Intrinsic value of AU Optronics ADR - AUO

Previous Close

$4.11

  Intrinsic Value

$7.74

stock screener

  Rating & Target

str. buy

+88%

Previous close

$4.11

 
Intrinsic value

$7.74

 
Up/down potential

+88%

 
Rating

str. buy

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

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 39.6

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  12.50
  11.75
  11.08
  10.47
  9.92
  9.43
  8.99
  8.59
  8.23
  7.91
  7.62
  7.35
  7.12
  6.91
  6.72
  6.54
  6.39
  6.25
  6.13
  6.01
  5.91
  5.82
  5.74
  5.66
  5.60
  5.54
  5.48
  5.44
  5.39
  5.35
Revenue, $m
  12,913
  14,430
  16,028
  17,706
  19,462
  21,297
  23,211
  25,204
  27,278
  29,435
  31,676
  34,006
  36,426
  38,942
  41,557
  44,277
  47,106
  50,051
  53,117
  56,311
  59,640
  63,111
  66,733
  70,513
  74,460
  78,584
  82,894
  87,400
  92,114
  97,045
Variable operating expenses, $m
  3,421
  3,822
  4,245
  4,689
  5,153
  5,638
  6,144
  6,672
  7,220
  7,790
  8,377
  8,993
  9,633
  10,298
  10,990
  11,709
  12,457
  13,236
  14,046
  14,891
  15,771
  16,689
  17,647
  18,647
  19,690
  20,781
  21,921
  23,112
  24,359
  25,663
Fixed operating expenses, $m
  7,433
  7,597
  7,764
  7,934
  8,109
  8,287
  8,470
  8,656
  8,847
  9,041
  9,240
  9,443
  9,651
  9,863
  10,080
  10,302
  10,529
  10,760
  10,997
  11,239
  11,486
  11,739
  11,997
  12,261
  12,531
  12,807
  13,088
  13,376
  13,671
  13,971
Total operating expenses, $m
  10,854
  11,419
  12,009
  12,623
  13,262
  13,925
  14,614
  15,328
  16,067
  16,831
  17,617
  18,436
  19,284
  20,161
  21,070
  22,011
  22,986
  23,996
  25,043
  26,130
  27,257
  28,428
  29,644
  30,908
  32,221
  33,588
  35,009
  36,488
  38,030
  39,634
Operating income, $m
  2,059
  3,011
  4,020
  5,083
  6,200
  7,372
  8,597
  9,877
  11,212
  12,604
  14,060
  15,570
  17,143
  18,781
  20,487
  22,266
  24,120
  26,055
  28,073
  30,181
  32,382
  34,683
  37,088
  39,605
  42,239
  44,997
  47,885
  50,912
  54,084
  57,411
EBITDA, $m
  2,888
  3,937
  5,047
  6,217
  7,446
  8,735
  10,082
  11,489
  12,956
  14,485
  16,078
  17,736
  19,463
  21,261
  23,135
  25,087
  27,121
  29,243
  31,457
  33,768
  36,181
  38,703
  41,339
  44,097
  46,982
  50,002
  53,165
  56,479
  59,952
  63,592
Interest expense (income), $m
  68
  207
  260
  317
  376
  438
  503
  572
  643
  717
  794
  874
  957
  1,043
  1,133
  1,226
  1,323
  1,424
  1,529
  1,639
  1,752
  1,871
  1,995
  2,123
  2,258
  2,398
  2,545
  2,698
  2,858
  3,025
  3,200
Earnings before tax, $m
  1,851
  2,751
  3,703
  4,707
  5,762
  6,868
  8,025
  9,234
  10,495
  11,810
  13,186
  14,613
  16,099
  17,648
  19,261
  20,943
  22,696
  24,525
  26,434
  28,428
  30,511
  32,688
  34,965
  37,347
  39,841
  42,452
  45,187
  48,054
  51,059
  54,211
Tax expense, $m
  500
  743
  1,000
  1,271
  1,556
  1,854
  2,167
  2,493
  2,834
  3,189
  3,560
  3,946
  4,347
  4,765
  5,200
  5,655
  6,128
  6,622
  7,137
  7,676
  8,238
  8,826
  9,441
  10,084
  10,757
  11,462
  12,201
  12,975
  13,786
  14,637
Net income, $m
  1,352
  2,008
  2,703
  3,436
  4,206
  5,014
  5,859
  6,741
  7,662
  8,621
  9,626
  10,668
  11,753
  12,883
  14,061
  15,288
  16,568
  17,903
  19,297
  20,753
  22,273
  23,862
  25,524
  27,263
  29,084
  30,990
  32,987
  35,080
  37,273
  39,574

