Intrinsic value of T. Rowe Price Group - TROW

Previous Close

$70.52

  Intrinsic Value

premium content

  Rating & Target

premium content

  Value-price divergence*

premium content

Previous close

$70.52

 
Intrinsic value

$93.02

 
Up/down potential

+32%

 
Rating

buy

 
Value-price divergence* premium content

Premium access subscription - $499/yr

please register and log in before paying
Our model is not good at valuating stocks of financial companies, such as TROW.

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

We calculate the intrinsic value of TROW 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 17.0

 

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, %
  0.52
  3.70
  3.83
  3.95
  4.05
  4.15
  4.23
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.63
  4.67
  4.70
  4.73
  4.76
  4.78
  4.80
  4.82
  4.84
  4.86
  4.87
  4.88
  4.90
  4.91
  4.92
  4.92
  4.93
  4.94
Revenue, $m
  4,223
  4,379
  4,547
  4,726
  4,918
  5,122
  5,339
  5,569
  5,813
  6,071
  6,344
  6,632
  6,937
  7,258
  7,597
  7,954
  8,331
  8,727
  9,144
  9,584
  10,046
  10,533
  11,044
  11,582
  12,148
  12,743
  13,368
  14,025
  14,716
  15,442
  16,204
Variable operating expenses, $m
 
  2,397
  2,487
  2,582
  2,684
  2,793
  2,908
  3,030
  3,160
  3,298
  3,443
  3,530
  3,692
  3,863
  4,043
  4,233
  4,434
  4,645
  4,867
  5,101
  5,347
  5,606
  5,878
  6,164
  6,466
  6,782
  7,115
  7,465
  7,832
  8,219
  8,624
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,490
  2,397
  2,487
  2,582
  2,684
  2,793
  2,908
  3,030
  3,160
  3,298
  3,443
  3,530
  3,692
  3,863
  4,043
  4,233
  4,434
  4,645
  4,867
  5,101
  5,347
  5,606
  5,878
  6,164
  6,466
  6,782
  7,115
  7,465
  7,832
  8,219
  8,624
Operating income, $m
  1,733
  1,982
  2,060
  2,144
  2,234
  2,329
  2,431
  2,538
  2,652
  2,773
  2,901
  3,102
  3,245
  3,395
  3,554
  3,721
  3,897
  4,082
  4,278
  4,483
  4,699
  4,927
  5,166
  5,418
  5,683
  5,961
  6,253
  6,561
  6,884
  7,223
  7,580
EBITDA, $m
  1,866
  2,115
  2,196
  2,282
  2,375
  2,473
  2,578
  2,689
  2,807
  2,931
  3,063
  3,202
  3,350
  3,505
  3,668
  3,841
  4,023
  4,214
  4,416
  4,628
  4,851
  5,086
  5,333
  5,593
  5,866
  6,153
  6,455
  6,772
  7,106
  7,456
  7,825
Interest expense (income), $m
  0
  0
  2
  3
  5
  7
  9
  11
  14
  16
  19
  21
  24
  27
  31
  34
  38
  41
  45
  50
  54
  59
  64
  69
  74
  80
  86
  92
  99
  106
  113
Earnings before tax, $m
  1,961
  1,982
  2,059
  2,141
  2,229
  2,322
  2,422
  2,527
  2,639
  2,757
  2,882
  3,081
  3,221
  3,368
  3,523
  3,687
  3,859
  4,041
  4,232
  4,433
  4,645
  4,868
  5,103
  5,349
  5,608
  5,881
  6,167
  6,469
  6,785
  7,118
  7,467
Tax expense, $m
  707
  535
  556
  578
  602
  627
  654
  682
  712
  744
  778
  832
  870
  909
  951
  995
  1,042
  1,091
  1,143
  1,197
  1,254
  1,314
  1,378
  1,444
  1,514
  1,588
  1,665
  1,747
  1,832
  1,922
  2,016
Net income, $m
  1,215
  1,447
  1,503
  1,563
  1,627
  1,695
  1,768
  1,845
  1,926
  2,013
  2,104
  2,249
  2,351
  2,458
  2,572
  2,691
  2,817
  2,950
  3,089
  3,236
  3,391
  3,554
  3,725
  3,905
  4,094
  4,293
  4,502
  4,722
  4,953
  5,196
  5,451

