Intrinsic value of Shutterfly, Inc. - SFLY

Previous Close

$50.40

  Intrinsic Value

$1,240

stock screener

  Rating & Target

str. buy

+999%

Previous close

$50.40

 
Intrinsic value

$1,240

 
Up/down potential

+999%

 
Rating

str. buy

We calculate the intrinsic value of SFLY 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 1.7

 

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, %
  60.00
  54.50
  49.55
  45.10
  41.09
  37.48
  34.23
  31.31
  28.68
  26.31
  24.18
  22.26
  20.53
  18.98
  17.58
  16.32
  15.19
  14.17
  13.26
  12.43
  11.69
  11.02
  10.42
  9.87
  9.39
  8.95
  8.55
  8.20
  7.88
  7.59
Revenue, $m
  3,139
  4,850
  7,253
  10,524
  14,848
  20,413
  27,400
  35,978
  46,294
  58,474
  72,611
  88,774
  107,002
  127,311
  149,696
  174,132
  200,585
  229,013
  259,370
  291,608
  325,688
  361,572
  399,234
  438,657
  479,835
  522,773
  567,488
  614,012
  662,387
  712,666
Variable operating expenses, $m
  2,850
  4,340
  6,433
  9,281
  13,047
  17,893
  23,978
  31,448
  40,433
  51,039
  63,235
  77,311
  93,186
  110,873
  130,366
  151,648
  174,685
  199,442
  225,879
  253,955
  283,634
  314,885
  347,684
  382,016
  417,877
  455,270
  494,212
  534,729
  576,857
  620,644
Fixed operating expenses, $m
  22
  23
  23
  24
  25
  25
  26
  26
  27
  27
  28
  29
  29
  30
  30
  31
  32
  33
  33
  34
  35
  36
  36
  37
  38
  39
  40
  40
  41
  42
Total operating expenses, $m
  2,872
  4,363
  6,456
  9,305
  13,072
  17,918
  24,004
  31,474
  40,460
  51,066
  63,263
  77,340
  93,215
  110,903
  130,396
  151,679
  174,717
  199,475
  225,912
  253,989
  283,669
  314,921
  347,720
  382,053
  417,915
  455,309
  494,252
  534,769
  576,898
  620,686
Operating income, $m
  267
  487
  797
  1,219
  1,777
  2,495
  3,396
  4,503
  5,835
  7,407
  9,348
  11,434
  13,787
  16,409
  19,299
  22,453
  25,868
  29,538
  33,457
  37,619
  42,019
  46,652
  51,514
  56,604
  61,920
  67,463
  73,236
  79,243
  85,488
  91,980
EBITDA, $m
  539
  845
  1,275
  1,860
  2,633
  3,629
  4,879
  6,413
  8,259
  10,439
  12,969
  15,861
  19,123
  22,757
  26,763
  31,136
  35,871
  40,958
  46,391
  52,160
  58,260
  64,682
  71,422
  78,477
  85,847
  93,531
  101,534
  109,861
  118,518
  127,517
Interest expense (income), $m
  3
  80
  149
  251
  393
  587
  843
  1,172
  1,586
  2,094
  2,705
  3,427
  4,264
  5,221
  6,301
  7,504
  8,830
  10,277
  11,844
  13,528
  15,326
  17,235
  19,254
  21,379
  23,610
  25,945
  28,384
  30,927
  33,575
  36,331
  39,196
Earnings before tax, $m
  187
  338
  546
  826
  1,190
  1,652
  2,224
  2,917
  3,741
  4,702
  5,921
  7,170
  8,566
  10,108
  11,795
  13,624
  15,591
  17,694
  19,930
  22,294
  24,784
  27,398
  30,135
  32,994
  35,975
  39,080
  42,309
  45,667
  49,157
  52,783
Tax expense, $m
  51
  91
  148
  223
  321
  446
  600
  788
  1,010
  1,269
  1,599
  1,936
  2,313
  2,729
  3,185
  3,678
  4,210
  4,778
  5,381
  6,019
  6,692
  7,398
  8,136
  8,908
  9,713
  10,551
  11,424
  12,330
  13,272
  14,251
Net income, $m
  137
  247
  399
  603
  869
  1,206
  1,623
  2,130
  2,731
  3,432
  4,322
  5,234
  6,253
  7,379
  8,610
  9,945
  11,382
  12,917
  14,549
  16,274
  18,092
  20,001
  21,999
  24,086
  26,262
  28,528
  30,886
  33,337
  35,885
  38,532

