Intrinsic value of Colony NorthStar - CLNS

Previous Close

$6.41

  Intrinsic Value

$109.17

stock screener

  Rating & Target

str. buy

+999%

Previous close

$6.41

 
Intrinsic value

$109.17

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of CLNS 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 3.4

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  4,475
  6,914
  10,340
  15,003
  21,167
  29,100
  39,061
  51,289
  65,997
  83,359
  103,513
  126,555
  152,541
  181,493
  213,404
  248,240
  285,952
  326,478
  369,754
  415,713
  464,296
  515,452
  569,143
  625,344
  684,046
  745,257
  809,004
  875,328
  944,289
  1,015,966
Variable operating expenses, $m
  2,822
  4,359
  6,518
  9,456
  13,341
  18,339
  24,616
  32,322
  41,590
  52,530
  65,228
  79,747
  96,122
  114,367
  134,475
  156,427
  180,190
  205,728
  232,997
  261,958
  292,572
  324,808
  358,641
  394,055
  431,046
  469,618
  509,787
  551,581
  595,036
  640,203
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,822
  4,359
  6,518
  9,456
  13,341
  18,339
  24,616
  32,322
  41,590
  52,530
  65,228
  79,747
  96,122
  114,367
  134,475
  156,427
  180,190
  205,728
  232,997
  261,958
  292,572
  324,808
  358,641
  394,055
  431,046
  469,618
  509,787
  551,581
  595,036
  640,203
Operating income, $m
  1,653
  2,555
  3,822
  5,547
  7,826
  10,760
  14,444
  18,967
  24,407
  30,829
  38,285
  46,807
  56,418
  67,127
  78,929
  91,814
  105,762
  120,751
  136,756
  153,755
  171,724
  190,644
  210,502
  231,288
  253,000
  275,639
  299,216
  323,747
  349,253
  375,763
EBITDA, $m
  4,424
  6,836
  10,223
  14,833
  20,927
  28,770
  38,618
  50,707
  65,248
  82,414
  102,339
  125,119
  150,811
  179,435
  210,984
  245,425
  282,709
  322,775
  365,560
  410,998
  459,030
  509,606
  562,688
  618,251
  676,287
  736,805
  799,828
  865,400
  933,579
  1,004,443
Interest expense (income), $m
  18
  615
  612
  607
  600
  591
  578
  562
  542
  518
  488
  453
  412
  366
  314
  255
  191
  121
  45
  -37
  -124
  -217
  -315
  -418
  -526
  -640
  -758
  -881
  -1,010
  -1,143
  -1,283
Earnings before tax, $m
  1,037
  1,943
  3,215
  4,946
  7,236
  10,182
  13,882
  18,425
  23,889
  30,341
  37,832
  46,395
  56,053
  66,813
  78,674
  91,623
  105,641
  120,706
  136,793
  153,879
  171,941
  190,959
  210,920
  231,815
  253,639
  276,397
  300,098
  324,757
  350,397
  377,046
Tax expense, $m
  280
  525
  868
  1,336
  1,954
  2,749
  3,748
  4,975
  6,450
  8,192
  10,215
  12,527
  15,134
  18,040
  21,242
  24,738
  28,523
  32,591
  36,934
  41,547
  46,424
  51,559
  56,948
  62,590
  68,483
  74,627
  81,026
  87,684
  94,607
  101,802
Net income, $m
  757
  1,418
  2,347
  3,611
  5,282
  7,433
  10,134
  13,450
  17,439
  22,149
  27,617
  33,868
  40,918
  48,774
  57,432
  66,885
  77,118
  88,115
  99,859
  112,332
  125,517
  139,400
  153,972
  169,225
  185,157
  201,770
  219,071
  237,072
  255,789
  275,243