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,205
  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
  6,225
  5,207
  5,407
  5,620
  5,848
  6,090
  6,348
  6,622
  6,911
  7,218
  7,543
  7,886
  8,248
  8,630
  9,033
  9,458
  9,906
  10,377
  10,873
  11,396
  11,946
  12,524
  13,132
  13,772
  14,445
  15,152
  15,896
  16,677
  17,498
  18,361
  19,268
Adjusted assets (=assets-cash), $m
  5,020
  5,207
  5,407
  5,620
  5,848
  6,090
  6,348
  6,622
  6,911
  7,218
  7,543
  7,886
  8,248
  8,630
  9,033
  9,458
  9,906
  10,377
  10,873
  11,396
  11,946
  12,524
  13,132
  13,772
  14,445
  15,152
  15,896
  16,677
  17,498
  18,361
  19,268
Revenue / Adjusted assets
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
  0.841
Average production assets, $m
  612
  635
  659
  685
  713
  743
  774
  807
  843
  880
  920
  962
  1,006
  1,052
  1,102
  1,153
  1,208
  1,265
  1,326
  1,390
  1,457
  1,527
  1,601
  1,679
  1,761
  1,848
  1,938
  2,034
  2,134
  2,239
  2,350
Working capital, $m
  0
  -1,248
  -1,296
  -1,347
  -1,402
  -1,460
  -1,522
  -1,587
  -1,657
  -1,730
  -1,808
  -1,890
  -1,977
  -2,069
  -2,165
  -2,267
  -2,374
  -2,487
  -2,606
  -2,731
  -2,863
  -3,002
  -3,148
  -3,301
  -3,462
  -3,632
  -3,810
  -3,997
  -4,194
  -4,401
  -4,618
Total debt, $m
  0
  44
  92
  144
  199
  258
  320
  386
  457
  531
  609
  692
  780
  872
  970
  1,073
  1,181
  1,295
  1,415
  1,542
  1,675
  1,815
  1,962
  2,117
  2,280
  2,451
  2,631
  2,820
  3,019
  3,227
  3,447
Total liabilities, $m
  1,216
  1,260
  1,308
  1,360
  1,415
  1,474
  1,536
  1,602
  1,673
  1,747
  1,825
  1,908
  1,996
  2,088
  2,186
  2,289
  2,397
  2,511
  2,631
  2,758
  2,891
  3,031
  3,178
  3,333
  3,496
  3,667
  3,847
  4,036
  4,235
  4,443
  4,663
Total equity, $m
  5,009
  3,947
  4,098
  4,260
  4,433
  4,616
  4,812
  5,019
  5,239
  5,472
  5,718
  5,978
  6,252
  6,542
  6,847
  7,169
  7,508
  7,866
  8,242
  8,638
  9,055
  9,493
  9,954
  10,439
  10,949
  11,485
  12,049
  12,641
  13,264
  13,918
  14,605
Total liabilities and equity, $m
  6,225
  5,207
  5,406
  5,620
  5,848
  6,090
  6,348
  6,621
  6,912
  7,219
  7,543
  7,886
  8,248
  8,630
  9,033
  9,458
  9,905
  10,377
  10,873
  11,396
  11,946
  12,524
  13,132
  13,772
  14,445
  15,152
  15,896
  16,677
  17,499
  18,361
  19,268
Debt-to-equity ratio
  0.000
  0.010
  0.020
  0.030
  0.040
  0.060
  0.070
  0.080
  0.090
  0.100
  0.110
  0.120
  0.120
  0.130
  0.140
  0.150
  0.160
  0.160
  0.170
  0.180
  0.180
  0.190
  0.200
  0.200
  0.210
  0.210
  0.220
  0.220
  0.230
  0.230
  0.240
Adjusted equity ratio
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758
  0.758

