Intrinsic value of Colliers International Group Inc. - CIGI

Previous Close

$73.08

  Intrinsic Value

$138.25

stock screener

  Rating & Target

str. buy

+89%

Previous close

$73.08

 
Intrinsic value

$138.25

 
Up/down potential

+89%

 
Rating

str. buy

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

We calculate the intrinsic value of CIGI 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 0001), $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 2.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  16.00
  14.90
  13.91
  13.02
  12.22
  11.50
  10.85
  10.26
  9.74
  9.26
  8.84
  8.45
  8.11
  7.80
  7.52
  7.26
  7.04
  6.83
  6.65
  6.49
  6.34
  6.20
  6.08
  5.97
  5.88
  5.79
  5.71
  5.64
  5.58
  5.52
Revenue, $m
  3,277
  3,765
  4,289
  4,847
  5,440
  6,065
  6,723
  7,413
  8,134
  8,888
  9,673
  10,490
  11,341
  12,225
  13,144
  14,099
  15,091
  16,122
  17,195
  18,310
  19,470
  20,678
  21,936
  23,247
  24,613
  26,038
  27,525
  29,077
  30,698
  32,392
Variable operating expenses, $m
  2,994
  3,438
  3,915
  4,424
  4,963
  5,533
  6,132
  6,760
  7,417
  8,103
  8,809
  9,554
  10,328
  11,133
  11,970
  12,840
  13,743
  14,683
  15,659
  16,675
  17,732
  18,832
  19,977
  21,171
  22,415
  23,713
  25,067
  26,481
  27,957
  29,500
Fixed operating expenses, $m
  45
  46
  47
  48
  49
  50
  51
  52
  54
  55
  56
  57
  58
  60
  61
  62
  64
  65
  67
  68
  69
  71
  73
  74
  76
  77
  79
  81
  83
  85
Total operating expenses, $m
  3,039
  3,484
  3,962
  4,472
  5,012
  5,583
  6,183
  6,812
  7,471
  8,158
  8,865
  9,611
  10,386
  11,193
  12,031
  12,902
  13,807
  14,748
  15,726
  16,743
  17,801
  18,903
  20,050
  21,245
  22,491
  23,790
  25,146
  26,562
  28,040
  29,585
Operating income, $m
  238
  281
  327
  376
  427
  482
  540
  600
  663
  730
  808
  880
  954
  1,032
  1,113
  1,197
  1,284
  1,374
  1,469
  1,567
  1,669
  1,775
  1,886
  2,002
  2,122
  2,248
  2,379
  2,515
  2,658
  2,808
EBITDA, $m
  297
  347
  401
  458
  519
  583
  650
  721
  795
  873
  954
  1,038
  1,125
  1,216
  1,311
  1,409
  1,511
  1,617
  1,728
  1,843
  1,962
  2,087
  2,217
  2,352
  2,493
  2,640
  2,793
  2,954
  3,121
  3,296
Interest expense (income), $m
  8
  36
  53
  72
  92
  113
  135
  158
  183
  209
  236
  265
  294
  325
  357
  391
  425
  461
  499
  537
  578
  620
  664
  709
  757
  806
  857
  911
  967
  1,026
  1,087
Earnings before tax, $m
  202
  228
  255
  284
  315
  347
  381
  417
  454
  493
  543
  585
  629
  675
  722
  771
  823
  876
  931
  989
  1,049
  1,112
  1,177
  1,245
  1,316
  1,390
  1,467
  1,548
  1,633
  1,721
Tax expense, $m
  55
  61
  69
  77
  85
  94
  103
  113
  123
  133
  147
  158
  170
  182
  195
  208
  222
  236
  251
  267
  283
  300
  318
  336
  355
  375
  396
  418
  441
  465
Net income, $m
  147
  166
  186
  207
  230
  253
  278
  304
  332
  360
  396
  427
  459
  492
  527
  563
  601
  639
  680
  722
  766
  812
  859
  909
  961
  1,015
  1,071
  1,130
  1,192
  1,256