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
Total assets, $m
  16,283
  18,197
  20,212
  22,328
  24,543
  26,857
  29,270
  31,784
  34,399
  37,118
  39,945
  42,882
  45,935
  49,107
  52,405
  55,835
  59,402
  63,116
  66,982
  71,010
  75,207
  79,585
  84,152
  88,919
  93,897
  99,097
  104,532
  110,215
  116,158
  122,377
Adjusted assets (=assets-cash), $m
  16,283
  18,197
  20,212
  22,328
  24,543
  26,857
  29,270
  31,784
  34,399
  37,118
  39,945
  42,882
  45,935
  49,107
  52,405
  55,835
  59,402
  63,116
  66,982
  71,010
  75,207
  79,585
  84,152
  88,919
  93,897
  99,097
  104,532
  110,215
  116,158
  122,377
Revenue / Adjusted assets
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
  0.793
Average production assets, $m
  8,225
  9,192
  10,210
  11,279
  12,398
  13,566
  14,786
  16,055
  17,376
  18,750
  20,178
  21,662
  23,204
  24,806
  26,472
  28,204
  30,007
  31,882
  33,835
  35,870
  37,990
  40,202
  42,509
  44,917
  47,431
  50,058
  52,804
  55,674
  58,676
  61,817
Working capital, $m
  -1,123
  -1,255
  -1,394
  -1,540
  -1,693
  -1,853
  -2,019
  -2,193
  -2,373
  -2,561
  -2,756
  -2,958
  -3,169
  -3,388
  -3,615
  -3,852
  -4,098
  -4,354
  -4,621
  -4,899
  -5,189
  -5,491
  -5,806
  -6,135
  -6,478
  -6,837
  -7,212
  -7,604
  -8,014
  -8,443
Total debt, $m
  4,822
  5,865
  6,963
  8,117
  9,324
  10,585
  11,900
  13,270
  14,695
  16,177
  17,718
  19,319
  20,982
  22,711
  24,509
  26,378
  28,322
  30,346
  32,453
  34,648
  36,936
  39,322
  41,811
  44,409
  47,122
  49,956
  52,918
  56,015
  59,254
  62,643
Total liabilities, $m
  8,874
  9,917
  11,016
  12,169
  13,376
  14,637
  15,952
  17,322
  18,747
  20,230
  21,770
  23,371
  25,034
  26,763
  28,561
  30,430
  32,374
  34,398
  36,505
  38,700
  40,988
  43,374
  45,863
  48,461
  51,174
  54,008
  56,970
  60,067
  63,306
  66,695
Total equity, $m
  7,409
  8,280
  9,196
  10,159
  11,167
  12,220
  13,318
  14,462
  15,652
  16,889
  18,175
  19,511
  20,900
  22,344
  23,844
  25,405
  27,028
  28,718
  30,477
  32,309
  34,219
  36,211
  38,289
  40,458
  42,723
  45,089
  47,562
  50,148
  52,852
  55,681
Total liabilities and equity, $m
  16,283
  18,197
  20,212
  22,328
  24,543
  26,857
  29,270
  31,784
  34,399
  37,119
  39,945
  42,882
  45,934
  49,107
  52,405
  55,835
  59,402
  63,116
  66,982
  71,009
  75,207
  79,585
  84,152
  88,919
  93,897
  99,097
  104,532
  110,215
  116,158
  122,376
Debt-to-equity ratio
  0.650
  0.710
  0.760
  0.800
  0.830
  0.870
  0.890
  0.920
  0.940
  0.960
  0.970
  0.990
  1.000
  1.020
  1.030
  1.040
  1.050
  1.060
  1.060
  1.070
  1.080
  1.090
  1.090
  1.100
  1.100
  1.110
  1.110
  1.120
  1.120
  1.130
Adjusted equity ratio
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455
  0.455

