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Rite Aid Corp (NYSE:RAD)
Intrinsic Value: Projected FCF
$0.85 (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, Rite Aid Corp's projected FCF intrinsic value is $0.85. The stock price of Rite Aid Corp is $8.24. Therefore, Rite Aid Corp's Price to Intrinsic Value: Projected FCF Ratio of today is 9.7.

RAD' s 10-Year Price to Intrinsic Value: Projected FCF Range
Min: 1.08   Max: 10.26
Current: 9.7

1.08
10.26

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Rite Aid Corp was 10.26. The lowest was 1.08. And the median was 1.98.

RAD's Price to Intrinsic Value: Projected FCF is ranked lower than
97% of the 217 Companies
in the Global Pharmaceutical Retailers industry.

( Industry Median: 1.44 vs. RAD: 9.70 )

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 Rite Aid Corp's FCF(6 year avg) is calculate as

Rite Aid Corp Quarterly Data

201302201305201308201311201402201405201408201411201502201505
total_freecashflow 11692-34131931263-5940213
201008201011201102201105201108201111201202201205201208201211
total_freecashflow -48-84-138329-181-66-65277-114158
200908200911201002201005
total_freecashflow -187-481-164479

Add all the Free Cash Flow together and divide 6 will get Rite Aid Corp's FCF(6 year avg) = $72.20.

Rite Aid Corp's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(May15)*0.8)/Shares Outstanding
=(10.125989036*72.2026666667+152.731*0.8)/1009.152
=0.85

* 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.

Rite Aid 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
=8.24/0.845569558438
=9.74

* 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.

Rite Aid Corp Annual Data

Feb06Feb07Feb08Feb09Feb10Feb11Feb12Feb13Feb14Feb15
Projected FCF 0.505.521.35-2.78-4.25-5.16-5.77-4.35-2.130.92

Rite Aid Corp Quarterly Data

Feb13May13Aug13Nov13Feb14May14Aug14Nov14Feb15May15
Projected FCF -4.35-4.03-3.70-2.44-2.13-1.52-1.18-1.020.920.85
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