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
  2,735
  3,143
  3,580
  4,046
  4,541
  5,063
  5,612
  6,187
  6,790
  7,419
  8,074
  8,757
  9,466
  10,204
  10,971
  11,768
  12,597
  13,458
  14,353
  15,284
  16,252
  17,260
  18,310
  19,405
  20,545
  21,735
  22,976
  24,271
  25,625
  27,039
Adjusted assets (=assets-cash), $m
  2,735
  3,143
  3,580
  4,046
  4,541
  5,063
  5,612
  6,187
  6,790
  7,419
  8,074
  8,757
  9,466
  10,204
  10,971
  11,768
  12,597
  13,458
  14,353
  15,284
  16,252
  17,260
  18,310
  19,405
  20,545
  21,735
  22,976
  24,271
  25,625
  27,039
Revenue / Adjusted assets
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
  1.198
Average production assets, $m
  691
  794
  905
  1,023
  1,148
  1,280
  1,418
  1,564
  1,716
  1,875
  2,041
  2,213
  2,393
  2,579
  2,773
  2,975
  3,184
  3,402
  3,628
  3,863
  4,108
  4,363
  4,628
  4,905
  5,193
  5,494
  5,808
  6,135
  6,477
  6,835
Working capital, $m
  -190
  -218
  -249
  -281
  -315
  -352
  -390
  -430
  -472
  -515
  -561
  -608
  -658
  -709
  -762
  -818
  -875
  -935
  -997
  -1,062
  -1,129
  -1,199
  -1,272
  -1,348
  -1,428
  -1,510
  -1,596
  -1,686
  -1,781
  -1,879
Total debt, $m
  989
  1,330
  1,695
  2,085
  2,498
  2,934
  3,393
  3,875
  4,378
  4,904
  5,452
  6,023
  6,616
  7,233
  7,874
  8,541
  9,233
  9,953
  10,701
  11,479
  12,289
  13,132
  14,010
  14,924
  15,878
  16,872
  17,910
  18,993
  20,124
  21,307
Total liabilities, $m
  2,287
  2,628
  2,993
  3,383
  3,796
  4,232
  4,691
  5,173
  5,676
  6,202
  6,750
  7,320
  7,914
  8,531
  9,172
  9,838
  10,531
  11,251
  11,999
  12,777
  13,587
  14,430
  15,308
  16,222
  17,176
  18,170
  19,208
  20,291
  21,422
  22,604
Total equity, $m
  449
  515
  587
  664
  745
  830
  920
  1,015
  1,114
  1,217
  1,324
  1,436
  1,552
  1,674
  1,799
  1,930
  2,066
  2,207
  2,354
  2,507
  2,665
  2,831
  3,003
  3,182
  3,369
  3,564
  3,768
  3,981
  4,202
  4,434
Total liabilities and equity, $m
  2,736
  3,143
  3,580
  4,047
  4,541
  5,062
  5,611
  6,188
  6,790
  7,419
  8,074
  8,756
  9,466
  10,205
  10,971
  11,768
  12,597
  13,458
  14,353
  15,284
  16,252
  17,261
  18,311
  19,404
  20,545
  21,734
  22,976
  24,272
  25,624
  27,038
Debt-to-equity ratio
  2.200
  2.580
  2.890
  3.140
  3.350
  3.530
  3.690
  3.820
  3.930
  4.030
  4.120
  4.190
  4.260
  4.320
  4.380
  4.430
  4.470
  4.510
  4.550
  4.580
  4.610
  4.640
  4.670
  4.690
  4.710
  4.730
  4.750
  4.770
  4.790
  4.800
Adjusted equity ratio
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164
  0.164

