Intrinsic value of Intel - INTC

Previous Close

$47.10

  Intrinsic Value

$28.34

stock screener

  Rating & Target

sell

-40%

Previous close

$47.10

 
Intrinsic value

$28.34

 
Up/down potential

-40%

 
Rating

sell

We calculate the intrinsic value of INTC 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 221.4

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  5.70
  5.63
  5.57
  5.51
  5.46
  5.41
  5.37
  5.33
  5.30
  5.27
  5.24
  5.22
  5.20
  5.18
  5.16
  5.14
  5.13
  5.12
  5.11
  5.09
  5.09
  5.08
  5.07
  5.06
  5.06
  5.05
  5.05
  5.04
  5.04
  5.03
Revenue, $m
  66,338
  70,073
  73,974
  78,050
  82,311
  86,767
  91,428
  96,306
  101,411
  106,757
  112,355
  118,220
  124,365
  130,804
  137,554
  144,630
  152,049
  159,829
  167,988
  176,546
  185,524
  194,942
  204,824
  215,192
  226,072
  237,489
  249,471
  262,046
  275,244
  289,097
Variable operating expenses, $m
  51,731
  54,435
  57,258
  60,209
  63,293
  66,518
  69,892
  73,423
  77,118
  80,988
  81,326
  85,571
  90,019
  94,680
  99,566
  104,688
  110,058
  115,689
  121,595
  127,790
  134,288
  141,106
  148,258
  155,763
  163,638
  171,902
  180,575
  189,677
  199,231
  209,258
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
  51,731
  54,435
  57,258
  60,209
  63,293
  66,518
  69,892
  73,423
  77,118
  80,988
  81,326
  85,571
  90,019
  94,680
  99,566
  104,688
  110,058
  115,689
  121,595
  127,790
  134,288
  141,106
  148,258
  155,763
  163,638
  171,902
  180,575
  189,677
  199,231
  209,258
Operating income, $m
  14,607
  15,639
  16,716
  17,842
  19,018
  20,249
  21,536
  22,883
  24,293
  25,769
  31,029
  32,648
  34,345
  36,124
  37,988
  39,942
  41,991
  44,139
  46,393
  48,756
  51,236
  53,837
  56,566
  59,429
  62,434
  65,587
  68,896
  72,369
  76,013
  79,839
EBITDA, $m
  25,611
  27,053
  28,559
  30,133
  31,778
  33,498
  35,297
  37,181
  39,152
  41,215
  43,377
  45,641
  48,013
  50,499
  53,105
  55,837
  58,701
  61,705
  64,855
  68,159
  71,625
  75,261
  79,076
  83,079
  87,279
  91,687
  96,313
  101,167
  106,263
  111,611
Interest expense (income), $m
  682
  1,448
  1,616
  1,790
  1,973
  2,163
  2,362
  2,570
  2,787
  3,015
  3,253
  3,503
  3,764
  4,038
  4,325
  4,625
  4,940
  5,271
  5,617
  5,980
  6,361
  6,761
  7,180
  7,619
  8,081
  8,565
  9,072
  9,605
  10,165
  10,752
  11,368
Earnings before tax, $m
  13,159
  14,022
  14,925
  15,869
  16,855
  17,887
  18,966
  20,096
  21,278
  22,516
  27,526
  28,884
  30,307
  31,799
  33,362
  35,002
  36,720
  38,522
  40,413
  42,395
  44,475
  46,657
  48,946
  51,348
  53,869
  56,514
  59,290
  62,204
  65,262
  68,471
Tax expense, $m
  3,553
  3,786
  4,030
  4,285
  4,551
  4,830
  5,121
  5,426
  5,745
  6,079
  7,432
  7,799
  8,183
  8,586
  9,008
  9,450
  9,914
  10,401
  10,911
  11,447
  12,008
  12,597
  13,215
  13,864
  14,545
  15,259
  16,008
  16,795
  17,621
  18,487
Net income, $m
  9,606
  10,236
  10,896
  11,584
  12,304
  13,058
  13,845
  14,670
  15,533
  16,437
  20,094
  21,086
  22,124
  23,213
  24,355
  25,551
  26,806
  28,121
  29,501
  30,949
  32,467
  34,060
  35,731
  37,484
  39,324
  41,255
  43,282
  45,409
  47,641
  49,984

