Intrinsic value of Ryanair Holdings ADR - RYAAY

Previous Close

$106.59

  Intrinsic Value

$300.21

stock screener

  Rating & Target

str. buy

+182%

Previous close

$106.59

 
Intrinsic value

$300.21

 
Up/down potential

+182%

 
Rating

str. buy

We calculate the intrinsic value of RYAAY 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 2017), $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 22.7

 

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, %
  1.71
  13.20
  12.38
  11.64
  10.98
  10.38
  9.84
  9.36
  8.92
  8.53
  8.18
  7.86
  7.57
  7.32
  7.08
  6.88
  6.69
  6.52
  6.37
  6.23
  6.11
  6.00
  5.90
  5.81
  5.73
  5.65
  5.59
  5.53
  5.48
  5.43
  5.39
Revenue, $m
  7,016
  7,942
  8,925
  9,964
  11,058
  12,206
  13,407
  14,662
  15,970
  17,333
  18,750
  20,223
  21,755
  23,347
  25,000
  26,719
  28,507
  30,365
  32,299
  34,311
  36,407
  38,590
  40,866
  43,239
  45,715
  48,300
  50,999
  53,819
  56,767
  59,849
  63,072
Variable operating expenses, $m
 
  2,692
  3,026
  3,378
  3,749
  4,138
  4,545
  4,970
  5,414
  5,876
  6,356
  6,856
  7,375
  7,914
  8,475
  9,058
  9,664
  10,294
  10,949
  11,631
  12,342
  13,082
  13,853
  14,658
  15,497
  16,374
  17,289
  18,245
  19,244
  20,289
  21,382
Fixed operating expenses, $m
 
  3,171
  3,251
  3,332
  3,415
  3,501
  3,588
  3,678
  3,770
  3,864
  3,961
  4,060
  4,161
  4,265
  4,372
  4,481
  4,593
  4,708
  4,826
  4,946
  5,070
  5,197
  5,327
  5,460
  5,596
  5,736
  5,880
  6,026
  6,177
  6,332
  6,490
Total operating expenses, $m
  5,397
  5,863
  6,277
  6,710
  7,164
  7,639
  8,133
  8,648
  9,184
  9,740
  10,317
  10,916
  11,536
  12,179
  12,847
  13,539
  14,257
  15,002
  15,775
  16,577
  17,412
  18,279
  19,180
  20,118
  21,093
  22,110
  23,169
  24,271
  25,421
  26,621
  27,872
Operating income, $m
  1,619
  2,078
  2,649
  3,255
  3,894
  4,568
  5,274
  6,014
  6,787
  7,593
  8,433
  9,308
  10,219
  11,167
  12,154
  13,181
  14,250
  15,363
  16,524
  17,733
  18,995
  20,311
  21,686
  23,121
  24,621
  26,190
  27,831
  29,548
  31,346
  33,229
  35,201
EBITDA, $m
  2,144
  2,675
  3,319
  4,003
  4,725
  5,484
  6,281
  7,115
  7,986
  8,894
  9,841
  10,826
  11,852
  12,920
  14,030
  15,186
  16,390
  17,643
  18,949
  20,309
  21,728
  23,208
  24,754
  26,367
  28,053
  29,816
  31,660
  33,588
  35,607
  37,722
  39,936
Interest expense (income), $m
  0
  145
  178
  215
  253
  294
  337
  382
  428
  477
  528
  581
  635
  692
  752
  813
  877
  944
  1,013
  1,085
  1,160
  1,238
  1,319
  1,404
  1,492
  1,585
  1,681
  1,781
  1,886
  1,996
  2,111
Earnings before tax, $m
  1,552
  1,933
  2,471
  3,040
  3,641
  4,274
  4,937
  5,632
  6,358
  7,116
  7,905
  8,727
  9,584
  10,474
  11,402
  12,367
  13,372
  14,420
  15,511
  16,648
  17,835
  19,073
  20,366
  21,717
  23,129
  24,606
  26,150
  27,767
  29,459
  31,232
  33,090
Tax expense, $m
  163
  522
  667
  821
  983
  1,154
  1,333
  1,521
  1,717
  1,921
  2,134
  2,356
  2,588
  2,828
  3,078
  3,339
  3,611
  3,893
  4,188
  4,495
  4,815
  5,150
  5,499
  5,864
  6,245
  6,643
  7,061
  7,497
  7,954
  8,433
  8,934
Net income, $m
  1,389
  1,411
  1,804
  2,219
  2,658
  3,120
  3,604
  4,112
  4,642
  5,195
  5,771
  6,371
  6,996
  7,646
  8,323
  9,028
  9,762
  10,526
  11,323
  12,153
  13,019
  13,923
  14,867
  15,854
  16,884
  17,962
  19,090
  20,270
  21,505
  22,800
  24,156

