Intrinsic value of Cypress Semiconductor - CY

Previous Close

$16.49

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$16.49

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

We calculate the intrinsic value of CY 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 5.5

 

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, %
  21.00
  19.40
  17.96
  16.66
  15.50
  14.45
  13.50
  12.65
  11.89
  11.20
  10.58
  10.02
  9.52
  9.07
  8.66
  8.29
  7.96
  7.67
  7.40
  7.16
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.03
  5.93
  5.84
  5.75
Revenue, $m
  2,817
  3,363
  3,967
  4,629
  5,346
  6,118
  6,944
  7,823
  8,753
  9,733
  10,763
  11,841
  12,969
  14,144
  15,369
  16,644
  17,970
  19,348
  20,780
  22,268
  23,815
  25,422
  27,094
  28,833
  30,642
  32,526
  34,489
  36,534
  38,667
  40,892
Variable operating expenses, $m
  3,828
  4,529
  5,303
  6,151
  7,071
  8,062
  9,121
  10,248
  11,441
  12,698
  13,803
  15,186
  16,631
  18,139
  19,710
  21,345
  23,045
  24,812
  26,649
  28,557
  30,540
  32,602
  34,746
  36,976
  39,297
  41,713
  44,230
  46,853
  49,588
  52,441
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
  3,828
  4,529
  5,303
  6,151
  7,071
  8,062
  9,121
  10,248
  11,441
  12,698
  13,803
  15,186
  16,631
  18,139
  19,710
  21,345
  23,045
  24,812
  26,649
  28,557
  30,540
  32,602
  34,746
  36,976
  39,297
  41,713
  44,230
  46,853
  49,588
  52,441
Operating income, $m
  -1,011
  -1,165
  -1,336
  -1,523
  -1,725
  -1,943
  -2,177
  -2,425
  -2,688
  -2,964
  -3,040
  -3,344
  -3,663
  -3,995
  -4,341
  -4,701
  -5,075
  -5,464
  -5,869
  -6,289
  -6,726
  -7,180
  -7,652
  -8,143
  -8,654
  -9,186
  -9,741
  -10,318
  -10,921
  -11,549
EBITDA, $m
  -488
  -583
  -687
  -802
  -926
  -1,060
  -1,203
  -1,355
  -1,516
  -1,686
  -1,864
  -2,051
  -2,247
  -2,450
  -2,662
  -2,883
  -3,113
  -3,352
  -3,600
  -3,858
  -4,125
  -4,404
  -4,694
  -4,995
  -5,308
  -5,635
  -5,975
  -6,329
  -6,698
  -7,084
Interest expense (income), $m
  33
  72
  98
  128
  160
  196
  234
  276
  321
  368
  418
  471
  527
  585
  645
  709
  775
  844
  915
  989
  1,067
  1,147
  1,230
  1,317
  1,407
  1,501
  1,598
  1,700
  1,806
  1,916
  2,031
Earnings before tax, $m
  -1,083
  -1,264
  -1,464
  -1,683
  -1,921
  -2,178
  -2,453
  -2,746
  -3,056
  -3,383
  -3,511
  -3,871
  -4,247
  -4,640
  -5,050
  -5,476
  -5,919
  -6,380
  -6,858
  -7,356
  -7,873
  -8,410
  -8,969
  -9,550
  -10,155
  -10,785
  -11,441
  -12,124
  -12,837
  -13,580
Tax expense, $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
Net income, $m
  -1,083
  -1,264
  -1,464
  -1,683
  -1,921
  -2,178
  -2,453
  -2,746
  -3,056
  -3,383
  -3,511
  -3,871
  -4,247
  -4,640
  -5,050
  -5,476
  -5,919
  -6,380
  -6,858
  -7,356
  -7,873
  -8,410
  -8,969
  -9,550
  -10,155
  -10,785
  -11,441
  -12,124
  -12,837
  -13,580

