Intrinsic value of Vantiv - VNTV

Previous Close

$71.71

  Intrinsic Value

$71.45

stock screener

  Rating & Target

hold

-0%

  Value-price divergence*

-16%

Previous close

$71.71

 
Intrinsic value

$71.45

 
Up/down potential

-0%

 
Rating

hold

 
Value-price divergence*

-16%

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

We calculate the intrinsic value of VNTV 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 14.0

 

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, %
  13.26
  13.30
  12.47
  11.72
  11.05
  10.45
  9.90
  9.41
  8.97
  8.57
  8.22
  7.89
  7.60
  7.34
  7.11
  6.90
  6.71
  6.54
  6.38
  6.25
  6.12
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.43
  5.39
Revenue, $m
  3,579
  4,055
  4,561
  5,095
  5,658
  6,249
  6,868
  7,515
  8,189
  8,891
  9,621
  10,381
  11,170
  11,990
  12,843
  13,729
  14,650
  15,608
  16,604
  17,641
  18,721
  19,846
  21,018
  22,241
  23,517
  24,848
  26,239
  27,691
  29,210
  30,797
  32,457
Variable operating expenses, $m
 
  2,700
  2,990
  3,296
  3,619
  3,958
  4,313
  4,684
  5,070
  5,473
  5,892
  5,954
  6,406
  6,877
  7,366
  7,874
  8,402
  8,951
  9,523
  10,118
  10,737
  11,382
  12,055
  12,756
  13,488
  14,251
  15,049
  15,882
  16,753
  17,663
  18,615
Fixed operating expenses, $m
 
  614
  629
  645
  661
  678
  695
  712
  730
  748
  767
  786
  806
  826
  846
  868
  889
  911
  934
  958
  982
  1,006
  1,031
  1,057
  1,083
  1,111
  1,138
  1,167
  1,196
  1,226
  1,256
Total operating expenses, $m
  3,010
  3,314
  3,619
  3,941
  4,280
  4,636
  5,008
  5,396
  5,800
  6,221
  6,659
  6,740
  7,212
  7,703
  8,212
  8,742
  9,291
  9,862
  10,457
  11,076
  11,719
  12,388
  13,086
  13,813
  14,571
  15,362
  16,187
  17,049
  17,949
  18,889
  19,871
Operating income, $m
  569
  741
  942
  1,154
  1,378
  1,614
  1,861
  2,119
  2,388
  2,670
  2,962
  3,641
  3,958
  4,288
  4,631
  4,987
  5,358
  5,745
  6,147
  6,566
  7,002
  7,458
  7,932
  8,428
  8,946
  9,487
  10,052
  10,643
  11,261
  11,908
  12,586
EBITDA, $m
  839
  1,190
  1,400
  1,622
  1,857
  2,103
  2,362
  2,632
  2,914
  3,208
  3,514
  3,833
  4,165
  4,510
  4,868
  5,241
  5,630
  6,034
  6,454
  6,892
  7,349
  7,825
  8,321
  8,840
  9,381
  9,946
  10,537
  11,155
  11,802
  12,478
  13,186
Interest expense (income), $m
  103
  109
  135
  162
  192
  222
  255
  288
  324
  361
  399
  439
  480
  524
  568
  615
  663
  714
  766
  821
  877
  936
  998
  1,062
  1,129
  1,198
  1,271
  1,347
  1,427
  1,510
  1,596
Earnings before tax, $m
  423
  633
  807
  992
  1,187
  1,391
  1,606
  1,830
  2,065
  2,309
  2,563
  3,202
  3,478
  3,764
  4,062
  4,372
  4,695
  5,031
  5,381
  5,745
  6,125
  6,521
  6,935
  7,366
  7,817
  8,288
  8,781
  9,296
  9,834
  10,399
  10,989
Tax expense, $m
  142
  171
  218
  268
  320
  376
  434
  494
  557
  623
  692
  865
  939
  1,016
  1,097
  1,181
  1,268
  1,358
  1,453
  1,551
  1,654
  1,761
  1,872
  1,989
  2,111
  2,238
  2,371
  2,510
  2,655
  2,808
  2,967
Net income, $m
  213
  462
  589
  724
  866
  1,016
  1,172
  1,336
  1,507
  1,686
  1,871
  2,338
  2,539
  2,748
  2,965
  3,192
  3,427
  3,673
  3,928
  4,194
  4,471
  4,761
  5,062
  5,377
  5,706
  6,050
  6,410
  6,786
  7,179
  7,591
  8,022