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
  3,416
  5,278
  7,893
  11,452
  16,157
  22,212
  29,815
  39,149
  50,375
  63,627
  79,011
  96,598
  116,433
  138,533
  162,890
  189,480
  218,265
  249,198
  282,230
  317,311
  354,394
  393,441
  434,423
  477,320
  522,127
  568,849
  617,506
  668,131
  720,769
  775,480
Adjusted assets (=assets-cash), $m
  3,416
  5,278
  7,893
  11,452
  16,157
  22,212
  29,815
  39,149
  50,375
  63,627
  79,011
  96,598
  116,433
  138,533
  162,890
  189,480
  218,265
  249,198
  282,230
  317,311
  354,394
  393,441
  434,423
  477,320
  522,127
  568,849
  617,506
  668,131
  720,769
  775,480
Revenue / Adjusted assets
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
  0.919
Average production assets, $m
  1,158
  1,790
  2,676
  3,883
  5,479
  7,532
  10,110
  13,276
  17,083
  21,577
  26,793
  32,758
  39,484
  46,978
  55,238
  64,255
  74,016
  84,506
  95,707
  107,603
  120,179
  133,420
  147,318
  161,865
  177,059
  192,903
  209,403
  226,571
  244,421
  262,974
Working capital, $m
  -348
  -538
  -805
  -1,168
  -1,648
  -2,266
  -3,041
  -3,994
  -5,139
  -6,491
  -8,060
  -9,854
  -11,877
  -14,132
  -16,616
  -19,329
  -22,265
  -25,420
  -28,790
  -32,369
  -36,151
  -40,135
  -44,315
  -48,691
  -53,262
  -58,028
  -62,991
  -68,155
  -73,525
  -79,106
Total debt, $m
  2,073
  3,481
  5,458
  8,149
  11,705
  16,283
  22,031
  29,087
  37,574
  47,593
  59,223
  72,519
  87,515
  104,222
  122,636
  142,738
  164,499
  187,885
  212,857
  239,378
  267,413
  296,932
  327,915
  360,345
  394,219
  429,541
  466,326
  504,598
  544,392
  585,754
Total liabilities, $m
  2,582
  3,990
  5,967
  8,658
  12,214
  16,792
  22,540
  29,596
  38,083
  48,102
  59,732
  73,028
  88,024
  104,731
  123,145
  143,247
  165,008
  188,394
  213,366
  239,887
  267,922
  297,441
  328,424
  360,854
  394,728
  430,050
  466,835
  505,107
  544,901
  586,263
Total equity, $m
  833
  1,288
  1,926
  2,794
  3,942
  5,420
  7,275
  9,552
  12,291
  15,525
  19,279
  23,570
  28,410
  33,802
  39,745
  46,233
  53,257
  60,804
  68,864
  77,424
  86,472
  96,000
  105,999
  116,466
  127,399
  138,799
  150,672
  163,024
  175,868
  189,217
Total liabilities and equity, $m
  3,415
  5,278
  7,893
  11,452
  16,156
  22,212
  29,815
  39,148
  50,374
  63,627
  79,011
  96,598
  116,434
  138,533
  162,890
  189,480
  218,265
  249,198
  282,230
  317,311
  354,394
  393,441
  434,423
  477,320
  522,127
  568,849
  617,507
  668,131
  720,769
  775,480
Debt-to-equity ratio
  2.490
  2.700
  2.830
  2.920
  2.970
  3.000
  3.030
  3.050
  3.060
  3.070
  3.070
  3.080
  3.080
  3.080
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.090
  3.100
  3.100
  3.100
Adjusted equity ratio
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244
  0.244

