Intrinsic value of Dell Technologies Cl V - DVMT

Previous Close

$95.01

  Intrinsic Value

$226.45

stock screener

  Rating & Target

str. buy

+138%

Previous close

$95.01

 
Intrinsic value

$226.45

 
Up/down potential

+138%

 
Rating

str. buy

We calculate the intrinsic value of DVMT 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 2018), $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 73.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   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
   2048

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  27.60
  25.34
  23.31
  21.48
  19.83
  18.35
  17.01
  15.81
  14.73
  13.76
  12.88
  12.09
  11.38
  10.74
  10.17
  9.65
  9.19
  8.77
  8.39
  8.05
  7.75
  7.47
  7.23
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
Revenue, $m
  100,370
  125,804
  155,124
  188,437
  225,800
  267,224
  312,680
  362,113
  415,447
  472,595
  533,466
  597,973
  666,040
  737,603
  812,618
  891,061
  972,931
  1,058,247
  1,147,057
  1,239,429
  1,335,455
  1,435,252
  1,538,957
  1,646,731
  1,758,753
  1,875,226
  1,996,369
  2,122,423
  2,253,648
  2,390,320
Variable operating expenses, $m
  98,990
  122,346
  149,271
  179,864
  214,175
  252,214
  293,958
  339,353
  388,331
  440,810
  489,890
  549,129
  611,635
  677,353
  746,241
  818,277
  893,459
  971,806
  1,053,362
  1,138,188
  1,226,371
  1,318,016
  1,413,250
  1,512,220
  1,615,093
  1,722,051
  1,833,299
  1,949,057
  2,069,563
  2,195,071
Fixed operating expenses, $m
  3,096
  3,164
  3,233
  3,304
  3,377
  3,451
  3,527
  3,605
  3,684
  3,765
  3,848
  3,933
  4,019
  4,108
  4,198
  4,291
  4,385
  4,481
  4,580
  4,681
  4,784
  4,889
  4,997
  5,106
  5,219
  5,334
  5,451
  5,571
  5,693
  5,819
Total operating expenses, $m
  102,086
  125,510
  152,504
  183,168
  217,552
  255,665
  297,485
  342,958
  392,015
  444,575
  493,738
  553,062
  615,654
  681,461
  750,439
  822,568
  897,844
  976,287
  1,057,942
  1,142,869
  1,231,155
  1,322,905
  1,418,247
  1,517,326
  1,620,312
  1,727,385
  1,838,750
  1,954,628
  2,075,256
  2,200,890
Operating income, $m
  -1,716
  294
  2,619
  5,269
  8,248
  11,558
  15,195
  19,155
  23,432
  28,019
  39,727
  44,911
  50,385
  56,142
  62,179
  68,494
  75,087
  81,960
  89,115
  96,560
  104,300
  112,347
  120,710
  129,404
  138,442
  147,841
  157,619
  167,795
  178,392
  189,430
EBITDA, $m
  14,879
  19,366
  24,547
  30,441
  37,060
  44,404
  52,468
  61,243
  70,715
  80,868
  91,687
  103,154
  115,257
  127,984
  141,328
  155,284
  169,851
  185,033
  200,839
  217,280
  234,374
  252,140
  270,605
  289,795
  309,744
  330,488
  352,065
  374,519
  397,897
  422,247
Interest expense (income), $m
  1,575
  2,801
  4,288
  6,210
  8,426
  10,944
  13,768
  16,899
  20,335
  24,071
  28,102
  32,422
  37,022
  41,898
  47,043
  52,452
  58,122
  64,051
  70,239
  76,687
  83,400
  90,381
  97,639
  105,182
  113,021
  121,167
  129,634
  138,437
  147,593
  157,121
  167,039
Earnings before tax, $m
  -4,517
  -3,994
  -3,591
  -3,157
  -2,696
  -2,210
  -1,704
  -1,180
  -639
  -83
  7,305
  7,889
  8,487
  9,099
  9,727
  10,372
  11,036
  11,721
  12,428
  13,160
  13,919
  14,708
  15,528
  16,383
  17,275
  18,207
  19,182
  20,202
  21,271
  22,391
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  1,972
  2,130
  2,291
  2,457
  2,626
  2,801
  2,980
  3,165
  3,356
  3,553
  3,758
  3,971
  4,193
  4,423
  4,664
  4,916
  5,179
  5,455
  5,743
  6,046
Net income, $m
  -4,517
  -3,994
  -3,591
  -3,157
  -2,696
  -2,210
  -1,704
  -1,180
  -639
  -83
  5,333
  5,759
  6,195
  6,642
  7,101
  7,572
  8,057
  8,556
  9,072
  9,607
  10,161
  10,736
  11,335
  11,960
  12,611
  13,291
  14,003
  14,747
  15,528
  16,345