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,215
  1,447
  1,503
  1,563
  1,627
  1,695
  1,768
  1,845
  1,926
  2,013
  2,104
  2,249
  2,351
  2,458
  2,572
  2,691
  2,817
  2,950
  3,089
  3,236
  3,391
  3,554
  3,725
  3,905
  4,094
  4,293
  4,502
  4,722
  4,953
  5,196
  5,451
Depreciation, amort., depletion, $m
  133
  133
  135
  138
  141
  144
  147
  151
  154
  158
  162
  100
  105
  110
  115
  120
  126
  132
  138
  145
  152
  159
  167
  175
  183
  192
  202
  212
  222
  233
  245
Funds from operations, $m
  174
  1,580
  1,638
  1,701
  1,768
  1,839
  1,915
  1,995
  2,081
  2,171
  2,266
  2,349
  2,456
  2,568
  2,687
  2,811
  2,943
  3,082
  3,228
  3,381
  3,543
  3,713
  3,892
  4,080
  4,278
  4,486
  4,704
  4,934
  5,175
  5,429
  5,696
Change in working capital, $m
  3
  -45
  -48
  -51
  -55
  -58
  -62
  -66
  -69
  -74
  -78
  -82
  -87
  -92
  -97
  -102
  -107
  -113
  -119
  -125
  -132
  -139
  -146
  -153
  -161
  -170
  -178
  -187
  -197
  -207
  -217
Cash from operations, $m
  171
  1,628
  1,686
  1,752
  1,823
  1,897
  1,977
  2,061
  2,150
  2,245
  2,344
  2,431
  2,543
  2,660
  2,783
  2,913
  3,050
  3,195
  3,347
  3,506
  3,675
  3,852
  4,038
  4,233
  4,439
  4,655
  4,882
  5,121
  5,372
  5,636
  5,913
Maintenance CAPEX, $m
  0
  -64
  -66
  -69
  -71
  -74
  -77
  -81
  -84
  -88
  -92
  -96
  -100
  -105
  -110
  -115
  -120
  -126
  -132
  -138
  -145
  -152
  -159
  -167
  -175
  -183
  -192
  -202
  -212
  -222
  -233
New CAPEX, $m
  -148
  -23
  -24
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -40
  -42
  -44
  -47
  -49
  -52
  -55
  -57
  -61
  -64
  -67
  -71
  -74
  -78
  -82
  -86
  -91
  -95
  -100
  -105
  -111
Cash from investing activities, $m
  106
  -87
  -90
  -95
  -99
  -104
  -108
  -114
  -119
  -125
  -132
  -138
  -144
  -152
  -159
  -167
  -175
  -183
  -193
  -202
  -212
  -223
  -233
  -245
  -257
  -269
  -283
  -297
  -312
  -327
  -344
Free cash flow, $m
  277
  1,541
  1,596
  1,657
  1,723
  1,794
  1,868
  1,947
  2,031
  2,119
  2,213
  2,294
  2,398
  2,508
  2,624
  2,747
  2,876
  3,011
  3,154
  3,305
  3,463
  3,629
  3,804
  3,988
  4,182
  4,385
  4,599
  4,824
  5,060
  5,308
  5,569
Issuance/(repayment) of debt, $m
  0
  44
  48
  52
  55
  59
  62
  66
  70
  74
  79
  83
  88
  92
  98
  103
  108
  114
  120
  126
  133
  140
  147
  155
  163
  171
  180
  189
  199
  209
  219
Issuance/(repurchase) of shares, $m
  -551
  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  
  365
  44
  48
  52
  55
  59
  62
  66
  70
  74
  79
  83
  88
  92
  98
  103
  108
  114
  120
  126
  133
  140
  147
  155
  163
  171
  180
  189
  199
  209
  219
Total cash flow (excl. dividends), $m
  639
  1,585
  1,644
  1,709
  1,778
  1,852
  1,930
  2,013
  2,101
  2,194
  2,291
  2,377
  2,486
  2,601
  2,722
  2,850
  2,984
  3,125
  3,274
  3,431
  3,596
  3,769
  3,952
  4,143
  4,345
  4,557
  4,779
  5,013
  5,259
  5,517
  5,789
Retained Cash Flow (-), $m
  -247
  -143
  -151
  -162
  -173
  -184
  -195
  -207
  -220
  -233
  -246
  -260
  -274
  -290
  -305
  -322
  -339
  -357
  -376
  -396
  -417
  -438
  -461
  -485
  -510
  -536
  -564
  -592
  -623
  -654
  -687
Prev. year cash balance distribution, $m
 