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  147
  166
  186
  207
  230
  253
  278
  304
  332
  360
  396
  427
  459
  492
  527
  563
  601
  639
  680
  722
  766
  812
  859
  909
  961
  1,015
  1,071
  1,130
  1,192
  1,256
Depreciation, amort., depletion, $m
  59
  66
  74
  82
  91
  101
  111
  121
  132
  143
  146
  158
  171
  184
  198
  212
  227
  243
  259
  276
  293
  312
  331
  350
  371
  392
  415
  438
  463
  488
Funds from operations, $m
  206
  232
  260
  290
  321
  354
  389
  425
  464
  503
  542
  585
  630
  677
  725
  776
  828
  882
  939
  998
  1,059
  1,123
  1,190
  1,259
  1,332
  1,407
  1,486
  1,569
  1,655
  1,745
Change in working capital, $m
  -26
  -28
  -30
  -32
  -34
  -36
  -38
  -40
  -42
  -44
  -46
  -47
  -49
  -51
  -53
  -55
  -58
  -60
  -62
  -65
  -67
  -70
  -73
  -76
  -79
  -83
  -86
  -90
  -94
  -98
Cash from operations, $m
  232
  260
  290
  322
  355
  390
  427
  465
  505
  547
  588
  633
  679
  728
  778
  831
  886
  942
  1,001
  1,063
  1,127
  1,193
  1,263
  1,335
  1,411
  1,490
  1,572
  1,659
  1,749
  1,843
Maintenance CAPEX, $m
  -42
  -49
  -57
  -65
  -73
  -82
  -91
  -101
  -112
  -123
  -134
  -146
  -158
  -171
  -184
  -198
  -212
  -227
  -243
  -259
  -276
  -293
  -312
  -331
  -350
  -371
  -392
  -415
  -438
  -463
New CAPEX, $m
  -97
  -103
  -111
  -118
  -125
  -132
  -139
  -146
  -152
  -159
  -166
  -173
  -179
  -187
  -194
  -201
  -209
  -218
  -226
  -235
  -245
  -255
  -265
  -277
  -288
  -301
  -314
  -328
  -342
  -357
Cash from investing activities, $m
  -139
  -152
  -168
  -183
  -198
  -214
  -230
  -247
  -264
  -282
  -300
  -319
  -337
  -358
  -378
  -399
  -421
  -445
  -469
  -494
  -521
  -548
  -577
  -608
  -638
  -672
  -706
  -743
  -780
  -820
Free cash flow, $m
  93
  108
  123
  140
  157
  177
  197
  219
  241
  265
  288
  314
  342
  371
  400
  431
  464
  497
  532
  568
  606
  645
  686
  728
  772
  818
  866
  916
  968
  1,023
Issuance/(repayment) of debt, $m
  317
  341
  365
  390
  413
  436
  459
  481
  504
  526
  548
  571
  593
  617
  641
  666
  692
  720
  748
  778
  810
  843
  878
  915
  953
  994
  1,038
  1,083
  1,131
  1,182
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  
  317
  341
  365
  390
  413
  436
  459
  481
  504
  526
  548
  571
  593
  617
  641
  666
  692
  720
  748
  778
  810
  843
  878
  915
  953
  994
  1,038
  1,083
  1,131
  1,182
Total cash flow (excl. dividends), $m
  410
  449
  489
  529
  571
  613
  656
  700
  745
  791
  836
  885
  935
  988
  1,042
  1,098
  1,156
  1,217
  1,280
  1,346
  1,416
  1,488
  1,564
  1,643
  1,726
  1,813
  1,904
  1,999
  2,100
  2,205
Retained Cash Flow (-), $m
  -61
  -67
  -72
  -76
  -81
  -86
  -90
  -94
  -99
  -103
  -107
  -112
  -116
  -121
  -126
  -131
  -136
  -141
  -147
  -153
  -159
  -165
  -172
  -179
  -187
  -195
  -204
  -213
  -222
  -232
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
  349
  382
  417
  453
  490
  527
  566
  605
  646
  688
  729
  773
  819
  866
  916
  967
  1,020
  1,076
  1,133
  1,194
  1,257
  1,323
  1,391
  1,463
  1,539
  1,618
  1,700
  1,787
  1,878
  1,973
Discount rate, %
  5.80
  6.09
  6.39
  6.71
  7.05
  7.40
  7.77
  8.16
  8.57
  9.00
  9.45
  9.92
  10.42
  10.94
  11.48
  12.06
  12.66
  13.29
  13.96
  14.66
  15.39
  16.16
  16.97
  17.81
  18.71
  19.64
  20.62
  21.65
  22.74
  23.87
PV of cash for distribution, $m
  330
  339
  346
  349
  348
  344
  335
  323
  308
  291
  270
  248
  226
  203
  179
  156
  134
  114
  95
  77
  62
  49
  38
  29
  21
  15
  11
  7
  5
  3
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