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
  130,331
  137,668
  145,332
  153,341
  161,712
  170,466
  179,623
  189,206
  199,236
  209,739
  220,737
  232,259
  244,331
  256,983
  270,243
  284,145
  298,721
  314,005
  330,036
  346,850
  364,487
  382,991
  402,404
  422,774
  444,149
  466,580
  490,120
  514,825
  540,755
  567,971
Adjusted assets (=assets-cash), $m
  130,331
  137,668
  145,332
  153,341
  161,712
  170,466
  179,623
  189,206
  199,236
  209,739
  220,737
  232,259
  244,331
  256,983
  270,243
  284,145
  298,721
  314,005
  330,036
  346,850
  364,487
  382,991
  402,404
  422,774
  444,149
  466,580
  490,120
  514,825
  540,755
  567,971
Revenue / Adjusted assets
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
  0.509
Average production assets, $m
  72,906
  77,010
  81,298
  85,777
  90,460
  95,357
  100,480
  105,840
  111,451
  117,326
  123,479
  129,924
  136,677
  143,754
  151,172
  158,948
  167,102
  175,652
  184,619
  194,025
  203,891
  214,242
  225,101
  236,496
  248,453
  261,000
  274,168
  287,988
  302,493
  317,718
Working capital, $m
  4,312
  4,555
  4,808
  5,073
  5,350
  5,640
  5,943
  6,260
  6,592
  6,939
  7,303
  7,684
  8,084
  8,502
  8,941
  9,401
  9,883
  10,389
  10,919
  11,476
  12,059
  12,671
  13,314
  13,987
  14,695
  15,437
  16,216
  17,033
  17,891
  18,791
Total debt, $m
  29,929
  33,157
  36,529
  40,053
  43,736
  47,588
  51,617
  55,834
  60,247
  64,868
  69,707
  74,777
  80,089
  85,655
  91,490
  97,607
  104,020
  110,745
  117,799
  125,197
  132,957
  141,099
  149,641
  158,604
  168,009
  177,878
  188,236
  199,106
  210,515
  222,490
Total liabilities, $m
  57,346
  60,574
  63,946
  67,470
  71,153
  75,005
  79,034
  83,251
  87,664
  92,285
  97,124
  102,194
  107,506
  113,072
  118,907
  125,024
  131,437
  138,162
  145,216
  152,614
  160,374
  168,516
  177,058
  186,021
  195,426
  205,295
  215,653
  226,523
  237,932
  249,907
Total equity, $m
  72,985
  77,094
  81,386
  85,871
  90,559
  95,461
  100,589
  105,955
  111,572
  117,454
  123,613
  130,065
  136,826
  143,910
  151,336
  159,121
  167,284
  175,843
  184,820
  194,236
  204,113
  214,475
  225,346
  236,754
  248,723
  261,285
  274,467
  288,302
  302,823
  318,064
Total liabilities and equity, $m
  130,331
  137,668
  145,332
  153,341
  161,712
  170,466
  179,623
  189,206
  199,236
  209,739
  220,737
  232,259
  244,332
  256,982
  270,243
  284,145
  298,721
  314,005
  330,036
  346,850
  364,487
  382,991
  402,404
  422,775
  444,149
  466,580
  490,120
  514,825
  540,755
  567,971
Debt-to-equity ratio
  0.410
  0.430
  0.450
  0.470
  0.480
  0.500
  0.510
  0.530
  0.540
  0.550
  0.560
  0.570
  0.590
  0.600
  0.600
  0.610
  0.620
  0.630
  0.640
  0.640
  0.650
  0.660
  0.660
  0.670
  0.680
  0.680
  0.690
  0.690
  0.700
  0.700
Adjusted equity ratio
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560
  0.560

