Intrinsic value of Envestnet, Inc - ENV

Previous Close

$69.23

  Intrinsic Value

$26.72

stock screener

  Rating & Target

str. sell

-61%

Previous close

$69.23

 
Intrinsic value

$26.72

 
Up/down potential

-61%

 
Rating

str. sell

We calculate the intrinsic value of ENV 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 3.3

 

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, %
  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
  5.47
Revenue, $m
  933
  1,063
  1,201
  1,348
  1,503
  1,666
  1,837
  2,016
  2,202
  2,397
  2,599
  2,810
  3,029
  3,257
  3,493
  3,739
  3,995
  4,261
  4,537
  4,824
  5,124
  5,435
  5,760
  6,099
  6,452
  6,820
  7,205
  7,607
  8,026
  8,465
Variable operating expenses, $m
  897
  1,010
  1,130
  1,257
  1,392
  1,533
  1,682
  1,837
  1,999
  2,168
  2,258
  2,441
  2,632
  2,829
  3,035
  3,248
  3,470
  3,701
  3,941
  4,191
  4,451
  4,722
  5,004
  5,298
  5,605
  5,925
  6,259
  6,608
  6,973
  7,354
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
  897
  1,010
  1,130
  1,257
  1,392
  1,533
  1,682
  1,837
  1,999
  2,168
  2,258
  2,441
  2,632
  2,829
  3,035
  3,248
  3,470
  3,701
  3,941
  4,191
  4,451
  4,722
  5,004
  5,298
  5,605
  5,925
  6,259
  6,608
  6,973
  7,354
Operating income, $m
  36
  53
  71
  91
  111
  132
  155
  178
  203
  228
  341
  369
  398
  428
  459
  491
  524
  559
  596
  633
  673
  714
  756
  801
  847
  895
  946
  999
  1,054
  1,111
EBITDA, $m
  169
  193
  218
  245
  273
  303
  334
  366
  400
  435
  472
  510
  550
  592
  635
  679
  726
  774
  824
  876
  931
  987
  1,046
  1,108
  1,172
  1,239
  1,309
  1,382
  1,458
  1,538
Interest expense (income), $m
  8
  33
  39
  46
  53
  60
  68
  76
  85
  94
  103
  113
  123
  134
  145
  156
  168
  181
  193
  207
  221
  235
  250
  266
  282
  299
  317
  336
  355
  375
  397
Earnings before tax, $m
  3
  14
  26
  38
  51
  64
  79
  94
  109
  125
  228
  246
  264
  283
  302
  323
  344
  366
  389
  413
  437
  463
  490
  518
  548
  578
  610
  643
  678
  715
Tax expense, $m
  1
  4
  7
  10
  14
  17
  21
  25
  29
  34
  62
  66
  71
  76
  82
  87
  93
  99
  105
  111
  118
  125
  132
  140
  148
  156
  165
  174
  183
  193
Net income, $m
  2
  10
  19
  28
  37
  47
  57
  68
  80
  91
  167
  179
  193
  206
  221
  236
  251
  267
  284
  301
  319
  338
  358
  378
  400
  422
  445
  470
  495
  522

