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Sears Holdings Corp (NAS:SHLD)
Intrinsic Value: Projected FCF
$-143.18 (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, Sears Holdings Corp's projected FCF intrinsic value is $-143.18. The stock price of Sears Holdings Corp is $11.54. Therefore, Sears Holdings Corp'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 Sears Holdings Corp was 4.60. The lowest was 0.26. And the median was 0.47.


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 Sears Holdings Corp's FCF(6 year avg) is calculate as

Sears Holdings Corp Quarterly Data

201404201407201410201501201504201507201510201601201604201607
total_freecashflow -632-241-1,271487-579-339-1,288-172-76247
201110201201201204201207201210201301201304201307201310201401
total_freecashflow -968916-139-94-1,305857-773-58-1,042435
201010201101201104201107
total_freecashflow -1,1251,180-374-281

Add all the Free Cash Flow together and divide 6 will get Sears Holdings Corp's FCF(6 year avg) = $-1,253.50.

Sears Holdings Corp's Intrinsic Value: Projected FCF for today is calculated as

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jul16)/0.8)/Shares Outstanding
=(9.52035159596*-1253.5+-2698/0.8)/106.900
=-143.18

* 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.

Sears Holdings 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
=11.54/-143.18298153
=

* 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.

Sears Holdings Corp Annual Data

Jan07Jan08Jan09Jan10Jan11Jan12Jan13Jan14Jan15Jan16
Projected FCF 0.000.000.00141.41122.5665.5334.70-9.14-65.52-129.65

Sears Holdings Corp Quarterly Data

Apr14Jul14Oct14Jan15Apr15Jul15Oct15Jan16Apr16Jul16
Projected FCF -12.58-27.22-32.99-65.52-74.33-71.18-97.38-129.65-142.83-143.18
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