Colliers International Group Inc. is engaged in the provision of commercial real estate services. The Company offers services, including outsourcing and advisory services, lease brokerage and sales brokerage. Its segments include Americas; Europe, Middle East and Africa (EMEA); Asia Pacific, and Corporate. It is engaged in the transaction brokerage business, which provides services in sales and leasing for commercial clients. The Sales and Lease Brokerage Division executes transactions across a client base, including corporations, financial institutions, governments and individuals. It provides services for sales, leases and mortgages in various areas, such as landlord representation, tenant representation, and capital markets and investment services. The Outsourcing and Advisory Services Division provides appraisal and valuation services; facility, property and asset management services; project management services, and research for commercial real estate clients.

FINANCIAL RATIOS  of  Colliers International Group Inc. (CIGI)

Valuation Ratios
P/E Ratio 41.5
Price to Sales 1.5
Price to Book 13.7
Price to Tangible Book
Price to Cash Flow 18.1
Price to Free Cash Flow 21.6
Growth Rates
Sales Growth Rate 10.2%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 8.7%
Cap. Spend. - 3 Yr. Gr. Rate -6.5%
Financial Strength
Quick Ratio 57
Current Ratio 0
LT Debt to Equity 126.7%
Total Debt to Equity 127.7%
Interest Coverage 18
Management Effectiveness
Return On Assets 6.4%
Ret/ On Assets - 3 Yr. Avg. 3.9%
Return On Total Capital 15.6%
Ret/ On T. Cap. - 3 Yr. Avg. 9.6%
Return On Equity 39.1%
Return On Equity - 3 Yr. Avg. 23.3%
Asset Turnover 1.7
Profitability Ratios
Gross Margin 37.8%
Gross Margin - 3 Yr. Avg. 39.1%
EBITDA Margin 10.1%
EBITDA Margin - 3 Yr. Avg. 8.1%
Operating Margin 7.7%
Oper. Margin - 3 Yr. Avg. 5.8%
Pre-Tax Margin 7.3%
Pre-Tax Margin - 3 Yr. Avg. 5.4%
Net Profit Margin 3.6%
Net Profit Margin - 3 Yr. Avg. 2.5%
Effective Tax Rate 33.8%
Eff/ Tax Rate - 3 Yr. Avg. 34.4%
Payout Ratio 4.4%

CIGI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CIGI stock intrinsic value calculation we used $2825 million for the last fiscal year's total revenue generated by Colliers International Group Inc.. The default revenue input number comes from 0001 income statement of Colliers International Group Inc.. 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 CIGI stock valuation model: a) initial revenue growth rate of 16% 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 5.8%, whose default value for CIGI is calculated based on our internal credit rating of Colliers International Group Inc., 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 Colliers International Group Inc..
    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 CIGI stock the variable cost ratio is equal to 91.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $44 million in the base year in the intrinsic value calculation for CIGI 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 Colliers International Group Inc..

Corporate tax rate of 27% is the nominal tax rate for Colliers International Group Inc.. 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 CIGI 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 CIGI are equal to 21.1%.

Life of production assets of 14 years is the average useful life of capital assets used in Colliers International Group Inc. 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 CIGI is equal to -5.8%. 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 - $387.553 million for Colliers International Group Inc. - 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 38.060 million for Colliers International Group Inc. 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 Colliers International Group Inc. at the current share price and the inputted number of shares is $2.8 billion.

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