Intrinsic value of Snap - SNAP

Previous Close

$6.48

  Intrinsic Value

$0.57

stock screener

  Rating & Target

str. sell

-91%

Previous close

$6.48

 
Intrinsic value

$0.57

 
Up/down potential

-91%

 
Rating

str. sell

We calculate the intrinsic value of SNAP 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 6.2

 

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, %
  44.40
  40.46
  36.91
  33.72
  30.85
  28.27
  25.94
  23.84
  21.96
  20.26
  18.74
  17.36
  16.13
  15.01
  14.01
  13.11
  12.30
  11.57
  10.91
  10.32
  9.79
  9.31
  8.88
  8.49
  8.14
  7.83
  7.55
  7.29
  7.06
  6.86
Revenue, $m
  1,191
  1,673
  2,291
  3,063
  4,008
  5,141
  6,475
  8,019
  9,780
  11,762
  13,966
  16,391
  19,034
  21,892
  24,960
  28,233
  31,706
  35,375
  39,235
  43,285
  47,523
  51,948
  56,561
  61,364
  66,361
  71,556
  76,955
  82,566
  88,397
  94,457
Variable operating expenses, $m
  2,687
  3,742
  5,094
  6,784
  8,852
  11,331
  14,250
  17,628
  21,482
  25,819
  30,561
  35,867
  41,652
  47,906
  54,619
  61,781
  69,381
  77,409
  85,857
  94,719
  103,992
  113,675
  123,769
  134,280
  145,214
  156,582
  168,397
  180,675
  193,435
  206,696
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
  2,687
  3,742
  5,094
  6,784
  8,852
  11,331
  14,250
  17,628
  21,482
  25,819
  30,561
  35,867
  41,652
  47,906
  54,619
  61,781
  69,381
  77,409
  85,857
  94,719
  103,992
  113,675
  123,769
  134,280
  145,214
  156,582
  168,397
  180,675
  193,435
  206,696
Operating income, $m
  -1,496
  -2,069
  -2,803
  -3,721
  -4,844
  -6,190
  -7,775
  -9,609
  -11,702
  -14,057
  -16,595
  -19,477
  -22,618
  -26,014
  -29,659
  -33,548
  -37,675
  -42,034
  -46,621
  -51,434
  -56,469
  -61,727
  -67,209
  -72,916
  -78,853
  -85,026
  -91,442
  -98,109
  -105,038
  -112,239
EBITDA, $m
  -1,363
  -1,915
  -2,622
  -3,506
  -4,587
  -5,884
  -7,410
  -9,177
  -11,192
  -13,461
  -15,983
  -18,758
  -21,783
  -25,054
  -28,565
  -32,310
  -36,285
  -40,483
  -44,902
  -49,537
  -54,386
  -59,450
  -64,729
  -70,226
  -75,945
  -81,890
  -88,069
  -94,490
  -101,163
  -108,099
Interest expense (income), $m
  0
  0
  10
  24
  41
  63
  90
  121
  159
  202
  252
  308
  370
  438
  512
  593
  679
  771
  869
  972
  1,080
  1,194
  1,314
  1,438
  1,568
  1,703
  1,844
  1,990
  2,142
  2,299
  2,463
Earnings before tax, $m
  -1,496
  -2,079
  -2,827
  -3,762
  -4,907
  -6,280
  -7,896
  -9,768
  -11,904
  -14,309
  -16,903
  -19,846
  -23,056
  -26,526
  -30,252
  -34,227
  -38,446
  -42,903
  -47,593
  -52,514
  -57,664
  -63,041
  -68,647
  -74,484
  -80,556
  -86,870
  -93,432
  -100,251
  -107,337
  -114,702
Tax expense, $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
Net income, $m
  -1,496
  -2,079
  -2,827
  -3,762
  -4,907
  -6,280
  -7,896
  -9,768
  -11,904
  -14,309
  -16,903
  -19,846
  -23,056
  -26,526
  -30,252
  -34,227
  -38,446
  -42,903
  -47,593
  -52,514
  -57,664
  -63,041
  -68,647
  -74,484
  -80,556
  -86,870
  -93,432
  -100,251
  -107,337
  -114,702

