Intrinsic value of Wintrust Financial - WTFC

Previous Close

$88.10

  Intrinsic Value

$13.28

stock screener

  Rating & Target

str. sell

-85%

Previous close

$88.10

 
Intrinsic value

$13.28

 
Up/down potential

-85%

 
Rating

str. sell

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

We calculate the intrinsic value of WTFC stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Shares outstanding, mln

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -100.00
  10.70
  10.13
  9.62
  9.16
  8.74
  8.37
  8.03
  7.73
  7.45
  7.21
  6.99
  6.79
  6.61
  6.45
  6.30
  6.17
  6.06
  5.95
  5.86
  5.77
  5.69
  5.62
  5.56
  5.51
  5.45
  5.41
  5.37
  5.33
  5.30
  5.27
Revenue, $m
  0
  1,242
  1,368
  1,499
  1,637
  1,780
  1,929
  2,083
  2,244
  2,412
  2,586
  2,766
  2,954
  3,149
  3,352
  3,564
  3,784
  4,013
  4,252
  4,501
  4,760
  5,031
  5,314
  5,610
  5,919
  6,242
  6,579
  6,932
  7,302
  7,689
  8,094
Variable operating expenses, $m
 
  576
  635
  696
  759
  826
  895
  967
  1,041
  1,119
  1,200
  1,284
  1,371
  1,461
  1,556
  1,654
  1,756
  1,862
  1,973
  2,088
  2,209
  2,335
  2,466
  2,603
  2,746
  2,896
  3,053
  3,217
  3,388
  3,568
  3,756
Fixed operating expenses, $m
 
  223
  228
  233
  238
  243
  248
  254
  259
  265
  271
  277
  283
  289
  296
  302
  309
  316
  323
  330
  337
  344
  352
  360
  368
  376
  384
  392
  401
  410
  419
Total operating expenses, $m
  0
  799
  863
  929
  997
  1,069
  1,143
  1,221
  1,300
  1,384
  1,471
  1,561
  1,654
  1,750
  1,852
  1,956
  2,065
  2,178
  2,296
  2,418
  2,546
  2,679
  2,818
  2,963
  3,114
  3,272
  3,437
  3,609
  3,789
  3,978
  4,175
Operating income, $m
  0
  443
  505
  571
  639
  711
  785
  863
  944
  1,028
  1,115
  1,206
  1,300
  1,399
  1,501
  1,608
  1,719
  1,835
  1,956
  2,083
  2,215
  2,353
  2,497
  2,647
  2,805
  2,970
  3,143
  3,323
  3,513
  3,711
  3,920
EBITDA, $m
  53
  3,409
  3,772
  4,152
  4,548
  4,961
  5,391
  5,839
  6,304
  6,788
  7,290
  7,812
  8,356
  8,920
  9,508
  10,119
  10,756
  11,419
  12,111
  12,832
  13,584
  14,369
  15,189
  16,045
  16,941
  17,877
  18,856
  19,880
  20,952
  22,075
  23,250
Interest expense (income), $m
  91
  1,339
  1,342
  1,470
  1,603
  1,742
  1,887
  2,037
  2,194
  2,357
  2,527
  2,703
  2,885
  3,076
  3,273
  3,479
  3,693
  3,916
  4,148
  4,389
  4,642
  4,904
  5,179
  5,465
  5,765
  6,077
  6,404
  6,746
  7,104
  7,478
  7,870
Earnings before tax, $m
  332
  -896
  -837
  -899
  -963
  -1,031
  -1,101
  -1,174
  -1,251
  -1,330
  -1,412
  -1,497
  -1,585
  -1,677
  -1,772
  -1,871
  -1,974
  -2,080
  -2,191
  -2,307
  -2,427
  -2,552
  -2,682
  -2,818
  -2,960
  -3,107
  -3,262
  -3,423
  -3,591
  -3,766
  -3,950
Tax expense, $m
  125
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  207
  -896
  -837
  -899
  -963
  -1,031
  -1,101
  -1,174
  -1,251
  -1,330
  -1,412
  -1,497
  -1,585
  -1,677
  -1,772
  -1,871
  -1,974
  -2,080
  -2,191
  -2,307
  -2,427
  -2,552
  -2,682
  -2,818
  -2,960
  -3,107
  -3,262
  -3,423
  -3,591
  -3,766
  -3,950

