Intrinsic value of Newmark Group, Inc. - NMRK

Previous Close

$8.35

  Intrinsic Value

$101.98

stock screener

  Rating & Target

str. buy

+999%

Previous close

$8.35

 
Intrinsic value

$101.98

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of NMRK 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 1.5

 

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, %
  28.10
  25.79
  23.71
  21.84
  20.16
  18.64
  17.28
  16.05
  14.94
  13.95
  13.05
  12.25
  11.52
  10.87
  10.28
  9.76
  9.28
  8.85
  8.47
  8.12
  7.81
  7.53
  7.27
  7.05
  6.84
  6.66
  6.49
  6.34
  6.21
  6.09
Revenue, $m
  2,044
  2,572
  3,182
  3,876
  4,658
  5,526
  6,481
  7,521
  8,644
  9,850
  11,136
  12,500
  13,941
  15,457
  17,046
  18,709
  20,445
  22,255
  24,140
  26,100
  28,138
  30,256
  32,457
  34,745
  37,122
  39,594
  42,164
  44,839
  47,623
  50,522
Variable operating expenses, $m
  1,788
  2,226
  2,733
  3,310
  3,960
  4,681
  5,474
  6,339
  7,272
  8,274
  9,253
  10,387
  11,584
  12,843
  14,164
  15,546
  16,989
  18,492
  20,058
  21,687
  23,381
  25,141
  26,969
  28,870
  30,846
  32,899
  35,035
  37,258
  39,571
  41,980
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
  1,788
  2,226
  2,733
  3,310
  3,960
  4,681
  5,474
  6,339
  7,272
  8,274
  9,253
  10,387
  11,584
  12,843
  14,164
  15,546
  16,989
  18,492
  20,058
  21,687
  23,381
  25,141
  26,969
  28,870
  30,846
  32,899
  35,035
  37,258
  39,571
  41,980
Operating income, $m
  256
  345
  448
  566
  698
  845
  1,006
  1,182
  1,372
  1,576
  1,883
  2,114
  2,357
  2,613
  2,882
  3,163
  3,457
  3,763
  4,082
  4,413
  4,758
  5,116
  5,488
  5,875
  6,277
  6,694
  7,129
  7,581
  8,052
  8,542
EBITDA, $m
  411
  517
  640
  780
  937
  1,111
  1,303
  1,512
  1,738
  1,981
  2,239
  2,514
  2,803
  3,108
  3,428
  3,762
  4,112
  4,476
  4,854
  5,249
  5,659
  6,084
  6,527
  6,987
  7,465
  7,962
  8,479
  9,017
  9,577
  10,160
Interest expense (income), $m
  12
  78
  106
  139
  177
  220
  269
  323
  382
  447
  517
  592
  673
  758
  847
  942
  1,041
  1,145
  1,253
  1,366
  1,483
  1,605
  1,732
  1,864
  2,001
  2,144
  2,292
  2,446
  2,606
  2,773
  2,947
Earnings before tax, $m
  178
  239
  310
  389
  478
  576
  683
  800
  925
  1,059
  1,290
  1,441
  1,599
  1,766
  1,940
  2,122
  2,312
  2,510
  2,716
  2,930
  3,152
  3,383
  3,624
  3,873
  4,133
  4,402
  4,683
  4,975
  5,279
  5,596
Tax expense, $m
  48
  65
  84
  105
  129
  156
  184
  216
  250
  286
  348
  389
  432
  477
  524
  573
  624
  678
  733
  791
  851
  914
  978
  1,046
  1,116
  1,189
  1,264
  1,343
  1,425
  1,511
Net income, $m
  130
  175
  226
  284
  349
  420
  499
  584
  675
  773
  942
  1,052
  1,168
  1,289
  1,416
  1,549
  1,688
  1,832
  1,983
  2,139
  2,301
  2,470
  2,645
  2,827
  3,017
  3,214
  3,419
  3,632
  3,854
  4,085