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,352
  2,008
  2,703
  3,436
  4,206
  5,014
  5,859
  6,741
  7,662
  8,621
  9,626
  10,668
  11,753
  12,883
  14,061
  15,288
  16,568
  17,903
  19,297
  20,753
  22,273
  23,862
  25,524
  27,263
  29,084
  30,990
  32,987
  35,080
  37,273
  39,574
Depreciation, amort., depletion, $m
  829
  926
  1,027
  1,134
  1,246
  1,363
  1,485
  1,612
  1,744
  1,881
  2,018
  2,166
  2,320
  2,481
  2,647
  2,820
  3,001
  3,188
  3,384
  3,587
  3,799
  4,020
  4,251
  4,492
  4,743
  5,006
  5,280
  5,567
  5,868
  6,182
Funds from operations, $m
  2,180
  2,934
  3,730
  4,570
  5,452
  6,377
  7,344
  8,353
  9,406
  10,503
  11,644
  12,834
  14,073
  15,363
  16,708
  18,109
  19,569
  21,092
  22,681
  24,339
  26,072
  27,883
  29,775
  31,755
  33,827
  35,996
  38,267
  40,647
  43,141
  45,756
Change in working capital, $m
  -125
  -132
  -139
  -146
  -153
  -160
  -166
  -173
  -180
  -188
  -195
  -203
  -211
  -219
  -228
  -237
  -246
  -256
  -267
  -278
  -290
  -302
  -315
  -329
  -343
  -359
  -375
  -392
  -410
  -429
Cash from operations, $m
  2,305
  3,066
  3,869
  4,716
  5,605
  6,536
  7,510
  8,526
  9,586
  10,690
  11,839
  13,036
  14,284
  15,582
  16,935
  18,345
  19,815
  21,348
  22,947
  24,617
  26,362
  28,185
  30,090
  32,084
  34,170
  36,355
  38,642
  41,039
  43,551
  46,185
Maintenance CAPEX, $m
  -731
  -823
  -919
  -1,021
  -1,128
  -1,240
  -1,357
  -1,479
  -1,606
  -1,738
  -1,875
  -2,018
  -2,166
  -2,320
  -2,481
  -2,647
  -2,820
  -3,001
  -3,188
  -3,384
  -3,587
  -3,799
  -4,020
  -4,251
  -4,492
  -4,743
  -5,006
  -5,280
  -5,567
  -5,868
New CAPEX, $m
  -918
  -966
  -1,018
  -1,069
  -1,119
  -1,169
  -1,219
  -1,270
  -1,321
  -1,374
  -1,428
  -1,484
  -1,542
  -1,603
  -1,666
  -1,732
  -1,802
  -1,876
  -1,953
  -2,035
  -2,121
  -2,211
  -2,307
  -2,408
  -2,515
  -2,627
  -2,745
  -2,870
  -3,002
  -3,141
Cash from investing activities, $m
  -1,649
  -1,789
  -1,937
  -2,090
  -2,247
  -2,409
  -2,576
  -2,749
  -2,927
  -3,112
  -3,303
  -3,502
  -3,708
  -3,923
  -4,147
  -4,379
  -4,622
  -4,877
  -5,141
  -5,419
  -5,708
  -6,010
  -6,327
  -6,659
  -7,007
  -7,370
  -7,751
  -8,150
  -8,569
  -9,009
Free cash flow, $m
  656
  1,277
  1,932
  2,626
  3,358
  4,128
  4,934
  5,778
  6,659
  7,579
  8,536
  9,535
  10,575
  11,659
  12,789
  13,966
  15,192
  16,472
  17,806
  19,199
  20,654
  22,174
  23,763
  25,425
  27,164
  28,984
  30,891
  32,888
  34,981
  37,176
Issuance/(repayment) of debt, $m
  984
  1,043
  1,098
  1,153
  1,207
  1,261
  1,315
  1,370
  1,425
  1,482
  1,540
  1,601
  1,664
  1,729
  1,797
  1,869
  1,944
  2,024
  2,107
  2,195
  2,288
  2,386
  2,489
  2,598
  2,713
  2,834
  2,962
  3,097
  3,239
  3,389
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
Cash from financing (excl. dividends), $m  
  984
  1,043
  1,098
  1,153
  1,207
  1,261
  1,315
  1,370
  1,425
  1,482
  1,540
  1,601
  1,664
  1,729
  1,797
  1,869
  1,944
  2,024
  2,107
  2,195
  2,288
  2,386
  2,489
  2,598
  2,713
  2,834
  2,962
  3,097
  3,239
  3,389
Total cash flow (excl. dividends), $m
  1,641
  2,319
  3,031
  3,780
  4,566
  5,389
  6,250
  7,148
  8,085
  9,061
  10,076
  11,136
  12,239
  13,388
  14,586
  15,835
  17,137
  18,495
  19,913
  21,394
  22,942
  24,560
  26,252
  28,023
  29,877
  31,819
  33,853
  35,985
  38,220
  40,565
Retained Cash Flow (-), $m
  -821
  -871
  -917
  -963
  -1,008
  -1,053
  -1,098
  -1,144
  -1,190
  -1,237
  -1,286
  -1,337
  -1,389
  -1,443
  -1,501
  -1,560
  -1,623
  -1,689
  -1,759
  -1,833
  -1,910
  -1,992
  -2,078
  -2,169
  -2,265
  -2,366
  -2,473
  -2,586
  -2,704
  -2,829
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
  820
  1,449
  2,114
  2,817
  3,558
  4,336
  5,152
  6,004
  6,895
  7,824
  8,790
  9,799
  10,850
  11,945
  13,086
  14,274
  15,513
  16,806
  18,154
  19,562
  21,032
  22,568
  24,174
  25,854
  27,612
  29,453
  31,380
  33,400
  35,516
  37,736
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
  786
  1,326
  1,839
  2,319
  2,758
  3,147
  3,480
  3,753
  3,961
  4,102
  4,174
  4,182
  4,125
  4,010
  3,842
  3,627
  3,375
  3,095
  2,795
  2,486
  2,175
  1,873
  1,584
  1,317
  1,074
  859
  674
  517
  388
  284
Current shareholders' claim on cash, %
  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