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
  -1,865
  -2,881
  -4,308
  -6,251
  -8,820
  -12,125
  -16,275
  -21,370
  -27,499
  -34,733
  -43,130
  -52,731
  -63,559
  -75,622
  -88,918
  -103,433
  -119,147
  -136,033
  -154,064
  -173,214
  -193,457
  -214,772
  -237,143
  -260,560
  -285,019
  -310,524
  -337,085
  -364,720
  -393,454
  -423,319
Adjusted assets (=assets-cash), $m
  -1,865
  -2,881
  -4,308
  -6,251
  -8,820
  -12,125
  -16,275
  -21,370
  -27,499
  -34,733
  -43,130
  -52,731
  -63,559
  -75,622
  -88,918
  -103,433
  -119,147
  -136,033
  -154,064
  -173,214
  -193,457
  -214,772
  -237,143
  -260,560
  -285,019
  -310,524
  -337,085
  -364,720
  -393,454
  -423,319
Revenue / Adjusted assets
  -2.399
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
  -2.400
Average production assets, $m
  27,693
  42,785
  63,985
  92,839
  130,982
  180,070
  241,707
  317,377
  408,387
  515,826
  640,539
  783,120
  943,923
  1,123,082
  1,320,545
  1,536,110
  1,769,470
  2,020,248
  2,288,036
  2,572,431
  2,873,064
  3,189,619
  3,521,858
  3,869,628
  4,232,876
  4,611,652
  5,006,114
  5,416,527
  5,843,263
  6,286,800
Working capital, $m
  -17,391
  -26,869
  -40,182
  -58,302
  -82,256
  -113,082
  -151,790
  -199,309
  -256,463
  -323,933
  -402,252
  -491,791
  -592,774
  -705,284
  -829,288
  -964,661
  -1,111,209
  -1,268,695
  -1,436,863
  -1,615,460
  -1,804,254
  -2,003,048
  -2,211,690
  -2,430,086
  -2,658,202
  -2,896,070
  -3,143,788
  -3,401,523
  -3,669,509
  -3,948,046
Total debt, $m
  5,186
  5,145
  5,086
  5,007
  4,901
  4,766
  4,596
  4,387
  4,136
  3,839
  3,495
  3,101
  2,657
  2,162
  1,617
  1,022
  378
  -314
  -1,054
  -1,839
  -2,669
  -3,543
  -4,460
  -5,420
  -6,423
  -7,469
  -8,558
  -9,691
  -10,869
  -12,093
Total liabilities, $m
  -76
  -118
  -177
  -256
  -362
  -497
  -667
  -876
  -1,127
  -1,424
  -1,768
  -2,162
  -2,606
  -3,101
  -3,646
  -4,241
  -4,885
  -5,577
  -6,317
  -7,102
  -7,932
  -8,806
  -9,723
  -10,683
  -11,686
  -12,731
  -13,820
  -14,954
  -16,132
  -17,356
Total equity, $m
  -1,788
  -2,763
  -4,132
  -5,995
  -8,458
  -11,628
  -15,608
  -20,494
  -26,371
  -33,309
  -41,362
  -50,569
  -60,953
  -72,522
  -85,273
  -99,193
  -114,262
  -130,455
  -147,747
  -166,112
  -185,525
  -205,966
  -227,420
  -249,877
  -273,333
  -297,792
  -323,264
  -349,766
  -377,322
  -405,963
Total liabilities and equity, $m
  -1,864
  -2,881
  -4,309
  -6,251
  -8,820
  -12,125
  -16,275
  -21,370
  -27,498
  -34,733
  -43,130
  -52,731
  -63,559
  -75,623
  -88,919
  -103,434
  -119,147
  -136,032
  -154,064
  -173,214
  -193,457
  -214,772
  -237,143
  -260,560
  -285,019
  -310,523
  -337,084
  -364,720
  -393,454
  -423,319
Debt-to-equity ratio
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
  0.000
Adjusted equity ratio
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959
  0.959

