iRobot (iRobot) Intrinsic Value: DCF (FCF Based) : $-49.29 (As of Apr. 28, 2024)

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iRobot Intrinsic Value: DCF (FCF Based) Chart

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Competitive Comparison of iRobot's Intrinsic Value: DCF (FCF Based)

For the Furnishings, Fixtures & Appliances subindustry, iRobot's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF 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.

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iRobot's Price-to-DCF (FCF Based) Distribution in the Furnishings, Fixtures & Appliances Industry

For the Furnishings, Fixtures & Appliances industry and Consumer Cyclical sector, iRobot's Price-to-DCF (FCF Based) distribution charts can be found below:

* The bar in red indicates where iRobot's Price-to-DCF (FCF Based) falls into.

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iRobot Intrinsic Value: DCF (FCF Based) Calculation

This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.

Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the 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 4.66%. 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 FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
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.
=> iRobot's average Free Cash Flow 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. Free Cash Flow per Share: fcf = $-4.271.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the 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.

iRobot's Intrinsic Value: DCF (FCF Based) for today is calculated as

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* 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.

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iRobot  (NAS:IRBT) Intrinsic Value: DCF (FCF Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.

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Be Aware

What you need to know about the DCF model:

1. The DCF 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 have relatively consistent performance.
4. The DCF model works poorly for inconsistent performers such as cyclicals.
5. What discount rate should you use? Your expected return from the investment is a good 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.

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iRobot Intrinsic Value: DCF (FCF Based) Related Terms

Thank you for viewing the detailed overview of iRobot's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: DCF (Earnings Based) Intrinsic Value: DCF (Dividends Based) Intrinsic Value: Projected FCF Free Cash Flow Free Cash Flow per Share Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) Margin of Safety % (DCF Dividends Based)

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iRobot (iRobot) Business Description

Executives

Faris Habbaba	officer: Chief R&D Officer	IROBOT CORPORATION, 8 CROSBY DRIVE, BEDFORD MA 01730
Julie Zeiler	officer: EVP, Chief Financial Officer	C/O IROBOT CORPORATION, 8 CROSBY DRIVE, BEDFORD MA 01730
Deborah G Ellinger	director	ONE CVS DR, WOONSOCKET RI 02895
Mohamad Ali	director	2 AVENUE DE LAFAYETTE, BOSTON MA 02111
Angle Colin M	director, 10 percent owner, officer: Chief Executive Officer	352 BEACON STREET, BOSTON MA 02116
Karen Golz	director	ONE TECHNOLOGY WAY, NORWOOD MA 02062
David Keith Hartsfield	officer: Chief Product Officer	C/O IROBOT CORPORATION, 8 CROSBY DRIVE, BEDFORD MA 01730
Ruey Bin Kao	director	CHINA HOLDINGS ACQUISITION CORP., 33 RIVERSIDE AVENUE, 5TH FLOOR, WESTPORT CT 06880
Andrew Miller	director	111 MCINNIS PARKWAY, SAN RAFAEL CA 94903
Jean Jacques Blanc	officer: Chief Commercial Officer	IROBOT CORPORATION, 8 CROSBY DRIVE, BEDFORD MA 01730
Elisha W Finney	director	C/O VARIAN MEDICAL SYSTEMS, INC, 3100 HANSEN WAY M/S E-327, PALO ALTO CA 94304
Glen Daniel Weinstein	officer: VP and General Counsel	IROBOT CORPORATION, 63 SOUTH AVENUE, BURLINGTON MA 01803
Russell J Campanello	officer: SVP Human Resources	C/O PHASE FORWARD INCORPORATED, 77 FOURTH AVENUE, WALTHAM X1 02451
Michelle Stacy	director	33 COFFEE LANE, WATERBURY VT 05676
Timothy Saeger	officer: EVP Engineering	C/O IROBOT CORPORATION, 8 CROSBY DRIVE, BEDFORD MA 01730