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  9,606
  10,236
  10,896
  11,584
  12,304
  13,058
  13,845
  14,670
  15,533
  16,437
  20,094
  21,086
  22,124
  23,213
  24,355
  25,551
  26,806
  28,121
  29,501
  30,949
  32,467
  34,060
  35,731
  37,484
  39,324
  41,255
  43,282
  45,409
  47,641
  49,984
Depreciation, amort., depletion, $m
  11,004
  11,414
  11,843
  12,291
  12,759
  13,249
  13,761
  14,297
  14,859
  15,446
  12,348
  12,992
  13,668
  14,375
  15,117
  15,895
  16,710
  17,565
  18,462
  19,402
  20,389
  21,424
  22,510
  23,650
  24,845
  26,100
  27,417
  28,799
  30,249
  31,772
Funds from operations, $m
  20,610
  21,651
  22,739
  23,876
  25,064
  26,307
  27,607
  28,967
  30,392
  31,883
  32,442
  34,078
  35,792
  37,589
  39,472
  41,446
  43,516
  45,687
  47,963
  50,351
  52,856
  55,484
  58,241
  61,134
  64,170
  67,355
  70,699
  74,208
  77,890
  81,756
Change in working capital, $m
  233
  243
  254
  265
  277
  290
  303
  317
  332
  347
  364
  381
  399
  419
  439
  460
  482
  506
  530
  556
  584
  612
  642
  674
  707
  742
  779
  817
  858
  900
Cash from operations, $m
  20,378
  21,408
  22,485
  23,611
  24,787
  26,017
  27,304
  28,650
  30,060
  31,535
  32,078
  33,697
  35,393
  37,170
  39,033
  40,986
  43,034
  45,181
  47,433
  49,795
  52,272
  54,872
  57,599
  60,460
  63,463
  66,613
  69,920
  73,390
  77,033
  80,855
Maintenance CAPEX, $m
  -6,900
  -7,291
  -7,701
  -8,130
  -8,578
  -9,046
  -9,536
  -10,048
  -10,584
  -11,145
  -11,733
  -12,348
  -12,992
  -13,668
  -14,375
  -15,117
  -15,895
  -16,710
  -17,565
  -18,462
  -19,402
  -20,389
  -21,424
  -22,510
  -23,650
  -24,845
  -26,100
  -27,417
  -28,799
  -30,249
New CAPEX, $m
  -3,902
  -4,105
  -4,287
  -4,480
  -4,683
  -4,897
  -5,123
  -5,360
  -5,611
  -5,875
  -6,153
  -6,445
  -6,753
  -7,077
  -7,418
  -7,776
  -8,154
  -8,550
  -8,967
  -9,406
  -9,866
  -10,351
  -10,860
  -11,395
  -11,957
  -12,548
  -13,168
  -13,820
  -14,505
  -15,224
Cash from investing activities, $m
  -10,802
  -11,396
  -11,988
  -12,610
  -13,261
  -13,943
  -14,659
  -15,408
  -16,195
  -17,020
  -17,886
  -18,793
  -19,745
  -20,745
  -21,793
  -22,893
  -24,049
  -25,260
  -26,532
  -27,868
  -29,268
  -30,740
  -32,284
  -33,905
  -35,607
  -37,393
  -39,268
  -41,237
  -43,304
  -45,473
Free cash flow, $m
  9,575
  10,013
  10,497
  11,001
  11,526
  12,074
  12,646
  13,242
  13,865
  14,515
  14,193
  14,904
  15,647
  16,425
  17,240
  18,092
  18,985
  19,921
  20,900
  21,927
  23,004
  24,132
  25,315
  26,555
  27,856
  29,221
  30,652
  32,153
  33,729
  35,382
Issuance/(repayment) of debt, $m
  3,116
  3,229
  3,372
  3,524
  3,683
  3,852
  4,029
  4,216
  4,413
  4,621
  4,839
  5,070
  5,312
  5,567
  5,835
  6,117
  6,413
  6,725
  7,053
  7,398
  7,761
  8,142
  8,542
  8,963
  9,405
  9,869
  10,358
  10,870
  11,409
  11,975
Issuance/(repurchase) of shares, $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 from financing (excl. dividends), $m  
  3,116
  3,229
  3,372
  3,524
  3,683
  3,852
  4,029
  4,216
  4,413
  4,621
  4,839
  5,070
  5,312
  5,567
  5,835
  6,117
  6,413
  6,725
  7,053
  7,398
  7,761
  8,142
  8,542
  8,963
  9,405
  9,869
  10,358
  10,870
  11,409
  11,975
Total cash flow (excl. dividends), $m
  12,690
  13,241
  13,869
  14,525
  15,210
  15,926
  16,675
  17,458
  18,278
  19,136
  19,032
  19,973
  20,959
  21,992
  23,074
  24,209
  25,399
  26,646
  27,954
  29,325
  30,764
  32,273
  33,857
  35,518
  37,261
  39,090
  41,009
  43,024
  45,138
  47,357
Retained Cash Flow (-), $m
  -3,966
  -4,109
  -4,292
  -4,485
  -4,688
  -4,902
  -5,128
  -5,366
  -5,617
  -5,881
  -6,159
  -6,452
  -6,760
  -7,085
  -7,426
  -7,785
  -8,162
  -8,559
  -8,977
  -9,416
  -9,877
  -10,362
  -10,872
  -11,407
  -11,970
  -12,561
  -13,182
  -13,835
  -14,521
  -15,241
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
  1,381
  1,459
  1,542
  1,627
  1,717
  1,811
  1,909
  2,011
  2,119
  2,231
  2,349
  2,472
  2,601
  2,736
  2,878
  3,026
  3,182
  3,345
  3,516
  3,696
  3,884
  4,082
  4,289
  4,506
  4,734
  4,974
  5,225
  5,488
  5,765
  6,055
Cash available for distribution, $m
  8,724
  9,132
  9,577
  10,040
  10,522
  11,024
  11,547
  12,092
  12,661
  13,255
  12,873
  13,521
  14,199
  14,907
  15,649
  16,424
  17,236
  18,086
  18,977
  19,910
  20,887
  21,911
  22,985
  24,111
  25,291
  26,529
  27,827
  29,189
  30,617
  32,116
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
  8,365
  8,360
  8,335
  8,267
  8,156
  8,000
  7,801
  7,558
  7,273
  6,949
  6,113
  5,770
  5,399
  5,005
  4,594
  4,174
  3,750
  3,331
  2,922
  2,530
  2,160
  1,818
  1,506
  1,228
  984
  774
  597
  452
  334
  242
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Intel Corporation is engaged in designing and manufacturing products and technologies, such as the cloud. The Company's segments are Client Computing Group (CCG), Data Center Group (DCG), Internet of Things Group (IOTG), Non-Volatile Memory Solutions Group (NSG), Intel Security Group (ISecG), Programmable Solutions Group (PSG), All Other and New Technology Group (NTG). It delivers computer, networking and communications platforms to a set of customers, including original equipment manufacturers (OEMs), original design manufacturers (ODMs), cloud and communications service providers, as well as industrial, communications and automotive equipment manufacturers. It offers platforms to integrate various components and technologies, including a microprocessor and chipset, a stand-alone System-on-Chip (SoC), or a multichip package. The CCG operating segment includes platforms that integrates in notebook, two in one systems, desktop computers for consumers and businesses, tablets, and phones.