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  757
  1,418
  2,347
  3,611
  5,282
  7,433
  10,134
  13,450
  17,439
  22,149
  27,617
  33,868
  40,918
  48,774
  57,432
  66,885
  77,118
  88,115
  99,859
  112,332
  125,517
  139,400
  153,972
  169,225
  185,157
  201,770
  219,071
  237,072
  255,789
  275,243
Depreciation, amort., depletion, $m
  2,772
  4,281
  6,401
  9,286
  13,101
  18,009
  24,173
  31,740
  40,841
  51,585
  64,054
  78,312
  94,392
  112,308
  132,054
  153,611
  176,947
  202,025
  228,804
  257,243
  287,306
  318,962
  352,186
  386,963
  423,288
  461,165
  500,611
  541,653
  584,326
  628,680
Funds from operations, $m
  3,529
  5,699
  8,748
  12,897
  18,383
  25,442
  34,307
  45,190
  58,280
  73,734
  91,671
  112,180
  135,311
  161,082
  189,487
  220,496
  254,065
  290,140
  328,663
  369,575
  412,823
  458,362
  506,158
  556,188
  608,444
  662,935
  719,683
  778,725
  840,116
  903,924
Change in working capital, $m
  -6,521
  -9,478
  -13,313
  -18,120
  -23,954
  -30,827
  -38,707
  -47,520
  -57,153
  -67,471
  -78,318
  -89,540
  -100,983
  -112,510
  -124,005
  -135,373
  -146,548
  -157,486
  -168,168
  -178,597
  -188,794
  -198,794
  -208,642
  -218,396
  -228,116
  -237,868
  -247,718
  -257,735
  -267,986
  -278,537
Cash from operations, $m
  10,050
  15,177
  22,061
  31,017
  42,336
  56,269
  73,014
  92,710
  115,434
  141,204
  169,990
  201,720
  236,293
  273,592
  313,491
  355,869
  400,613
  447,626
  496,831
  548,172
  601,617
  657,156
  714,800
  774,583
  836,560
  900,803
  967,401
  1,036,460
  1,108,102
  1,182,460
Maintenance CAPEX, $m
  -1,731
  -2,769
  -4,278
  -6,398
  -9,284
  -13,098
  -18,007
  -24,171
  -31,738
  -40,839
  -51,583
  -64,054
  -78,312
  -94,392
  -112,308
  -132,054
  -153,611
  -176,947
  -202,025
  -228,804
  -257,243
  -287,306
  -318,962
  -352,186
  -386,963
  -423,288
  -461,165
  -500,611
  -541,653
  -584,326
New CAPEX, $m
  -10,387
  -15,092
  -21,200
  -28,854
  -38,143
  -49,088
  -61,637
  -75,670
  -91,010
  -107,439
  -124,713
  -142,581
  -160,803
  -179,159
  -197,463
  -215,566
  -233,360
  -250,777
  -267,788
  -284,396
  -300,633
  -316,555
  -332,238
  -347,770
  -363,248
  -378,776
  -394,462
  -410,413
  -426,736
  -443,537
Cash from investing activities, $m
  -12,118
  -17,861
  -25,478
  -35,252
  -47,427
  -62,186
  -79,644
  -99,841
  -122,748
  -148,278
  -176,296
  -206,635
  -239,115
  -273,551
  -309,771
  -347,620
  -386,971
  -427,724
  -469,813
  -513,200
  -557,876
  -603,861
  -651,200
  -699,956
  -750,211
  -802,064
  -855,627
  -911,024
  -968,389
  -1,027,863
Free cash flow, $m
  -2,067
  -2,685
  -3,417
  -4,235
  -5,091
  -5,917
  -6,629
  -7,130
  -7,314
  -7,073
  -6,306
  -4,915
  -2,822
  41
  3,720
  8,249
  13,642
  19,901
  27,018
  34,973
  43,741
  53,294
  63,599
  74,628
  86,350
  98,739
  111,774
  125,436
  139,713
  154,597
Issuance/(repayment) of debt, $m
  -29
  -42
  -59
  -80
  -105
  -136
  -170
  -209
  -251
  -297
  -344
  -394
  -444
  -495
  -545
  -595
  -644
  -692
  -739
  -785
  -830
  -874
  -917
  -960
  -1,003
  -1,046
  -1,089
  -1,133
  -1,178
  -1,224
Issuance/(repurchase) of shares, $m
  -670
  -975
  -1,369
  -1,863
  -2,463
  -3,170
  -3,980
  -4,886
  -5,877
  -6,938
  -8,053
  -9,207
  -10,384
  -11,569
  -12,751
  -13,920
  -15,069
  -16,194
  -17,292
  -18,365
  -19,413
  -20,441
  -21,454
  -22,457
  -23,456
  -24,459
  -25,472
  -26,502
  -27,556
  -28,641
Cash from financing (excl. dividends), $m  
  -699
  -1,017
  -1,428
  -1,943
  -2,568
  -3,306
  -4,150
  -5,095
  -6,128
  -7,235
  -8,397
  -9,601
  -10,828
  -12,064
  -13,296
  -14,515
  -15,713
  -16,886
  -18,031
  -19,150
  -20,243
  -21,315
  -22,371
  -23,417
  -24,459
  -25,505
  -26,561
  -27,635
  -28,734
  -29,865
Total cash flow (excl. dividends), $m
  -2,766
  -3,701
  -4,845
  -6,178
  -7,659
  -9,222
  -10,780
  -12,225
  -13,442
  -14,308
  -14,703
  -14,516
  -13,649
  -12,023
  -9,576
  -6,267
  -2,072
  3,015
  8,987
  15,824
  23,498
  31,979
  41,228
  51,211
  61,890
  73,234
  85,213
  97,801
  110,979
  124,731
Retained Cash Flow (-), $m
  670
  975
  1,369
  1,863
  2,463
  3,170
  3,980
  4,886
  5,877
  6,938
  8,053
  9,207
  10,384
  11,569
  12,751
  13,920
  15,069
  16,194
  17,292
  18,365
  19,413
  20,441
  21,454
  22,457
  23,456
  24,459
  25,472
  26,502
  27,556
  28,641
Prev. year cash balance distribution, $m
  1,118
  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
  15,727
  17,956
  20,336
  22,864
  25,536
  28,350
  31,303
  34,394
  37,623
  40,989
  44,495
  48,143
  51,936
Cash available for distribution, $m
  670
  975
  1,369
  1,863
  2,463
  3,170
  3,980
  4,886
  5,877
  6,938
  8,053
  9,207
  10,384
  11,569
  12,751
  13,920
  15,069
  19,209
  26,279
  34,188
  42,911
  52,420
  62,682
  73,668
  85,347
  97,693
  110,685
  124,303
  138,535
  153,372
Discount rate, %
  5.60
  5.88
  6.17
  6.48
  6.81
  7.15
  7.50
  7.88
  8.27
  8.69
  9.12
  9.58
  10.06
  10.56
  11.09
  11.64
  12.22
  12.84
  13.48
  14.15
  14.86
  15.60
  16.38
  17.20
  18.06
  18.96
  19.91
  20.91
  21.95
  23.05
PV of cash for distribution, $m
  635
  869
  1,144
  1,449
  1,772
  2,095
  2,398
  2,664
  2,874
  3,016
  3,083
  3,072
  2,988
  2,838
  2,634
  2,390
  2,121
  2,185
  2,379
  2,423
  2,340
  2,159
  1,913
  1,633
  1,345
  1,069
  822
  611
  439
  304
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

