Intrinsic value of Genworth Financial Cl A - GNW

Previous Close

$4.60

  Intrinsic Value

$0.00

stock screener

  Rating & Target

str. sell

-100%

Previous close

$4.60

 
Intrinsic value

$0.00

 
Up/down potential

-100%

 
Rating

str. sell

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

We calculate the intrinsic value of GNW 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 2.3

 

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, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  8,461
  8,656
  8,878
  9,128
  9,404
  9,708
  10,039
  10,397
  10,782
  11,196
  11,639
  12,111
  12,614
  13,148
  13,716
  14,317
  14,953
  15,626
  16,337
  17,087
  17,879
  18,715
  19,595
  20,523
  21,500
  22,528
  23,611
  24,750
  25,949
  27,210
Variable operating expenses, $m
  7,801
  7,980
  8,185
  8,416
  8,671
  8,951
  9,256
  9,586
  9,941
  10,323
  10,731
  11,166
  11,630
  12,123
  12,646
  13,200
  13,787
  14,407
  15,062
  15,754
  16,485
  17,255
  18,067
  18,922
  19,823
  20,771
  21,769
  22,820
  23,925
  25,088
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
  7,801
  7,980
  8,185
  8,416
  8,671
  8,951
  9,256
  9,586
  9,941
  10,323
  10,731
  11,166
  11,630
  12,123
  12,646
  13,200
  13,787
  14,407
  15,062
  15,754
  16,485
  17,255
  18,067
  18,922
  19,823
  20,771
  21,769
  22,820
  23,925
  25,088
Operating income, $m
  660
  675
  692
  712
  734
  757
  783
  811
  841
  873
  908
  945
  984
  1,026
  1,070
  1,117
  1,166
  1,219
  1,274
  1,333
  1,395
  1,460
  1,528
  1,601
  1,677
  1,757
  1,842
  1,931
  2,024
  2,122
EBITDA, $m
  11,368
  11,630
  11,928
  12,264
  12,636
  13,044
  13,488
  13,969
  14,487
  15,043
  15,638
  16,272
  16,948
  17,666
  18,428
  19,236
  20,091
  20,995
  21,950
  22,958
  24,023
  25,145
  26,328
  27,574
  28,887
  30,269
  31,724
  33,255
  34,865
  36,559
Interest expense (income), $m
  453
  3,963
  3,855
  3,883
  3,915
  3,950
  3,989
  4,032
  4,079
  4,130
  4,184
  4,243
  4,306
  4,373
  4,444
  4,520
  4,600
  4,685
  4,775
  4,871
  4,971
  5,078
  5,190
  5,308
  5,433
  5,565
  5,703
  5,849
  6,002
  6,164
  6,333
Earnings before tax, $m
  -3,303
  -3,180
  -3,191
  -3,203
  -3,216
  -3,232
  -3,249
  -3,268
  -3,289
  -3,311
  -3,335
  -3,361
  -3,389
  -3,418
  -3,450
  -3,483
  -3,519
  -3,557
  -3,596
  -3,639
  -3,683
  -3,730
  -3,780
  -3,832
  -3,888
  -3,946
  -4,007
  -4,072
  -4,140
  -4,211
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
  -3,303
  -3,180
  -3,191
  -3,203
  -3,216
  -3,232
  -3,249
  -3,268
  -3,289
  -3,311
  -3,335
  -3,361
  -3,389
  -3,418
  -3,450
  -3,483
  -3,519
  -3,557
  -3,596
  -3,639
  -3,683
  -3,730
  -3,780
  -3,832
  -3,888
  -3,946
  -4,007
  -4,072
  -4,140
  -4,211

