Intrinsic value of Presidio, Inc. - PSDO

Previous Close

$14.42

  Intrinsic Value

$80.71

stock screener

  Rating & Target

str. buy

+460%

Previous close

$14.42

 
Intrinsic value

$80.71

 
Up/down potential

+460%

 
Rating

str. buy

We calculate the intrinsic value of PSDO 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 1.2

 

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, %
  18.30
  16.97
  15.77
  14.70
  13.73
  12.85
  12.07
  11.36
  10.73
  10.15
  9.64
  9.17
  8.76
  8.38
  8.04
  7.74
  7.46
  7.22
  7.00
  6.80
  6.62
  6.46
  6.31
  6.18
  6.06
  5.95
  5.86
  5.77
  5.70
  5.63
Revenue, $m
  3,381
  3,955
  4,579
  5,251
  5,972
  6,740
  7,553
  8,411
  9,314
  10,259
  11,248
  12,280
  13,355
  14,474
  15,638
  16,848
  18,106
  19,413
  20,771
  22,183
  23,651
  25,177
  26,766
  28,420
  30,142
  31,937
  33,809
  35,760
  37,797
  39,924
Variable operating expenses, $m
  2,775
  3,221
  3,705
  4,227
  4,787
  5,383
  6,015
  6,681
  7,381
  8,115
  8,733
  9,534
  10,368
  11,237
  12,141
  13,081
  14,057
  15,072
  16,126
  17,222
  18,362
  19,547
  20,780
  22,064
  23,402
  24,795
  26,248
  27,764
  29,345
  30,996
Fixed operating expenses, $m
  390
  399
  408
  417
  426
  435
  445
  455
  465
  475
  485
  496
  507
  518
  529
  541
  553
  565
  578
  590
  603
  617
  630
  644
  658
  673
  687
  703
  718
  734
Total operating expenses, $m
  3,165
  3,620
  4,113
  4,644
  5,213
  5,818
  6,460
  7,136
  7,846
  8,590
  9,218
  10,030
  10,875
  11,755
  12,670
  13,622
  14,610
  15,637
  16,704
  17,812
  18,965
  20,164
  21,410
  22,708
  24,060
  25,468
  26,935
  28,467
  30,063
  31,730
Operating income, $m
  215
  335
  466
  607
  759
  922
  1,094
  1,276
  1,468
  1,669
  2,030
  2,250
  2,480
  2,719
  2,968
  3,227
  3,496
  3,776
  4,067
  4,370
  4,686
  5,014
  5,355
  5,711
  6,082
  6,469
  6,873
  7,294
  7,734
  8,194
EBITDA, $m
  420
  549
  690
  842
  1,006
  1,180
  1,366
  1,562
  1,768
  1,984
  2,211
  2,447
  2,694
  2,951
  3,219
  3,497
  3,787
  4,088
  4,401
  4,727
  5,066
  5,418
  5,786
  6,168
  6,567
  6,983
  7,416
  7,869
  8,342
  8,836
Interest expense (income), $m
  76
  47
  66
  88
  111
  136
  163
  192
  222
  254
  288
  323
  360
  399
  439
  481
  524
  569
  616
  665
  716
  768
  823
  880
  940
  1,001
  1,066
  1,133
  1,203
  1,275
  1,352
Earnings before tax, $m
  169
  269
  378
  496
  623
  758
  902
  1,054
  1,214
  1,381
  1,707
  1,890
  2,081
  2,280
  2,487
  2,703
  2,927
  3,160
  3,402
  3,655
  3,917
  4,190
  4,475
  4,772
  5,081
  5,404
  5,740
  6,092
  6,459
  6,843
Tax expense, $m
  46
  73
  102
  134
  168
  205
  244
  285
  328
  373
  461
  510
  562
  616
  672
  730
  790
  853
  919
  987
  1,058
  1,131
  1,208
  1,288
  1,372
  1,459
  1,550
  1,645
  1,744
  1,848
Net income, $m
  123
  196
  276
  362
  455
  554
  659
  769
  886
  1,008
  1,246
  1,380
  1,519
  1,664
  1,816
  1,973
  2,137
  2,307
  2,484
  2,668
  2,860
  3,059
  3,267
  3,483
  3,709
  3,945
  4,190
  4,447
  4,715
  4,995