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  139
  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
  7,044
  7,828
  8,804
  9,837
  10,924
  12,065
  13,259
  14,507
  15,808
  17,163
  18,573
  20,040
  21,564
  23,147
  24,793
  26,503
  28,281
  30,130
  32,054
  34,056
  36,141
  38,312
  40,576
  42,936
  45,399
  47,970
  50,654
  53,458
  56,389
  59,454
  62,659
Adjusted assets (=assets-cash), $m
  6,905
  7,828
  8,804
  9,837
  10,924
  12,065
  13,259
  14,507
  15,808
  17,163
  18,573
  20,040
  21,564
  23,147
  24,793
  26,503
  28,281
  30,130
  32,054
  34,056
  36,141
  38,312
  40,576
  42,936
  45,399
  47,970
  50,654
  53,458
  56,389
  59,454
  62,659
Revenue / Adjusted assets
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
  0.518
Average production assets, $m
  1,154
  1,306
  1,469
  1,641
  1,822
  2,012
  2,212
  2,420
  2,637
  2,863
  3,098
  3,343
  3,597
  3,861
  4,135
  4,421
  4,717
  5,026
  5,346
  5,680
  6,028
  6,390
  6,768
  7,162
  7,572
  8,001
  8,449
  8,917
  9,405
  9,917
  10,451
Working capital, $m
  -401
  -406
  -456
  -510
  -566
  -625
  -687
  -751
  -819
  -889
  -962
  -1,038
  -1,117
  -1,199
  -1,284
  -1,373
  -1,465
  -1,561
  -1,660
  -1,764
  -1,872
  -1,985
  -2,102
  -2,224
  -2,352
  -2,485
  -2,624
  -2,769
  -2,921
  -3,080
  -3,246
Total debt, $m
  3,242
  3,847
  4,637
  5,472
  6,351
  7,274
  8,241
  9,250
  10,303
  11,399
  12,540
  13,726
  14,959
  16,240
  17,571
  18,955
  20,394
  21,890
  23,446
  25,065
  26,752
  28,509
  30,340
  32,250
  34,242
  36,321
  38,493
  40,762
  43,133
  45,612
  48,205
Total liabilities, $m
  5,728
  6,333
  7,123
  7,958
  8,837
  9,760
  10,727
  11,736
  12,789
  13,885
  15,026
  16,212
  17,445
  18,726
  20,057
  21,441
  22,880
  24,376
  25,932
  27,551
  29,238
  30,995
  32,826
  34,736
  36,728
  38,807
  40,979
  43,248
  45,619
  48,098
  50,691
Total equity, $m
  1,316
  1,495
  1,682
  1,879
  2,086
  2,304
  2,532
  2,771
  3,019
  3,278
  3,548
  3,828
  4,119
  4,421
  4,735
  5,062
  5,402
  5,755
  6,122
  6,505
  6,903
  7,318
  7,750
  8,201
  8,671
  9,162
  9,675
  10,211
  10,770
  11,356
  11,968
Total liabilities and equity, $m
  7,044
  7,828
  8,805
  9,837
  10,923
  12,064
  13,259
  14,507
  15,808
  17,163
  18,574
  20,040
  21,564
  23,147
  24,792
  26,503
  28,282
  30,131
  32,054
  34,056
  36,141
  38,313
  40,576
  42,937
  45,399
  47,969
  50,654
  53,459
  56,389
  59,454
  62,659
Debt-to-equity ratio
  2.464
  2.570
  2.760
  2.910
  3.040
  3.160
  3.250
  3.340
  3.410
  3.480
  3.530
  3.590
  3.630
  3.670
  3.710
  3.740
  3.780
  3.800
  3.830
  3.850
  3.880
  3.900
  3.910
  3.930
  3.950
  3.960
  3.980
  3.990
  4.000
  4.020
  4.030
Adjusted equity ratio
  0.170
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191
  0.191