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
  156,097
  195,652
  241,250
  293,060
  351,167
  415,589
  486,283
  563,162
  646,107
  734,984
  829,651
  929,973
  1,035,831
  1,147,127
  1,263,792
  1,385,788
  1,513,111
  1,645,797
  1,783,914
  1,927,572
  2,076,913
  2,232,118
  2,393,401
  2,561,012
  2,735,230
  2,916,370
  3,104,773
  3,300,814
  3,504,896
  3,717,450
Adjusted assets (=assets-cash), $m
  156,097
  195,652
  241,250
  293,060
  351,167
  415,589
  486,283
  563,162
  646,107
  734,984
  829,651
  929,973
  1,035,831
  1,147,127
  1,263,792
  1,385,788
  1,513,111
  1,645,797
  1,783,914
  1,927,572
  2,076,913
  2,232,118
  2,393,401
  2,561,012
  2,735,230
  2,916,370
  3,104,773
  3,300,814
  3,504,896
  3,717,450
Revenue / Adjusted assets
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
  0.643
Average production assets, $m
  97,761
  122,533
  151,091
  183,538
  219,930
  260,276
  304,550
  352,698
  404,645
  460,307
  519,595
  582,426
  648,723
  718,425
  791,490
  867,894
  947,634
  1,030,733
  1,117,233
  1,207,203
  1,300,733
  1,397,935
  1,498,944
  1,603,916
  1,713,025
  1,826,470
  1,944,463
  2,067,240
  2,195,053
  2,328,172
Working capital, $m
  -19,974
  -25,035
  -30,870
  -37,499
  -44,934
  -53,178
  -62,223
  -72,060
  -82,674
  -94,046
  -106,160
  -118,997
  -132,542
  -146,783
  -161,711
  -177,321
  -193,613
  -210,591
  -228,264
  -246,646
  -265,756
  -285,615
  -306,252
  -327,699
  -349,992
  -373,170
  -397,277
  -422,362
  -448,476
  -475,674
Total debt, $m
  79,403
  115,002
  156,041
  202,670
  254,966
  312,946
  376,571
  445,762
  520,413
  600,402
  685,602
  775,892
  871,164
  971,331
  1,076,329
  1,186,125
  1,300,716
  1,420,133
  1,544,439
  1,673,730
  1,808,138
  1,947,822
  2,092,977
  2,243,827
  2,400,623
  2,563,649
  2,733,212
  2,909,649
  3,093,322
  3,284,621
Total liabilities, $m
  140,487
  176,086
  217,125
  263,754
  316,050
  374,030
  437,655
  506,846
  581,497
  661,486
  746,686
  836,976
  932,248
  1,032,415
  1,137,413
  1,247,209
  1,361,800
  1,481,217
  1,605,523
  1,734,814
  1,869,222
  2,008,906
  2,154,061
  2,304,911
  2,461,707
  2,624,733
  2,794,296
  2,970,733
  3,154,406
  3,345,705
Total equity, $m
  15,610
  19,565
  24,125
  29,306
  35,117
  41,559
  48,628
  56,316
  64,611
  73,498
  82,965
  92,997
  103,583
  114,713
  126,379
  138,579
  151,311
  164,580
  178,391
  192,757
  207,691
  223,212
  239,340
  256,101
  273,523
  291,637
  310,477
  330,081
  350,490
  371,745
Total liabilities and equity, $m
  156,097
  195,651
  241,250
  293,060
  351,167
  415,589
  486,283
  563,162
  646,108
  734,984
  829,651
  929,973
  1,035,831
  1,147,128
  1,263,792
  1,385,788
  1,513,111
  1,645,797
  1,783,914
  1,927,571
  2,076,913
  2,232,118
  2,393,401
  2,561,012
  2,735,230
  2,916,370
  3,104,773
  3,300,814
  3,504,896
  3,717,450
Debt-to-equity ratio
  5.090
  5.880
  6.470
  6.920
  7.260
  7.530
  7.740
  7.920
  8.050