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
  2,492
  3,500
  4,793
  6,409
  8,386
  10,756
  13,546
  16,776
  20,460
  24,606
  29,217
  34,291
  39,821
  45,800
  52,218
  59,065
  66,330
  74,005
  82,082
  90,555
  99,420
  108,678
  118,328
  128,377
  138,830
  149,698
  160,994
  172,732
  184,931
  197,609
Adjusted assets (=assets-cash), $m
  2,492
  3,500
  4,793
  6,409
  8,386
  10,756
  13,546
  16,776
  20,460
  24,606
  29,217
  34,291
  39,821
  45,800
  52,218
  59,065
  66,330
  74,005
  82,082
  90,555
  99,420
  108,678
  118,328
  128,377
  138,830
  149,698
  160,994
  172,732
  184,931
  197,609
Revenue / Adjusted assets
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
  0.478
Average production assets, $m
  627
  880
  1,205
  1,611
  2,108
  2,704
  3,406
  4,218
  5,144
  6,187
  7,346
  8,622
  10,012
  11,515
  13,129
  14,851
  16,677
  18,607
  20,638
  22,768
  24,997
  27,325
  29,751
  32,277
  34,906
  37,638
  40,478
  43,430
  46,497
  49,684
Working capital, $m
  -32
  -45
  -62
  -83
  -108
  -139
  -175
  -217
  -264
  -318
  -377
  -443
  -514
  -591
  -674
  -762
  -856
  -955
  -1,059
  -1,169
  -1,283
  -1,403
  -1,527
  -1,657
  -1,792
  -1,932
  -2,078
  -2,229
  -2,387
  -2,550
Total debt, $m
  191
  442
  764
  1,167
  1,659
  2,249
  2,944
  3,748
  4,665
  5,698
  6,846
  8,109
  9,486
  10,975
  12,573
  14,278
  16,087
  17,998
  20,009
  22,119
  24,326
  26,631
  29,034
  31,537
  34,139
  36,846
  39,658
  42,581
  45,618
  48,775
Total liabilities, $m
  621
  872
  1,193
  1,596
  2,088
  2,678
  3,373
  4,177
  5,095
  6,127
  7,275
  8,538
  9,915
  11,404
  13,002
  14,707
  16,516
  18,427
  20,438
  22,548
  24,756
  27,061
  29,464
  31,966
  34,569
  37,275
  40,088
  43,010
  46,048
  49,205
Total equity, $m
  1,872
  2,629
  3,599
  4,813
  6,298
  8,078
  10,173
  12,599
  15,366
  18,479
  21,942
  25,752
  29,905
  34,396
  39,216
  44,358
  49,814
  55,578
  61,644
  68,007
  74,665
  81,617
  88,864
  96,411
  104,261
  112,423
  120,906
  129,722
  138,883
  148,404
Total liabilities and equity, $m
  2,493
  3,501
  4,792
  6,409
  8,386
  10,756
  13,546
  16,776
  20,461
  24,606
  29,217
  34,290
  39,820
  45,800
  52,218
  59,065
  66,330
  74,005
  82,082
  90,555
  99,421
  108,678
  118,328
  128,377
  138,830
  149,698
  160,994
  172,732
  184,931
  197,609
Debt-to-equity ratio
  0.100
  0.170
  0.210
  0.240
  0.260
  0.280
  0.290
  0.300
  0.300
  0.310
  0.310
  0.310
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.320
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
  0.330
Adjusted equity ratio
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751
  0.751

