Intrinsic value of TIM Participacoes ADR - TSU

Previous Close

$17.90

  Intrinsic Value

$18.21

stock screener

  Rating & Target

hold

+2%

  Value-price divergence*

+385%

Previous close

$17.90

 
Intrinsic value

$18.21

 
Up/down potential

+2%

 
Rating

hold

 
Value-price divergence*

+385%

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

We calculate the intrinsic value of TSU 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 8.6

 

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, %
  -8.89
  2.50
  2.75
  2.97
  3.18
  3.36
  3.52
  3.67
  3.80
  3.92
  4.03
  4.13
  4.22
  4.29
  4.36
  4.43
  4.49
  4.54
  4.58
  4.62
  4.66
  4.70
  4.73
  4.75
  4.78
  4.80
  4.82
  4.84
  4.85
  4.87
  4.88
Revenue, $m
  4,938
  5,061
  5,201
  5,355
  5,526
  5,711
  5,912
  6,129
  6,363
  6,612
  6,879
  7,163
  7,465
  7,785
  8,125
  8,485
  8,866
  9,268
  9,692
  10,141
  10,614
  11,112
  11,637
  12,190
  12,773
  13,386
  14,031
  14,710
  15,424
  16,175
  16,965
Variable operating expenses, $m
 
  4,099
  4,210
  4,334
  4,470
  4,618
  4,780
  4,953
  5,140
  5,340
  5,553
  5,732
  5,973
  6,230
  6,502
  6,790
  7,094
  7,416
  7,756
  8,115
  8,493
  8,892
  9,312
  9,755
  10,221
  10,712
  11,228
  11,771
  12,343
  12,944
  13,576
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
  4,488
  4,099
  4,210
  4,334
  4,470
  4,618
  4,780
  4,953
  5,140
  5,340
  5,553
  5,732
  5,973
  6,230
  6,502
  6,790
  7,094
  7,416
  7,756
  8,115
  8,493
  8,892
  9,312
  9,755
  10,221
  10,712
  11,228
  11,771
  12,343
  12,944
  13,576
Operating income, $m
  450
  963
  991
  1,022
  1,056
  1,093
  1,133
  1,176
  1,223
  1,273
  1,326
  1,431
  1,491
  1,555
  1,623
  1,695
  1,771
  1,852
  1,936
  2,026
  2,120
  2,220
  2,325
  2,435
  2,552
  2,674
  2,803
  2,939
  3,081
  3,232
  3,389
EBITDA, $m
  1,647
  1,648
  1,693
  1,744
  1,799
  1,859
  1,925
  1,996
  2,072
  2,153
  2,240
  2,332
  2,430
  2,535
  2,645
  2,763
  2,886
  3,017
  3,156
  3,302
  3,456
  3,618
  3,789
  3,969
  4,159
  4,358
  4,568
  4,789
  5,022
  5,266
  5,524
Interest expense (income), $m
  0
  81
  85
  90
  96
  102
  109
  116
  124
  132
  141
  151
  161
  172
  184
  196
  210
  223
  238
  253
  270
  287
  305
  324
  344
  365
  388
  411
  436
  462
  489
Earnings before tax, $m
  320
  882
  906
  931
  960
  991
  1,024
  1,060
  1,099
  1,140
  1,185
  1,280
  1,330
  1,383
  1,439
  1,499
  1,562
  1,628
  1,698
  1,772
  1,851
  1,933
  2,020
  2,111
  2,207
  2,309
  2,415
  2,528
  2,646
  2,770
  2,900
Tax expense, $m
  83
  238
  245
  252
  259
  268
  277
  286
  297
  308
  320
  346
  359
  373
  389
  405
  422
  440
  459
  479
  500
  522
  545
  570
  596
  623
  652
  682
  714
  748
  783
Net income, $m
  237
  644
  661
  680
  701
  723
  748
  774
  802
  832
  865
  934
  971
  1,010
  1,051
  1,094
  1,140
  1,189
  1,240
  1,294
  1,351
  1,411
  1,474
  1,541
  1,611
  1,685
  1,763
  1,845
  1,931
  2,022
  2,117