  8.170
  8.260
  8.340
  8.410
  8.470
  8.520
  8.560
  8.600
  8.630
  8.660
  8.680
  8.710
  8.730
  8.740
  8.760
  8.780
  8.790
  8.800
  8.810
  8.830
  8.840
Adjusted equity ratio
  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
  -4,517
  -3,994
  -3,591
  -3,157
  -2,696
  -2,210
  -1,704
  -1,180
  -639
  -83
  5,333
  5,759
  6,195
  6,642
  7,101
  7,572
  8,057
  8,556
  9,072
  9,607
  10,161
  10,736
  11,335
  11,960
  12,611
  13,291
  14,003
  14,747
  15,528
  16,345
Depreciation, amort., depletion, $m
  16,595
  19,072
  21,928
  25,172
  28,811
  32,846
  37,274
  42,088
  47,283
  52,849
  51,960
  58,243
  64,872
  71,843
  79,149
  86,789
  94,763
  103,073
  111,723
  120,720
  130,073
  139,794
  149,894
  160,392
  171,303
  182,647
  194,446
  206,724
  219,505
  232,817
Funds from operations, $m
  12,078
  15,078
  18,337
  22,015
  26,116
  30,636
  35,569
  40,909
  46,644
  52,766
  57,292
  64,001
  71,068
  78,485
  86,250
  94,361
  102,820
  111,630
  120,796
  130,327
  140,234
  150,530
  161,230
  172,351
  183,913
  195,938
  208,449
  221,472
  235,033
  249,163
Change in working capital, $m
  -4,320
  -5,061
  -5,835
  -6,629
  -7,435
  -8,243
  -9,046
  -9,837
  -10,613
  -11,372
  -12,113
  -12,837
  -13,545
  -14,241
  -14,928
  -15,610
  -16,292
  -16,978
  -17,673
  -18,382
  -19,109
  -19,860
  -20,637
  -21,447
  -22,292
  -23,178
  -24,108
  -25,085
  -26,114
  -27,198
Cash from operations, $m
  16,398
  20,139
  24,171
  28,645
  33,551
  38,879
  44,615
  50,746
  57,258
  64,138
  69,406
  76,838
  84,613
  92,726
  101,178
  109,971
  119,112
  128,608
  138,469
  148,709
  159,343
  170,390
  181,867
  193,798
  206,206
  219,116
  232,557
  246,556
  261,147
  276,360
Maintenance CAPEX, $m
  -7,660
  -9,776
  -12,253
  -15,109
  -18,354
  -21,993
  -26,028
  -30,455
  -35,270
  -40,465
  -46,031
  -51,960
  -58,243
  -64,872
  -71,843
  -79,149
  -86,789
  -94,763
  -103,073
  -111,723
  -120,720
  -130,073
  -139,794
  -149,894
  -160,392
  -171,303
  -182,647
  -194,446
  -206,724
  -219,505
New CAPEX, $m
  -21,165
  -24,773
  -28,558
  -32,447
  -36,392
  -40,346
  -44,274
  -48,148
  -51,947
  -55,662
  -59,288
  -62,830
  -66,297
  -69,703
  -73,065
  -76,404
  -79,741
  -83,098
  -86,501
  -89,970
  -93,530
  -97,202
  -101,009
  -104,971
  -109,110
  -113,444
  -117,994
  -122,777
  -127,813
  -133,119
Cash from investing activities, $m
  -28,825
  -34,549
  -40,811
  -47,556
  -54,746
  -62,339
  -70,302
  -78,603
  -87,217
  -96,127
  -105,319
  -114,790
  -124,540
  -134,575
  -144,908
  -155,553
  -166,530
  -177,861
  -189,574
  -201,693
  -214,250
  -227,275
  -240,803
  -254,865
  -269,502
  -284,747
  -300,641
  -317,223
  -334,537
  -352,624
Free cash flow, $m
  -12,426
  -14,409
  -16,640
  -18,912
  -21,194
  -23,460
  -25,687
  -27,857
  -29,960
  -31,988
  -35,913
  -37,951
  -39,927
  -41,849
  -43,730
  -45,581
  -47,418
  -49,254
  -51,105
  -52,984
  -54,907
  -56,886