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -1,496
  -2,079
  -2,827
  -3,762
  -4,907
  -6,280
  -7,896
  -9,768
  -11,904
  -14,309
  -16,903
  -19,846
  -23,056
  -26,526
  -30,252
  -34,227
  -38,446
  -42,903
  -47,593
  -52,514
  -57,664
  -63,041
  -68,647
  -74,484
  -80,556
  -86,870
  -93,432
  -100,251
  -107,337
  -114,702
Depreciation, amort., depletion, $m
  133
  154
  181
  215
  256
  306
  364
  432
  509
  596
  612
  718
  834
  960
  1,094
  1,238
  1,390
  1,551
  1,720
  1,897
  2,083
  2,277
  2,479
  2,690
  2,909
  3,137
  3,373
  3,619
  3,875
  4,140
Funds from operations, $m
  -1,363
  -1,925
  -2,646
  -3,547
  -4,650
  -5,974
  -7,532
  -9,336
  -11,395
  -13,712
  -16,290
  -19,128
  -22,221
  -25,566
  -29,158
  -32,989
  -37,056
  -41,352
  -45,874
  -50,617
  -55,581
  -60,764
  -66,167
  -71,794
  -77,648
  -83,733
  -90,059
  -96,632
  -103,463
  -110,562
Change in working capital, $m
  -10
  -13
  -17
  -21
  -26
  -31
  -36
  -42
  -48
  -54
  -60
  -65
  -71
  -77
  -83
  -88
  -94
  -99
  -104
  -109
  -114
  -119
  -125
  -130
  -135
  -140
  -146
  -151
  -157
  -164
Cash from operations, $m
  -1,353
  -1,912
  -2,629
  -3,526
  -4,625
  -5,943
  -7,496
  -9,294
  -11,347
  -13,659
  -16,231
  -19,062
  -22,150
  -25,489
  -29,075
  -32,901
  -36,962
  -41,253
  -45,769
  -50,508
  -55,466
  -60,644
  -66,043
  -71,664
  -77,513
  -83,593
  -89,913
  -96,480
  -103,305
  -110,398
Maintenance CAPEX, $m
  -36
  -52
  -73
  -100
  -134
  -176
  -225
  -284
  -352
  -429
  -516
  -612
  -718
  -834
  -960
  -1,094
  -1,238
  -1,390
  -1,551
  -1,720
  -1,897
  -2,083
  -2,277
  -2,479
  -2,690
  -2,909
  -3,137
  -3,373
  -3,619
  -3,875
New CAPEX, $m
  -193
  -254
  -325
  -406
  -497
  -596
  -701
  -812
  -926
  -1,042
  -1,159
  -1,276
  -1,390
  -1,503
  -1,614
  -1,721
  -1,827
  -1,930
  -2,031
  -2,130
  -2,229
  -2,328
  -2,426
  -2,526
  -2,628
  -2,733
  -2,840
  -2,951
  -3,067
  -3,188
Cash from investing activities, $m
  -229
  -306
  -398
  -506
  -631
  -772
  -926
  -1,096
  -1,278
  -1,471
  -1,675
  -1,888
  -2,108
  -2,337
  -2,574
  -2,815
  -3,065
  -3,320
  -3,582
  -3,850
  -4,126
  -4,411
  -4,703
  -5,005
  -5,318
  -5,642
  -5,977
  -6,324
  -6,686
  -7,063
Free cash flow, $m
  -1,582
  -2,218
  -3,027
  -4,033
  -5,256
  -6,715
  -8,422
  -10,390
  -12,625
  -15,130
  -17,906
  -20,950
  -24,259
  -27,827
  -31,648
  -35,717
  -40,026
  -44,573
  -49,351
  -54,358
  -59,593
  -65,055
  -70,746
  -76,670
  -82,831
  -89,235
  -95,890
  -102,805
  -109,991
  -117,461
Issuance/(repayment) of debt, $m
  191
  251
  322
  402
  492
  590
  695
  804
  917
  1,032
  1,148
  1,263
  1,377
  1,489
  1,598
  1,705
  1,809
  1,911
  2,011
  2,110
  2,207
  2,305
  2,403
  2,502
  2,603
  2,706
  2,813
  2,923
  3,037
  3,157
Issuance/(repurchase) of shares, $m
  2,072
  2,836
  3,797
  4,976
  6,391
  8,060
  9,991
  12,194
  14,671
  17,422
  20,365
  23,656
  27,209
  31,016
  35,072
  39,369
  43,902
  48,667
  53,659
  58,877
  64,322
  69,993
  75,894
  82,030
  88,407
  95,032
  101,915
  109,066
  116,498
  124,224
Cash from financing (excl. dividends), $m  
  2,263
  3,087
  4,119
  5,378
  6,883
  8,650
  10,686
  12,998
  15,588
  18,454
  21,513
  24,919
  28,586
  32,505
  36,670
  41,074
  45,711
  50,578
  55,670
  60,987
  66,529
  72,298
  78,297
  84,532
  91,010
  97,738
  104,728
  111,989
  119,535
  127,381
Total cash flow (excl. dividends), $m
  681
  870
  1,092
  1,345
  1,628
  1,935
  2,264
  2,608
  2,963
  3,325
  3,608
  3,970
  4,327
  4,678
  5,022
  5,357
  5,685
  6,005
  6,319
  6,629
  6,937
  7,243
  7,551
  7,862
  8,179
  8,504
  8,838
  9,184
  9,544
  9,920
Retained Cash Flow (-), $m
  -2,072
  -2,836
  -3,797
  -4,976
  -6,391
  -8,060
  -9,991
  -12,194
  -14,671
  -17,422
  -20,365
  -23,656
  -27,209
  -31,016
  -35,072
  -39,369
  -43,902
  -48,667
  -53,659
  -58,877
  -64,322
  -69,993
  -75,894
  -82,030
  -88,407
  -95,032
  -101,915
  -109,066
  -116,498
  -124,224
Prev. year cash balance distribution, $m
  1,697
  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
  306
  -1,967
  -2,705
  -3,631
  -4,764
  -6,124
  -7,728
  -9,586
  -11,708
  -14,098
  -16,758
  -19,687
  -22,882
  -26,338
  -30,050
  -34,012
  -38,217
  -42,661
  -47,339
  -52,248
  -57,385
  -62,750
  -68,343
  -74,168
  -80,228
  -86,528
  -93,077
  -99,882
  -106,954
  -114,304
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
  293
  -1,801
  -2,354
  -2,989
  -3,693
  -4,445
  -5,221
  -5,992
  -6,725
  -7,391
  -7,958
  -8,401
  -8,700
  -8,842
  -8,822
  -8,643
  -8,315
  -7,857
  -7,289
  -6,639
  -5,936
  -5,207
  -4,479
  -3,778
  -3,121
  -2,524
  -1,998
  -1,545
  -1,168
  -861
Current shareholders' claim on cash, %
  56.6
  32.8
  19.4
  11.6
  7.1
  4.4
  2.8
  1.8
  1.1
  0.7
  0.5
  0.3
  0.2
  0.1
  0.1
  0.1
  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