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
  4,281
  5,111
  6,030
  7,034
  8,124
  9,298
  10,554
  11,889
  13,302
  14,792
  16,357
  17,996
  19,709
  21,496
  23,358
  25,295
  27,310
  29,404
  31,580
  33,842
  36,192
  38,636
  41,176
  43,819
  46,569
  49,432
  52,415
  55,523
  58,764
  62,146
Adjusted assets (=assets-cash), $m
  4,281
  5,111
  6,030
  7,034
  8,124
  9,298
  10,554
  11,889
  13,302
  14,792
  16,357
  17,996
  19,709
  21,496
  23,358
  25,295
  27,310
  29,404
  31,580
  33,842
  36,192
  38,636
  41,176
  43,819
  46,569
  49,432
  52,415
  55,523
  58,764
  62,146
Revenue / Adjusted assets
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
  0.658
Average production assets, $m
  3,076
  3,673
  4,332
  5,054
  5,838
  6,681
  7,583
  8,543
  9,558
  10,629
  11,753
  12,931
  14,162
  15,446
  16,783
  18,175
  19,623
  21,128
  22,692
  24,317
  26,005
  27,761
  29,586
  31,485
  33,461
  35,519
  37,662
  39,896
  42,224
  44,654
Working capital, $m
  70
  84
  99
  116
  134
  153
  174
  196
  219
  243
  269
  296
  324
  354
  384
  416
  449
  484
  519
  557
  595
  636
  677
  721
  766
  813
  862
  913
  967
  1,022
Total debt, $m
  1,344
  1,748
  2,194
  2,682
  3,212
  3,783
  4,393
  5,042
  5,729
  6,453
  7,213
  8,010
  8,842
  9,711
  10,616
  11,557
  12,536
  13,554
  14,612
  15,711
  16,853
  18,041
  19,275
  20,560
  21,896
  23,288
  24,737
  26,248
  27,823
  29,466
Total liabilities, $m
  2,081
  2,484
  2,930
  3,419
  3,948
  4,519
  5,129
  5,778
  6,465
  7,189
  7,949
  8,746
  9,579
  10,447
  11,352
  12,293
  13,273
  14,290
  15,348
  16,447
  17,589
  18,777
  20,012
  21,296
  22,633
  24,024
  25,474
  26,984
  28,560
  30,203
Total equity, $m
  2,200
  2,627
  3,099
  3,616
  4,176
  4,779
  5,425
  6,111
  6,837
  7,603
  8,407
  9,250
  10,130
  11,049
  12,006
  13,002
  14,037
  15,114
  16,232
  17,395
  18,603
  19,859
  21,164
  22,523
  23,936
  25,408
  26,941
  28,539
  30,205
  31,943
Total liabilities and equity, $m
  4,281
  5,111
  6,029
  7,035
  8,124
  9,298
  10,554
  11,889
  13,302
  14,792
  16,356
  17,996
  19,709
  21,496
  23,358
  25,295
  27,310
  29,404
  31,580
  33,842
  36,192
  38,636
  41,176
  43,819
  46,569
  49,432
  52,415
  55,523
  58,765
  62,146
Debt-to-equity ratio
  0.610
  0.670
  0.710
  0.740
  0.770
  0.790
  0.810
  0.830
  0.840
  0.850
  0.860
  0.870
  0.870
  0.880
  0.880
  0.890
  0.890
  0.900
  0.900
  0.900
  0.910
  0.910
  0.910
  0.910
  0.910
  0.920
  0.920
  0.920
  0.920
  0.920
Adjusted equity ratio
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514
  0.514