  -58,935
  -61,068
  -63,296
  -65,631
  -68,084
  -70,667
  -73,390
  -76,264
Issuance/(repayment) of debt, $m
  27,532
  35,599
  41,039
  46,628
  52,297
  57,980
  63,625
  69,191
  74,651
  79,989
  85,200
  90,290
  95,272
  100,166
  104,998
  109,796
  114,591
  119,417
  124,306
  129,292
  134,407
  139,684
  145,155
  150,849
  156,797
  163,025
  169,563
  176,437
  183,673
  191,299
Issuance/(repurchase) of shares, $m
  10,800
  7,949
  8,151
  8,338
  8,506
  8,653
  8,774
  8,868
  8,933
  8,971
  4,134
  4,273
  4,391
  4,487
  4,566
  4,628
  4,676
  4,712
  4,739
  4,759
  4,773
  4,784
  4,793
  4,801
  4,811
  4,823
  4,838
  4,857
  4,881
  4,910
Cash from financing (excl. dividends), $m  
  38,332
  43,548
  49,190
  54,966
  60,803
  66,633
  72,399
  78,059
  83,584
  88,960
  89,334
  94,563
  99,663
  104,653
  109,564
  114,424
  119,267
  124,129
  129,045
  134,051
  139,180
  144,468
  149,948
  155,650
  161,608
  167,848
  174,401
  181,294
  188,554
  196,209
Total cash flow (excl. dividends), $m
  25,906
  29,139
  32,550
  36,055
  39,609
  43,172
  46,711
  50,202
  53,625
  56,972
  53,421
  56,612
  59,736
  62,805
  65,834
  68,843
  71,849
  74,875
  77,940
  81,066
  84,274
  87,583
  91,013
  94,583
  98,312
  102,217
  106,317
  110,627
  115,164
  119,945
Retained Cash Flow (-), $m
  -10,800
  -7,949
  -8,151
  -8,338
  -8,506
  -8,653
  -8,774
  -8,868
  -8,933
  -8,971
  -9,467
  -10,032
  -10,586
  -11,130
  -11,666
  -12,200
  -12,732
  -13,269
  -13,812
  -14,366
  -14,934
  -15,520
  -16,128
  -16,761
  -17,422
  -18,114
  -18,840
  -19,604
  -20,408
  -21,255
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
  865
  1,104
  1,384
  1,706
  2,073
  2,484
  2,939
  3,439
  3,983
  4,570
  5,199
  5,868
  6,578
  7,326
  8,114
  8,939
  9,802
  10,702
  11,641
  12,618
  13,634
  14,690
  15,788
  16,929
  18,114
  19,346
  20,627
  21,960
  23,347
  24,790
Cash available for distribution, $m
  15,106
  21,190
  24,399
  27,717
  31,102
  34,519
  37,938
  41,334
  44,692
  48,001
  43,954
  46,580
  49,150
  51,675
  54,168
  56,643
  59,117
  61,606
  64,128
  66,701
  69,340
  72,062
  74,884
  77,822
  80,890
  84,104
  87,476
  91,023
  94,756
  98,690
Discount rate, %
  7.60
  7.98
  8.38
  8.80
  9.24
  9.70
  10.18
  10.69
  11.23
  11.79
  12.38
  13.00
  13.65
  14.33
  15.05
  15.80
  16.59
  17.42
  18.29
  19.20
  20.17
  21.17
  22.23
  23.34
  24.51
  25.74
  27.02
  28.37
  29.79
  31.28
PV of cash for distribution, $m
  14,039
  18,174
  19,166
  19,782
  19,995
  19,807
  19,241
  18,336
  17,150
  15,748
  12,174
  10,748
  9,315
  7,925
  6,616
  5,418
  4,350
  3,422
  2,636
  1,987
  1,464
  1,054
  740
  506
  337
  218
  137
  84
  49
  28
Current shareholders' claim on cash, %
  87.1
  81.8
  77.7
  74.4
  71.7
  69.5
  67.7
  66.2
  64.9
  63.7
  63.3
  62.9
  62.5
  62.2
  61.8
  61.5
  61.3
  61.0
  60.8
  60.6
  60.4
  60.2
  60.1
  59.9
  59.8
  59.6
  59.5
  59.4
  59.3
  59.2