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  213
  462
  589
  724
  866
  1,016
  1,172
  1,336
  1,507
  1,686
  1,871
  2,338
  2,539
  2,748
  2,965
  3,192
  3,427
  3,673
  3,928
  4,194
  4,471
  4,761
  5,062
  5,377
  5,706
  6,050
  6,410
  6,786
  7,179
  7,591
  8,022
Depreciation, amort., depletion, $m
  270
  449
  458
  468
  479
  490
  501
  513
  525
  538
  552
  192
  207
  222
  238
  254
  271
  289
  307
  326
  346
  367
  389
  412
  435
  460
  486
  512
  541
  570
  601
Funds from operations, $m
  634
  911
  1,047
  1,192
  1,345
  1,505
  1,673
  1,849
  2,033
  2,224
  2,423
  2,530
  2,745
  2,970
  3,203
  3,446
  3,698
  3,961
  4,235
  4,520
  4,818
  5,128
  5,451
  5,789
  6,142
  6,510
  6,895
  7,298
  7,720
  8,161
  8,623
Change in working capital, $m
  -35
  -48
  -51
  -53
  -56
  -59
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -82
  -85
  -89
  -92
  -96
  -100
  -104
  -108
  -112
  -117
  -122
  -128
  -133
  -139
  -145
  -152
  -159
  -166
Cash from operations, $m
  669
  959
  1,098
  1,246
  1,401
  1,564
  1,735
  1,914
  2,100
  2,294
  2,496
  2,606
  2,824
  3,052
  3,288
  3,534
  3,791
  4,057
  4,335
  4,624
  4,926
  5,240
  5,569
  5,911
  6,269
  6,643
  7,034
  7,443
  7,872
  8,320
  8,789
Maintenance CAPEX, $m
  0
  -66
  -75
  -84
  -94
  -105
  -116
  -127
  -139
  -152
  -165
  -178
  -192
  -207
  -222
  -238
  -254
  -271
  -289
  -307
  -326
  -346
  -367
  -389
  -412
  -435
  -460
  -486
  -512
  -541
  -570
New CAPEX, $m
  -118
  -152
  -163
  -172
  -181
  -190
  -199
  -208
  -217
  -226
  -235
  -245
  -254
  -264
  -274
  -285
  -297
  -308
  -321
  -334
  -348
  -362
  -378
  -394
  -411
  -429
  -448
  -468
  -489
  -511
  -535
Cash from investing activities, $m
  -570
  -218
  -238
  -256
  -275
  -295
  -315
  -335
  -356
  -378
  -400
  -423
  -446
  -471
  -496
  -523
  -551
  -579
  -610
  -641
  -674
  -708
  -745
  -783
  -823
  -864
  -908
  -954
  -1,001
  -1,052
  -1,105
Free cash flow, $m
  99
  740
  860
  989
  1,125
  1,269
  1,420
  1,579
  1,744
  1,917
  2,097
  2,183
  2,378
  2,581
  2,792
  3,012
  3,240
  3,478
  3,725
  3,983
  4,252
  4,532
  4,824
  5,129
  5,447
  5,779
  6,127
  6,490
  6,870
  7,268
  7,684
Issuance/(repayment) of debt, $m
  149
  744
  790
  835
  879
  923
  966
  1,009
  1,053
  1,096
  1,141
  1,186
  1,233
  1,281
  1,331
  1,384
  1,438
  1,496
  1,556
  1,620
  1,686
  1,757
  1,831
  1,910
  1,992
  2,080
  2,172
  2,269
  2,371
  2,479
  2,593
Issuance/(repurchase) of shares, $m
  -72
  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  
  -156
  744
  790
  835
  879
  923
  966
  1,009
  1,053
  1,096
  1,141
  1,186
  1,233
  1,281
  1,331
  1,384
  1,438
  1,496
  1,556
  1,620
  1,686
  1,757
  1,831
  1,910
  1,992
  2,080
  2,172
  2,269
  2,371
  2,479
  2,593
Total cash flow (excl. dividends), $m
  -58
  1,484
  1,650
  1,824
  2,005
  2,192
  2,387
  2,588
  2,797
  3,013
  3,237
  3,369
  3,611
  3,862
  4,123
  4,395
  4,678
  4,974
  5,281
  5,603
  5,938
  6,289
  6,655
  7,038
  7,439
  7,859
  8,298
  8,759
  9,241
  9,747
  10,277
Retained Cash Flow (-), $m
  -363
  -179
  -186
  -197
  -208
  -218
  -228
  -238
  -249
  -259
  -269
  -280
  -291
  -302
  -314
  -327
  -340
  -353
  -367
  -382
  -398
  -415
  -432
  -451
  -470
  -491
  -513
  -536
  -560
  -585
  -612
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,305
  1,463
  1,627
  1,797
  1,974
  2,159
  2,350
  2,548
  2,754
  2,968
  3,089
  3,320
  3,560
  3,809
  4,069
  4,339
  4,620
  4,914
  5,220
  5,540
  5,874
  6,223
  6,587
  6,969
  7,368
  7,786
  8,223
  8,682
  9,162
  9,665
Discount rate, %
 