Colony NorthStar, Inc. is a diversified equity real estate investment trust (REIT). The Company combines a portfolio of real assets across the world, which are managed with a global real estate investment manager. The Company has property holdings in the healthcare, industrial and hospitality sectors, opportunistic equity and debt investments, and an embedded institutional and retail investment management business. In addition, the Company owns NorthStar Securities, LLC, a captive broker-dealer platform which raises capital in the retail market. The Company acquires, develops and operates industrial properties in metropolitan markets throughout the United States with a focus on light industrial buildings. The Company provides investment management services and offers investment products while serving as a fiduciary to a set of institutional and individual investors.

FINANCIAL RATIOS  of  Colony NorthStar (CLNS)

Valuation Ratios
P/E Ratio 25.5
Price to Sales 2.8
Price to Book 0.4
Price to Tangible Book
Price to Cash Flow 6.3
Price to Free Cash Flow 6.3
Growth Rates
Sales Growth Rate -12.4%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate NaN%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio NaN
LT Debt to Equity 134%
Total Debt to Equity 134%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.1%
Ret/ On Assets - 3 Yr. Avg. 17.2%
Return On Total Capital 1.2%
Ret/ On T. Cap. - 3 Yr. Avg. 22.7%
Return On Equity 2.8%
Return On Equity - 3 Yr. Avg. 27.7%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 94.5%
Gross Margin - 3 Yr. Avg. 75.8%
EBITDA Margin 22.5%
EBITDA Margin - 3 Yr. Avg. 21.4%
Operating Margin 15.2%
Oper. Margin - 3 Yr. Avg. 18.7%
Pre-Tax Margin 15.2%
Pre-Tax Margin - 3 Yr. Avg. 18.7%
Net Profit Margin 11%
Net Profit Margin - 3 Yr. Avg. 15.3%
Effective Tax Rate 19%
Eff/ Tax Rate - 3 Yr. Avg. 14.6%
Payout Ratio 181%

CLNS stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CLNS stock intrinsic value calculation we used $2797 million for the last fiscal year's total revenue generated by Colony NorthStar. The default revenue input number comes from 2017 income statement of Colony NorthStar. 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 CLNS stock valuation model: a) initial revenue growth rate of 60% 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 5.6%, whose default value for CLNS is calculated based on our internal credit rating of Colony NorthStar, 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 Colony NorthStar.
    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 CLNS stock the variable cost ratio is equal to 63.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for CLNS 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 11.8% for Colony NorthStar.

Corporate tax rate of 27% is the nominal tax rate for Colony NorthStar. 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 CLNS stock is equal to 5.5%.

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 CLNS are equal to 618.8%.

Life of production assets of 10 years is the average useful life of capital assets used in Colony NorthStar 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 CLNS is equal to -388.6%. 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 Colony NorthStar - 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 533 million for Colony NorthStar 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 Colony NorthStar at the current share price and the inputted number of shares is $3.4 billion.

RELATED COMPANIES Price Int.Val. Rating
CLNS Colony NorthSt 6.41 109.17  str.buy
GOOD Gladstone Comm 19.78 184.20  str.buy
STAR iStar 10.71 247.06  str.buy
AAT American Asset 37.57 293.29  str.buy
VNO Vornado Realty 72.19 24.92  str.sell
CLI Mack-Cali Real 19.43 15.38  hold
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