Note: Discounted Earnings model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
Yadkin Financial's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.
The historical rank and industry rank for Yadkin Financial's Intrinsic Value: DCF (Earnings Based) or its related term are showing as below:
YDKN's Price-to-DCF (Earnings Based) is not ranked *
in the Banks industry.
Industry Median: 0.56 * Ranked among companies with meaningful Price-to-DCF (Earnings Based) only.
Yadkin Financial Intrinsic Value: DCF (Earnings Based) Historical Data
The historical data trend for Yadkin Financial's Intrinsic Value: DCF (Earnings Based) 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.
Competitive Comparison of Yadkin Financial's Intrinsic Value: DCF (Earnings Based)
For the Banks - Regional subindustry, Yadkin Financial's Price-to-DCF (Earnings Based), along with its competitors' market caps and Price-to-DCF (Earnings Based) 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.
Yadkin Financial's Price-to-DCF (Earnings Based) Distribution in the Banks Industry
For the Banks industry and Financial Services sector, Yadkin Financial's Price-to-DCF (Earnings Based) distribution charts can be found below:
* The bar in red indicates where Yadkin Financial's Price-to-DCF (Earnings Based) falls into.
This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.
Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 11% A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.50%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year EPS without NRI Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year EPS without NRI Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year EPS without NRI Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=>
Yadkin Financial's average EPS without NRI Growth Rate in the past
3 years was 0.00%,
which is less than 5%. GuruFocus defaults => Growth Rate: 5%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. EPS without NRI: eps without nri = $1.120. GuruFocus DCF calculator is actually a Discounted Earnings calculator, EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
Yadkin Financial's Intrinsic Value: DCF (Earnings Based) for today is calculated as:
* 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.
Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
Be Aware
What you need to know about Discounted Earnings model:
1. The Discounted Earnings model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that are relatively consistent performers.
4. The Discounted Earnings model works poorly for inconsistent performers like cyclicals.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.
You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Yadkin Financial Intrinsic Value: DCF (Earnings Based) Related Terms
Thank you for viewing the detailed overview of Yadkin Financial's Intrinsic Value: DCF (Earnings Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Yadkin Financial (Yadkin Financial) Business Description
Yadkin Financial Corp was incorporated under the laws of North Carolina on March 2, 2006. It is a bank holding company. It conducts its business operations through its wholly-owned subsidiary, Yadkin Bank. Yadkin Bank's primary business is providing banking, mortgage, investment and insurance services to businesses and consumers across the Carolinas. The Company has a single operating segment, which is providing general commercial banking and financial services to individuals and businesses located in North Carolina and South Carolina, and to customers in various states through its SBA lending program. The Company operates branches in North Carolina and South Carolina. From an operational standpoint, management has organized its branches into six regions. The Company provides Commercial and Industrial (C&I) Loans, Commercial Real Estate Loans, Construction Loans, Consumer Loans, Home Equity Lines of Credit and Residential Real Estate Loans, Residential Mortgage Loans and Government-Guaranteed Loans. The Company provides deposit services to businesses and individuals, including non-interest bearing checking accounts, interest-bearing checking accounts, savings accounts, money market accounts, IRAs and CDs. The Company competes in its market areas with regional and national banking organizations, other federally and state-chartered financial institutions such as savings and loan institutions and credit unions, consumer finance companies, mortgage companies and other lenders engaged in the business of extending credit. As a bank holding company, the Company is subject to regulation under the Bank Holding Company Act and to the supervision, examination and reporting requirements of the Board of Governors of the Federal Reserve System, or the Federal Reserve.
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