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
  1,380
  1,572
  1,777
  1,994
  2,223
  2,464
  2,717
  2,982
  3,258
  3,546
  3,845
  4,157
  4,481
  4,818
  5,168
  5,532
  5,910
  6,303
  6,711
  7,137
  7,580
  8,041
  8,521
  9,022
  9,544
  10,089
  10,658
  11,253
  11,873
  12,522
Adjusted assets (=assets-cash), $m
  1,380
  1,572
  1,777
  1,994
  2,223
  2,464
  2,717
  2,982
  3,258
  3,546
  3,845
  4,157
  4,481
  4,818
  5,168
  5,532
  5,910
  6,303
  6,711
  7,137
  7,580
  8,041
  8,521
  9,022
  9,544
  10,089
  10,658
  11,253
  11,873
  12,522
Revenue / Adjusted assets
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
  0.676
Average production assets, $m
  489
  557
  629
  706
  787
  873
  962
  1,056
  1,154
  1,256
  1,362
  1,472
  1,587
  1,707
  1,831
  1,959
  2,093
  2,233
  2,377
  2,528
  2,685
  2,848
  3,018
  3,196
  3,381
  3,574
  3,775
  3,986
  4,206
  4,436
Working capital, $m
  -99
  -113
  -127
  -143
  -159
  -177
  -195
  -214
  -233
  -254
  -276
  -298
  -321
  -345
  -370
  -396
  -423
  -452
  -481
  -511
  -543
  -576
  -611
  -646
  -684
  -723
  -764
  -806
  -851
  -897
Total debt, $m
  545
  636
  733
  835
  944
  1,058
  1,177
  1,302
  1,433
  1,569
  1,711
  1,858
  2,012
  2,171
  2,337
  2,509
  2,687
  2,873
  3,067
  3,268
  3,477
  3,695
  3,923
  4,159
  4,407
  4,664
  4,933
  5,215
  5,508
  5,815
Total liabilities, $m
  653
  744
  840
  943
  1,052
  1,166
  1,285
  1,410
  1,541
  1,677
  1,819
  1,966
  2,120
  2,279
  2,444
  2,616
  2,795
  2,981
  3,175
  3,376
  3,585
  3,803
  4,030
  4,267
  4,514
  4,772
  5,041
  5,322
  5,616
  5,923
Total equity, $m
  727
  829
  936
  1,051
  1,172
  1,299
  1,432
  1,571
  1,717
  1,869
  2,026
  2,191
  2,362
  2,539
  2,723
  2,915
  3,114
  3,322
  3,537
  3,761
  3,994
  4,237
  4,491
  4,755
  5,030
  5,317
  5,617
  5,930
  6,257
  6,599
Total liabilities and equity, $m
  1,380
  1,573
  1,776
  1,994
  2,224
  2,465
  2,717
  2,981
  3,258
  3,546
  3,845
  4,157
  4,482
  4,818
  5,167
  5,531
  5,909
  6,303
  6,712
  7,137
  7,579
  8,040
  8,521
  9,022
  9,544
  10,089
  10,658
  11,252
  11,873
  12,522
Debt-to-equity ratio
  0.750
  0.770
  0.780
  0.790
  0.810
  0.810
  0.820
  0.830
  0.830
  0.840
  0.840
  0.850
  0.850
  0.860
  0.860
  0.860
  0.860
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.870
  0.880
  0.880
  0.880
  0.880
  0.880
  0.880
Adjusted equity ratio
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527
  0.527

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  2
  10
  19
  28
  37
  47
  57
  68
  80
  91
  167
  179
  193
  206
  221
  236
  251
  267
  284
  301
  319
  338
  358
  378
  400
  422
  445
  470
  495
  522
Depreciation, amort., depletion, $m
  133
  140
  147
  154
  162
  170
  179
  188
  197
  207
  131
  142
  153
  164
  176
  188
  201
  215
  229
  243
  258
  274
  290
  307
  325
  344
  363
  383
  404
  427
Funds from operations, $m
  136
  150
  166
  182
  199
  217
  236
  256
  277
  298
  298
  321
  345
  370
  397
  424
  452
  482
  512
  544
  577
  612
  648
  686
  725
  766
  808
  853
  900
  948
Change in working capital, $m
  -13
  -14
  -15
  -16
  -16
  -17
  -18
  -19
  -20
  -21
  -21
  -22
  -23
  -24
  -25
  -26
  -27
  -28
  -29
  -30
  -32
  -33
  -34
  -36
  -37
  -39
  -41
  -43
  -44
  -47
Cash from operations, $m
  148
  164
  180
  197
  216
  235
  254
  275
  297
  319
  319
  343
  368
  395
  422
  450
  479
  510
  542
  575
  609
  645
  682
  721
  762
  805
  849
  896
  944
  995
Maintenance CAPEX, $m
  -41
  -47
  -54
  -61
  -68
  -76
  -84
  -93
  -102
  -111
  -121
  -131
  -142
  -153
  -164
  -176
  -188
  -201
  -215
  -229
  -243
  -258
  -274
  -290
  -307
  -325
  -344
  -363
  -383
  -404
New CAPEX, $m
  -63
  -68
  -73
  -77
  -81
  -85
  -90
  -94
  -98
  -102
  -106
  -110
  -115
  -119
  -124
  -129
  -134
  -139
  -145
  -151
  -157
  -163
  -170
  -177
  -185
  -193
  -202
  -211
  -220
  -230
Cash from investing activities, $m
  -104
  -115
  -127
  -138
  -149
  -161
  -174
  -187
  -200
  -213
  -227
  -241
  -257
  -272
  -288
  -305
  -322
  -340
  -360
  -380
  -400
  -421
  -444
  -467
  -492
  -518
  -546
  -574
  -603
  -634
Free cash flow, $m
  44
  49
  54
  60
  66
  73
  81
  89
  97
  106
  92
  102
  112
  123
  134
  145
  157
  169
  182
  195
  209
  224
  238
  254
  270
  287
  304
  322
  341
  360
Issuance/(repayment) of debt, $m
  85
  91
  97
  103
  108
  114
  120
  125
  131
  136
  142
  147
  153
  159
  166
  172
  179
  186
  193
  201
  209
  218
  227
  237
  247
  258
  269
  281
  294
  307
Issuance/(repurchase) of shares, $m
  91
  91
  89
  87
  84
  80
  76
  71
  66
  60
  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  
  176
  182
  186
  190
  192
  194
  196
  196
  197
  196
  142
  147
  153
  159
  166
  172
  179
  186
  193
  201
  209
  218
  227
  237
  247
  258
  269
  281
  294
  307
Total cash flow (excl. dividends), $m
  220
  231
  240
  249
  259
  267
  276
  285
  294
  303
  234
  249
  265
  282
  299
  317
  336
  355
  376
  397
  419
  442
  466
  491
  517
  544
  573
  603
  635
  667
Retained Cash Flow (-), $m
  -94
  -101
  -108
  -114
  -121
  -127
  -133
  -139
  -146
  -152
  -158
  -164
  -171
  -178
  -184
  -192
  -199
  -207
  -215
  -224
  -233
  -243
  -253
  -264
  -275
  -287
  -300
  -313
  -327
  -342
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
  126
  129
  132
  135
  138
  140
  143
  146
  148
  151
  76
  85
  95
  104
  115
  126
  137
  148
  160
  173
  185
  199
  212
  227
  242
  257
  273
  290
  307
  325
Discount rate, %
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
  121
  118
  115
  111
  107
  102
  97
  91
  85
  79
  36
  36
  36
  35
  34
  32
  30
  27
  25
  22
  19
  16
  14
  12
  9
  8
  6
  4
  3
  2
Current shareholders' claim on cash, %
  97.3
  95.1
  93.2
  91.6
  90.2
  89.0
  88.1
  87.2
  86.5
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0
  86.0

