Switch to:
Radian Group Inc (NYSE:RDN)
Intrinsic Value: Projected FCF
$-6.67 (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, Radian Group Inc's projected FCF intrinsic value is $-6.67. The stock price of Radian Group Inc is $13.56. Therefore, Radian Group Inc's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

During the past 13 years, the highest Price to Intrinsic Value: Projected FCF Ratio of Radian Group Inc was 88.39. The lowest was 0.00. And the median was 0.68.


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

Radian Group Inc Quarterly Data

201403201406201409201412201503201506201509201512201603201606
total_freecashflow -140-1283480-4-76521535103
201109201112201203201206201209201212201303201306201309201312
total_freecashflow -154-132-155-20800-166-126-279-100
201009201012201103201106
total_freecashflow -48784-262-353

Add all the Free Cash Flow together and divide 6 will get Radian Group Inc's FCF(6 year avg) = $-394.28.

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

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jun16)*0.8)/Shares Outstanding
=(9.52035159596*-394.278666667+2805.367*0.8)/226.203
=-6.67

* 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.

Radian 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
=13.56/-6.67266982956
=

* 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.

Radian Group Inc Annual Data

Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14Dec15
Projected FCF 108.4683.5458.4847.798.64-8.45-21.23-25.17-12.71-10.99

Radian Group Inc Quarterly Data

Mar14Jun14Sep14Dec14Mar15Jun15Sep15Dec15Mar16Jun16
Projected FCF -18.94-16.46-15.63-12.71-12.06-1.440.18-10.99-8.62-6.67
Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
FEEDBACK