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
  3,239
  3,788
  4,386
  5,030
  5,721
  6,456
  7,235
  8,057
  8,921
  9,827
  10,774
  11,762
  12,792
  13,864
  14,979
  16,138
  17,343
  18,595
  19,896
  21,248
  22,654
  24,116
  25,638
  27,222
  28,872
  30,591
  32,384
  34,253
  36,204
  38,241
Adjusted assets (=assets-cash), $m
  3,239
  3,788
  4,386
  5,030
  5,721
  6,456
  7,235
  8,057
  8,921
  9,827
  10,774
  11,762
  12,792
  13,864
  14,979
  16,138
  17,343
  18,595
  19,896
  21,248
  22,654
  24,116
  25,638
  27,222
  28,872
  30,591
  32,384
  34,253
  36,204
  38,241
Revenue / Adjusted assets
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
  1.044
Average production assets, $m
  940
  1,099
  1,273
  1,460
  1,660
  1,874
  2,100
  2,338
  2,589
  2,852
  3,127
  3,414
  3,713
  4,024
  4,347
  4,684
  5,033
  5,397
  5,774
  6,167
  6,575
  6,999
  7,441
  7,901
  8,380
  8,879
  9,399
  9,941
  10,508
  11,099
Working capital, $m
  132
  154
  179
  205
  233
  263
  295
  328
  363
  400
  439
  479
  521
  564
  610
  657
  706
  757
  810
  865
  922
  982
  1,044
  1,108
  1,176
  1,246
  1,319
  1,395
  1,474
  1,557
Total debt, $m
  1,227
  1,624
  2,055
  2,521
  3,019
  3,550
  4,113
  4,706
  5,330
  5,984
  6,668
  7,381
  8,125
  8,899
  9,704
  10,541
  11,411
  12,314
  13,254
  14,230
  15,245
  16,301
  17,400
  18,543
  19,735
  20,976
  22,270
  23,620
  25,029
  26,499
Total liabilities, $m
  2,338
  2,735
  3,166
  3,632
  4,130
  4,661
  5,224
  5,817
  6,441
  7,095
  7,779
  8,492
  9,236
  10,010
  10,815
  11,652
  12,522
  13,425
  14,365
  15,341
  16,356
  17,412
  18,511
  19,654
  20,846
  22,087
  23,381
  24,731
  26,140
  27,610
Total equity, $m
  900
  1,053
  1,219
  1,398
  1,590
  1,795
  2,011
  2,240
  2,480
  2,732
  2,995
  3,270
  3,556
  3,854
  4,164
  4,486
  4,821
  5,169
  5,531
  5,907
  6,298
  6,704
  7,127
  7,568
  8,026
  8,504
  9,003
  9,522
  10,065
  10,631
Total liabilities and equity, $m
  3,238
  3,788
  4,385
  5,030
  5,720
  6,456
  7,235
  8,057
  8,921
  9,827
  10,774
  11,762
  12,792
  13,864
  14,979
  16,138
  17,343
  18,594
  19,896
  21,248
  22,654
  24,116
  25,638
  27,222
  28,872
  30,591
  32,384
  34,253
  36,205
  38,241
Debt-to-equity ratio
  1.360
  1.540
  1.690
  1.800
  1.900
  1.980
  2.040
  2.100
  2.150
  2.190
  2.230
  2.260
  2.280
  2.310
  2.330
  2.350
  2.370
  2.380
  2.400
  2.410
  2.420
  2.430
  2.440
  2.450
  2.460
  2.470
  2.470
  2.480
  2.490
  2.490
Adjusted equity ratio
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278
  0.278