  9.40
  9.87
  10.36
  10.88
  11.43
  12.00
  12.60
  13.23
  13.89
  14.58
  15.31
  16.08
  16.88
  17.73
  18.61
  19.54
  20.52
  21.54
  22.62
  23.75
  24.94
  26.19
  27.50
  28.87
  30.32
  31.83
  33.42
  35.09
  36.85
  38.69
PV of cash for distribution, $m
 
  1,193
  1,212
  1,210
  1,189
  1,150
  1,094
  1,024
  943
  854
  761
  645
  555
  469
  388
  314
  249
  194
  147
  108
  78
  55
  37
  25
  16
  10
  6
  3
  2
  1
  1
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

Vantiv, Inc., through its subsidiary, Vantiv Holding, LLC, provides electronic payment processing services to merchants and financial institutions in the United States. It operates in two segments, Merchant Services and Financial Institution Services. The Merchant Services segment offers merchant acquiring and payment processing services, such as authorization and settlement, customer service, chargeback and retrieval processing, and interchange management to merchants, and regional and small-to-mid sized businesses. This segment also provides value-added services, such as omni-channel acceptance, prepaid services, and gift card solutions; security solutions, including point-to-point encryption and tokenization at the point of sale and for e-commerce transactions. The Financial Institution Services segment offers card issuer processing, payment network processing, fraud protection, card production, prepaid program management, automated teller machine driving, portfolio optimization, data analytics, and card program marketing, as well as network gateway and switching services. It also provides statement production, and collections and inbound/outbound call centers for credit transactions, as well as other services, which include credit card portfolio analytics, program strategy and support, fraud and security management, and chargeback and dispute services. This segment serves financial institutions comprising regional banks, community banks, credit unions, and regional personal identification number networks. The company markets its services through various distribution channels, including national, regional, and mid-market sales teams, as well as through third-party reseller clients and telesales operation. Vantiv, Inc. was incorporated in 2009 and is headquartered in Cincinnati, Ohio.

FINANCIAL RATIOS  of  Vantiv (VNTV)

Valuation Ratios
P/E Ratio 66
Price to Sales 3.9
Price to Book 10.7
Price to Tangible Book
Price to Cash Flow 21
Price to Free Cash Flow 25.5
Growth Rates
Sales Growth Rate 13.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 38.8%
Cap. Spend. - 3 Yr. Gr. Rate 13.7%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 235.8%
Total Debt to Equity 246.4%
Interest Coverage 5
Management Effectiveness
Return On Assets 4.2%
Ret/ On Assets - 3 Yr. Avg. 3.6%
Return On Total Capital 5%
Ret/ On T. Cap. - 3 Yr. Avg. 4%
Return On Equity 18.8%
Return On Equity - 3 Yr. Avg. 16.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 53.2%
Gross Margin - 3 Yr. Avg. 53.6%
EBITDA Margin 22.2%
EBITDA Margin - 3 Yr. Avg. 21.6%
Operating Margin 15.9%
Oper. Margin - 3 Yr. Avg. 13.9%
Pre-Tax Margin 11.8%
Pre-Tax Margin - 3 Yr. Avg. 10.1%
Net Profit Margin 6%
Net Profit Margin - 3 Yr. Avg. 5.2%
Effective Tax Rate 33.6%
Eff/ Tax Rate - 3 Yr. Avg. 30.4%
Payout Ratio 0%

VNTV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the VNTV stock intrinsic value calculation we used $3579 million for the last fiscal year's total revenue generated by Vantiv. The default revenue input number comes from 2016 income statement of Vantiv. 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 VNTV stock valuation model: a) initial revenue growth rate of 13.3% 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 9.4%, whose default value for VNTV is calculated based on our internal credit rating of Vantiv, 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 Vantiv.
    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 VNTV stock the variable cost ratio is equal to 67.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $599 million in the base year in the intrinsic value calculation for VNTV 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 Vantiv.

