  2,600
  3,493
  4,570
  5,835
  7,288
  8,923
  10,732
  12,701
  14,816
  17,060
  19,419
  21,879
  24,427
  27,055
  29,754
  32,522
  35,354
  38,253
  41,219
  44,258
  47,375
  50,575
  53,869
  57,263
  60,768
  64,393
  68,149
Maintenance CAPEX, $m
  0
  -123
  -197
  -304
  -454
  -659
  -930
  -1,278
  -1,716
  -2,253
  -2,899
  -3,662
  -4,547
  -5,559
  -6,701
  -7,973
  -9,374
  -10,905
  -12,561
  -14,341
  -16,242
  -18,261
  -20,395
  -22,643
  -25,001
  -27,470
  -30,049
  -32,737
  -35,538
  -38,451
  -41,480
New CAPEX, $m
  -1
  -734
  -1,071
  -1,505
  -2,048
  -2,708
  -3,485
  -4,375
  -5,372
  -6,461
  -7,627
  -8,853
  -10,122
  -11,415
  -12,718
  -14,018
  -15,303
  -16,566
  -17,802
  -19,010
  -20,189
  -21,341
  -22,472
  -23,585
  -24,688
  -25,786
  -26,889
  -28,002
  -29,135
  -30,293
  -31,486
Cash from investing activities, $m
  -92
  -857
  -1,268
  -1,809
  -2,502
  -3,367
  -4,415
  -5,653
  -7,088
  -8,714
  -10,526
  -12,515
  -14,669
  -16,974
  -19,419
  -21,991
  -24,677
  -27,471
  -30,363
  -33,351
  -36,431
  -39,602
  -42,867
  -46,228
  -49,689
  -53,256
  -56,938
  -60,739
  -64,673
  -68,744
  -72,966
Free cash flow, $m
  -88
  20
  46
  70
  98
  127
  155
  181
  200
  210
  206
  187
  147
  86
  0
  -112
  -250
  -416
  -609
  -830
  -1,077
  -1,350
  -1,648
  -1,970
  -2,314
  -2,681
  -3,069
  -3,477
  -3,904
  -4,351
  -4,818
Issuance/(repayment) of debt, $m
  5
  430
  856
  1,203
  1,637
  2,164
  2,785
  3,496
  4,292
  5,163
  6,095
  7,075
  8,088
  9,122
  10,163
  11,201
  12,228
  13,238
  14,226
  15,191
  16,133
  17,054
  17,957
  18,847
  19,728
  20,606
  21,487
  22,377
  23,281
  24,207
  25,160
Issuance/(repurchase) of shares, $m
  0
  256
  137
  187
  253
  336
  441
  567
  718
  895
  1,098
  1,327
  1,584
  1,866
  2,175
  2,509
  2,867
  3,249
  3,654
  4,081
  4,529
  5,000
  5,491
  6,003
  6,536
  7,091
  7,667
  8,265
  8,887
  9,532
  10,202
Cash from financing (excl. dividends), $m  
  113
  686
  993
  1,390
  1,890
  2,500
  3,226
  4,063
  5,010
  6,058
  7,193
  8,402
  9,672
  10,988
  12,338
  13,710
  15,095
  16,487
  17,880
  19,272
  20,662
  22,054
  23,448
  24,850
  26,264
  27,697
  29,154
  30,642
  32,168
  33,739
  35,362
Total cash flow (excl. dividends), $m
  25
  706
  1,039
  1,460
  1,987
  2,627
  3,381
  4,245
  5,211
  6,268
  7,399
  8,589
  9,819
  11,074
  12,338
  13,599
  14,845
  16,071
  17,270
  18,442
  19,585
  20,704
  21,800
  22,880
  23,950
  25,016
  26,085
  27,165
  28,264
  29,388
  30,545
Retained Cash Flow (-), $m
  34
  -256
  -137
  -187
  -253
  -336
  -441
  -567
  -718
  -895
  -1,098
  -1,327
  -1,584
  -1,866
  -2,175
  -2,509
  -2,867
  -3,249
  -3,654
  -4,081
  -4,529
  -5,000
  -5,491
  -6,003
  -6,536
  -7,091
  -7,667
  -8,265
  -8,887
  -9,532
  -10,202
Prev. year cash balance distribution, $m
 
  38
  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
 
  1
  1
  2
  3
  4
  6
  8
  11
  15
  19
  24
  30
  37
  45
  53
  62
  72
  83
  95
  108
  121
  135
  150
  166
  182
  200
  217
  236
  255
  275
Cash available for distribution, $m
 
  488
  902
  1,273
  1,734
  2,290
  2,940
  3,677
  4,493
  5,373
  6,301
  7,261
  8,235
  9,208
  10,163
  11,090
  11,978
  12,822
  13,617
  14,361
  15,056
  15,704
  16,309
  16,877
  17,414
  17,925
  18,418
  18,900
  19,377
  19,856
  20,343
Discount rate, %
 
