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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Sonic Foundry's forward rate of return for was 0.00%.
The historical rank and industry rank for Sonic Foundry's Forward Rate of Return (Yacktman) % or its related term are showing as below:
During the past 13 years, Sonic Foundry's highest Forward Rate of Return was -1.17. The lowest was -2.02. And the median was -1.40.
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
The historical data trend for Sonic Foundry's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Software - Application subindustry, Sonic Foundry's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Software industry and Technology sector, Sonic Foundry's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Sonic Foundry's Forward Rate of Return (Yacktman) % falls into.
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
Sonic Foundry's Forward Rate of Return of Sep. 2023 is
Forward Rate of Return | = | Normalized Free Cash Flow | / | Price | + | 5-Year EBITDA Growth Rate |
= | 0 | / | 0.6576 | + | 0 | |
= | 0.00 % |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Sonic Foundry (OTCPK:SOFO) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Thank you for viewing the detailed overview of Sonic Foundry's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.
Brian Wiegand | director | 8215 GREENWAY BLVD, SUITE 340, MIDDLETON WI 53562 |
Ron W Busslinger | 10 percent owner | 27901 VIA DEL AGUA, LAGUNA NIGUEL CA 92677 |
Joe Jr Mozden | director | 3423 WILD PRAIRIE LN, GENEVA IL 60134 |
Kenneth A Minor | officer: Chief Financial Officer | |
Nelson A Murphy | director | 2300 W INNES ST, SALISBURY NC 28144 |
Taha Jangda | director | 3827 LINKLEA DRIVE, HOUSTON TX 77025 |
Lawrence William St | director | 23 ASHLAND STREET, NEWBURYPORT MA 01950-1905 |
Kelsy L Boyd | director | 2839 PLEASANT VIEW HTS, COTTAGE GROVE WI 53527 |
Michael Norregaard | officer: Chief Operating Officer | 4891 ENCHANTED VALLEY ROAD, MIDDLETON WI 53562 |
Andrew D. Burish | 10 percent owner | 8020 EXCELSIOR DRIVE, MADISON WI 53717 |
David Slayton | director | 701 WASHINGTON AVE N. SUITE #400, MINNEAPOLIS WI 55401 |
Gary Weis | director, officer: Chief Executive Officer & CTO | |
Kopko Frederick H Jr | director | 4901 S ELLIS AVE, CHICAGO IL 60615 |
Mark D Burish | director | HURLEY, BURISH, MILLIKEN S.C., 301 NORTH BROOM STREET, MADISON WI 53703 |
David Kleinman | director |
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