Dell Technologies Inc., formerly Denali Holding Inc., is a provider of information technology solutions. The Company operates through two segments: Client Solutions and Enterprise Solutions Group (ESG). The Client Solutions segment includes sales to commercial and consumer customers of desktops, thin client products and notebooks, as well as services and third-party software and peripherals closely tied to the sale of Client Solutions hardware. Its offerings include hardware, such as desktop personal computers, notebooks and tablets, and peripherals, such as monitors, printers and projectors, as well as third-party software and peripherals. The ESG segment includes servers, networking and storage, as well as services and third-party software and peripherals that are closely tied to the sale of ESG hardware. It designs, develops, manufactures, markets, sells and supports a range of products and services.

FINANCIAL RATIOS  of  Dell Technologies Cl V (DVMT)

Valuation Ratios
P/E Ratio -44.2
Price to Sales 1.2
Price to Book 5.5
Price to Tangible Book
Price to Cash Flow 33.3
Price to Free Cash Flow 56.2
Growth Rates
Sales Growth Rate 21.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 88%
Cap. Spend. - 3 Yr. Gr. Rate 11.2%
Financial Strength
Quick Ratio 2
Current Ratio 0.1
LT Debt to Equity 319.6%
Total Debt to Equity 366.6%
Interest Coverage -2
Management Effectiveness
Return On Assets -0.7%
Ret/ On Assets - 3 Yr. Avg. -1.4%
Return On Total Capital -4.3%
Ret/ On T. Cap. - 3 Yr. Avg. -8.5%
Return On Equity -22.2%
Return On Equity - 3 Yr. Avg. -51.2%
Asset Turnover 0.8
Profitability Ratios
Gross Margin 21%
Gross Margin - 3 Yr. Avg. 18%
EBITDA Margin 1.9%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin -5.8%
Oper. Margin - 3 Yr. Avg. -2.5%
Pre-Tax Margin -8.7%
Pre-Tax Margin - 3 Yr. Avg. -4.5%
Net Profit Margin -2.7%
Net Profit Margin - 3 Yr. Avg. -2.4%
Effective Tax Rate 30.2%
Eff/ Tax Rate - 3 Yr. Avg. 16.1%
Payout Ratio 0%

DVMT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DVMT stock intrinsic value calculation we used $78660 million for the last fiscal year's total revenue generated by Dell Technologies Cl V. The default revenue input number comes from 2018 income statement of Dell Technologies Cl V. 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 DVMT stock valuation model: a) initial revenue growth rate of 27.6% 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 7.6%, whose default value for DVMT is calculated based on our internal credit rating of Dell Technologies Cl V, 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 Dell Technologies Cl V.
    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 DVMT stock the variable cost ratio is equal to 100.5%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $3029 million in the base year in the intrinsic value calculation for DVMT 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 Dell Technologies Cl V.