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  25,669
  25,876
  28,497
  31,238
  34,098
  37,078
  40,180
  43,406
  46,760
  50,245
  53,867
  57,631
  61,543
  65,611
  69,842
  74,245
  78,829
  83,603
  88,577
  93,764
  99,174
  104,820
  110,715
  116,872
  123,306
  130,032
  137,066
  144,424
  152,124
  160,184
  168,623
Adjusted assets (=assets-cash), $m
  25,669
  25,876
  28,497
  31,238
  34,098
  37,078
  40,180
  43,406
  46,760
  50,245
  53,867
  57,631
  61,543
  65,611
  69,842
  74,245
  78,829
  83,603
  88,577
  93,764
  99,174
  104,820
  110,715
  116,872
  123,306
  130,032
  137,066
  144,424
  152,124
  160,184
  168,623
Revenue / Adjusted assets
  0.000
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
  0.048
Average production assets, $m
  618
  29,664
  32,669
  35,811
  39,089
  42,506
  46,062
  49,760
  53,605
  57,600
  61,752
  66,067
  70,552
  75,215
  80,066
  85,113
  90,368
  95,841
  101,544
  107,490
  113,692
  120,164
  126,922
  133,980
  141,356
  149,067
  157,130
  165,565
  174,392
  183,632
  193,307
Working capital, $m
  0
  -27,037
  -29,776
  -32,639
  -35,628
  -38,741
  -41,982
  -45,353
  -48,857
  -52,499
  -56,283
  -60,216
  -64,304
  -68,555
  -72,976
  -77,576
  -82,365
  -87,353
  -92,551
  -97,971
  -103,624
  -109,523
  -115,682
  -122,116
  -128,838
  -135,866
  -143,215
  -150,903
  -158,949
  -167,370
  -176,188
Total debt, $m
  655
  24,855
  27,214
  29,681
  32,255
  34,937
  37,728
  40,632
  43,650
  46,787
  50,047
  53,434
  56,955
  60,616
  64,425
  68,387
  72,512
  76,809
  81,286
  85,954
  90,823
  95,905
  101,210
  106,752
  112,542
  118,596
  124,926
  131,548
  138,478
  145,732
  153,327
Total liabilities, $m
  22,973
  23,289
  25,648
  28,114
  30,688
  33,370
  36,162
  39,065
  42,084
  45,220
  48,480
  51,868
  55,389
  59,050
  62,858
  66,820
  70,946
  75,242
  79,720
  84,388
  89,257
  94,338
  99,644
  105,185
  110,976
  117,029
  123,359
  129,982
  136,912
  144,166
  151,761
Total equity, $m
  2,696
  2,588
  2,850
  3,124
  3,410
  3,708
  4,018
  4,341
  4,676
  5,024
  5,387
  5,763
  6,154
  6,561
  6,984
  7,424
  7,883
  8,360
  8,858
  9,376
  9,917
  10,482
  11,072
  11,687
  12,331
  13,003
  13,707
  14,442
  15,212
  16,018
  16,862
Total liabilities and equity, $m
  25,669
  25,877
  28,498
  31,238
  34,098
  37,078
  40,180
  43,406
  46,760
  50,244
  53,867
  57,631
  61,543
  65,611
  69,842
  74,244
  78,829
  83,602
  88,578
  93,764
  99,174
  104,820
  110,716
  116,872
  123,307
  130,032
  137,066
  144,424
  152,124
  160,184
  168,623
Debt-to-equity ratio
  0.243
  9.610
  9.550
  9.500
  9.460
  9.420
  9.390
  9.360
  9.340
  9.310
  9.290
  9.270
  9.250
  9.240
  9.220
  9.210
  9.200
  9.190
  9.180
  9.170
  9.160
  9.150
  9.140
  9.130
  9.130
  9.120
  9.110
  9.110
  9.100
  9.100
  9.090
Adjusted equity ratio
  0.105
  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
  207
  -896
  -837
  -899
  -963
  -1,031
  -1,101
  -1,174
  -1,251
  -1,330
  -1,412
  -1,497
  -1,585
  -1,677
  -1,772
  -1,871
  -1,974
  -2,080
  -2,191
  -2,307
  -2,427
  -2,552
  -2,682
  -2,818
  -2,960
  -3,107
  -3,262
  -3,423
  -3,591
  -3,766
  -3,950
Depreciation, amort., depletion, $m
  53
  2,966
  3,267
  3,581
  3,909
  4,251
  4,606
  4,976
  5,360
  5,760
  6,175
  6,607
  7,055
  7,522
  8,007
  8,511
  9,037
  9,584
  10,154
  10,749
  11,369
  12,016
  12,692
  13,398
  14,136
  14,907
  15,713
  16,557
  17,439
  18,363
  19,331
Funds from operations, $m