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
  2,694
  3,388
  4,192
  5,107
  6,137
  7,281
  8,538
  9,909
  11,389
  12,978
  14,672
  16,469
  18,367
  20,364
  22,459
  24,650
  26,937
  29,322
  31,805
  34,387
  37,073
  39,863
  42,763
  45,777
  48,909
  52,166
  55,553
  59,076
  62,744
  66,564
Adjusted assets (=assets-cash), $m
  2,694
  3,388
  4,192
  5,107
  6,137
  7,281
  8,538
  9,909
  11,389
  12,978
  14,672
  16,469
  18,367
  20,364
  22,459
  24,650
  26,937
  29,322
  31,805
  34,387
  37,073
  39,863
  42,763
  45,777
  48,909
  52,166
  55,553
  59,076
  62,744
  66,564
Revenue / Adjusted assets
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
  0.759
Average production assets, $m
  615
  774
  958
  1,167
  1,402
  1,663
  1,951
  2,264
  2,602
  2,965
  3,352
  3,763
  4,196
  4,652
  5,131
  5,631
  6,154
  6,699
  7,266
  7,856
  8,470
  9,107
  9,770
  10,458
  11,174
  11,918
  12,691
  13,497
  14,335
  15,207
Working capital, $m
  -243
  -306
  -379
  -461
  -554
  -658
  -771
  -895
  -1,029
  -1,172
  -1,325
  -1,488
  -1,659
  -1,839
  -2,028
  -2,226
  -2,433
  -2,648
  -2,873
  -3,106
  -3,348
  -3,600
  -3,862
  -4,135
  -4,418
  -4,712
  -5,018
  -5,336
  -5,667
  -6,012
Total debt, $m
  1,962
  2,571
  3,275
  4,076
  4,978
  5,980
  7,082
  8,282
  9,580
  10,971
  12,455
  14,030
  15,692
  17,442
  19,276
  21,196
  23,200
  25,289
  27,463
  29,726
  32,078
  34,523
  37,063
  39,703
  42,447
  45,300
  48,267
  51,353
  54,567
  57,913
Total liabilities, $m
  2,360
  2,968
  3,672
  4,474
  5,376
  6,378
  7,480
  8,680
  9,977
  11,369
  12,853
  14,427
  16,090
  17,839
  19,674
  21,593
  23,597
  25,686
  27,861
  30,123
  32,476
  34,920
  37,461
  40,101
  42,844
  45,697
  48,664
  51,751
  54,964
  58,310
Total equity, $m
  334
  420
  520
  633
  761
  903
  1,059
  1,229
  1,412
  1,609
  1,819
  2,042
  2,278
  2,525
  2,785
  3,057
  3,340
  3,636
  3,944
  4,264
  4,597
  4,943
  5,303
  5,676
  6,065
  6,469
  6,889
  7,325
  7,780
  8,254
Total liabilities and equity, $m
  2,694
  3,388
  4,192
  5,107
  6,137
  7,281
  8,539
  9,909
  11,389
  12,978
  14,672
  16,469
  18,368
  20,364
  22,459
  24,650
  26,937
  29,322
  31,805
  34,387
  37,073
  39,863
  42,764
  45,777
  48,909
  52,166
  55,553
  59,076
  62,744
  66,564
Debt-to-equity ratio
  5.870
  6.120
  6.300
  6.440
  6.540
  6.620
  6.690
  6.740
  6.780
  6.820
  6.850
  6.870
  6.890
  6.910
  6.920
  6.930
  6.950
  6.960
  6.960
  6.970
  6.980
  6.980
  6.990
  6.990
  7.000
  7.000
  7.010
  7.010
  7.010
  7.020
Adjusted equity ratio
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124
  0.124