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  1,773
  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
  10,957
  9,408
  9,667
  9,954
  10,270
  10,616
  10,990
  11,393
  11,827
  12,291
  12,786
  13,314
  13,875
  14,471
  15,103
  15,771
  16,479
  17,226
  18,016
  18,849
  19,728
  20,654
  21,630
  22,659
  23,741
  24,881
  26,080
  27,342
  28,670
  30,066
  31,534
Adjusted assets (=assets-cash), $m
  9,184
  9,408
  9,667
  9,954
  10,270
  10,616
  10,990
  11,393
  11,827
  12,291
  12,786
  13,314
  13,875
  14,471
  15,103
  15,771
  16,479
  17,226
  18,016
  18,849
  19,728
  20,654
  21,630
  22,659
  23,741
  24,881
  26,080
  27,342
  28,670
  30,066
  31,534
Revenue / Adjusted assets
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
  0.538
Average production assets, $m
  6,211
  6,367
  6,542
  6,737
  6,951
  7,185
  7,438
  7,711
  8,004
  8,318
  8,654
  9,011
  9,391
  9,794
  10,221
  10,674
  11,153
  11,659
  12,193
  12,757
  13,352
  13,979
  14,640
  15,335
  16,068
  16,840
  17,651
  18,505
  19,404
  20,349
  21,342
Working capital, $m
  894
  -496
  -510
  -525
  -542
  -560
  -579
  -601
  -624
  -648
  -674
  -702
  -732
  -763
  -796
  -832
  -869
  -908
  -950
  -994
  -1,040
  -1,089
  -1,140
  -1,195
  -1,252
  -1,312
  -1,375
  -1,442
  -1,512
  -1,585
  -1,663
Total debt, $m
  2,694
  2,430
  2,575
  2,735
  2,912
  3,105
  3,314
  3,540
  3,782
  4,041
  4,318
  4,613
  4,927
  5,260
  5,613
  5,987
  6,383
  6,800
  7,242
  7,708
  8,199
  8,717
  9,262
  9,837
  10,442
  11,080
  11,750
  12,455
  13,197
  13,978
  14,798
Total liabilities, $m
  5,523
  5,259
  5,404
  5,564
  5,741
  5,934
  6,143
  6,369
  6,611
  6,870
  7,147
  7,442
  7,756
  8,089
  8,442
  8,816
  9,212
  9,629
  10,071
  10,537
  11,028
  11,546
  12,091
  12,666
  13,271
  13,909
  14,579
  15,284
  16,026
  16,807
  17,627
Total equity, $m
  5,434
  4,149
  4,263
  4,390
  4,529
  4,681
  4,846
  5,024
  5,215
  5,420
  5,639
  5,871
  6,119
  6,382
  6,660
  6,955
  7,267
  7,597
  7,945
  8,312
  8,700
  9,108
  9,539
  9,992
  10,470
  10,973
  11,501
  12,058
  12,643
  13,259
  13,906
Total liabilities and equity, $m
  10,957
  9,408
  9,667
  9,954
  10,270
  10,615
  10,989
  11,393
  11,826
  12,290
  12,786
  13,313
  13,875
  14,471
  15,102
  15,771
  16,479
  17,226
  18,016
  18,849
  19,728
  20,654
  21,630
  22,658
  23,741
  24,882
  26,080
  27,342
  28,669
  30,066
  31,533
Debt-to-equity ratio
  0.496
  0.590
  0.600
  0.620
  0.640
  0.660
  0.680
  0.700
  0.730
  0.750
  0.770
  0.790
  0.810
  0.820
  0.840
  0.860
  0.880
  0.900
  0.910
  0.930
  0.940
  0.960
  0.970
  0.980
  1.000
  1.010
  1.020
  1.030
  1.040
  1.050
  1.060
Adjusted equity ratio
  0.399
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441
  0.441