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
  24,667
  25,235
  25,883
  26,611
  27,418
  28,303
  29,267
  30,311
  31,435
  32,641
  33,932
  35,309
  36,775
  38,333
  39,987
  41,739
  43,594
  45,556
  47,629
  49,817
  52,126
  54,561
  57,128
  59,833
  62,681
  65,680
  68,837
  72,159
  75,653
  79,329
Adjusted assets (=assets-cash), $m
  24,667
  25,235
  25,883
  26,611
  27,418
  28,303
  29,267
  30,311
  31,435
  32,641
  33,932
  35,309
  36,775
  38,333
  39,987
  41,739
  43,594
  45,556
  47,629
  49,817
  52,126
  54,561
  57,128
  59,833
  62,681
  65,680
  68,837
  72,159
  75,653
  79,329
Revenue / Adjusted assets
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
  0.343
Average production assets, $m
  107,081
  109,544
  112,359
  115,520
  119,022
  122,865
  127,049
  131,579
  136,458
  141,695
  147,298
  153,276
  159,641
  166,406
  173,584
  181,191
  189,243
  197,759
  206,756
  216,256
  226,280
  236,852
  247,994
  259,735
  272,100
  285,119
  298,822
  313,242
  328,412
  344,369
Working capital, $m
  -91,462
  -93,566
  -95,971
  -98,670
  -101,662
  -104,944
  -108,518
  -112,387
  -116,555
  -121,028
  -125,813
  -130,919
  -136,356
  -142,134
  -148,265
  -154,763
  -161,640
  -168,914
  -176,599
  -184,713
  -193,275
  -202,304
  -211,822
  -221,850
  -232,411
  -243,532
  -255,236
  -267,553
  -280,510
  -294,139
Total debt, $m
  71,398
  71,908
  72,492
  73,147
  73,873
  74,670
  75,537
  76,477
  77,488
  78,574
  79,736
  80,975
  82,295
  83,697
  85,185
  86,762
  88,432
  90,197
  92,063
  94,032
  96,111
  98,302
  100,612
  103,047
  105,610
  108,309
  111,150
  114,140
  117,285
  120,593
Total liabilities, $m
  22,201
  22,711
  23,295
  23,950
  24,676
  25,473
  26,340
  27,280
  28,291
  29,377
  30,539
  31,778
  33,098
  34,500
  35,988
  37,565
  39,235
  41,000
  42,866
  44,835
  46,914
  49,105
  51,415
  53,850
  56,413
  59,112
  61,953
  64,943
  68,088
  71,396
Total equity, $m
  2,467
  2,523
  2,588
  2,661
  2,742
  2,830
  2,927
  3,031
  3,143
  3,264
  3,393
  3,531
  3,678
  3,833
  3,999
  4,174
  4,359
  4,556
  4,763
  4,982
  5,213
  5,456
  5,713
  5,983
  6,268
  6,568
  6,884
  7,216
  7,565
  7,933
Total liabilities and equity, $m
  24,668
  25,234
  25,883
  26,611
  27,418
  28,303
  29,267
  30,311
  31,434
  32,641
  33,932
  35,309
  36,776
  38,333
  39,987
  41,739
  43,594
  45,556
  47,629
  49,817
  52,127
  54,561
  57,128
  59,833
  62,681
  65,680
  68,837
  72,159
  75,653
  79,329
Debt-to-equity ratio
  28.940
  28.500
  28.010
  27.490
  26.940
  26.380
  25.810
  25.230
  24.650
  24.070
  23.500
  22.930
  22.380
  21.830
  21.300
  20.790
  20.290
  19.800
  19.330
  18.880
  18.440
  18.020
  17.610
  17.220
  16.850
  16.490
  16.150
  15.820
  15.500
  15.200
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
  -3,303
  -3,180
  -3,191
  -3,203
  -3,216
  -3,232
  -3,249
  -3,268
  -3,289
  -3,311
  -3,335
  -3,361
  -3,389
  -3,418
  -3,450
  -3,483
  -3,519
  -3,557
  -3,596
  -3,639
  -3,683
  -3,730
  -3,780
  -3,832
  -3,888
  -3,946
  -4,007
  -4,072
  -4,140
  -4,211
Depreciation, amort., depletion, $m
  10,708
  10,954
  11,236
  11,552
  11,902
  12,286
  12,705
  13,158
  13,646
  14,170
  14,730
  15,328
  15,964
  16,641
  17,358
  18,119
  18,924
  19,776
  20,676
  21,626
  22,628
  23,685
  24,799
  25,973
  27,210
  28,512
  29,882
  31,324
  32,841
  34,437
Funds from operations, $m
  7,405
  7,774
  8,045
  8,349
  8,686
  9,055
  9,456
  9,890
  10,357
  10,858
  11,395
  11,967
  12,575
  13,222
  13,909
  14,636
  15,405
  16,219
  17,079
  17,987
  18,945
  19,955
  21,020
  22,141
  23,322
  24,566
  25,875
  27,253
  28,702
  30,226
Change in working capital, $m
  -1,793
  -2,104
  -2,405
  -2,700
  -2,991
  -3,282
  -3,574
  -3,869
  -4,168
  -4,473
  -4,785
  -5,106
  -5,437
  -5,778
  -6,131
  -6,497
  -6,878
  -7,273
  -7,685
  -8,114
  -8,562
  -9,029
  -9,518
  -10,028
  -10,562
  -11,120
  -11,705
  -12,317
  -12,958
  -13,629