Snap Inc., formerly Snapchat, Inc., is a camera company. The Company’s flagship product, Snapchat, is a camera application that helps people to communicate through short videos and images known as a Snap. The Company offers three ways for people to make Snaps: the Snapchat application, Publishers Tools that help its partners to create Publisher Stories, and Spectacles, its sunglasses that make Snaps. Snaps are viewed primarily through the Snapchat application, but can also be embedded on the Web or on television in certain circumstances. Snapchat opens directly into the Camera, helping in creating a Snap and sending it to friends. The Company’s advertising products include Snap Ads and Sponsored Creative Tools, such as Sponsored Lenses and Sponsored Geofilters. As of December 31, 2016, on an average, 158 million people used Snapchat every day to Snap with family, watch Stories from friends, see events from around the world, and explore curated content from publishers.

FINANCIAL RATIOS  of  Snap (SNAP)

Valuation Ratios
P/E Ratio -14.6
Price to Sales 18.6
Price to Book 4.9
Price to Tangible Book
Price to Cash Flow -12.3
Price to Free Cash Flow -11.1
Growth Rates
Sales Growth Rate 584.7%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 139.3%
Cap. Spend. - 3 Yr. Gr. Rate NaN%
Financial Strength
Quick Ratio NaN
Current Ratio 0
LT Debt to Equity 1%
Total Debt to Equity 1%
Interest Coverage 0
Management Effectiveness
Return On Assets -38.7%
Ret/ On Assets - 3 Yr. Avg. -39.4%
Return On Total Capital -44.6%
Ret/ On T. Cap. - 3 Yr. Avg. -46.9%
Return On Equity -45.1%
Return On Equity - 3 Yr. Avg. -47.6%
Asset Turnover 0.3
Profitability Ratios
Gross Margin -11.6%
Gross Margin - 3 Yr. Avg. -73.9%
EBITDA Margin -122%
EBITDA Margin - 3 Yr. Avg. -246.9%
Operating Margin -129%
Oper. Margin - 3 Yr. Avg. -258.2%
Pre-Tax Margin -129.2%
Pre-Tax Margin - 3 Yr. Avg. -257.8%
Net Profit Margin -127.5%
Net Profit Margin - 3 Yr. Avg. -253.2%
Effective Tax Rate 1.3%
Eff/ Tax Rate - 3 Yr. Avg. 1.1%
Payout Ratio 0%