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,083
  -1,264
  -1,464
  -1,683
  -1,921
  -2,178
  -2,453
  -2,746
  -3,056
  -3,383
  -3,511
  -3,871
  -4,247
  -4,640
  -5,050
  -5,476
  -5,919
  -6,380
  -6,858
  -7,356
  -7,873
  -8,410
  -8,969
  -9,550
  -10,155
  -10,785
  -11,441
  -12,124
  -12,837
  -13,580
Depreciation, amort., depletion, $m
  523
  583
  649
  721
  799
  884
  974
  1,070
  1,171
  1,278
  1,175
  1,293
  1,416
  1,545
  1,678
  1,818
  1,962
  2,113
  2,269
  2,432
  2,601
  2,776
  2,959
  3,149
  3,346
  3,552
  3,766
  3,990
  4,222
  4,465
Funds from operations, $m
  -560
  -681
  -815
  -962
  -1,122
  -1,294
  -1,479
  -1,676
  -1,884
  -2,104
  -2,336
  -2,578
  -2,831
  -3,096
  -3,371
  -3,658
  -3,957
  -4,267
  -4,589
  -4,924
  -5,272
  -5,634
  -6,010
  -6,402
  -6,809
  -7,233
  -7,675
  -8,135
  -8,614
  -9,115
Change in working capital, $m
  12
  14
  15
  17
  18
  19
  21
  22
  23
  25
  26
  27
  28
  29
  31
  32
  33
  34
  36
  37
  39
  40
  42
  43
  45
  47
  49
  51
  53
  56
Cash from operations, $m
  -572
  -694
  -830
  -979
  -1,140
  -1,314
  -1,500
  -1,698
  -1,908
  -2,129
  -2,361
  -2,605
  -2,859
  -3,125
  -3,402
  -3,690
  -3,990
  -4,301
  -4,625
  -4,961
  -5,311
  -5,674
  -6,052
  -6,445
  -6,854
  -7,280
  -7,724
  -8,186
  -8,668
  -9,170
Maintenance CAPEX, $m
  -254
  -308
  -367
  -433
  -505
  -584
  -668
  -758
  -854
  -956
  -1,063
  -1,175
  -1,293
  -1,416
  -1,545
  -1,678
  -1,818
  -1,962
  -2,113
  -2,269
  -2,432
  -2,601
  -2,776
  -2,959
  -3,149
  -3,346
  -3,552
  -3,766
  -3,990
  -4,222
New CAPEX, $m
  -533
  -597
  -660
  -722
  -783
  -843
  -902
  -959
  -1,016
  -1,070
  -1,124
  -1,178
  -1,231
  -1,284
  -1,338
  -1,392
  -1,448
  -1,505
  -1,564
  -1,625
  -1,689
  -1,756
  -1,825
  -1,899
  -1,976
  -2,057
  -2,143
  -2,234
  -2,329
  -2,429
Cash from investing activities, $m
  -787
  -905
  -1,027
  -1,155
  -1,288
  -1,427
  -1,570
  -1,717
  -1,870
  -2,026
  -2,187
  -2,353
  -2,524
  -2,700
  -2,883
  -3,070
  -3,266
  -3,467
  -3,677
  -3,894
  -4,121
  -4,357
  -4,601
  -4,858
  -5,125
  -5,403
  -5,695
  -6,000
  -6,319
  -6,651
Free cash flow, $m
  -1,360
  -1,599
  -1,857
  -2,134
  -2,429
  -2,741
  -3,070
  -3,416
  -3,777
  -4,155
  -4,549
  -4,958
  -5,383
  -5,825
  -6,284
  -6,760
  -7,255
  -7,768
  -8,302
  -8,856
  -9,431
  -10,030
  -10,654
  -11,303
  -11,979
  -12,684
  -13,419
  -14,186
  -14,986
  -15,822
Issuance/(repayment) of debt, $m
  361
  404
  446
  488
  530
  570
  610
  649
  687
  724
  761
  797
  833
  868
  905
  942
  979
  1,018
  1,058
  1,099
  1,142
  1,187
  1,235
  1,284
  1,337
  1,392
  1,450
  1,511
  1,575
  1,643
Issuance/(repurchase) of shares, $m
  1,466
  1,690
  1,935
  2,199
  2,481
  2,781
  3,098
  3,432
  3,782
  4,148
  4,315
  4,713
  5,128
  5,559
  6,007
  6,472
  6,954
  7,456
  7,977
  8,518
  9,081
  9,666
  10,275
  10,909
  11,569
  12,257
  12,974
  13,722
  14,503
  15,318
Cash from financing (excl. dividends), $m  
  1,827
  2,094
  2,381
  2,687
  3,011
  3,351
  3,708
  4,081
  4,469
  4,872
  5,076
  5,510
  5,961
  6,427
  6,912
  7,414
  7,933
  8,474
  9,035
  9,617
  10,223
  10,853
  11,510
  12,193
  12,906
  13,649
  14,424
  15,233
  16,078
  16,961
Total cash flow (excl. dividends), $m
  467
  495
  525
  554
  583
  611
  638
  665
  692
  717
  527
  552
  577
  602
  627
  653
  679
  705
  733
  762
  792
  823
  856
  890
  926
  965
  1,005
  1,047
  1,092
  1,139
Retained Cash Flow (-), $m
  -1,466
  -1,690
  -1,935
  -2,199
  -2,481
  -2,781
  -3,098
  -3,432
  -3,782
  -4,148
  -4,315
  -4,713
  -5,128
  -5,559
  -6,007
  -6,472
  -6,954
  -7,456
  -7,977
  -8,518
  -9,081
  -9,666
  -10,275
  -10,909
  -11,569
  -12,257
  -12,974
  -13,722
  -14,503
  -15,318
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
  91
  110
  131
  155
  181
  208
  239
  271
  305
  341
  380
  420
  462
  506
  552
  599
  649
  701
  755
  810
  868
  929
  991
  1,057
  1,124
  1,195
  1,269
  1,345
  1,425
  1,508
Cash available for distribution, $m
  -999
  -1,195
  -1,411
  -1,645
  -1,899
  -2,170
  -2,460
  -2,767
  -3,091
  -3,431
  -3,788
  -4,161
  -4,551
  -4,957
  -5,379
  -5,819
  -6,276
  -6,751
  -7,244
  -7,756
  -8,289
  -8,843
  -9,419
  -10,018
  -10,642
  -11,292
  -11,969
  -12,675
  -13,411
  -14,179
Discount rate, %
  4.70
  4.94
  5.18
  5.44
  5.71
  6.00
  6.30
  6.61
  6.94
  7.29
  7.66
  8.04
  8.44
  8.86
  9.31
  9.77
  10.26
  10.77
  11.31
  11.88
  12.47
  13.09
  13.75
  14.44
  15.16
  15.92
  16.71
  17.55
  18.42
  19.35
PV of cash for distribution, $m
  -954
  -1,085
  -1,212
  -1,331
  -1,438
  -1,530
  -1,604
  -1,658
  -1,689
  -1,697
  -1,683
  -1,645
  -1,587
  -1,510
  -1,416
  -1,309
  -1,193
  -1,070
  -946
  -822
  -703
  -590
  -487
  -394
  -312
  -243
  -184
  -137
  -99
  -70
Current shareholders' claim on cash, %
  78.9
  62.9
  50.6
  41.0
  33.4
  27.4
  22.5
  18.6
  15.5
  12.9
  10.8
  9.1
  7.7
  6.5
  5.5
  4.7
  4.0
  3.4
  2.9
  2.5
  2.1
  1.8
  1.5
  1.3
  1.1
  1.0
  0.8
  0.7
  0.6
  0.5