  373
  2,071
  2,430
  2,682
  2,946
  3,220
  3,505
  3,802
  4,110
  4,430
  4,764
  5,110
  5,470
  5,845
  6,235
  6,640
  7,063
  7,504
  7,963
  8,442
  8,942
  9,464
  10,010
  10,580
  11,176
  11,799
  12,451
  13,134
  13,849
  14,597
  15,381
Change in working capital, $m
  64
  -2,613
  -2,739
  -2,864
  -2,988
  -3,114
  -3,241
  -3,371
  -3,504
  -3,642
  -3,784
  -3,933
  -4,088
  -4,250
  -4,421
  -4,600
  -4,789
  -4,988
  -5,198
  -5,419
  -5,653
  -5,899
  -6,159
  -6,433
  -6,723
  -7,028
  -7,349
  -7,688
  -8,045
  -8,422
  -8,818
Cash from operations, $m
  309
  4,684
  5,169
  5,546
  5,934
  6,333
  6,746
  7,172
  7,614
  8,072
  8,548
  9,043
  9,558
  10,095
  10,656
  11,241
  11,852
  12,492
  13,161
  13,862
  14,595
  15,364
  16,169
  17,013
  17,899
  18,827
  19,801
  20,822
  21,894
  23,018
  24,199
Maintenance CAPEX, $m
  0
  -2,679
  -2,966
  -3,267
  -3,581
  -3,909
  -4,251
  -4,606
  -4,976
  -5,360
  -5,760
  -6,175
  -6,607
  -7,055
  -7,522
  -8,007
  -8,511
  -9,037
  -9,584
  -10,154
  -10,749
  -11,369
  -12,016
  -12,692
  -13,398
  -14,136
  -14,907
  -15,713
  -16,557
  -17,439
  -18,363
New CAPEX, $m
  -34
  -2,872
  -3,005
  -3,142
  -3,279
  -3,416
  -3,556
  -3,698
  -3,845
  -3,995
  -4,152
  -4,315
  -4,485
  -4,663
  -4,851
  -5,047
  -5,255
  -5,473
  -5,703
  -5,946
  -6,202
  -6,472
  -6,758
  -7,059
  -7,376
  -7,711
  -8,063
  -8,435
  -8,827
  -9,240
  -9,675
Cash from investing activities, $m
  -2,493
  -5,551
  -5,971
  -6,409
  -6,860
  -7,325
  -7,807
  -8,304
  -8,821
  -9,355
  -9,912
  -10,490
  -11,092
  -11,718
  -12,373
  -13,054
  -13,766
  -14,510
  -15,287
  -16,100
  -16,951
  -17,841
  -18,774
  -19,751
  -20,774
  -21,847
  -22,970
  -24,148
  -25,384
  -26,679
  -28,038
Free cash flow, $m
  -2,184
  -867
  -802
  -863
  -926
  -992
  -1,061
  -1,132
  -1,207
  -1,284
  -1,364
  -1,447
  -1,534
  -1,623
  -1,717
  -1,813
  -1,913
  -2,018
  -2,126
  -2,239
  -2,356
  -2,478
  -2,605
  -2,737
  -2,875
  -3,019
  -3,169
  -3,326
  -3,490
  -3,661
  -3,839
Issuance/(repayment) of debt, $m
  -14
  63
  2,359
  2,467
  2,574
  2,682
  2,792
  2,904
  3,018
  3,137
  3,260
  3,388
  3,521
  3,661
  3,808
  3,963
  4,125
  4,297
  4,477
  4,668
  4,869
  5,081
  5,305
  5,541
  5,791
  6,053
  6,330
  6,622
  6,930
  7,254
  7,595
Issuance/(repurchase) of shares, $m
  168
  3,525
  1,099
  1,173
  1,249
  1,329
  1,411
  1,497
  1,586
  1,678
  1,774
  1,873
  1,976
  2,084
  2,195
  2,311
  2,432
  2,558
  2,689
  2,825
  2,968
  3,117
  3,272
  3,434
  3,603
  3,780
  3,965
  4,158
  4,361
  4,572
  4,794
Cash from financing (excl. dividends), $m  
  2,217
  3,588
  3,458
  3,640
  3,823
  4,011
  4,203
  4,401
  4,604
  4,815
  5,034
  5,261
  5,497
  5,745
  6,003
  6,274
  6,557
  6,855
  7,166
  7,493
  7,837
  8,198
  8,577
  8,975
  9,394
  9,833
  10,295
  10,780
  11,291
  11,826
  12,389
Total cash flow (excl. dividends), $m
  33
  2,721
  2,656
  2,777
  2,897
  3,019
  3,143
  3,268
  3,398
  3,531
  3,669
  3,813
  3,964
  4,121
  4,287
  4,461
  4,644
  4,837
  5,040
  5,255
  5,481
  5,720
  5,972
  6,238
  6,518
  6,814
  7,126
  7,455
  7,801
  8,166
  8,550
Retained Cash Flow (-), $m
  -344
  -3,525
  -1,099
  -1,173
  -1,249
  -1,329
  -1,411
  -1,497
  -1,586
  -1,678
  -1,774
  -1,873
  -1,976
  -2,084
  -2,195
  -2,311
  -2,432
  -2,558
  -2,689
  -2,825
  -2,968
  -3,117
  -3,272
  -3,434
  -3,603
  -3,780
  -3,965
  -4,158
  -4,361
  -4,572
  -4,794
Prev. year cash balance distribution, $m
 