Cash from operations, $m
  9,198
  9,878
  10,450
  11,049
  11,677
  12,337
  13,030
  13,759
  14,525
  15,332
  16,180
  17,073
  18,012
  19,000
  20,040
  21,133
  22,283
  23,493
  24,764
  26,101
  27,507
  28,984
  30,537
  32,169
  33,884
  35,686
  37,580
  39,569
  41,659
  43,855
Maintenance CAPEX, $m
  -10,498
  -10,708
  -10,954
  -11,236
  -11,552
  -11,902
  -12,286
  -12,705
  -13,158
  -13,646
  -14,170
  -14,730
  -15,328
  -15,964
  -16,641
  -17,358
  -18,119
  -18,924
  -19,776
  -20,676
  -21,626
  -22,628
  -23,685
  -24,799
  -25,973
  -27,210
  -28,512
  -29,882
  -31,324
  -32,841
New CAPEX, $m
  -2,104
  -2,463
  -2,815
  -3,161
  -3,502
  -3,843
  -4,184
  -4,529
  -4,880
  -5,237
  -5,603
  -5,978
  -6,365
  -6,765
  -7,178
  -7,607
  -8,052
  -8,515
  -8,997
  -9,500
  -10,024
  -10,571
  -11,143
  -11,740
  -12,365
  -13,019
  -13,703
  -14,420
  -15,170
  -15,957
Cash from investing activities, $m
  -12,602
  -13,171
  -13,769
  -14,397
  -15,054
  -15,745
  -16,470
  -17,234
  -18,038
  -18,883
  -19,773
  -20,708
  -21,693
  -22,729
  -23,819
  -24,965
  -26,171
  -27,439
  -28,773
  -30,176
  -31,650
  -33,199
  -34,828
  -36,539
  -38,338
  -40,229
  -42,215
  -44,302
  -46,494
  -48,798
Free cash flow, $m
  -3,403
  -3,293
  -3,320
  -3,348
  -3,377
  -3,408
  -3,441
  -3,476
  -3,513
  -3,551
  -3,592
  -3,635
  -3,681
  -3,729
  -3,779
  -3,832
  -3,888
  -3,947
  -4,009
  -4,074
  -4,143
  -4,215
  -4,291
  -4,371
  -4,455
  -4,543
  -4,635
  -4,733
  -4,835
  -4,943
Issuance/(repayment) of debt, $m
  -1,994
  511
  584
  655
  726
  797
  868
  939
  1,012
  1,086
  1,162
  1,239
  1,320
  1,402
  1,488
  1,577
  1,669
  1,765
  1,865
  1,970
  2,078
  2,192
  2,310
  2,434
  2,564
  2,699
  2,841
  2,990
  3,145
  3,308
Issuance/(repurchase) of shares, $m
  5,770
  3,237
  3,255
  3,275
  3,297
  3,320
  3,346
  3,372
  3,401
  3,432
  3,464
  3,499
  3,535
  3,574
  3,615
  3,659
  3,704
  3,753
  3,804
  3,857
  3,914
  3,974
  4,037
  4,103
  4,172
  4,246
  4,323
  4,404
  4,489
  4,579
Cash from financing (excl. dividends), $m  
  3,776
  3,748
  3,839
  3,930
  4,023
  4,117
  4,214
  4,311
  4,413
  4,518
  4,626
  4,738
  4,855
  4,976
  5,103
  5,236
  5,373
  5,518
  5,669
  5,827
  5,992
  6,166
  6,347
  6,537
  6,736
  6,945
  7,164
  7,394
  7,634
  7,887
Total cash flow (excl. dividends), $m
  372
  454
  519
  583
  646
  709
  772
  836
  900
  966
  1,034
  1,103
  1,174
  1,248
  1,324
  1,404
  1,486
  1,571
  1,660
  1,753
  1,849
  1,950
  2,056
  2,166
  2,281
  2,402
  2,528
  2,660
  2,799
  2,944
Retained Cash Flow (-), $m
  -5,770
  -3,237
  -3,255
  -3,275
  -3,297
  -3,320
  -3,346
  -3,372
  -3,401
  -3,432
  -3,464
  -3,499
  -3,535
  -3,574
  -3,615
  -3,659
  -3,704
  -3,753
  -3,804
  -3,857
  -3,914
  -3,974
  -4,037
  -4,103
  -4,172
  -4,246
  -4,323
  -4,404
  -4,489
  -4,579
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
  41
  42
  43
  44
  46
  47
  49
  50
  52
  54
  56
  58
  61
  63
  66
  69
  72
  75
  78
  82
  85
  89
  94
  98
  103
  107
  113
  118
  124
  130
Cash available for distribution, $m
  -5,398
  -2,783
  -2,736
  -2,692
  -2,651
  -2,611
  -2,574
  -2,537
  -2,501
  -2,466
  -2,431
  -2,396
  -2,361
  -2,326
  -2,291
  -2,255
  -2,219
  -2,182
  -2,144
  -2,105
  -2,065
  -2,023
  -1,981
  -1,937
  -1,891
  -1,844
  -1,794
  -1,743
  -1,690
  -1,635
Discount rate, %
  15.30
  16.07
  16.87
  17.71
  18.60
  19.53
  20.50
  21.53
  22.61
  23.74
  24.92
  26.17
  27.48
  28.85
  30.29
  31.81
  33.40
  35.07
  36.82
  38.66
  40.60
  42.63
  44.76
  46.99
  49.34
  51.81
  54.40
  57.12
  59.98
  62.98
PV of cash for distribution, $m
  -4,681
  -2,066
  -1,714
  -1,402
  -1,130
  -896
  -697
  -533
  -399
  -293
  -210
  -147
  -101
  -67
  -43
  -27
  -17
  -10
  -6
  -3
  -2
  -1
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  50.0
  21.6
  9.4
  4.2
  1.9
  0.8
  0.4
  0.2
  0.1
  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
  0.0
  0.0
  0.0
  0.0
  0.0
  0.0

