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Electro Rent Corp (NAS:ELRC)
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, Electro Rent Corp's projected FCF intrinsic value is \$0.00. The stock price of Electro Rent Corp is \$15.50. Therefore, Electro Rent Corp'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 Electro Rent Corp's FCF(6 year avg) is calculate as

Electro Rent Corp Quarterly Data

 201311 201402 201405 201408 201411 201502 201505 201508 201511 201602 total_freecashflow -3 -0.9 -3.1 -5.5 -4.8 0.2 -9.2 0.3 -6.3 5.9 201105 201108 201111 201202 201205 201208 201211 201302 201305 201308 total_freecashflow 3.7 -8 -12 -4.7 -3.1 1.1 -4.6 1.9 5.4 -2.8 201005 201008 201011 201102 total_freecashflow -11.1 -9.9 -12.3 -5.9

Add all the Free Cash Flow together and divide 6 will get Electro Rent Corp's FCF(6 year avg) = \$-14.79.

Electro Rent Corp's Intrinsic Value: Projected FCF for today is calculated as

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Feb16) * 0.8) / Shares Outstanding = (9.52035159596 * -14.7856666667 + 225.099 * 0.8) / 24.440 = 1.61

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's 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.

Electro Rent Corp'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 = 15.50 / 1.60861107826 = 9.64

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Electro Rent Corp Annual Data

 May06 May07 May08 May09 May10 May11 May12 May13 May14 May15 Projected FCF 9.21 6.66 3.75 1.25 0.40 -1.57 -3.79 -1.88 -0.03 -0.21

Electro Rent Corp Quarterly Data

 Nov13 Feb14 May14 Aug14 Nov14 Feb15 May15 Aug15 Nov15 Feb16 Projected FCF -1.51 -1.09 -0.03 -0.88 -0.58 -0.14 -0.21 0.61 0.94 1.61
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