  13.50
  14.18
  14.88
  15.63
  16.41
  17.23
  18.09
  19.00
  19.95
  20.94
  21.99
  23.09
  24.24
  25.46
  26.73
  28.07
  29.47
  30.94
  32.49
  34.11
  35.82
  37.61
  39.49
  41.47
  43.54
  45.72
  48.00
  50.40
  52.92
  55.57
PV of cash for distribution, $m
 
  430
  692
  839
  970
  1,071
  1,133
  1,148
  1,118
  1,045
  941
  816
  681
  548
  425
  318
  229
  159
  106
  69
  42
  25
  15
  8
  4
  2
  1
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  28.0
  16.5
  10.1
  6.4
  4.2
  2.8
  1.9
  1.3
  0.9
  0.7
  0.5
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Pacific Mercantile Bancorp is the holding company for Pacific Mercantile Bank (the Bank). The Company's business operations are conducted by the Bank. It operates through commercial banking segment. The Bank offers its customers different loan products, including commercial loans and credit lines, accounts receivable and inventory financing, Small Business Administration (SBA) guaranteed business loans, and owner-occupied commercial real estate loans. Its investments primarily include securities available for sale, which consist of residential mortgage backed securities issued by the United States agencies; residential collateralized mortgage obligations issued by non agencies; asset backed security and mutual funds. Its sources of funds include deposits, and borrowings and contractual obligations. Its deposits consist of noninterest bearing demand deposits, interest-bearing checking accounts, money market and savings deposits, and time deposits.

FINANCIAL RATIOS  of  Pacific Mercantile Bancorp (PMBC)

Valuation Ratios
P/E Ratio -6.4
Price to Sales 0
Price to Book 2.3
Price to Tangible Book
Price to Cash Flow 56.4
Price to Free Cash Flow 75.1
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 0%
Cap. Spend. - 3 Yr. Gr. Rate 0%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 33%
Total Debt to Equity 33%
Interest Coverage -2
Management Effectiveness
Return On Assets -2.1%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital -24.6%
Ret/ On T. Cap. - 3 Yr. Avg. -5.4%
Return On Equity -29.9%
Return On Equity - 3 Yr. Avg. -6.8%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate -94.4%
Eff/ Tax Rate - 3 Yr. Avg. -398.1%
Payout Ratio 0%

PMBC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PMBC stock intrinsic value calculation we used $48 million for the last fiscal year's total revenue generated by Pacific Mercantile Bancorp. The default revenue input number comes from 2016 income statement of Pacific Mercantile Bancorp. 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 PMBC 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 13.5%, whose default value for PMBC is calculated based on our internal credit rating of Pacific Mercantile Bancorp, 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 Pacific Mercantile Bancorp.
    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 PMBC stock the variable cost ratio is equal to 39.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $30 million in the base year in the intrinsic value calculation for PMBC 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 5.4% for Pacific Mercantile Bancorp.

Corporate tax rate of 27% is the nominal tax rate for Pacific Mercantile Bancorp. 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 PMBC stock is equal to 1.7%.

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 PMBC are equal to 2559.7%.

Life of production assets of 10 years is the average useful life of capital assets used in Pacific Mercantile Bancorp 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 PMBC is equal to -2514.2%. 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 - $0 million for Pacific Mercantile Bancorp - 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 23 million for Pacific Mercantile Bancorp 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 Pacific Mercantile Bancorp at the current share price and the inputted number of shares is $0.2 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Pacific Mercantile: 1Q Earnings Snapshot   [08:21AM  Associated Press]
▶ Pacific Mercantile Bank Announces New Regional Managers   [Mar-05-18 08:00AM  GlobeNewswire]
▶ Pacific Mercantile posts 4Q profit   [08:42AM  Associated Press]
▶ Pacific Mercantile posts 3Q profit   [Oct-23-17 08:53AM  Associated Press]
▶ Why Pacific Mercantile Bancorp (PMBC) Could Be A Buy   [Sep-06-17 09:44PM  Simply Wall St.]
▶ Pacific Mercantile posts 2Q profit   [Jul-24-17 11:08PM  Associated Press]
▶ Pacific Mercantile posts 1Q profit   [Apr-24-17 08:12AM  Associated Press]
▶ Is Adverum Biotechnologies Inc (ADVM) a Good Stock to Buy?   [Dec-14-16 06:16PM  at Insider Monkey]
▶ Pacific Mercantile Bank Provides Financing to PriceSpider   [Aug-30-16 08:00AM  GlobeNewswire]
▶ Pacific Mercantile Bancorp Set to Join Russell 3000 Index   [Jun-14-16 04:05PM  GlobeNewswire]
Financial statements of PMBC
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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