FINANCIAL RATIOS  of  Intel (INTC)

Valuation Ratios
P/E Ratio 21.6
Price to Sales 3.8
Price to Book 3.4
Price to Tangible Book
Price to Cash Flow 10.2
Price to Free Cash Flow 18.3
Growth Rates
Sales Growth Rate 7.3%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 29.3%
Cap. Spend. - 3 Yr. Gr. Rate -2.2%
Financial Strength
Quick Ratio 4
Current Ratio 0.4
LT Debt to Equity 31.2%
Total Debt to Equity 38.2%
Interest Coverage 20
Management Effectiveness
Return On Assets 10.1%
Ret/ On Assets - 3 Yr. Avg. 11.6%
Return On Total Capital 11.8%
Ret/ On T. Cap. - 3 Yr. Avg. 14.4%
Return On Equity 16.2%
Return On Equity - 3 Yr. Avg. 18.7%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 60.9%
Gross Margin - 3 Yr. Avg. 62.4%
EBITDA Margin 36%
EBITDA Margin - 3 Yr. Avg. 40.6%
Operating Margin 21.5%
Oper. Margin - 3 Yr. Avg. 24.8%
Pre-Tax Margin 21.8%
Pre-Tax Margin - 3 Yr. Avg. 25.2%
Net Profit Margin 17.4%
Net Profit Margin - 3 Yr. Avg. 19.6%
Effective Tax Rate 20.3%
Eff/ Tax Rate - 3 Yr. Avg. 21.9%
Payout Ratio 47.7%