  42
  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
 
  12
  14
  15
  16
  18
  20
  21
  23
  25
  27
  28
  30
  32
  35
  37
  39
  42
  44
  47
  50
  52
  55
  58
  62
  65
  69
  72
  76
  80
  85
Cash available for distribution, $m
 
  -762
  1,557
  1,604
  1,648
  1,690
  1,731
  1,771
  1,812
  1,853
  1,896
  1,940
  1,987
  2,038
  2,092
  2,149
  2,212
  2,279
  2,351
  2,429
  2,513
  2,604
  2,700
  2,804
  2,915
  3,034
  3,161
  3,296
  3,440
  3,593
  3,756
Discount rate, %
 
  14.40
  15.12
  15.88
  16.67
  17.50
  18.38
  19.30
  20.26
  21.28
  22.34
  23.46
  24.63
  25.86
  27.15
  28.51
  29.94
  31.43
  33.01
  34.66
  36.39
  38.21
  40.12
  42.12
  44.23
  46.44
  48.76
  51.20
  53.76
  56.45
  59.27
PV of cash for distribution, $m
 
  -666
  1,175
  1,031
  890
  755
  629
  515
  414
  327
  252
  191
  142
  102
  72
  50
  33
  22
  14
  9
  5
  3
  2
  1
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  100
  50.0
  35.1
  24.9
  17.8
  12.8
  9.3
  6.7
  4.9
  3.6
  2.7
  2.0
  1.5
  1.1
  0.8
  0.6
  0.5
  0.4
  0.3
  0.2
  0.2
  0.1
  0.1
  0.1
  0.1
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Wintrust Financial Corporation is a financial holding company. The Company conducts its businesses through three segments: community banking, specialty finance and wealth management. The Company offers community banking services to individuals, small to mid-sized businesses, local governmental units and institutional clients. Through specialty finance segment, the Company offers financing of insurance premiums for businesses and individuals; accounts receivable financing, value-added, out-sourced administrative services, and other specialty finance businesses. The Company offers a range of wealth management services through its subsidiaries, including trust and investment services, asset management and securities brokerage services. The Company offers MaxSafe deposit accounts, which provide customers with expanded Federal Deposit Insurance Corporation (FDIC) insurance coverage by spreading a customer's deposit across its banks.