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  137
  247
  399
  603
  869
  1,206
  1,623
  2,130
  2,731
  3,432
  4,322
  5,234
  6,253
  7,379
  8,610
  9,945
  11,382
  12,917
  14,549
  16,274
  18,092
  20,001
  21,999
  24,086
  26,262
  28,528
  30,886
  33,337
  35,885
  38,532
Depreciation, amort., depletion, $m
  273
  358
  478
  641
  856
  1,134
  1,482
  1,910
  2,424
  3,032
  3,621
  4,427
  5,336
  6,348
  7,465
  8,683
  10,002
  11,420
  12,933
  14,541
  16,240
  18,030
  19,908
  21,874
  23,927
  26,068
  28,298
  30,618
  33,030
  35,537
Funds from operations, $m
  409
  605
  877
  1,244
  1,725
  2,340
  3,106
  4,040
  5,155
  6,464
  7,943
  9,661
  11,589
  13,727
  16,075
  18,628
  21,384
  24,337
  27,482
  30,815
  34,333
  38,030
  41,906
  45,959
  50,189
  54,596
  59,184
  63,955
  68,915
  74,069
Change in working capital, $m
  -131
  -190
  -267
  -363
  -480
  -618
  -776
  -952
  -1,145
  -1,352
  -1,569
  -1,794
  -2,023
  -2,254
  -2,485
  -2,712
  -2,936
  -3,155
  -3,370
  -3,579
  -3,783
  -3,983
  -4,181
  -4,376
  -4,571
  -4,766
  -4,963
  -5,164
  -5,370
  -5,581
Cash from operations, $m
  540
  794
  1,143
  1,607
  2,205
  2,957
  3,881
  4,992
  6,300
  7,816
  9,512
  11,455
  13,612
  15,982
  18,559
  21,341
  24,320
  27,492
  30,852
  34,394
  38,115
  42,014
  46,087
  50,335
  54,759
  59,362
  64,147
  69,119
  74,284
  79,650
Maintenance CAPEX, $m
  -98
  -157
  -242
  -362
  -525
  -740
  -1,018
  -1,366
  -1,794
  -2,308
  -2,916
  -3,621
  -4,427
  -5,336
  -6,348
  -7,465
  -8,683
  -10,002
  -11,420
  -12,933
  -14,541
  -16,240
  -18,030
  -19,908
  -21,874
  -23,927
  -26,068
  -28,298
  -30,618
  -33,030
New CAPEX, $m
  -435
  -631
  -887
  -1,207
  -1,596
  -2,053
  -2,578
  -3,165
  -3,807
  -4,494
  -5,217
  -5,964
  -6,726
  -7,494
  -8,260
  -9,017
  -9,761
  -10,490
  -11,201
  -11,896
  -12,575
  -13,241
  -13,897
  -14,547
  -15,194
  -15,844
  -16,500
  -17,167
  -17,850
  -18,553
Cash from investing activities, $m
  -533
  -788
  -1,129
  -1,569
  -2,121
  -2,793
  -3,596
  -4,531
  -5,601
  -6,802
  -8,133
  -9,585
  -11,153
  -12,830
  -14,608
  -16,482
  -18,444
  -20,492
  -22,621
  -24,829
  -27,116
  -29,481
  -31,927
  -34,455
  -37,068
  -39,771
  -42,568
  -45,465
  -48,468
  -51,583
Free cash flow, $m
  7
  7
  15
  38
  85
  164
  285
  460
  699
  1,013
  1,380
  1,870
  2,459
  3,152
  3,951
  4,859
  5,876
  7,000
  8,230
  9,564
  10,999
  12,532
  14,160
  15,880
  17,691
  19,591
  21,579
  23,654
  25,816
  28,067
Issuance/(repayment) of debt, $m
  969
  1,407
  1,977
  2,691
  3,557
  4,578
  5,748
  7,056
  8,487
  10,019
  11,630
  13,296
  14,995
  16,707
  18,414
  20,102
  21,761
  23,386
  24,972
  26,521
  28,035
  29,520
  30,982
  32,431
  33,874
  35,322
  36,785
  38,272
  39,794
  41,361
Issuance/(repurchase) of shares, $m
  175
  208
  239
  265
  279
  272
  232
  148
  9
  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  
  1,144
  1,615
  2,216
  2,956
  3,836
  4,850
  5,980
  7,204
  8,496
  10,019
  11,630
  13,296
  14,995
  16,707
  18,414
  20,102
  21,761
  23,386
  24,972
  26,521
  28,035
  29,520
  30,982
  32,431
  33,874
  35,322
  36,785
  38,272
  39,794
  41,361
Total cash flow (excl. dividends), $m
  1,151
  1,622
  2,231
  2,994
  3,921
  5,013
  6,265
  7,665
  9,195
  11,032
  13,010
  15,166
  17,454
  19,859
  22,365
  24,961
  27,637
  30,386
  33,202
  36,085
  39,034
  42,052
  45,142
  48,311
  51,565
  54,913
  58,364
  61,926
  65,611
  69,428
Retained Cash Flow (-), $m
  -311
  -454
  -638
  -868
  -1,148
  -1,477
  -1,855
  -2,277
  -2,739
  -3,234
  -3,754
  -4,291
  -4,840
  -5,392
  -5,943
  -6,488
  -7,024
  -7,548
  -8,060
  -8,560
  -9,048
  -9,528
  -10,000
  -10,467
  -10,933
  -11,400
  -11,872
  -12,352
  -12,844
  -13,349
Prev. year cash balance distribution, $m
  152
  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
  992
  1,167
  1,593
  2,126
  2,773
  3,535
  4,410
  5,387
  6,456
  7,799
  9,256
  10,875
  12,615
  14,467
  16,422
  18,473
  20,614
  22,838
  25,143
  27,526
  29,986
  32,524
  35,142
  37,844
  40,632
  43,513
  46,491
  49,574
  52,767
  56,079
Discount rate, %
  5.30
  5.57
  5.84
  6.14
  6.44
  6.76
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.52
  9.99
  10.49
  11.02
  11.57
  12.15
  12.76
  13.39
  14.06
  14.77
  15.50
  16.28
  17.09
  17.95
  18.85
  19.79
  20.78
  21.82
PV of cash for distribution, $m
  942
  1,047
  1,343
  1,675
  2,029
  2,387
  2,728
  3,030
  3,275
  3,539
  3,723
  3,839
  3,869
  3,812
  3,676
  3,469
  3,206
  2,900
  2,569
  2,229
  1,892
  1,572
  1,277
  1,014
  786
  595
  439
  316
  221
  151
Current shareholders' claim on cash, %
  88.4
  80.5
  75.0
  71.2
  68.5
  66.7
  65.6
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1
  65.1