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  4,357
  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
  12,654
  9,388
  10,550
  11,778
  13,071
  14,428
  15,848
  17,331
  18,877
  20,488
  22,163
  23,905
  25,715
  27,596
  29,551
  31,583
  33,696
  35,892
  38,178
  40,557
  43,034
  45,615
  48,305
  51,110
  54,037
  57,092
  60,283
  63,616
  67,100
  70,743
  74,554
Adjusted assets (=assets-cash), $m
  8,297
  9,388
  10,550
  11,778
  13,071
  14,428
  15,848
  17,331
  18,877
  20,488
  22,163
  23,905
  25,715
  27,596
  29,551
  31,583
  33,696
  35,892
  38,178
  40,557
  43,034
  45,615
  48,305
  51,110
  54,037
  57,092
  60,283
  63,616
  67,100
  70,743
  74,554
Revenue / Adjusted assets
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
  0.846
Average production assets, $m
  7,161
  8,109
  9,113
  10,174
  11,291
  12,462
  13,689
  14,970
  16,306
  17,697
  19,144
  20,648
  22,212
  23,837
  25,525
  27,281
  29,105
  31,003
  32,977
  35,032
  37,171
  39,400
  41,724
  44,147
  46,675
  49,314
  52,070
  54,950
  57,959
  61,106
  64,397
Working capital, $m
  1,788
  -2,367
  -2,660
  -2,969
  -3,295
  -3,637
  -3,995
  -4,369
  -4,759
  -5,165
  -5,587
  -6,027
  -6,483
  -6,957
  -7,450
  -7,962
  -8,495
  -9,049
  -9,625
  -10,225
  -10,849
  -11,500
  -12,178
  -12,885
  -13,623
  -14,393
  -15,198
  -16,038
  -16,917
  -17,835
  -18,796
Total debt, $m
  4,627
  5,090
  6,136
  7,241
  8,405
  9,626
  10,904
  12,239
  13,631
  15,080
  16,588
  18,155
  19,785
  21,478
  23,237
  25,066
  26,967
  28,944
  31,001
  33,142
  35,371
  37,694
  40,115
  42,640
  45,274
  48,024
  50,895
  53,896
  57,031
  60,310
  63,739
Total liabilities, $m
  7,986
  8,449
  9,495
  10,600
  11,764
  12,985
  14,263
  15,598
  16,990
  18,439
  19,947
  21,514
  23,144
  24,837
  26,596
  28,425
  30,326
  32,303
  34,360
  36,501
  38,730
  41,053
  43,474
  45,999
  48,633
  51,383
  54,254
  57,255
  60,390
  63,669
  67,098
Total equity, $m
  4,668
  939
  1,055
  1,178
  1,307
  1,443
  1,585
  1,733
  1,888
  2,049
  2,216
  2,390
  2,572
  2,760
  2,955
  3,158
  3,370
  3,589
  3,818
  4,056
  4,303
  4,561
  4,830
  5,111
  5,404
  5,709
  6,028
  6,362
  6,710
  7,074
  7,455
Total liabilities and equity, $m
  12,654
  9,388
  10,550
  11,778
  13,071
  14,428
  15,848
  17,331
  18,878
  20,488
  22,163
  23,904
  25,716
  27,597
  29,551
  31,583
  33,696
  35,892
  38,178
  40,557
  43,033
  45,614
  48,304
  51,110
  54,037
  57,092
  60,282
  63,617
  67,100
  70,743
  74,553
Debt-to-equity ratio
  0.991
  5.420
  5.820
  6.150
  6.430
  6.670
  6.880
  7.060
  7.220
  7.360
  7.480
  7.590
  7.690
  7.780
  7.860
  7.940
  8.000
  8.060
  8.120
  8.170
  8.220
  8.260
  8.300
  8.340
  8.380
  8.410
  8.440
  8.470
  8.500
  8.530
  8.550
Adjusted equity ratio
  0.037
  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
  1,389
  1,411
  1,804
  2,219
  2,658
  3,120
  3,604
  4,112
  4,642
  5,195
  5,771
  6,371
  6,996
  7,646
  8,323
  9,028
  9,762
  10,526
  11,323
  12,153
  13,019
  13,923
  14,867
  15,854
  16,884
  17,962
  19,090
  20,270
  21,505
  22,800
  24,156
Depreciation, amort., depletion, $m
  525
  596
  670
  748
  830
  916
  1,007
  1,101
  1,199
  1,301
  1,408
  1,518
  1,633
  1,753
  1,877
