Intrinsic value of QIWI plc - QIWI

Previous Close

$20.76

  Intrinsic Value

$67.99

stock screener

  Rating & Target

str. buy

+228%

Previous close

$20.76

 
Intrinsic value

$67.99

 
Up/down potential

+228%

 
Rating

str. buy

We calculate the intrinsic value of QIWI 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 1.3

 

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, %
  24.80
  22.82
  21.04
  19.43
  17.99
  16.69
  15.52
  14.47
  13.52
  12.67
  11.90
  11.21
  10.59
  10.03
  9.53
  9.08
  8.67
  8.30
  7.97
  7.67
  7.41
  7.17
  6.95
  6.75
  6.58
  6.42
  6.28
  6.15
  6.04
  5.93
Revenue, $m
  452
  555
  672
  802
  946
  1,104
  1,276
  1,460
  1,658
  1,868
  2,090
  2,325
  2,571
  2,829
  3,099
  3,380
  3,673
  3,978
  4,295
  4,625
  4,967
  5,323
  5,693
  6,078
  6,477
  6,893
  7,326
  7,777
  8,246
  8,735
Variable operating expenses, $m
  345
  419
  503
  597
  701
  815
  939
  1,072
  1,215
  1,366
  1,508
  1,677
  1,855
  2,041
  2,235
  2,438
  2,649
  2,869
  3,098
  3,336
  3,583
  3,840
  4,107
  4,384
  4,672
  4,972
  5,285
  5,610
  5,948
  6,301
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
  345
  419
  503
  597
  701
  815
  939
  1,072
  1,215
  1,366
  1,508
  1,677
  1,855
  2,041
  2,235
  2,438
  2,649
  2,869
  3,098
  3,336
  3,583
  3,840
  4,107
  4,384
  4,672
  4,972
  5,285
  5,610
  5,948
  6,301
Operating income, $m
  107
  136
  168
  205
  245
  289
  337
  388
  443
  502
  583
  648
  716
  788
  863
  942
  1,023
  1,108
  1,197
  1,289
  1,384
  1,483
  1,586
  1,694
  1,805
  1,921
  2,041
  2,167
  2,298
  2,434
EBITDA, $m
  135
  166
  201
  240
  283
  330
  381
  436
  495
  558
  625
  695
  768
  845
  926
  1,010
  1,097
  1,189
  1,283
  1,382
  1,484
  1,591
  1,701
  1,816
  1,935
  2,060
  2,189
  2,324
  2,464
  2,610
Interest expense (income), $m
  2
  0
  6
  12
  19
  27
  36
  46
  56
  68
  80
  93
  107
  121
  136
  152
  169
  186
  205
  223
  243
  263
  285
  307
  329
  353
  378
  404
  430
  458
  487
Earnings before tax, $m
  107
  130
  157
  186
  218
  253
  291
  332
  375
  422
  489
  541
  595
  652
  711
  773
  837
  904
  973
  1,046
  1,121
  1,199
  1,280
  1,364
  1,452
  1,543
  1,638
  1,737
  1,840
  1,947
Tax expense, $m
  29
  35
  42
  50
  59
  68
  79
  90
  101
  114
  132
  146
  161
  176
  192
  209
  226
  244
  263
  282
  303
  324
  346
  368
  392
  417
  442
  469
  497
  526
Net income, $m
  78
  95
  114
  136
  159
  185
  212
  242
  274
  308
  357
  395
  434
  476
  519
  564
  611
  660
  711
  763
  818
  875
  934
  996
  1,060
  1,126
  1,196
  1,268
  1,343
  1,421