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  123
  196
  276
  362
  455
  554
  659
  769
  886
  1,008
  1,246
  1,380
  1,519
  1,664
  1,816
  1,973
  2,137
  2,307
  2,484
  2,668
  2,860
  3,059
  3,267
  3,483
  3,709
  3,945
  4,190
  4,447
  4,715
  4,995
Depreciation, amort., depletion, $m
  205
  214
  224
  235
  246
  259
  272
  286
  300
  315
  181
  197
  215
  233
  251
  271
  291
  312
  334
  356
  380
  405
  430
  457
  484
  513
  543
  575
  607
  642
Funds from operations, $m
  328
  410
  500
  597
  701
  812
  930
  1,055
  1,186
  1,323
  1,427
  1,577
  1,734
  1,897
  2,067
  2,244
  2,427
  2,619
  2,817
  3,024
  3,240
  3,464
  3,697
  3,940
  4,194
  4,458
  4,734
  5,022
  5,322
  5,637
Change in working capital, $m
  20
  22
  24
  26
  28
  30
  32
  33
  35
  37
  39
  40
  42
  44
  45
  47
  49
  51
  53
  55
  57
  60
  62
  64
  67
  70
  73
  76
  79
  83
Cash from operations, $m
  307
  388
  476
  571
  673
  782
  899
  1,021
  1,151
  1,287
  1,388
  1,537
  1,692
  1,853
  2,021
  2,196
  2,378
  2,568
  2,765
  2,969
  3,182
  3,404
  3,635
  3,876
  4,126
  4,388
  4,661
  4,946
  5,243
  5,554
Maintenance CAPEX, $m
  -46
  -54
  -64
  -74
  -84
  -96
  -108
  -121
  -135
  -150
  -165
  -181
  -197
  -215
  -233
  -251
  -271
  -291
  -312
  -334
  -356
  -380
  -405
  -430
  -457
  -484
  -513
  -543
  -575
  -607
New CAPEX, $m
  -147
  -160
  -173
  -187
  -200
  -213
  -226
  -239
  -251
  -263
  -275
  -287
  -299
  -311
  -324
  -336
  -350
  -363
  -378
  -392
  -408
  -424
  -442
  -460
  -479
  -499
  -520
  -543
  -566
  -591
Cash from investing activities, $m
  -193
  -214
  -237
  -261
  -284
  -309
  -334
  -360
  -386
  -413
  -440
  -468
  -496
  -526
  -557
  -587
  -621
  -654
  -690
  -726
  -764
  -804
  -847
  -890
  -936
  -983
  -1,033
  -1,086
  -1,141
  -1,198
Free cash flow, $m
  115
  174
  239
  310
  388
  473
  564
  661
  765
  874
  948
  1,069
  1,196
  1,328
  1,465
  1,609
  1,758
  1,913
  2,075
  2,243
  2,418
  2,600
  2,789
  2,986
  3,191
  3,405
  3,627
  3,860
  4,102
  4,355
Issuance/(repayment) of debt, $m
  362
  397
  431
  465
  498
  531
  563
  593
  624
  654
  684
  714
  744
  774
  805
  837
  870
  904
  939
  976
  1,015
  1,056
  1,099
  1,144
  1,191
  1,241
  1,294
  1,350
  1,409
  1,471
Issuance/(repurchase) of shares, $m
  17
  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  
  379
  397
  431
  465
  498
  531
  563
  593
  624
  654
  684
  714
  744
  774
  805
  837
  870
  904
  939
  976
  1,015
  1,056
  1,099
  1,144
  1,191
  1,241
  1,294
  1,350
  1,409
  1,471
Total cash flow (excl. dividends), $m
  494
  571
  670
  775
  887
  1,004
  1,127
  1,255
  1,389
  1,528
  1,632
  1,783
  1,939
  2,102
  2,270
  2,446
  2,628
  2,817
  3,014
  3,219
  3,433
  3,655
  3,887
  4,129
  4,382
  4,646
  4,921
  5,209
  5,511
  5,826
Retained Cash Flow (-), $m
  -140
  -153
  -166
  -179
  -192
  -204
  -217
  -229
  -240
  -252
  -263
  -275
  -286
  -298
  -310
  -322
  -335
  -348
  -362
  -376
  -391
  -407
  -423
  -440
  -459
  -478
  -498
  -520
  -542
  -566
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
  354
  418
  504
  596
  695
  800
  910
  1,026
  1,148
  1,276
  1,369
  1,508
  1,653
  1,804
  1,960
  2,123
  2,293
  2,469
  2,653
  2,843
  3,042
  3,249
  3,464
  3,689
  3,923
  4,168
  4,423
  4,690
  4,968
  5,260
Discount rate, %
  7.50
  7.88
  8.27
  8.68
  9.12
  9.57
  10.05
  10.55
  11.08
  11.63
  12.22
  12.83
  13.47
  14.14
  14.85
  15.59
  16.37
  17.19
  18.05
  18.95
  19.90
  20.89
  21.94
  23.04
  24.19
  25.40
  26.67
  28.00
  29.40
  30.87
PV of cash for distribution, $m
  329
  359
  397
  427
  449
  462
  466
  460
  446
  425
  385
  354
  320
  283
  246
  209
  174
  142
  113
  88
  67
  50
  36
  25
  17
  12
  7
  5
  3
  2
Current shareholders' claim on cash, %
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6
  98.6