  1,205
  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
 
  2,647
  1,493
  1,547
  1,606
  1,668
  1,735
  1,806
  1,881
  1,961
  2,045
  2,117
  2,211
  2,311
  2,416
  2,528
  2,645
  2,768
  2,898
  3,035
  3,179
  3,331
  3,490
  3,658
  3,835
  4,020
  4,216
  4,421
  4,636
  4,863
  5,101
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
 
  2,538
  1,366
  1,347
  1,322
  1,293
  1,259
  1,220
  1,176
  1,126
  1,072
  1,005
  944
  879
  811
  742
  672
  602
  534
  467
  404
  345
  290
  240
  195
  156
  123
  95
  72
  53
  38
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

T. Rowe Price Group, Inc. is a publicly owned investment manager. The firm provides its services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It launches and manages equity and fixed income mutual funds. The firm invests in the public equity and fixed income markets across the globe. It employs fundamental and quantitative analysis with a bottom-up approach. The firm utilizes in-house and external research to make its investments. It employs socially responsible investing with a focus on environmental, social, and governance issues. It makes investment in late-stage venture capital transactions and usually invests between $3 million and $5 million. The firm was previously known as T. Rowe Group, Inc. and T. Rowe Price Associates, Inc. T. Rowe Price Group, Inc. was founded in 1937 and is based in Baltimore, Maryland, with additional offices in Colorado Springs, Colorado; Owings Mills, Maryland; San Francisco, California; Tampa, Florida; Toronto, Ontario; Hellerup, Denmark; Amsterdam, The Netherlands; Luxembourg, Grand Duchy of Luxembourg; Zurich, Switzerland; Dubai, United Arab Emirates; London, United Kingdom; Sydney, New South Wales; Hong Kong; Tokyo, Japan; Singapore; Frankfurt, Germany, Madrid, Spain, Milan, Italy, Stockholm, Sweden, Melbourne, Australia, and Amsterdam, Netherlands.

FINANCIAL RATIOS  of  T. Rowe Price Group (TROW)

Valuation Ratios
P/E Ratio 14.2
Price to Sales 4.1
Price to Book 3.4
Price to Tangible Book
Price to Cash Flow 100.9
Price to Free Cash Flow 750.5
Growth Rates
Sales Growth Rate 0.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -2%
Cap. Spend. - 3 Yr. Gr. Rate 6.9%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 0%
Total Debt to Equity 0%
Interest Coverage 0
Management Effectiveness
Return On Assets 21.4%
Ret/ On Assets - 3 Yr. Avg. 22.4%
Return On Total Capital 24.9%
Ret/ On T. Cap. - 3 Yr. Avg. 24.3%
Return On Equity 24.9%
Return On Equity - 3 Yr. Avg. 24.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 49.6%
EBITDA Margin - 3 Yr. Avg. 51.1%
Operating Margin 41%
Oper. Margin - 3 Yr. Avg. 44.6%
Pre-Tax Margin 46.4%
Pre-Tax Margin - 3 Yr. Avg. 48.1%
Net Profit Margin 28.8%
Net Profit Margin - 3 Yr. Avg. 29.6%
Effective Tax Rate 36.1%
Eff/ Tax Rate - 3 Yr. Avg. 37.9%
Payout Ratio 44.5%

TROW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TROW stock intrinsic value calculation we used $4223 million for the last fiscal year's total revenue generated by T. Rowe Price Group. The default revenue input number comes from 2016 income statement of T. Rowe Price Group. 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 TROW stock valuation model: a) initial revenue growth rate of 3.7% 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 TROW is calculated based on our internal credit rating of T. Rowe Price Group, 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 T. Rowe Price Group.
    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 TROW stock the variable cost ratio is equal to 54.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for TROW 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 T. Rowe Price Group.

Corporate tax rate of 27% is the nominal tax rate for T. Rowe Price Group. 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 TROW 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 TROW are equal to 14.5%.

Life of production assets of 9.6 years is the average useful life of capital assets used in T. Rowe Price Group 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 TROW is equal to -28.5%. 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 - $5009 million for T. Rowe Price Group - 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 241.526 million for T. Rowe Price Group 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 T. Rowe Price Group at the current share price and the inputted number of shares is $17.0 billion.