Shutterfly, Inc. is an online manufacturer and retailer of personalized products and services. The Company focuses on helping consumers manage their memories through the medium of photography. The Company's segments are Consumer and Shutterfly Business Solutions (SBS). The Consumer segment offers photo-based products, such as photo books, stationery and greeting cards, other photo-based merchandise, photo prints and statement gifts. The SBS segment includes printing and shipping of direct marketing and other variable data print products and formats. The Company provides a range of personalized photo-based products and services that enables the consumers to upload, edit, organize, find, share, create, print, and preserve their memories in a thoughtful manner. The Company's brands include Shutterfly, Tiny Prints, Wedding Paper Divas, MyPublisher, BorrowLenses and Groovebook. The Company has its production facilities in Fort Mill, South Carolina; Shakopee, Minnesota, and Tempe, Arizona.

FINANCIAL RATIOS  of  Shutterfly, Inc. (SFLY)

Valuation Ratios
P/E Ratio 106
Price to Sales 1.5
Price to Book 3
Price to Tangible Book
Price to Cash Flow 8.8
Price to Free Cash Flow 16.5
Growth Rates
Sales Growth Rate 7.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 16.9%
Cap. Spend. - 3 Yr. Gr. Rate 2.9%
Financial Strength
Quick Ratio 20
Current Ratio 0
LT Debt to Equity 68.7%
Total Debt to Equity 71.6%
Interest Coverage 10
Management Effectiveness
Return On Assets 1.5%
Ret/ On Assets - 3 Yr. Avg. 0.4%
Return On Total Capital 1.6%
Ret/ On T. Cap. - 3 Yr. Avg. 0.3%
Return On Equity 2.7%
Return On Equity - 3 Yr. Avg. 0.5%
Asset Turnover 0.9
Profitability Ratios
Gross Margin 50.1%
Gross Margin - 3 Yr. Avg. 50.4%
EBITDA Margin 12.7%
EBITDA Margin - 3 Yr. Avg. 11.2%
Operating Margin 4.3%
Oper. Margin - 3 Yr. Avg. 2.3%
Pre-Tax Margin 2.4%
Pre-Tax Margin - 3 Yr. Avg. 0.4%
Net Profit Margin 1.4%
Net Profit Margin - 3 Yr. Avg. 0.1%
Effective Tax Rate 40.7%
Eff/ Tax Rate - 3 Yr. Avg. 36.9%
Payout Ratio 0%

SFLY stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SFLY stock intrinsic value calculation we used $1962 million for the last fiscal year's total revenue generated by Shutterfly, Inc.. The default revenue input number comes from 0001 income statement of Shutterfly, 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 SFLY stock valuation model: a) initial revenue growth rate of 60% 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 5.3%, whose default value for SFLY is calculated based on our internal credit rating of Shutterfly, 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 Shutterfly, 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 SFLY stock the variable cost ratio is equal to 93%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $22 million in the base year in the intrinsic value calculation for SFLY 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 7.2% for Shutterfly, Inc..

Corporate tax rate of 27% is the nominal tax rate for Shutterfly, 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 SFLY 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 SFLY are equal to 36.9%.

Life of production assets of 7.4 years is the average useful life of capital assets used in Shutterfly, 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 SFLY is equal to -11.1%. 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 - $674.366 million for Shutterfly, 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 34.069 million for Shutterfly, 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 Shutterfly, Inc. at the current share price and the inputted number of shares is $1.7 billion.

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