Presidio, Inc. is a United States-based company, which is an information technology (IT) solutions provider. The Company's services include strategy and consulting, solutions design and deployment, managed services, asset maintenance and support, financing services, global services and carrier connectivity. It offers various solutions under categories, including Digital Infrastructure, including Networking, Collaboration, Enterprise Mobility, Internet of Things and Data Analytics; Cloud, including Data Center Modernization, Hybrid/Multi Cloud and Cloud Concierge; and Security, including Next Generation Risk Management, Infrastructure Security, Managed Security and Physical Security. The Company focuses on technologies, including Collaboration, Virtualization, Data Center, Mobility, Hybrid Cloud Computing, IT Convergence and Cyber Security. It focuses on industries, such as healthcare, education, media and entertainment, energy and utilities, and legal and professional services.

FINANCIAL RATIOS  of  Presidio, Inc. (PSDO)

Valuation Ratios
P/E Ratio 327.9
Price to Sales 0.5
Price to Book 2.2
Price to Tangible Book
Price to Cash Flow 25.7
Price to Free Cash Flow -20.8
Growth Rates
Sales Growth Rate 3.8%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -0.9%
Cap. Spend. - 3 Yr. Gr. Rate 6.6%
Financial Strength
Quick Ratio NaN
Current Ratio 0.1
LT Debt to Equity 121.2%
Total Debt to Equity 121.2%
Interest Coverage 1
Management Effectiveness
Return On Assets 1.8%
Ret/ On Assets - 3 Yr. Avg. 1.8%
Return On Total Capital 0.3%
Ret/ On T. Cap. - 3 Yr. Avg. -1.5%
Return On Equity 0.8%
Return On Equity - 3 Yr. Avg. -5.8%
Asset Turnover 1.1
Profitability Ratios
Gross Margin 20.8%
Gross Margin - 3 Yr. Avg. 20.4%
EBITDA Margin 6.1%
EBITDA Margin - 3 Yr. Avg. 4.9%
Operating Margin 2.8%
Oper. Margin - 3 Yr. Avg. 2.4%
Pre-Tax Margin 0.2%
Pre-Tax Margin - 3 Yr. Avg. -0.5%
Net Profit Margin 0.1%
Net Profit Margin - 3 Yr. Avg. -0.4%
Effective Tax Rate 42.9%
Eff/ Tax Rate - 3 Yr. Avg. 22.8%
Payout Ratio 0%

PSDO stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the PSDO stock intrinsic value calculation we used $2858 million for the last fiscal year's total revenue generated by Presidio, Inc.. The default revenue input number comes from 0001 income statement of Presidio, 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 PSDO stock valuation model: a) initial revenue growth rate of 18.3% 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 7.5%, whose default value for PSDO is calculated based on our internal credit rating of Presidio, 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 Presidio, 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 PSDO stock the variable cost ratio is equal to 82.9%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $382 million in the base year in the intrinsic value calculation for PSDO 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 Presidio, Inc..

Corporate tax rate of 27% is the nominal tax rate for Presidio, 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 PSDO 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 PSDO are equal to 27.8%.

Life of production assets of 17.3 years is the average useful life of capital assets used in Presidio, 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 PSDO is equal to 3.9%. 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 - $760.3 million for Presidio, 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 82.606 million for Presidio, 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 Presidio, Inc. at the current share price and the inputted number of shares is $1.2 billion.

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