Cypress Semiconductor Corporation manufactures embedded system solutions for automotive, industrial, home automation and appliances, consumer electronics and medical products. The Company's segments include Microcontroller and Connectivity Division (MCD), and Memory Products Division (MPD). MCD focuses on microcontroller (MCU), analog and wireless and wired connectivity solutions. MPD focuses on parallel and serial NOR flash memories, NAND flash memories, static random access memory (SRAM), ferroelectric-random access memory (F-RAM) ferroelectric memory devices and other specialty memories. The Company's products include Traveo MCUs and Flexible MCUs; PSoC 1, PSoC 3, PSoC 4 and PSoC 5LP; CapSense, and TrueTouch Analog Power Management integrated circuits (PMICs) and energy harvesting solutions.

FINANCIAL RATIOS  of  Cypress Semiconductor (CY)

Valuation Ratios
P/E Ratio -7.8
Price to Sales 2.8
Price to Book 2.8
Price to Tangible Book
Price to Cash Flow 24.6
Price to Free Cash Flow 33.3
Growth Rates
Sales Growth Rate 19.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 21.3%
Cap. Spend. - 3 Yr. Gr. Rate 9%
Financial Strength
Quick Ratio 4
Current Ratio 0.1
LT Debt to Equity 63.2%
Total Debt to Equity 64.7%
Interest Coverage -19
Management Effectiveness
Return On Assets -16.6%
Ret/ On Assets - 3 Yr. Avg. -9.9%
Return On Total Capital -21%
Ret/ On T. Cap. - 3 Yr. Avg. -12.2%
Return On Equity -29.7%
Return On Equity - 3 Yr. Avg. -15.4%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 35.6%
Gross Margin - 3 Yr. Avg. 36.9%
EBITDA Margin -19.1%
EBITDA Margin - 3 Yr. Avg. -5.5%
Operating Margin -31.8%
Oper. Margin - 3 Yr. Avg. -16.5%
Pre-Tax Margin -34.7%
Pre-Tax Margin - 3 Yr. Avg. -18%
Net Profit Margin -35.7%
Net Profit Margin - 3 Yr. Avg. -18.9%
Effective Tax Rate -0.3%
Eff/ Tax Rate - 3 Yr. Avg. -5%
Payout Ratio -20.6%