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
  974
  1,196
  1,447
  1,729
  2,040
  2,380
  2,750
  3,148
  3,573
  4,026
  4,505
  5,010
  5,541
  6,097
  6,678
  7,284
  7,916
  8,573
  9,256
  9,967
  10,705
  11,472
  12,269
  13,098
  13,960
  14,856
  15,789
  16,760
  17,772
  18,826
Adjusted assets (=assets-cash), $m
  974
  1,196
  1,447
  1,729
  2,040
  2,380
  2,750
  3,148
  3,573
  4,026
  4,505
  5,010
  5,541
  6,097
  6,678
  7,284
  7,916
  8,573
  9,256
  9,967
  10,705
  11,472
  12,269
  13,098
  13,960
  14,856
  15,789
  16,760
  17,772
  18,826
Revenue / Adjusted assets
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
  0.464
Average production assets, $m
  128
  158
  191
  228
  269
  314
  362
  415
  471
  531
  594
  660
  730
  803
  880
  960
  1,043
  1,130
  1,220
  1,313
  1,411
  1,512
  1,617
  1,726
  1,840
  1,958
  2,081
  2,209
  2,342
  2,481
Working capital, $m
  -276
  -339
  -410
  -490
  -578
  -675
  -780
  -892
  -1,013
  -1,141
  -1,277
  -1,420
  -1,571
  -1,729
  -1,893
  -2,065
  -2,244
  -2,430
  -2,624
  -2,826
  -3,035
  -3,252
  -3,478
  -3,713
  -3,958
  -4,212
  -4,476
  -4,752
  -5,038
  -5,337
Total debt, $m
  102
  220
  354
  503
  668
  849
  1,045
  1,257
  1,483
  1,723
  1,977
  2,246
  2,528
  2,823
  3,131
  3,453
  3,788
  4,137
  4,500
  4,877
  5,269
  5,677
  6,100
  6,540
  6,998
  7,474
  7,969
  8,485
  9,022
  9,582
Total liabilities, $m
  517
  635
  769
  918
  1,083
  1,264
  1,460
  1,671
  1,897
  2,138
  2,392
  2,661
  2,942
  3,238
  3,546
  3,868
  4,203
  4,552
  4,915
  5,292
  5,684
  6,092
  6,515
  6,955
  7,413
  7,889
  8,384
  8,900
  9,437
  9,997
Total equity, $m
  457
  561
  679
  811
  957
  1,116
  1,290
  1,476
  1,676
  1,888
  2,113
  2,350
  2,599
  2,860
  3,132
  3,416
  3,712
  4,021
  4,341
  4,674
  5,021
  5,380
  5,754
  6,143
  6,547
  6,968
  7,405
  7,861
  8,335
  8,830
Total liabilities and equity, $m
  974
  1,196
  1,448
  1,729
  2,040
  2,380
  2,750
  3,147
  3,573
  4,026
  4,505
  5,011
  5,541
  6,098
  6,678
  7,284
  7,915
  8,573
  9,256
  9,966
  10,705
  11,472
  12,269
  13,098
  13,960
  14,857
  15,789
  16,761
  17,772
  18,827
Debt-to-equity ratio
  0.220
  0.390
  0.520
  0.620
  0.700
  0.760
  0.810
  0.850
  0.880
  0.910
  0.940
  0.960
  0.970
  0.990
  1.000
  1.010
  1.020
  1.030
  1.040
  1.040
  1.050
  1.060
  1.060
  1.060
  1.070
  1.070
  1.080
  1.080
  1.080
  1.090
Adjusted equity ratio
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469
  0.469

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  78
  95
  114
  136
  159
  185
  212
  242
  274
  308
  357
  395
  434
  476
  519
  564
  611
  660
  711
  763
  818
  875
  934
  996
  1,060
  1,126
  1,196
  1,268
  1,343
  1,421
Depreciation, amort., depletion, $m
  28
  30
  32
  35
  38
  41
  44
  48
  52
  56
  42
  47
  52
  57
  62
  68
  74
  80
  87
  93
  100
  107
  115
  122
  130
  139
  148
  157
  166
  176
Funds from operations, $m
  106
  125
  147
  170
  197
  226
  257
  290
  326
  364
  399
  442
  486
  533
  581
  632
  685
  740
  797
  856
  918
  982
  1,049
  1,118
  1,190
  1,265
  1,343
  1,424
  1,509
  1,597
Change in working capital, $m
  -55
  -63
  -71
  -80
  -88
  -97
  -105
  -113
  -121
  -128
  -136
  -143
  -150
  -158
  -165
  -172
  -179
  -186
  -194
  -201
  -209
  -217
  -226
  -235
  -244
  -254
  -264
  -275
  -287
  -299
Cash from operations, $m
  161
  188
  218
  250
  285
  322
  362
  403
  447
  493
  535
  585
  637
  690
  746
  804
  864
  926
  991
  1,058
  1,127
  1,200
  1,275
  1,353
  1,435
  1,519
  1,608
  1,700
  1,796
  1,896
Maintenance CAPEX, $m
  -7
  -9
  -11
  -14
  -16
  -19
  -22
  -26
  -29
  -33
  -38
  -42
  -47
  -52
  -57
  -62
  -68
  -74
  -80
  -87
  -93
  -100
  -107
  -115
  -122
  -130
  -139
  -148
  -157
  -166
New CAPEX, $m
  -26
  -29
  -33
  -37
  -41
  -45
  -49
  -52
  -56
  -60
  -63
  -67
  -70
  -73
  -77
  -80
  -83
  -87
  -90
  -94
  -97
  -101
  -105
  -109
  -114
  -118
  -123
  -128
  -133
  -139
Cash from investing activities, $m
  -33
  -38
  -44
  -51
  -57
  -64
  -71
  -78
  -85
  -93
  -101
  -109
  -117
  -125
  -134
  -142
  -151
  -161
  -170
  -181
  -190
  -201
  -212
  -224
  -236
  -248
  -262
  -276
  -290
  -305
Free cash flow, $m
  128
  150
  174
  200
  228
  258
  291
  325
  361
  400
  435
  476
  520
  565
  613
  662
  713
  766
  821
  878
  937
  999
  1,063
  1,129
  1,199
  1,271
  1,346
  1,424
  1,506
  1,591
Issuance/(repayment) of debt, $m
  102
  118
  134
  149
  165
  181
  196
  211
  226
  240
  254
  268
  282
  295
  309
  322
  335
  349
  363
  377
  392
  407
  423
  440
  458
  476
  495
  516
  537
  560
Issuance/(repurchase) of shares, $m
  12
  9
  4
  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  
  114
  127
  138
  149
  165
  181
  196
  211
  226
  240
  254
  268
  282
  295
  309
  322
  335
  349
  363
  377
  392
  407
  423
  440
  458
  476
  495
  516
  537
  560
Total cash flow (excl. dividends), $m
  243
  277
  311
  349
  393
  439
  487
  536
  587
  640
  689
  745
  802
  861
  921
  984
  1,048
  1,115
  1,184
  1,255
  1,329
  1,406
  1,486
  1,569
  1,656
  1,747
  1,841
  1,940
  2,043
  2,151
Retained Cash Flow (-), $m
  -91
  -104
  -118
  -132
  -146
  -160
  -173
  -187
  -200
  -212
  -225
  -237
  -249
  -261
  -272
  -284
  -296
  -308
  -321
  -333
  -346
  -360
  -374
  -389
  -404
  -420
  -438
  -456
  -474
  -494
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
  152
  172
  193
  217
  247
  279
  314
  350
  388
  428
  464
  508
  553
  600
  649
  699
  752
  806
  863
  922
  983
  1,046
  1,112
  1,181
  1,252
  1,326
  1,404
  1,484
  1,569
  1,657
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
  146
  158
  168
  179
  192
  203
  212
  219
  223
  224
  220
  217
  210
  201
  190
  178
  164
  149
  133
  117
  102
  87
  73
  60
  49
  39
  30
  23
  17
  12
Current shareholders' claim on cash, %
  99.0
  98.5
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3
  98.3