  2,006
  2,140
  2,280
  2,425
  2,576
  2,733
  2,897
  3,068
  3,246
  3,432
  3,626
  3,829
  4,040
  4,262
  4,493
  4,735
Funds from operations, $m
  2,157
  2,008
  2,474
  2,967
  3,488
  4,036
  4,611
  5,212
  5,840
  6,496
  7,178
  7,889
  8,629
  9,399
  10,200
  11,034
  11,902
  12,806
  13,748
  14,729
  15,753
  16,821
  17,935
  19,100
  20,316
  21,588
  22,918
  24,310
  25,767
  27,293
  28,891
Change in working capital, $m
  123
  -276
  -293
  -310
  -326
  -342
  -358
  -374
  -390
  -406
  -422
  -439
  -456
  -474
  -493
  -512
  -533
  -554
  -576
  -600
  -624
  -651
  -678
  -707
  -738
  -770
  -804
  -840
  -878
  -918
  -961
Cash from operations, $m
  2,034
  2,284
  2,767
  3,277
  3,814
  4,378
  4,969
  5,586
  6,230
  6,902
  7,601
  8,328
  9,086
  9,873
  10,693
  11,546
  12,435
  13,360
  14,324
  15,329
  16,377
  17,471
  18,614
  19,807
  21,054
  22,358
  23,723
  25,151
  26,645
  28,211
  29,852
Maintenance CAPEX, $m
  0
  -527
  -596
  -670
  -748
  -830
  -916
  -1,007
  -1,101
  -1,199
  -1,301
  -1,408
  -1,518
  -1,633
  -1,753
  -1,877
  -2,006
  -2,140
  -2,280
  -2,425
  -2,576
  -2,733
  -2,897
  -3,068
  -3,246
  -3,432
  -3,626
  -3,829
  -4,040
  -4,262
  -4,493
New CAPEX, $m
  -1,530
  -948
  -1,004
  -1,061
  -1,117
  -1,172
  -1,227
  -1,281
  -1,336
  -1,391
  -1,447
  -1,505
  -1,564
  -1,625
  -1,689
  -1,755
  -1,825
  -1,898
  -1,974
  -2,055
  -2,140
  -2,229
  -2,324
  -2,423
  -2,528
  -2,639
  -2,756
  -2,879
  -3,009
  -3,147
  -3,291
Cash from investing activities, $m
  -1,362
  -1,475
  -1,600
  -1,731
  -1,865
  -2,002
  -2,143
  -2,288
  -2,437
  -2,590
  -2,748
  -2,913
  -3,082
  -3,258
  -3,442
  -3,632
  -3,831
  -4,038
  -4,254
  -4,480
  -4,716
  -4,962
  -5,221
  -5,491
  -5,774
  -6,071
  -6,382
  -6,708
  -7,049
  -7,409
  -7,784
Free cash flow, $m
  672
  809
  1,167
  1,546
  1,949
  2,376
  2,826
  3,299
  3,794
  4,312
  4,853
  5,416
  6,004
  6,615
  7,252
  7,914
  8,604
  9,322
  10,070
  10,849
  11,662
  12,509
  13,393
  14,316
  15,280
  16,287
  17,341
  18,442
  19,596
  20,803
  22,067
Issuance/(repayment) of debt, $m
  365
  944
  1,046
  1,105
  1,164
  1,221
  1,278
  1,335
  1,392
  1,449
  1,508
  1,568
  1,629
  1,693
  1,760
  1,829
  1,901
  1,977
  2,057
  2,141
  2,229
  2,323
  2,421
  2,525
  2,634
  2,750
  2,872
  3,000
  3,136
  3,279
  3,429
Issuance/(repurchase) of shares, $m
  -1,074
  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  
  -709
  944
  1,046
  1,105
  1,164
  1,221
  1,278
  1,335
  1,392
  1,449
  1,508
  1,568
  1,629
  1,693
  1,760
  1,829
  1,901
  1,977
  2,057
  2,141
  2,229
  2,323
  2,421
  2,525
  2,634
  2,750
  2,872
  3,000
  3,136
  3,279
  3,429
Total cash flow (excl. dividends), $m
  -37
  1,753
  2,213
  2,651
  3,113
  3,597
  4,104
  4,633
  5,186
  5,761
  6,360
  6,984
  7,633
  8,308
  9,011
  9,743
  10,505
  11,299
  12,127
  12,990
  13,891
  14,832
  15,814
  16,841
  17,914
  19,037
  20,212
  21,443
  22,731
  24,081
  25,497
Retained Cash Flow (-), $m
  -872
  -147
  -116
  -123
  -129
  -136
  -142
  -148
  -155
  -161
  -168
  -174
  -181
  -188
  -196
  -203
  -211
  -220
  -229
  -238
  -248
  -258
  -269
  -281
  -293
  -306
  -319
  -333
  -348
  -364
  -381
Prev. year cash balance distribution, $m
 