SNAP stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SNAP stock intrinsic value calculation we used $824.949 million for the last fiscal year's total revenue generated by Snap. The default revenue input number comes from 0001 income statement of Snap. 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 SNAP stock valuation model: a) initial revenue growth rate of 44.4% 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 SNAP is calculated based on our internal credit rating of Snap, 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 Snap.
    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 SNAP stock the variable cost ratio is equal to 228.6%.

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 SNAP 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 Snap.

Corporate tax rate of 27% is the nominal tax rate for Snap. 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 SNAP 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 SNAP are equal to 52.6%.

Life of production assets of 12 years is the average useful life of capital assets used in Snap 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 SNAP is equal to -2.7%. 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 - $2992.327 million for Snap - 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 962.983 million for Snap 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 Snap at the current share price and the inputted number of shares is $6.2 billion.

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COMPANY NEWS

▶ Company News For Nov 15, 2018   [09:47AM  Zacks]
▶ Snap Stocks Risks Limit Its Near-Term Upside   [08:46AM  InvestorPlace]
▶ Feds subpoena Snap over shareholder lawsuit   [Nov-14-18 08:17PM  Associated Press]
▶ Business Highlights   [06:19PM  Associated Press]
▶ Snap stock tumbles after report of DOJ, SEC probe   [12:31PM  American City Business Journals]
▶ [$$] FirstFT: Todays top stories   [07:44AM  Financial Times]
▶ [$$] Snaps Disclosures Ahead of IPO Draw Regulator Scrutiny   [12:10AM  The Wall Street Journal]
▶ [$$] Snap's Disclosures Ahead of IPO Draw Regulator Scrutiny   [Nov-13-18 10:58PM  The Wall Street Journal]
▶ [$$] Snap reveals IPO probe from US regulators   [10:36PM  Financial Times]
▶ Snapchat adds Bitmoji merch to Snap Store   [05:56PM  American City Business Journals]
▶ The top iPhone and iPad apps on App Store   [01:18PM  Associated Press]
▶ [$$] Snaps Head of Content to Leave Company by Years End   [Nov-12-18 08:04PM  The Wall Street Journal]
▶ [$$] Snap's Head of Content to Leave Company   [03:32PM  The Wall Street Journal]
▶ Snap loses another exec. This time its VP of Content Nick Bell   [02:16PM  American City Business Journals]
▶ Facebook Stock Could Be Boosted by Spinoffs   [Nov-07-18 02:54PM  InvestorPlace]
▶ The top iPhone and iPad apps on App Store   [Nov-06-18 06:24PM  Associated Press]
▶ Why Snap Inc. Stock Fell 22.1% in October   [05:29PM  Motley Fool]
▶ These 3 Stocks Might Not Survive in 2019   [09:42AM  Motley Fool]
▶ How Safe is Venmo and is it Free?   [02:16PM  Investopedia]
▶ [$$] ComScore to Measure Viewership on Snapchat Discover   [06:00AM  The Wall Street Journal]
▶ Better Social Media Stock: Snap Inc. vs. Twitter Inc.   [Nov-04-18 02:00PM  Motley Fool]
▶ 1 Billion People Share Stories on Facebook Every Day   [Nov-02-18 05:30PM  Motley Fool]
▶ Snapchat influencer refuses to wear Snap Specs   [12:23PM  Yahoo Finance Video]
▶ Snapchat launches campaign to get out the vote on Election Day   [12:01AM  American City Business Journals]
▶ Imagine Facebook without the ads but with a monthly fee   [Oct-31-18 06:10PM  Yahoo Finance]
▶ The top iPhone and iPad apps on App Store   [05:50PM  Associated Press]
▶ At What Price Is Snap a Buy?   [03:16PM  GuruFocus.com]
▶ Snapchat adds 25 shows from the U.K.   [12:43PM  American City Business Journals]
▶ Is It Time to Give Up on Snap Inc. Stock?   [Oct-29-18 07:42PM  Motley Fool]

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