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Information Services Group Inc (NAS:III)
Intrinsic Value: Projected FCF
$2.61 (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, Information Services Group Inc's projected FCF intrinsic value is $2.61. The stock price of Information Services Group Inc is $3.69. Therefore, Information Services Group Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 1.4.

III' s 10-Year Price to Intrinsic Value: Projected FCF Range
Min: 0.48   Max: 1.85
Current: 1.41

0.48
1.85

During the past 9 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Information Services Group Inc was 1.85. The lowest was 0.48. And the median was 1.42.

III's Price to Intrinsic Value: Projected FCF is ranked lower than
57% of the 387 Companies
in the Global Business Services industry.

( Industry Median: 1.33 vs. III: 1.41 )

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 Information Services Group Inc's FCF(6 year avg) is calculate as

Information Services Group Inc Quarterly Data

201303201306201309201312201403201406201409201412201503201506
total_freecashflow -2.22.66.114.7-7.5-4.48.18.7-2.5-0.9
201009201012201103201106201109201112201203201206201209201212
total_freecashflow -0.55.0-9.2-7.26.79.0-5.51.72.510.3
200909200912201003201006
total_freecashflow 1.44.9-2.73.0

Add all the Free Cash Flow together and divide 6 will get Information Services Group Inc's FCF(6 year avg) = $6.97.

Information Services Group Inc's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jun15)*0.8)/Shares Outstanding
=(9.71809505475*6.97016666667+42.686*0.8)/38.971
=2.61

* 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.

Information Services Group 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
=3.69/2.6143938368
=1.41

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


Related Terms

Intrinsic Value: DCF (Earnings Based), Intrinsic Value: DCF (FCF Based), Free Cash Flow


Historical Data

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

Information Services Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
Projected FCF 0.000.000.000.000.000.000.002.243.182.65

Information Services Group Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
Projected FCF 2.132.282.553.182.962.602.582.652.922.61
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