FINANCIAL RATIOS  of  Wintrust Financial (WTFC)

Valuation Ratios
P/E Ratio 22.1
Price to Sales 0
Price to Book 1.7
Price to Tangible Book
Price to Cash Flow 14.8
Price to Free Cash Flow 16.6
Growth Rates
Sales Growth Rate -100%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -20.9%
Cap. Spend. - 3 Yr. Gr. Rate -2.2%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 24.3%
Total Debt to Equity 24.3%
Interest Coverage 5
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 1%
Return On Total Capital 6.5%
Ret/ On T. Cap. - 3 Yr. Avg. 6%
Return On Equity 8.2%
Return On Equity - 3 Yr. Avg. 7.6%
Asset Turnover 0
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 0%
EBITDA Margin - 3 Yr. Avg. 0%
Operating Margin 0%
Oper. Margin - 3 Yr. Avg. 0%
Pre-Tax Margin 0%
Pre-Tax Margin - 3 Yr. Avg. 0%
Net Profit Margin 0%
Net Profit Margin - 3 Yr. Avg. 0%
Effective Tax Rate 37.7%
Eff/ Tax Rate - 3 Yr. Avg. 38%
Payout Ratio 18.8%

WTFC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the WTFC stock intrinsic value calculation we used $1122 million for the last fiscal year's total revenue generated by Wintrust Financial. The default revenue input number comes from 2016 income statement of Wintrust Financial. 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 WTFC stock valuation model: a) initial revenue growth rate of 10.7% 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 14.4%, whose default value for WTFC is calculated based on our internal credit rating of Wintrust Financial, 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 Wintrust Financial.
    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 WTFC stock the variable cost ratio is equal to 46.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $218 million in the base year in the intrinsic value calculation for WTFC stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for Wintrust Financial.

Corporate tax rate of 27% is the nominal tax rate for Wintrust Financial. 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 WTFC stock is equal to 1.1%.

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 WTFC are equal to 2388.3%.

Life of production assets of 10 years is the average useful life of capital assets used in Wintrust Financial 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 WTFC is equal to -2176.8%. 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 - $0 million for Wintrust Financial - 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 55 million for Wintrust Financial 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 Wintrust Financial at the current share price and the inputted number of shares is $4.8 billion.

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COMPANY NEWS

▶ Wintrust Financial Corporation to Host Earnings Call   [Jul-18-18 09:00AM  ACCESSWIRE]
▶ Wintrust: 2Q Earnings Snapshot   [Jul-17-18 04:48PM  Associated Press]
▶ 3 Bank Stocks to Buy After the Feds Stress Tests   [Jun-22-18 10:45AM  InvestorPlace]
▶ 2 Stocks That May Surge on Bank Takeovers   [May-25-18 06:00AM  Investopedia]
▶ Wintrust Financial Corporation Announces Cash Dividend   [Apr-26-18 04:53PM  GlobeNewswire]
▶ Wintrust Financial Corporation to Host Earnings Call   [Apr-17-18 10:00AM  ACCESSWIRE]
▶ Wintrust: 1Q Earnings Snapshot   [Apr-16-18 06:22PM  Associated Press]
▶ Wintrust tops Street 4Q forecasts   [Jan-22-18 06:07PM  Associated Press]
▶ Wintrust Announces an Increase in Its Minimum Wage   [Jan-19-18 05:11PM  GlobeNewswire]
▶ Stocks Generating Improved Relative Strength: Wintrust Financial   [Jan-11-18 03:00AM  Investor's Business Daily]
▶ Wintrust Financial Shows Rising Price Performance With Jump To 82 RS Rating   [Dec-05-17 03:00AM  Investor's Business Daily]
▶ Wintrust Financial Clears Key Benchmark, Hitting 80-Plus RS Rating   [Nov-30-17 03:00AM  Investor's Business Daily]
▶ [$$] Stop Using Excel, Finance Chiefs Tell Staffs   [09:38AM  The Wall Street Journal]
▶ Wintrust Financial Earns Relative Strength Rating Upgrade   [03:00AM  Investor's Business Daily]
▶ [$$] Stop Using Excel, Finance Chiefs Tell Staffs   [Nov-23-17 11:57PM  The Wall Street Journal]
▶ Wintrust Financial Corporation Announces Cash Dividend   [Oct-26-17 04:26PM  GlobeNewswire]
▶ Wintrust tops 3Q profit forecasts   [Oct-18-17 04:42PM  Associated Press]
▶ 5 Top Bank Stocks to Buy Ahead of Q3 Earnings   [Oct-11-17 09:58AM  Zacks]
▶ Stocks With Rising Relative Strength: Wintrust Financial   [03:00AM  Investor's Business Daily]
Financial statements of WTFC
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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