INTC stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the INTC stock intrinsic value calculation we used $62761 million for the last fiscal year's total revenue generated by Intel. The default revenue input number comes from 2017 income statement of Intel. 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 INTC stock valuation model: a) initial revenue growth rate of 5.7% 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 INTC is calculated based on our internal credit rating of Intel, 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 Intel.
    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 INTC stock the variable cost ratio is equal to 78.3%.

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 INTC 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 Intel.

Corporate tax rate of 27% is the nominal tax rate for Intel. 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 INTC stock is equal to 2.2%.

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 INTC are equal to 109.9%.

Life of production assets of 10 years is the average useful life of capital assets used in Intel 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 INTC is equal to 6.5%. 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 - $69019 million for Intel - 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 4701 million for Intel 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 Intel at the current share price and the inputted number of shares is $221.4 billion.

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COMPANY NEWS

▶ Intel's Memory Business Is Still Losing Money   [Aug-18-18 04:00PM  Motley Fool]
▶ Nanometrics Boosted By Gear For Making 3D Nand Memory Chips   [04:25PM  Investor's Business Daily]
▶ Bitcoin review: Crypto millionaire gets duped, LINE launches fund   [02:18PM  American City Business Journals]
▶ Meet the highest-paid San Francisco Bay Area CEOs in tech   [10:41AM  American City Business Journals]
▶ [$$] AMD Set to Crack Intels Lock on Data Centers   [03:55PM  The Wall Street Journal]
▶ 4 Cant Lose Tech Stocks to Cut Loose Today   [09:47AM  InvestorPlace]
▶ Amid immigration crackdown, H-1B visas still on rise among tech giants   [10:21AM  American City Business Journals]
▶ Intel discovers new chip security vulnerability   [Aug-14-18 06:32PM  The Telegraph]
▶ Betsy Atkins, Corporate Board Director   [05:12PM  Yahoo Finance Video]
▶ Intel says its sold $1B worth of AI chips to data centers so far   [03:07PM  American City Business Journals]
▶ Stocks Open Higher As Tesla, Nielsen, Amazon Take Early Gains   [09:38AM  Investor's Business Daily]
▶ Intel target lowered to $49 at Cowen   [08:37AM  MarketWatch]
▶ Intel's Smart Plan to Boost Desktop Processor Prices   [Aug-11-18 08:15AM  Motley Fool]
▶ Morningstar Runs the Numbers   [06:00AM  Morningstar]
▶ 5 Top Stock Trades for Monday Morning   [03:59PM  InvestorPlace]
▶ Intels stock rocked by Goldmans sell call   [02:54PM  MarketWatch]
▶ What's Bad for Intel Is Good for AMD   [02:22PM  Barrons.com]
▶ The call of the day: the big chip company   [02:02PM  CNBC Videos]
▶ Sell Intel Right Now, Goldman Sachs Says   [05:57AM  TheStreet.com]
▶ When Will NVIDIAs Self-Driving Car Bet Pay Off?   [Aug-09-18 08:43PM  Motley Fool]
▶ Final Trade: INTC, LOW & more   [06:16PM  CNBC Videos]
▶ 3 Chip Stocks to Buy for the Next 3 Years   [02:27PM  InvestorPlace]
▶ Biz Smarts: Why the word 'sponsor' is best seen as a verb   [10:16AM  American City Business Journals]
▶ Intel says its sold $1B worth of AI chips to data centers so far   [10:12AM  American City Business Journals]
▶ Will Intel's Rally Close the Gap?   [09:27AM  Investopedia]
▶ Qualcomm Will Be Free to Fly With 5G   [01:04PM  InvestorPlace]
▶ Has Intel Given Up on the PC?   [Aug-06-18 06:10PM  Motley Fool]
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