Genworth Financial, Inc. provides mortgage insurance products that allow people to purchase homes. The Company offers individual and group long-term care insurance products to meet consumer needs for long-term care. Its segments include U.S. Mortgage Insurance, Canada Mortgage Insurance, Australia Mortgage Insurance, U.S. Life Insurance, Runoff, and Corporate and Other. In the United States, the Company offers mortgage insurance products predominantly insuring prime-based, individually underwritten residential mortgage loans (flow mortgage insurance). The Canada Mortgage Insurance segment offers flow mortgage insurance and also provides bulk mortgage insurance. In Australia, the Company offers flow mortgage insurance and provides bulk mortgage insurance. It offers long-term care insurance products. The Runoff segment's non-strategic products include its variable annuity, variable life insurance, corporate-owned life insurance, and other accident and health insurance products. _tck('aft');

FINANCIAL RATIOS  of  Genworth Financial Cl A (GNW)

Valuation Ratios
P/E Ratio 4.1
Price to Sales 0.2
Price to Book 0.2
Price to Tangible Book
Price to Cash Flow 1.6
Price to Free Cash Flow 1.6
Growth Rates
Sales Growth Rate -3.3%
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 51.7%
Total Debt to Equity 51.7%
Interest Coverage 3
Management Effectiveness
Return On Assets 0.8%
Ret/ On Assets - 3 Yr. Avg. 0.6%
Return On Total Capital 2.5%
Ret/ On T. Cap. - 3 Yr. Avg. 1.3%
Return On Equity 3.6%
Return On Equity - 3 Yr. Avg. 2%
Asset Turnover 0.1
Profitability Ratios
Gross Margin 0%
Gross Margin - 3 Yr. Avg. 0%
EBITDA Margin 22%
EBITDA Margin - 3 Yr. Avg. 17.3%
Operating Margin 16.4%
Oper. Margin - 3 Yr. Avg. 11.3%
Pre-Tax Margin 11.1%
Pre-Tax Margin - 3 Yr. Avg. 6.2%
Net Profit Margin 5.9%
Net Profit Margin - 3 Yr. Avg. 3.2%
Effective Tax Rate 30.9%
Eff/ Tax Rate - 3 Yr. Avg. 15.1%
Payout Ratio 0%