Corporate tax rate of 27% is the nominal tax rate for Vantiv. 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 VNTV 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 VNTV are equal to 32.2%.

Life of production assets of 17.4 years is the average useful life of capital assets used in Vantiv 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 VNTV is equal to -10%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1316 million for Vantiv - 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 194.977 million for Vantiv 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 Vantiv at the current share price and the inputted number of shares is $14.0 billion.

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COMPANY NEWS

▶ Vantiv wins Vendor Award of Excellence at RetailNOW 2017   [Aug-17-17 10:19AM  PR Newswire]
▶ Vantiv-Worldpay Deal an Inversion That Wasn't   [Aug-10-17 03:39PM  TheStreet.com]
▶ Tax-Saving Mergers Go From Hot to Not   [02:36PM  Bloomberg]
▶ Vantiv: Will Worldpay Deal Pay Off?   [11:03AM  Barrons.com]
▶ Vantiv tops Street 2Q forecasts   [Aug-09-17 04:46PM  Associated Press]
▶ Vantiv seals deal to buy British company for $10.4 billion   [09:58AM  American City Business Journals]
▶ Vantiv Seals $12B Worldpay Deal   [07:19AM  Investopedia]
▶ For Worldpay, Everything Must Grow   [07:01AM  Bloomberg]
▶ [$$] Vantiv Seals $10 Billion Worldpay Deal   [04:51AM  The Wall Street Journal]
▶ [$$] Vantiv to Buy Back $1.27 Billion in Shares Held by Fifth Third   [Aug-08-17 01:13PM  The Wall Street Journal]
▶ [$$] Worldpay/Vantiv: marry in haste   [10:36AM  Financial Times]
▶ ETFs with exposure to Vantiv, Inc. : July 25, 2017   [Jul-25-17 02:03PM  Capital Cube]
▶ Vantiv's big acquisition could affect its HQ   [Jul-24-17 05:40PM  American City Business Journals]
▶ Vantiv Deal Renews Interest in Payment Processors   [01:00PM  Zacks Small Cap Research]
▶ Electronic Payment Sector Swipes Ahead Of S&P, Gets Price Hikes   [Jul-18-17 04:25PM  Investor's Business Daily]
▶ ETFs with exposure to Vantiv, Inc. : July 14, 2017   [Jul-14-17 05:30PM  Capital Cube]
▶ [$$] Vantiv Stock Would Reach $100 on Worldpay Deal   [Jul-13-17 03:22PM  Barrons.com]
▶ Vantiv and Worldpay: Cramer's Top Takeaways   [06:37AM  TheStreet.com]
▶ Cramer Remix: This stock is just too sexy to ignore   [Jul-12-17 07:14PM  CNBC Videos]
▶ The Rise and Fall (And Rise and Fall) of Ethereum   [Jul-11-17 10:07AM  InvestorPlace]
▶ Here Are The 5 Stories Europe Was Talking About This Week   [Jul-07-17 09:42PM  TheStreet.com]
▶ [$$] Vantiv Strikes $10 Billion Deal to Buy Worldpay   [12:06AM  The Wall Street Journal]
▶ PRESS DIGEST- Financial Times - July 6   [Jul-05-17 08:22PM  Reuters]
▶ Vantiv makes huge overseas acquisition to combat Amazon   [04:53PM  American City Business Journals]
▶ Payment Processor Worldpay Agrees To Vantiv Acquisition Offer   [04:11PM  Investor's Business Daily]
▶ Why Digital Payments Deals Are on the Rise   [03:49PM  Bloomberg Video]
▶ [$$] Vantiv Strikes $10 Billion Deal to Buy Worldpay   [01:15PM  The Wall Street Journal]
▶ JPMorgan's Welcome Snub   [12:40PM  Bloomberg]
▶ [$$] Payments Business Gets a $10 Billion Jolt   [12:38PM  The Wall Street Journal]
Stock chart of VNTV Financial statements of VNTV
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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