  3,876
  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
 
  5,482
  2,096
  2,528
  2,983
  3,461
  3,962
  4,485
  5,031
  5,600
  6,193
  6,810
  7,452
  8,120
  8,816
  9,540
  10,294
  11,080
  11,898
  12,752
  13,643
  14,573
  15,545
  16,560
  17,621
  18,732
  19,893
  21,109
  22,383
  23,717
  25,115
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
 
  5,256
  1,919
  2,200
  2,457
  2,683
  2,875
  3,030
  3,144
  3,217
  3,247
  3,234
  3,180
  3,087
  2,960
  2,801
  2,616
  2,411
  2,191
  1,964
  1,734
  1,507
  1,290
  1,085
  897
  729
  580
  453
  346
  259
  189
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

Ryanair Holdings plc (Ryanair Holdings) is a holding company for Ryanair Limited (Ryanair). Ryanair operates an ultra-low fare, scheduled-passenger airline serving short-haul, point-to-point routes between Ireland, the United Kingdom, Continental Europe, Morocco and Israel. Ryanair provides various ancillary services and engages in other activities connected with its core air passenger service, including non-flight scheduled services, Internet-related services, and the in-flight sale of beverages, food and merchandise. Ryanair markets accommodation services and travel insurance through its Website. It provides hotel and accommodation services. Ryanair provides its own aircraft and passenger handling and ticketing services at Dublin Airport. As of June 30, 2016, Ryanair had a principal fleet of over 350 Boeing 737-800 aircraft and offered over 2,000 scheduled short-haul flights per day serving approximately 200 airports throughout Europe.