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  130
  175
  226
  284
  349
  420
  499
  584
  675
  773
  942
  1,052
  1,168
  1,289
  1,416
  1,549
  1,688
  1,832
  1,983
  2,139
  2,301
  2,470
  2,645
  2,827
  3,017
  3,214
  3,419
  3,632
  3,854
  4,085
Depreciation, amort., depletion, $m
  155
  172
  191
  214
  239
  266
  297
  330
  366
  405
  357
  400
  446
  495
  546
  599
  655
  713
  773
  836
  901
  969
  1,039
  1,113
  1,189
  1,268
  1,350
  1,436
  1,525
  1,618
Funds from operations, $m
  285
  347
  417
  498
  588
  687
  796
  914
  1,041
  1,178
  1,299
  1,452
  1,614
  1,784
  1,962
  2,148
  2,343
  2,545
  2,756
  2,975
  3,202
  3,439
  3,685
  3,940
  4,205
  4,482
  4,769
  5,067
  5,379
  5,703
Change in working capital, $m
  -53
  -63
  -73
  -83
  -93
  -103
  -114
  -124
  -134
  -143
  -153
  -162
  -171
  -180
  -189
  -198
  -207
  -215
  -224
  -233
  -243
  -252
  -262
  -272
  -283
  -294
  -306
  -318
  -331
  -345
Cash from operations, $m
  338
  409
  490
  580
  680
  790
  909
  1,038
  1,175
  1,321
  1,452
  1,614
  1,785
  1,964
  2,151
  2,346
  2,549
  2,760
  2,980
  3,208
  3,445
  3,691
  3,946
  4,212
  4,488
  4,776
  5,075
  5,386
  5,710
  6,048
Maintenance CAPEX, $m
  -51
  -65
  -82
  -102
  -124
  -149
  -177
  -208
  -241
  -277
  -315
  -357
  -400
  -446
  -495
  -546
  -599
  -655
  -713
  -773
  -836
  -901
  -969
  -1,039
  -1,113
  -1,189
  -1,268
  -1,350
  -1,436
  -1,525
New CAPEX, $m
  -135
  -159
  -184
  -209
  -235
  -261
  -287
  -313
  -338
  -363
  -387
  -411
  -434
  -456
  -478
  -501
  -523
  -545
  -567
  -590
  -613
  -638
  -663
  -688
  -716
  -744
  -774
  -805
  -838
  -873
Cash from investing activities, $m
  -186
  -224
  -266
  -311
  -359
  -410
  -464
  -521
  -579
  -640
  -702
  -768
  -834
  -902
  -973
  -1,047
  -1,122
  -1,200
  -1,280
  -1,363
  -1,449
  -1,539
  -1,632
  -1,727
  -1,829
  -1,933
  -2,042
  -2,155
  -2,274
  -2,398
Free cash flow, $m
  152
  185
  224
  269
  321
  380
  445
  517
  596
  681
  749
  847
  952
  1,062
  1,178
  1,300
  1,428
  1,561
  1,700
  1,845
  1,996
  2,152
  2,315
  2,484
  2,660
  2,843
  3,033
  3,231
  3,436
  3,650
Issuance/(repayment) of debt, $m
  519
  609
  704
  802
  902
  1,002
  1,102
  1,200
  1,297
  1,392
  1,484
  1,574
  1,663
  1,749
  1,835
  1,919
  2,004
  2,089
  2,175
  2,262
  2,352
  2,445
  2,540
  2,640
  2,744
  2,853
  2,967
  3,087
  3,213
  3,346
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  
  519
  609
  704
  802
  902
  1,002
  1,102
  1,200
  1,297
  1,392
  1,484
  1,574
  1,663
  1,749
  1,835
  1,919
  2,004
  2,089
  2,175
  2,262
  2,352
  2,445
  2,540
  2,640
  2,744
  2,853
  2,967
  3,087
  3,213
  3,346
Total cash flow (excl. dividends), $m
  671
  794
  928
  1,071
  1,223
  1,382
  1,547
  1,718
  1,893
  2,073
  2,233
  2,422
  2,614
  2,811
  3,013
  3,219
  3,432
  3,650
  3,875
  4,107
  4,348
  4,597
  4,855
  5,124
  5,404
  5,696
  6,000
  6,317
  6,649
  6,996
Retained Cash Flow (-), $m
  -74
  -86
  -100
  -114
  -128
  -142
  -156
  -170
  -184
  -197
  -210
  -223
  -235
  -248
  -260
  -272
  -284
  -296
  -308
  -320
  -333
  -346
  -360
  -374
  -388
  -404
  -420
  -437
  -455
  -474
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
  597
  708
  828
  958
  1,095
  1,240
  1,391
  1,548
  1,710
  1,876
  2,023
  2,199
  2,379
  2,563
  2,753
  2,948
  3,148
  3,354
  3,567
  3,787
  4,015
  4,251
  4,496
  4,751
  5,016
  5,292
  5,580
  5,880
  6,194
  6,523
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
  572
  648
  721
  789
  849
  900
  940
  967
  982
  984
  961
  938
  904
  861
  808
  749
  685
  618
  549
  481
  415
  353
  295
  242
  195
  154
  120
  91
  68
  49
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