CY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the CY stock intrinsic value calculation we used $2328 million for the last fiscal year's total revenue generated by Cypress Semiconductor. The default revenue input number comes from 2017 income statement of Cypress Semiconductor. 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 CY stock valuation model: a) initial revenue growth rate of 21% 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 4.7%, whose default value for CY is calculated based on our internal credit rating of Cypress Semiconductor, 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 Cypress Semiconductor.
    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 CY stock the variable cost ratio is equal to 137.5%.

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 CY 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 7.3% for Cypress Semiconductor.

Corporate tax rate of 27% is the nominal tax rate for Cypress Semiconductor. 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 CY stock is equal to 3.9%.

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 CY are equal to 109.2%.

Life of production assets of 10 years is the average useful life of capital assets used in Cypress Semiconductor 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 CY is equal to 2.5%. 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 - $1817 million for Cypress Semiconductor - 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 333 million for Cypress Semiconductor 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 Cypress Semiconductor at the current share price and the inputted number of shares is $5.5 billion.

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COMPANY NEWS

▶ Cypress to Announce Second Quarter 2018 Results   [Jul-12-18 08:00AM  Business Wire]
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▶ Time to Get Greedy With Cypress Semiconductor Stock   [Jun-30-18 08:49PM  Motley Fool]
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▶ Cypress Announces Quarterly Cash Dividend   [May-15-18 04:05PM  Business Wire]
▶ Top 10 Stocks Under $20   [11:56AM  Zacks]
▶ Cypress: 1Q Earnings Snapshot   [Apr-26-18 05:59PM  Associated Press]
▶ Cypress Reports First Quarter 2018 Results   [04:05PM  Business Wire]
▶ 4 Oversold Stocks Poised to Soar on Earnings   [Apr-19-18 06:00AM  Investopedia]
▶ Cypress to Announce First Quarter 2018 Results on April 26   [Apr-12-18 08:00AM  Business Wire]
▶ 3 Top Value Stocks to Buy in April   [Apr-02-18 09:03PM  Motley Fool]
▶ Cramer Remix: The one bright spot after a tough week   [Mar-23-18 07:06PM  CNBC Videos]
▶ 9 Takeover Targets Broadcom May Pursue After Qualcomm   [Mar-16-18 02:00PM  Investopedia]
▶ [$$] Buying Oracle, Cypress, Walmart, Shake Shack   [Mar-08-18 01:49PM  Barrons.com]
▶ Harry Boxers four tech stocks to watch   [11:39AM  MarketWatch]
▶ Cypress to Address Two Investor Conferences in March   [Mar-05-18 04:05PM  Business Wire]
▶ 4 Bargain Chip Stocks   [Mar-02-18 11:44AM  Investopedia]
▶ Roku rockets 6% as Silicon Valley stocks shrug off big Dow drop   [Feb-20-18 05:02PM  American City Business Journals]
▶ Why Chip Stocks Are Still Cheap   [01:06PM  Investopedia]
▶ Cypress Announces Quarterly Cash Dividend   [08:00AM  Business Wire]
▶ 3 High-Yield Stocks at Rock-Bottom Prices   [Feb-15-18 05:23PM  Motley Fool]
▶ How Cypress Semiconductor Keeps Beating the Odds   [Feb-12-18 11:05AM  Motley Fool]
▶ 10 Reasons to Buy Cypress Semiconductor Stock Today   [Feb-11-18 10:04AM  Motley Fool]
▶ 3 Top Stocks for Next-Gen Technologies   [Feb-10-18 01:04PM  Motley Fool]
▶ Cramers Exec Cut: Focusing On Fundamentals   [Feb-09-18 07:06PM  CNBC Videos]
▶ So what happens next?   [Feb-05-18 07:53PM  CNBC Videos]
▶ Cypress reports 4Q loss   [05:05PM  Associated Press]
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