Corporate tax rate of 27% is the nominal tax rate for Dell Technologies Cl V. 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 DVMT 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 DVMT are equal to 97.4%.

Life of production assets of 10 years is the average useful life of capital assets used in Dell Technologies Cl V 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 DVMT is equal to -19.9%. 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 - $9326 million for Dell Technologies Cl V - 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 769 million for Dell Technologies Cl V 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 Dell Technologies Cl V at the current share price and the inputted number of shares is $73.1 billion.

RELATED COMPANIES Price Int.Val. Rating
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COMPANY NEWS

▶ Dell website to get smarter thanks to Austin AI startup CognitiveScale   [Aug-14-18 09:00AM  American City Business Journals]
▶ Dell to sell 5G division to VMware as it seeks to go public   [Aug-11-18 04:56PM  American City Business Journals]
▶ VMware to acquire Dell business unit aimed at 5G, touts better together alliance   [Aug-10-18 05:53PM  American City Business Journals]
▶ Dell Still Has Some Explaining to Do on Its Deal Math   [Aug-09-18 08:16AM  Bloomberg]
▶ [$$] Dell projects bullish outlook as it woos investors   [Aug-07-18 08:55AM  Financial Times]
▶ [$$] Dell paints a bright post-private future   [07:15AM  Financial Times]
▶ Dell's Buyout Math Doesn't Quite Compute   [Jul-17-18 08:05AM  Bloomberg]
▶ Dell is Going Public...Again   [Jul-12-18 11:10PM  Motley Fool]
▶ VMware COO Poonen: Still Happy Being Switzerland   [Jul-11-18 06:07PM  Barrons.com]
▶ [$$] BlackRock, Other Big Investors Have Misgivings About Dell Offer   [Jul-10-18 07:52PM  The Wall Street Journal]
▶ [$$] Dell Plan Meets Resistance   [02:48PM  The Wall Street Journal]
▶ The Dell IPO that isnt an IPO: What you need to know   [Jul-08-18 09:34AM  MarketWatch]
▶ [$$] It's a Dell Deal? Then Buyer Beware   [Jul-06-18 08:13PM  Barrons.com]
▶ 3 ETFs with the Largest Dell Holdings   [03:26PM  TheStreet.com]
▶ 3 Must Reads on the Market From TheStreet's Top Columnists   [Jul-05-18 03:00PM  TheStreet.com]
▶ Corrections & Amplifications   [Jul-04-18 08:00PM  The Wall Street Journal]
▶ [$$] Carl Icahn Unlikely to Push Dell for a Better Deal   [Jul-03-18 11:53PM  The Wall Street Journal]
▶ Dell moves to go public, spurns IPO   [03:21AM  Reuters]
▶ Dell will soon be a public company (again)   [Jul-02-18 10:44PM  TechCrunch]
▶ [$$] Dell Deal Is as Good as It Gets for VMware   [07:46PM  The Wall Street Journal]
▶ What Happened in the Stock Market Today   [05:09PM  Motley Fool]
▶ Dell moves to go public, spurns IPO   [04:26PM  Reuters]
▶ Stocks Rebound to End Higher   [04:07PM  TheStreet.com]
▶ Dell to buy VMware tracking stock   [03:12PM  Reuters Videos]
▶ [$$] Dell Deal Is as Good as It Gets for VMware   [02:21PM  The Wall Street Journal]
▶ Dude, Dell is going public again   [11:24AM  Associated Press]
▶ Why did Dell go public? Experts debate   [11:13AM  CNBC Videos]
▶ Dell Is Going More Public Again   [10:53AM  Bloomberg]
▶ Dell tightens its grip on VMware with multibillion-dollar stock swap   [10:25AM  American City Business Journals]
▶ How to Play VMware's Sharply Higher Opening   [09:07AM  TheStreet.com]
▶ [$$] Dell Nears Deal That Would Make It a Public Company Again   [Jul-01-18 07:52PM  The Wall Street Journal]
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