Newmark Group, Inc. is a commercial real estate services company. The Company is focused on offering products and services to both owners and occupiers across the entire commercial real estate industry. Its investor/owner services and products include capital markets, which consists of investment sales, debt and structured finance and loan sales, agency leasing, property management, valuation and advisory, diligence and underwriting and government-sponsored enterprise lending and loan servicing. Its occupier services and products include tenant representation, real estate management technology systems, workplace and occupancy strategy, global corporate services consulting, project management, lease administration and facilities management.

FINANCIAL RATIOS  of  Newmark Group, Inc. (NMRK)

Valuation Ratios
P/E Ratio 7.5
Price to Sales 0.9
Price to Book 1.3
Price to Tangible Book
Price to Cash Flow -2
Price to Free Cash Flow -1.9
Growth Rates
Sales Growth Rate 12.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 66.7%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 0%
Total Debt to Equity 26.3%
Interest Coverage 15
Management Effectiveness
Return On Assets 8.6%
Ret/ On Assets - 3 Yr. Avg. 2.9%
Return On Total Capital 14%
Ret/ On T. Cap. - 3 Yr. Avg. 4.5%
Return On Equity 18.9%
Return On Equity - 3 Yr. Avg. 6%
Asset Turnover 0.6
Profitability Ratios
Gross Margin 98.7%
Gross Margin - 3 Yr. Avg. 65.7%
EBITDA Margin 18.9%
EBITDA Margin - 3 Yr. Avg. 8.3%
Operating Margin 11.3%
Oper. Margin - 3 Yr. Avg. 3.4%
Pre-Tax Margin 12.7%
Pre-Tax Margin - 3 Yr. Avg. 4%
Net Profit Margin 12.4%
Net Profit Margin - 3 Yr. Avg. 4.1%
Effective Tax Rate 2.3%
Eff/ Tax Rate - 3 Yr. Avg. 23%
Payout Ratio 0%

NMRK stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the NMRK stock intrinsic value calculation we used $1596 million for the last fiscal year's total revenue generated by Newmark Group, Inc.. The default revenue input number comes from 0001 income statement of Newmark Group, 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 NMRK stock valuation model: a) initial revenue growth rate of 28.1% 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 NMRK is calculated based on our internal credit rating of Newmark Group, 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 Newmark Group, 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 NMRK stock the variable cost ratio is equal to 88.7%.

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 NMRK 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 Newmark Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for Newmark Group, 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 NMRK 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 NMRK are equal to 30.1%.

Life of production assets of 9.4 years is the average useful life of capital assets used in Newmark Group, 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 NMRK is equal to -11.9%. 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 - $260.41 million for Newmark Group, 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 176.404 million for Newmark Group, 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 Newmark Group, Inc. at the current share price and the inputted number of shares is $1.5 billion.

CONTACT US      

About X-FIN       Privacy policy       Terms of use      

Copyright © X-FIN.com 2005-2019. All rigths reserved.