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Zale Corp (NYSE:ZLC)
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, Zale Corp's projected FCF intrinsic value is $0.00. The stock price of Zale Corp is $21.13. Therefore, Zale Corp's Price to Intrinsic Value: Projected FCF Ratio of today is 0.0.

ZLC' s 10-Year Price to Intrinsic Value: Projected FCF Range
Min: 0   Max: 0
Current: 0

ZLC's Price to Intrinsic Value: Projected FCF is ranked lower than
269% of the 409 Companies
in the Global Luxury Goods industry.

( Industry Median: 1.29 vs. ZLC: 0.00 )

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

Zale Corp Quarterly Data

201110201201201204201207201210201301201304201307201310201401
total_freecashflow -10066-12-12-80541241-9672
200904200907200910201001201004201007201010201101201104201107
total_freecashflow 428-1561065913-1337016-21
200804200807200810200901
total_freecashflow 5122-7013

Add all the Free Cash Flow together and divide 6 will get Zale Corp's FCF(6 year avg) = $-8.69.

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

Intrinsic Value=(Growth Multiple*Free Cash Flow(6 year avg)+Total Equity(Jan14)*0.8)/Shares Outstanding
=(9.52035159596*-8.69466666667+192.073*0.8)/45.022
=1.57

* 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.

Zale 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
=21.13/1.57438843951
=13.42

* 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.

Zale Corp Annual Data

Jul04Jul05Jul06Jul07Jul08Jul09Jul10Jul11Jul12Jul13
Projected FCF 23.1832.3831.1229.5229.4517.2310.820.89-2.640.83

Zale Corp Quarterly Data

Oct11Jan12Apr12Jul12Oct12Jan13Apr13Jul13Oct13Jan14
Projected FCF 0.55-4.66-2.45-2.642.42-0.731.440.83-0.641.57
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