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Dell Inc (NAS:DELL)
Intrinsic Value: Projected FCF
\$0.00 (As of Today)

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company. The details of how we calculate the intrinsic value of stocks are described in detail here.

As of today, Dell Inc's projected FCF intrinsic value is \$0.00. The stock price of Dell Inc is \$13.86. Therefore, Dell Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

Definition

Since the intrinsic value calculations based on Discounted Cash Flow Intrinsic Value: DCF (FCF Based), or Discounted Earnings Intrinsic Value: DCF (Earnings Based) cannot be applied to companies without consistent revenue and earnings, GuruFocus developed a valuation model based on normalized Free Cash Flow and Book Value of the company.

The details of how we calculate the intrinsic value of stocks are described in detail here.

This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of total equity.

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + 0.8*Total Equity(most recent))/Shares Outstanding

In the case of negative total equity, the following formula is used (see the Total Equity section for the reason):

Value = ((Growth Multiple)*Free Cash Flow(6 year avg) + Total Equity(most recent)/0.8)/Shares Outstanding

Here Dell Inc's FCF(6 year avg) is calculate as

Dell Inc Quarterly Data

 201104 201107 201110 201201 201204 201207 201210 201301 201304 201307 total_freecashflow 328 2,215 637 1,672 -280 517 1,222 1,311 -197 1,514 200810 200901 200904 200907 200910 201001 201004 201007 201010 201101 total_freecashflow -223 690 681 977 731 1,150 192 1,190 820 1,323 200710 200801 200804 200807 total_freecashflow 826 1,002 21 966

Add all the Free Cash Flow together and divide 6 will get Dell Inc's FCF(6 year avg) = \$3,214.17.

Dell Inc's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Jul13) * 0.8) / Shares Outstanding = (9.52035159596 * 3214.16666667 + 10781 * 0.8) / 1764.000 = 22.24

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Explanation

The growth multiple is capped between 8.35 and 17.74.

Total equity weighting is more art than science and it should always be revisited in more detail when researching a company. Weightings from 0% to 100% to more than 100% are possible. 80% was chosen as a happy medium after taking the above ideas into consideration. Learn more here.

Dell Inc's Price to Intrinsic Value: Projected FCF Ratio for today is calculated as

 Price to Intrinsic Value: Projected FCF = Share Price / Intrinsic Value: Projected FCF = 13.86 / 22.2362793394 = 0.62

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Dell Inc Annual Data

 Jan04 Jan05 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Projected FCF 20.34 23.95 25.52 26.26 26.19 25.50 20.20 19.51 24.85 24.38

Dell Inc Quarterly Data

 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Apr13 Jul13 Projected FCF 19.71 22.11 22.62 24.85 24.07 24.05 24.09 24.38 23.15 22.24
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