Note: Discounted Earnings model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
Carmike Cinemas's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.
The historical rank and industry rank for Carmike Cinemas's Intrinsic Value: DCF (Earnings Based) or its related term are showing as below:
CKEC's Price-to-DCF (Earnings Based) is not ranked *
in the Media - Diversified industry.
Industry Median: 0.76 * Ranked among companies with meaningful Price-to-DCF (Earnings Based) only.
Carmike Cinemas Intrinsic Value: DCF (Earnings Based) Historical Data
The historical data trend for Carmike Cinemas's Intrinsic Value: DCF (Earnings Based) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Competitive Comparison of Carmike Cinemas's Intrinsic Value: DCF (Earnings Based)
For the Broadcasting subindustry, Carmike Cinemas's Price-to-DCF (Earnings Based), along with its competitors' market caps and Price-to-DCF (Earnings Based) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Carmike Cinemas's Price-to-DCF (Earnings Based) Distribution in the Media - Diversified Industry
For the Media - Diversified industry and Communication Services sector, Carmike Cinemas's Price-to-DCF (Earnings Based) distribution charts can be found below:
* The bar in red indicates where Carmike Cinemas's Price-to-DCF (Earnings Based) falls into.
This is the intrinsic value calculated from the Discounted Earnings model with default parameters. The calculation method is the same as Discounted Cash Flow model except earnings are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.
Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 11% A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.50%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year EPS without NRI Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year EPS without NRI Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year EPS without NRI Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=>
Carmike Cinemas's average EPS without NRI Growth Rate in the past
3 years was 0.00%,
which is less than 5%. GuruFocus defaults => Growth Rate: 5%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. EPS without NRI: eps without nri = $0.240. GuruFocus DCF calculator is actually a Discounted Earnings calculator, EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
Carmike Cinemas's Intrinsic Value: DCF (Earnings Based) for today is calculated as:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Unlike valuation methods such as Net Current Asset Value, Tangible Book Value per Share, Graham Number, Median Ratio etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
Be Aware
What you need to know about Discounted Earnings model:
1. The Discounted Earnings model evaluates a company based on its future earnings power
2. Growth is taken into account; therefore a faster growth company is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies that are relatively consistent performers.
4. The Discounted Earnings model works poorly for inconsistent performers like cyclicals.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less predictable businesses.
You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Carmike Cinemas Intrinsic Value: DCF (Earnings Based) Related Terms
Thank you for viewing the detailed overview of Carmike Cinemas's Intrinsic Value: DCF (Earnings Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Carmike Cinemas (Carmike Cinemas) Business Description
Carmike Cinemas Inc was organized in the state of Delaware in April 1982. The Company is a motion picture exhibitor in the United States and as of December 31, 2013, it owned, operated or had an interest in 252 theatres with 2,660 screens located in 37 states. The Company target small to mid-size non-urban markets with the belief that they provide a number of operating benefits, including lower operating costs and fewer alternative forms of entertainment. Its theatres are equipped to provide digital cinema and as of December 31, 2013, it had 240 theatres with 2,552 screens on a digital-based platform. In addition, Company had 233 theatres with 983 screens equipped for 3-D as of December 31, 2013. At December 31, 2013, it operated 15 theatres with 107 screens as discount theatres. The Company obtains licenses to exhibit films by directly negotiating with film distributors. It license films through its booking office located in Columbus, Georgia. The Company typically enters into film licenses that provide for rental fees based on firm terms which are negotiated and established prior to the opening of the picture; mutually agreed settlement upon the conclusion of the film run; or a sliding scale formula which is based on a percentage of the box office receipts using a pre-determined and agreed-upon film rental scale. The Company utilizes a point-of-sale system in its theatres developed by Allure Global Solutions, Inc., its point-of-sale system allows to centralize theatre-level administrative functions at its corporate headquarters. It allows corporate management to monitor ticket and concession sales and box office and concession staffing on a daily basis, enabling theatre managers to focus on the day-to-day operation of the theatre. The point-of-sale systems also facilitate services such as advanced ticket sales and Internet ticket sales. The Company owns or has rights to trademarks or trade-names that are used in conjunction with the operations of its theatres. It owns Carmike Cinemas and Hollywood Connection, the Carmike C and its film strip design, Big D, Carmike Rewards, Ovation Club, Muvico, MuviXL, and Wynnsong Cinemas trademarks. In addition, its logo is its trademark. Coca-Cola, Rave Reviews Cinemas, L.L.C., Cinemark USA, Inc., Christie, RealD, Screenvision, Showtime Concession Supply, Inc., Continental Concession Supplies, Inc., Allure Global Solutions, Inc. Bogarts and IMAX are registered trademarks. The Company competes with other motion picture exhibitors and a number of other film delivery methods, including DVDs, video-on-demand, pay-per view services and downloads via the Internet. It also competes for the publics leisure time and disposable income with all forms of entertainment, including sporting events, concerts, live theatre and restaurants. The Companys theatre operations are also subject to federal, state and local laws governing such matters as construction, renovation and operation of its theatres as well
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