QIWI plc is a provider of payment services in Russia and the Commonwealth of Independent States (CIS). The Company's network enables payment services across physical, online and mobile channels. The Company operates in target markets and customer segments. As of December 31, 2016, the Company had deployed over 17.2 million virtual wallets, over 162,000 kiosks and terminals, and enabled merchants to accept over Russian rubles 70 billion cash and electronic payments monthly. The Company's consumers can use cash, stored value and other electronic payment methods to order and pay for goods and services across physical or virtual environments interchangeably. The Company provides integrated network of physical distribution points and virtual wallets, as well as payment channels and methods that enable consumers to deposit cash, convert it into a digital form and transfer the funds to a virtual wallet or pay for any merchant in its network.

FINANCIAL RATIOS  of  QIWI plc (QIWI)

Valuation Ratios
P/E Ratio 30
Price to Sales 4.1
Price to Book 3.7
Price to Tangible Book
Price to Cash Flow 13.4
Price to Free Cash Flow 15.3
Growth Rates
Sales Growth Rate 1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 140%
Cap. Spend. - 3 Yr. Gr. Rate 14.9%
Financial Strength
Quick Ratio 9
Current Ratio 0
LT Debt to Equity 0%
Total Debt to Equity 11.8%
Interest Coverage 28
Management Effectiveness
Return On Assets 6.3%
Ret/ On Assets - 3 Yr. Avg. 13.6%
Return On Total Capital 10.5%
Ret/ On T. Cap. - 3 Yr. Avg. 38.4%
Return On Equity 11.7%
Return On Equity - 3 Yr. Avg. 44.2%
Asset Turnover 0.4
Profitability Ratios
Gross Margin 51.6%
Gross Margin - 3 Yr. Avg. 51.1%
EBITDA Margin 22.7%
EBITDA Margin - 3 Yr. Avg. 35%
Operating Margin 23%
Oper. Margin - 3 Yr. Avg. 25.7%
Pre-Tax Margin 17.4%
Pre-Tax Margin - 3 Yr. Avg. 30.8%
Net Profit Margin 13.8%
Net Profit Margin - 3 Yr. Avg. 25.7%
Effective Tax Rate 20.8%
Eff/ Tax Rate - 3 Yr. Avg. 17%
Payout Ratio 188.1%

QIWI stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the QIWI stock intrinsic value calculation we used $362 million for the last fiscal year's total revenue generated by QIWI plc. The default revenue input number comes from 0001 income statement of QIWI plc. 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 QIWI stock valuation model: a) initial revenue growth rate of 24.8% 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 QIWI is calculated based on our internal credit rating of QIWI plc, 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 QIWI plc.
    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 QIWI stock the variable cost ratio is equal to 77.3%.

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 QIWI 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 QIWI plc.

Corporate tax rate of 27% is the nominal tax rate for QIWI plc. 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 QIWI 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 QIWI are equal to 28.4%.

Life of production assets of 14.1 years is the average useful life of capital assets used in QIWI plc 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 QIWI is equal to -61.1%. 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 - $365.967769884 million for QIWI plc - 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 60.994 million for QIWI plc 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 QIWI plc at the current share price and the inputted number of shares is $1.3 billion.

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