Premium access subscription - $499/yr

please register and log in before paying
RELATED COMPANIES Price Int.Val. Rating
GROW U.S. Global In 1.31 0.41  str.sell
AEG Aegon ADR 5.11 21.75  str.buy
FII Federated Inve 28.08 114.63  str.buy
FNGN Financial Engi 43.25 6.95  str.sell
VOYA Voya Financial 37.61 3,260.90  str.buy
WDR Waddell&Reed F 17.85 42.63  str.buy
BLK BlackRock 390.71 788.66  str.buy
EV Eaton Vance 43.64 58.91  buy

COMPANY NEWS

▶ Legg Mason: "Positive But Volatile"   [Apr-27-17 12:39PM  Barrons.com]
▶ On eve of Cloudera IPO, analysts offer ways to judge its success   [10:08AM  American City Business Journals]
▶ T. Rowe Price Trades Higher On In-Line Q1 Earnings   [Apr-26-17 03:40PM  Barrons.com]
▶ T. Rowe Price earnings rise but stock falls   [Apr-25-17 11:05AM  American City Business Journals]
▶ T. Rowe Price Group Don't Get No Respect   [09:57AM  Barrons.com]
▶ 3 Dividend Aristocrats We Refuse to Buy   [09:09AM  Motley Fool]
▶ T. Rowe misses 1Q profit forecasts   [07:50AM  Associated Press]
▶ Baltimore's biggest companies report earnings this week. Here's what to look for.   [Apr-24-17 03:15PM  American City Business Journals]
▶ 3 Top Dividend Aristocrats to Buy Now   [Apr-14-17 09:49AM  Motley Fool]
▶ Retirement Withdrawal Strategies That Keep the IRS at Bay   [Apr-11-17 09:34AM  TheStreet.com]
▶ T. Rowe Price: Free to Be Transaction-Fee Free   [Apr-03-17 02:23PM  Barrons.com]
▶ Diamond Hill Sells Morgan Stanley and IBM, Buys Pepsi   [Mar-28-17 04:36PM  GuruFocus.com]
▶ T. Rowe Price: Ready to Rumble?   [Mar-27-17 10:18AM  Barrons.com]
▶ Behind WeWorks Billion Dollar Valuation (RGU, BXP)   [Mar-21-17 01:57PM  Investopedia]
▶ T. Rowe Price CEO takes home $9 million in first year   [Mar-20-17 02:55PM  at bizjournals.com]
▶ A Cut For Coming Fee Cuts: T. Rowe and Franklin   [Mar-17-17 11:40AM  at Barrons.com]
▶ 3 Incredibly Cheap Dividend Stocks   [Mar-11-17 10:15AM  at Motley Fool]
▶ 'Trump effect' rally pumping up many Baltimore-area stocks   [Mar-01-17 02:50PM  at bizjournals.com]
▶ Fidelity, T. Rowe poised for gains on Snap IPO   [Feb-24-17 12:55PM  Reuters]
▶ [$$] Snapchat owner cuts IPO valuation from $25bn to $18.5bn   [Feb-16-17 01:33PM  at Financial Times]
▶ Harvard's Endowment: T. Rowe's Rogers Joins Board   [Feb-14-17 01:57PM  at Barrons.com]
▶ [$$] US small-caps guru Ellenbogen warns over post-election rally   [Feb-09-17 05:54AM  at Financial Times]
▶ 7 Dividend Growth Stocks On Sale   [Feb-08-17 11:07AM  at Insider Monkey]
▶ [$$] T. Rowe Price Profit Climbs   [Jan-26-17 05:24PM  at The Wall Street Journal]
▶ Invesco Drops 1.8%, EPS Beats, Revenue Misses   [12:35PM  at Barrons.com]
▶ Janus Seeks SEC Approval For Clean Shares   [11:11AM  at Barrons.com]
Stock chart of TROW Financial statements of TROW
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.

FREE DOWNLOAD
Follow us on:   twitter   twitter   twitter   twitter

VALUATION THEORY       ASSET ALLOCATION

About X-FIN       Site news       Privacy policy       Terms of use       FAQ

Copyright © X-FIN.com 2005-2017. All rigths reserved.