AU Optronics Corp. is a thin-film-transistor liquid-crystal display (TFT-LCD) panel provider. The Company operates in two business segments: display business and solar business. Through Display business segment, the Company designs, develops, manufactures, assembles and markets flat panel displays and most of its products are TFT-LCD panels. Its panels are primarily used in televisions, monitors, mobile personal computers (PCs), mobile devices and commercial and other applications (such as displays for automobiles, industrial PCs, automated teller machines, point of sale terminals and pachinko machines). Through Solar business segment, the Company is capable of manufacturing upstream and midstream products, such as ingots, solar wafers and solar cells. Through the Company's subsidiaries AUO Crystal Corp. and M.Setek Co., Ltd. (M.Setek), it mainly focuses on research, production and sales of solar materials, such as ingots and solar wafers.

FINANCIAL RATIOS  of  AU Optronics ADR (AUO)

Valuation Ratios
P/E Ratio 157.6
Price to Sales 3.7
Price to Book 6.8
Price to Tangible Book
Price to Cash Flow 33.5
Price to Free Cash Flow -129.3
Growth Rates
Sales Growth Rate -8.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 38.2%
Cap. Spend. - 3 Yr. Gr. Rate 12.7%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 58.6%
Total Debt to Equity 68.9%
Interest Coverage 6
Management Effectiveness
Return On Assets 2.1%
Ret/ On Assets - 3 Yr. Avg. 2.6%
Return On Total Capital 2.6%
Ret/ On T. Cap. - 3 Yr. Avg. 3.2%
Return On Equity 4.3%
Return On Equity - 3 Yr. Avg. 6.1%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 10.5%
Gross Margin - 3 Yr. Avg. 11.1%
EBITDA Margin 16.1%
EBITDA Margin - 3 Yr. Avg. 17.3%
Operating Margin 3.4%
Oper. Margin - 3 Yr. Avg. 3.3%
Pre-Tax Margin 3.4%
Pre-Tax Margin - 3 Yr. Avg. 3.5%
Net Profit Margin 2.4%
Net Profit Margin - 3 Yr. Avg. 2.6%
Effective Tax Rate 41.1%
Eff/ Tax Rate - 3 Yr. Avg. 31.1%
Payout Ratio 43%

AUO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the AUO stock intrinsic value calculation we used $11478 million for the last fiscal year's total revenue generated by AU Optronics ADR. The default revenue input number comes from 2017 income statement of AU Optronics 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 AUO stock valuation model: a) initial revenue growth rate of 12.5% 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 AUO is calculated based on our internal credit rating of AU Optronics 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 AU Optronics 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 AUO stock the variable cost ratio is equal to 26.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $7273 million in the base year in the intrinsic value calculation for AUO 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 AU Optronics ADR.