GNW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the GNW stock intrinsic value calculation we used $8295 million for the last fiscal year's total revenue generated by Genworth Financial Cl A. The default revenue input number comes from 2017 income statement of Genworth Financial Cl A. 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 GNW stock valuation model: a) initial revenue growth rate of 2% 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 15.3%, whose default value for GNW is calculated based on our internal credit rating of Genworth Financial Cl A, 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 Genworth Financial Cl A.
    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 GNW stock the variable cost ratio is equal to 92.2%.

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 GNW 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 Genworth Financial Cl A.

Corporate tax rate of 27% is the nominal tax rate for Genworth Financial Cl A. 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 GNW stock is equal to 0.5%.

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 GNW are equal to 1265.6%.

Life of production assets of 10 years is the average useful life of capital assets used in Genworth Financial Cl A 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 GNW is equal to -1081%. 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 Genworth Financial Cl A - 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 499 million for Genworth Financial Cl A 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 Genworth Financial Cl A at the current share price and the inputted number of shares is $2.3 billion.

RELATED COMPANIES Price Int.Val. Rating

COMPANY NEWS

▶ Genworth and Oceanwide Extend Merger Agreement   [Aug-14-18 04:15PM  PR Newswire]
▶ Genworth Financial: 2Q Earnings Snapshot   [Jul-31-18 05:34PM  Associated Press]
▶ Earnings Preview: Genworth Financial   [08:20AM  Benzinga]
▶ Genworth and Oceanwide Extend Merger Agreement   [Jun-28-18 04:15PM  PR Newswire]
▶ Is It Time To Buy Genworth Financial Inc (NYSE:GNW)?   [Jun-26-18 10:41AM  Simply Wall St.]
▶ Sempra Energy and Boston Scientific jump; PG&E skids   [Jun-11-18 04:35PM  Associated Press]
▶ [$$] Cfius/Genworth: Inconsistent strike zone   [02:18AM  Financial Times]
▶ Best Cheap Stocks To Buy   [10:02AM  Simply Wall St.]
▶ Genworth Financial: 1Q Earnings Snapshot   [May-01-18 05:21PM  Associated Press]
▶ Genworth and Oceanwide Extend Merger Agreement   [Mar-27-18 04:15PM  PR Newswire]
▶ [$$] Genworth Financial's Plan B   [Mar-12-18 06:00AM  The Wall Street Journal]
▶ Genworth Closes $450 Million Senior Secured Term Loan   [Mar-07-18 04:15PM  PR Newswire]
▶ Genworth Announces Pricing of Senior Secured Term Loan   [Feb-28-18 04:05PM  PR Newswire]
▶ Genworth Mourns the Death of Board Member James Parke   [Feb-22-18 05:00PM  PR Newswire]
▶ 3 Names That Could Jump 25% if Big 'What Ifs' Are Answered   [Feb-15-18 12:15PM  TheStreet.com]
▶ Here's Why Genworth Financial Is Soaring Today   [Feb-07-18 11:23AM  Motley Fool]
▶ Genworth Financial posts 4Q profit   [Feb-06-18 06:41PM  Associated Press]
▶ The Disaster That Is General Electric Company Stock   [Jan-24-18 06:45AM  InvestorPlace]
▶ Genworth Promotes Steve Hitchings to HFA Director   [Jan-16-18 09:00AM  PR Newswire]
▶ Deals of the day-Mergers and acquisitions   [Jan-04-18 09:00AM  Reuters]
▶ Genworth Financial Announces Results of Annual Meeting   [Dec-13-17 01:00PM  PR Newswire]
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