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PetSmart Inc (NAS:PETM)
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, PetSmart Inc's projected FCF intrinsic value is \$0.00. The stock price of PetSmart Inc is \$82.98. Therefore, PetSmart 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 PetSmart Inc's FCF(6 year avg) is calculate as

PetSmart Inc Quarterly Data

 201210 201301 201304 201307 201310 201401 201404 201407 201410 201501 total_freecashflow 93 260 112 60 56 240 104 56 88 0 201004 201007 201010 201101 201104 201107 201110 201201 201204 201207 total_freecashflow 55 18 51 208 65 89 96 205 93 68 200904 200907 200910 201001 total_freecashflow 136 56 64 198

Add all the Free Cash Flow together and divide 6 will get PetSmart Inc's FCF(6 year avg) = \$412.09.

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

 Intrinsic Value = (Growth Multiple * Free Cash Flow(6 year avg) + Total Equity(Jan15) * 0.8) / Shares Outstanding = (14.8626533105 * 412.094166667 + 1369.987 * 0.8) / 100.198 = 72.07

* 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.

PetSmart 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 = 82.98 / 72.0653339432 = 1.15

* 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.

PetSmart Inc Annual Data

 Jan06 Jan07 Jan08 Jan09 Jan10 Jan11 Jan12 Jan13 Jan14 Jan15 Projected FCF 11.50 15.60 15.57 19.26 28.05 33.67 40.91 53.00 66.15 0.00

PetSmart Inc Quarterly Data

 Oct12 Jan13 Apr13 Jul13 Oct13 Jan14 Apr14 Jul14 Oct14 Jan15 Projected FCF 44.97 53.00 56.32 59.01 60.96 66.15 69.40 71.01 73.80 0.00
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