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  237
  644
  661
  680
  701
  723
  748
  774
  802
  832
  865
  934
  971
  1,010
  1,051
  1,094
  1,140
  1,189
  1,240
  1,294
  1,351
  1,411
  1,474
  1,541
  1,611
  1,685
  1,763
  1,845
  1,931
  2,022
  2,117
Depreciation, amort., depletion, $m
  1,197
  685
  703
  722
  743
  767
  792
  819
  849
  880
  914
  901
  939
  979
  1,022
  1,067
  1,115
  1,166
  1,219
  1,276
  1,335
  1,398
  1,464
  1,534
  1,607
  1,684
  1,765
  1,851
  1,940
  2,035
  2,134
Funds from operations, $m
  1,162
  1,329
  1,364
  1,402
  1,444
  1,490
  1,540
  1,593
  1,651
  1,713
  1,778
  1,835
  1,910
  1,989
  2,073
  2,161
  2,255
  2,354
  2,459
  2,570
  2,686
  2,809
  2,938
  3,075
  3,218
  3,369
  3,528
  3,696
  3,872
  4,057
  4,251
Change in working capital, $m
  -416
  -12
  -14
  -15
  -17
  -18
  -20
  -21
  -23
  -24
  -26
  -28
  -30
  -31
  -33
  -35
  -37
  -39
  -42
  -44
  -46
  -49
  -51
  -54
  -57
  -60
  -63
  -67
  -70
  -74
  -77
Cash from operations, $m
  1,578
  1,341
  1,377
  1,417
  1,461
  1,508
  1,559
  1,615
  1,674
  1,737
  1,804
  1,863
  1,939
  2,020
  2,106
  2,197
  2,293
  2,394
  2,501
  2,614
  2,732
  2,858
  2,990
  3,129
  3,275
  3,429
  3,592
  3,762
  3,942
  4,130
  4,329
Maintenance CAPEX, $m
  0
  -621
  -637
  -654
  -674
  -695
  -718
  -744
  -771
  -800
  -832
  -865
  -901
  -939
  -979
  -1,022
  -1,067
  -1,115
  -1,166
  -1,219
  -1,276
  -1,335
  -1,398
  -1,464
  -1,534
  -1,607
  -1,684
  -1,765
  -1,851
  -1,940
  -2,035
New CAPEX, $m
  -1,424
  -157
  -175
  -195
  -214
  -234
  -253
  -273
  -293
  -314
  -335
  -357
  -380
  -403
  -427
  -453
  -479
  -506
  -534
  -564
  -595
  -627
  -661
  -696
  -733
  -771
  -812
  -854
  -898
  -945
  -993
Cash from investing activities, $m
  -1,343
  -778
  -812
  -849
  -888
  -929
  -971
  -1,017
  -1,064
  -1,114
  -1,167
  -1,222
  -1,281
  -1,342
  -1,406
  -1,475
  -1,546
  -1,621
  -1,700
  -1,783
  -1,871
  -1,962
  -2,059
  -2,160
  -2,267
  -2,378
  -2,496
  -2,619
  -2,749
  -2,885
  -3,028
Free cash flow, $m
  235
  563
  565
  568
  573
  580
  588
  598
  609
  623
  637
  641
  659
  678
  699
  722
  746
  773
  801
  830
  862
  896
  931
  969
  1,009
  1,051
  1,096
  1,143
  1,193
  1,245
  1,300
Issuance/(repayment) of debt, $m
  -493
  129
  145
  161
  177
  193
  209
  226
  242
  259
  277
  295
  314
  333
  353
  374
  395
  418
  441
  466
  491
  518
  546
  575
  605
  637
  670
  705
  742
  780
  821
Issuance/(repurchase) of shares, $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
Cash from financing (excl. dividends), $m  
  -396
  129
  145
  161
  177
  193
  209
  226
  242
  259
  277
  295
  314
  333
  353
  374
  395
  418
  441
  466
  491
  518
  546
  575
  605
  637
  670
  705
  742
  780
  821
Total cash flow (excl. dividends), $m
  -161
  692
  710
  729
  750
  772
  797
  823
  852
  882
  914
  936
  972
  1,011
  1,052
  1,096
  1,142
  1,190
  1,242
  1,296
  1,353
  1,413
  1,477
  1,544
  1,614
  1,688
  1,766
  1,848
  1,935
  2,025
  2,121
Retained Cash Flow (-), $m
  -193
  -95
  -114
  -127
  -139
  -152
  -165
  -178
  -191
  -205
  -219
  -233
  -248
  -263
  -279
  -295
  -312
  -330
  -348
  -367
  -388
  -409
  -431
  -453
  -477
  -503
  -529
  -556
  -585
  -616
  -647
Prev. year cash balance distribution, $m
 