Corporate tax rate of 27% is the nominal tax rate for AU Optronics 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 AUO 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 AUO are equal to 63.7%.

Life of production assets of 10 years is the average useful life of capital assets used in AU Optronics 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 AUO is equal to -8.7%. 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 - $6588 million for AU Optronics 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 9624 million for AU Optronics 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 AU Optronics ADR at the current share price and the inputted number of shares is $39.6 billion.

RELATED COMPANIES Price Int.Val. Rating
LPL LG Display ADR 9.54 6.98  sell

COMPANY NEWS

▶ AU Optronics Corp. Files 2017 Annual Report on Form 20-F   [Mar-29-18 07:11AM  PR Newswire]
▶ AU Optronics posts 4Q profit   [Feb-07-18 05:01AM  Associated Press]
▶ Why AU Optronics Stock Popped 14% This Morning   [Jan-24-18 01:41PM  Motley Fool]
▶ 3 Stocks That Could Put Amazon's Returns to Shame   [Oct-30-17 08:49PM  Motley Fool]
▶ 3 Stocks With Starbucks-Like Return Potential   [Aug-12-17 10:35AM  Motley Fool]
▶ ETFs with exposure to AU Optronics Corp. : August 8, 2017   [Aug-08-17 04:00PM  Capital Cube]
▶ AU Optronics posts 2Q profit   [Jul-26-17 09:54PM  Associated Press]
▶ ETFs with exposure to AU Optronics Corp. : June 28, 2017   [Jun-28-17 02:33PM  Capital Cube]
▶ 3 Great Stocks Under $10   [Jun-19-17 12:04PM  Motley Fool]
▶ Top Ranked Value Stocks to Buy for June 16th   [Jun-16-17 11:46AM  Zacks]
▶ 3 Stocks With Electronic Arts-Like Return Potential   [Jun-08-17 04:17PM  Motley Fool]
▶ Flat Panel Display Stocks: Why It's Time to Sell   [Jun-07-17 09:00PM  Barrons.com]
▶ ETFs with exposure to AU Optronics Corp. : June 5, 2017   [Jun-05-17 02:01PM  Capital Cube]
▶ ETFs with exposure to AU Optronics Corp. : May 25, 2017   [May-25-17 12:35PM  Capital Cube]
▶ 3 Top Stocks Under $5   [May-20-17 09:11AM  Motley Fool]
▶ IIROC Trading Resumption - AUO.P   [May-19-17 04:10PM  PR Newswire]
▶ IIROC Trading Resumption - AUO.P   [04:10PM  CNW Group]
▶ IIROC Trading Halt - AUO.P   [07:52AM  CNW Group]
▶ Top Ranked Value Stocks to Buy for May 9th   [May-09-17 11:04AM  Zacks]
▶ AU Optronics posts 1Q profit   [Apr-27-17 05:00AM  Associated Press]
▶ AU Optronics Corp. Files 2016 Annual Report on Form 20-F   [Mar-30-17 08:59AM  PR Newswire]
▶ Top Ranked Momentum Stocks to Buy for March 1st   [Mar-01-17 10:49AM  Zacks]
▶ AU Optronics posts 4Q profit   [Feb-14-17 05:03AM  AP]
▶ JPMorgan Turns Sour On LCD Display   [Feb-12-17 10:57PM  at Barrons.com]
▶ Is AU Optronics Corp (ADR) (AUO) Going to Burn These Hedge Funds?   [Dec-12-16 11:21AM  at Insider Monkey]
▶ AU Optronics reports 2Q loss   [Jul-27-16 05:03AM  AP]
▶ 10 Fresh Analyst Stocks Under $10 With Massive Upside Calls   [Jul-24-16 10:15AM  at 24/7 Wall St.]
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