Envestnet, Inc. is a provider of financial and wealth management technology and services to financial advisors, investors and financial service providers. The Company's segments are Envestnet and Envestnet Yodlee. Its Envestnet segment provides unified wealth management software and services empowering financial advisors and institutions. Its Envestnet Yodlee segment is a data aggregation and data analytics platform. Its services and related technology are provided through Envestnet's wealth management software, Envestnet PMC, Envestnet Tamarac, Vantage Reporting Solution, Envestnet WMS, Envestnet Placemark, Envestnet Retirement Solutions, Envestnet Yodlee and Envestnet Finance Logix. It operates Registered Investment Advisors (RIAs) and a registered broker-dealer. Its centrally-hosted technology platform services include risk assessment and selection of investment strategies and solutions, asset allocation models, and research and due diligence.

FINANCIAL RATIOS  of  Envestnet, Inc (ENV)

Valuation Ratios
P/E Ratio -53.5
Price to Sales 5.2
Price to Book 7.2
Price to Tangible Book
Price to Cash Flow 38.9
Price to Free Cash Flow 55.4
Growth Rates
Sales Growth Rate 37.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 53.3%
Cap. Spend. - 3 Yr. Gr. Rate 20.6%
Financial Strength
Quick Ratio 1
Current Ratio 0.1
LT Debt to Equity 61.1%
Total Debt to Equity 70.3%
Interest Coverage -4
Management Effectiveness
Return On Assets -5.1%
Ret/ On Assets - 3 Yr. Avg. -0%
Return On Total Capital -7.8%
Ret/ On T. Cap. - 3 Yr. Avg. -0.5%
Return On Equity -13.1%
Return On Equity - 3 Yr. Avg. -1.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 68.9%
Gross Margin - 3 Yr. Avg. 62.5%
EBITDA Margin 5.5%
EBITDA Margin - 3 Yr. Avg. 9.1%
Operating Margin -4.2%
Oper. Margin - 3 Yr. Avg. 2.1%
Pre-Tax Margin -6.9%
Pre-Tax Margin - 3 Yr. Avg. 0.6%
Net Profit Margin -9.7%
Net Profit Margin - 3 Yr. Avg. -1.6%
Effective Tax Rate -40%
Eff/ Tax Rate - 3 Yr. Avg. 18.2%
Payout Ratio 0%

ENV stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the ENV stock intrinsic value calculation we used $812 million for the last fiscal year's total revenue generated by Envestnet, Inc. The default revenue input number comes from 0001 income statement of Envestnet, 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 ENV stock valuation model: a) initial revenue growth rate of 14.9% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for ENV is calculated based on our internal credit rating of Envestnet, 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 Envestnet, 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 ENV stock the variable cost ratio is equal to 97.5%.

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 ENV 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 7.2% for Envestnet, Inc.

Corporate tax rate of 27% is the nominal tax rate for Envestnet, 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 ENV 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 ENV are equal to 52.4%.

Life of production assets of 10.4 years is the average useful life of capital assets used in Envestnet, 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 ENV is equal to -10.6%. 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 - $633.7 million for Envestnet, 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 48.169 million for Envestnet, 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 Envestnet, Inc at the current share price and the inputted number of shares is $3.3 billion.

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