  1,380
  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
 
  1,978
  596
  602
  610
  620
  632
  645
  661
  677
  696
  703
  725
  748
  774
  801
  830
  861
  894
  929
  966
  1,005
  1,046
  1,090
  1,137
  1,186
  1,237
  1,292
  1,349
  1,410
  1,474
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
 
  1,896
  546
  524
  503
  481
  459
  436
  413
  389
  365
  334
  309
  285
  260
  235
  211
  187
  165
  143
  123
  104
  87
  71
  58
  46
  36
  28
  21
  15
  11
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

TIM Participações S.A., through its subsidiaries, provides mobile telecommunication services in Brazil. The company offers mobile, fixed, and long distance telephony; data transmission; and broadband services. It provides prepaid and post-paid services; and value-added services, including short message services or text messaging, multimedia messaging services, push-mail, video call, WAP downloads, Web browsing, business data solutions, mobile-learning services, wellness services, songs, ringback tones, applications, voicemail, conference calling, chats, and other content. The company also sells various mobile handsets and accessories through its dealer network, which includes its own stores, exclusive franchises, authorized dealers, and department stores; and offers co-billing services to other telecommunication service providers. In addition, it provides products for mobile banking, insurance, mobile payment, and mobile money; and TIM Itaucard, a co-branded credit card. As of December 31, 2015, it served a subscriber base of 66.2 million clients; and had approximately 13,100 points of sales, including 182 company owned stores, as well as had 328,000 points of sale stations for prepaid phone services, including supermarkets, newsstands, and other small retailers as alternative channels to access products and services in Brazil. The company was formerly known as Tele Celular Sul Participações S.A., and changed its name to TIM Participações S.A. in August 2004. The company was founded in 1998 and is headquartered in Rio de Janeiro, Brazil. TIM Participações S.A. is a subsidiary of TIM Brasil Serviços e Participações S.A.

FINANCIAL RATIOS  of  TIM Participacoes ADR (TSU)

Valuation Ratios
P/E Ratio 182.8
Price to Sales 8.8
Price to Book 8
Price to Tangible Book
Price to Cash Flow 27.5
Price to Free Cash Flow 281.3
Growth Rates
Sales Growth Rate -8.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -5.4%
Cap. Spend. - 3 Yr. Gr. Rate 4.8%
Financial Strength
Quick Ratio 5
Current Ratio 0
LT Debt to Equity 42.3%
Total Debt to Equity 49.6%
Interest Coverage 0
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. 4.8%
Return On Total Capital 2.9%
Ret/ On T. Cap. - 3 Yr. Avg. 6.3%
Return On Equity 4.4%
Return On Equity - 3 Yr. Avg. 9.4%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 50.7%
Gross Margin - 3 Yr. Avg. 50.2%
EBITDA Margin 30.7%
EBITDA Margin - 3 Yr. Avg. 32.2%
Operating Margin 9.1%
Oper. Margin - 3 Yr. Avg. 13.6%
Pre-Tax Margin 6.5%
Pre-Tax Margin - 3 Yr. Avg. 11.7%
Net Profit Margin 4.8%
Net Profit Margin - 3 Yr. Avg. 8.3%
Effective Tax Rate 25.9%
Eff/ Tax Rate - 3 Yr. Avg. 28.6%
Payout Ratio 61.6%

TSU stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the TSU stock intrinsic value calculation we used $4938 million for the last fiscal year's total revenue generated by TIM Participacoes ADR. The default revenue input number comes from 2016 income statement of TIM Participacoes 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 TSU stock valuation model: a) initial revenue growth rate of 2.5% 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 TSU is calculated based on our internal credit rating of TIM Participacoes 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 TIM Participacoes 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 TSU stock the variable cost ratio is equal to 81%.

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 TSU 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 TIM Participacoes ADR.

Corporate tax rate of 27% is the nominal tax rate for TIM Participacoes 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 TSU 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 TSU are equal to 125.8%.

Life of production assets of 10 years is the average useful life of capital assets used in TIM Participacoes 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 TSU is equal to -9.8%. 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 - $5434 million for TIM Participacoes 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 481.084 million for TIM Participacoes 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 TIM Participacoes ADR at the current share price and the inputted number of shares is $8.6 billion.

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Stock chart of TSU Financial statements of TSU
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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