FINANCIAL RATIOS  of  Ryanair Holdings ADR (RYAAY)

Valuation Ratios
P/E Ratio 93.5
Price to Sales 18.5
Price to Book 27.8
Price to Tangible Book
Price to Cash Flow 63.8
Price to Free Cash Flow 257.6
Growth Rates
Sales Growth Rate 1.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 19.1%
Cap. Spend. - 3 Yr. Gr. Rate 23.4%
Financial Strength
Quick Ratio 9
Current Ratio 0.1
LT Debt to Equity 88.8%
Total Debt to Equity 99.1%
Interest Coverage 0
Management Effectiveness
Return On Assets 11.3%
Ret/ On Assets - 3 Yr. Avg. 11%
Return On Total Capital 16%
Ret/ On T. Cap. - 3 Yr. Avg. 15.7%
Return On Equity 32.8%
Return On Equity - 3 Yr. Avg. 32.5%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 37.4%
Gross Margin - 3 Yr. Avg. 34.9%
EBITDA Margin 29.6%
EBITDA Margin - 3 Yr. Avg. 28.8%
Operating Margin 23.1%
Oper. Margin - 3 Yr. Avg. 21.3%
Pre-Tax Margin 22.1%
Pre-Tax Margin - 3 Yr. Avg. 21.9%
Net Profit Margin 19.8%
Net Profit Margin - 3 Yr. Avg. 19.7%
Effective Tax Rate 10.5%
Eff/ Tax Rate - 3 Yr. Avg. 10.6%
Payout Ratio 0%

RYAAY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the RYAAY stock intrinsic value calculation we used $7016 million for the last fiscal year's total revenue generated by Ryanair Holdings ADR. The default revenue input number comes from 2017 income statement of Ryanair 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 RYAAY stock valuation model: a) initial revenue growth rate of 13.2% 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 RYAAY is calculated based on our internal credit rating of Ryanair 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 Ryanair 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 RYAAY stock the variable cost ratio is equal to 33.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3094 million in the base year in the intrinsic value calculation for RYAAY 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 Ryanair Holdings ADR.

Corporate tax rate of 27% is the nominal tax rate for Ryanair 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 RYAAY 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 RYAAY are equal to 102.1%.

Life of production assets of 13.6 years is the average useful life of capital assets used in Ryanair 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 RYAAY is equal to -29.8%. 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 - $4668 million for Ryanair 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 212.989 million for Ryanair 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 Ryanair Holdings ADR at the current share price and the inputted number of shares is $22.7 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ [$$] Ryanair Recognizes Pilot Unions, Calls for Strikes to Be Canceled   [Dec-15-17 11:44PM  The Wall Street Journal]
▶ Stocks With Rising Relative Price Strength: Ryanair   [03:00AM  Investor's Business Daily]
▶ Ryanair's Winter of Discontent   [Dec-13-17 05:48AM  Bloomberg]
▶ Ryanair faces strike threats in Germany, Ireland   [11:10AM  Associated Press]
▶ 15K American Airlines flights don't have pilots   [Nov-30-17 11:09AM  Yahoo Finance Video]
▶ EasyJet benefits from woes of rivals   [Nov-21-17 10:52AM  Reuters Videos]
▶ [$$] Week in Review: November 4   [Nov-03-17 04:15PM  Financial Times]
▶ Ryanair Earns Relative Strength Rating Upgrade; Hits Key Threshold   [Nov-01-17 03:00AM  Investor's Business Daily]
▶ [$$] Ryanair: pilot lite   [11:02AM  Financial Times]
▶ Ryanair profits rise despite mass cancellations   [05:10AM  Associated Press]
▶ IBD Rating Upgrades: Ryanair Flashes Improved Price Strength   [03:00AM  Investor's Business Daily]
▶ [$$] Central bank meetings, Facebook and Ryanair in spotlight   [Oct-29-17 10:28AM  Financial Times]
▶ [$$] Pilot relations in spotlight ahead of Ryanair results   [Oct-27-17 11:00PM  Financial Times]
▶ [$$] Ryanair's Stansted pilots turn down O'Leary's pay offer   [Oct-20-17 05:04PM  Financial Times]
▶ [$$] Malaysia Airlines Names New CEO   [09:15AM  The Wall Street Journal]
▶ [$$] Malaysia Airlines Loses Third CEO Since 2014   [Oct-17-17 09:30AM  The Wall Street Journal]
Financial statements of RYAAY
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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