Caesars Entertainment (Caesars Entertainment) Intrinsic Value: DCF (Earnings Based) : $53.27 (As of Apr. 28, 2024)

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Caesars Entertainment Intrinsic Value: DCF (Earnings Based) Chart

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Competitive Comparison of Caesars Entertainment's Intrinsic Value: DCF (Earnings Based)

For the Resorts & Casinos subindustry, Caesars Entertainment'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.

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Caesars Entertainment's Price-to-DCF (Earnings Based) Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Caesars Entertainment's Price-to-DCF (Earnings Based) distribution charts can be found below:

* The bar in red indicates where Caesars Entertainment's Price-to-DCF (Earnings Based) falls into.

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Caesars Entertainment Intrinsic Value: DCF (Earnings Based) Calculation

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 4.66%. 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.
=> Caesars Entertainment'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 = $4.616.
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.

Caesars Entertainment's Intrinsic Value: DCF (Earnings Based) for today is calculated as:

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

* 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.

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Caesars Entertainment  (NAS:CZR) Intrinsic Value: DCF (Earnings Based) Explanation

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.

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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.

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Caesars Entertainment Intrinsic Value: DCF (Earnings Based) Related Terms

Thank you for viewing the detailed overview of Caesars Entertainment's Intrinsic Value: DCF (Earnings Based) provided by GuruFocus.com. Please click on the following links to see related term pages.

Predictability Rank Intrinsic Value: DCF (FCF Based) Intrinsic Value: DCF (Dividends Based) Intrinsic Value: Projected FCF EPS without NRI Free Cash Flow Margin of Safety % (DCF FCF Based) Margin of Safety % (DCF Earnings Based) Margin of Safety % (DCF Dividends Based)

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Caesars Entertainment (Caesars Entertainment) Business Description

Executives

Michael E Pegram	director	PO BOX 285, BURLINGTON WA 98233
Stephanie Lepori	officer: CAO & Chief Admin. Officer	100 WEST LIBERTY STREET, SUITE 1150, RENO NV 89501
Thomas Reeg	director, officer: Chief Executive Officer	21 WATERWAY AVE, SUITE 150, THE WOODLANDS TX 77380
David P Tomick	director	100 REGENCY FOREST DR, SUITE 400, CARY NC 27511
Don R Kornstein	director	DON R KORNSTEIN, 825 LAKESHORE BLVD, INCLINE VILLAGE NV 89451
Fahrenkopf Frank J Jr	director	ONE CORPORATE CENTER, RYE NY 10580
Mather Courtney	director	C/O ICAHN ENTERPRISES L.P., 16690 COLLINS AVE., PH, SUNNY ISLES FL 33160
Sandra Douglass Morgan	director	601 RIVERSIDE AVENUE, JACKSONVILLE FL 32204
Quatmann Edmund L Jr	officer: See Remarks	600 EMERSON ROAD, SUITE 300, ST. LOUIS MO 63141
Josh Jones	officer: Chief Marketing Officer	100 W. LIBERTY ST., 12TH FLOOR, RENO NV 89501
Anthony L. Carano	officer: President and COO	100 WEST LIBERTY STREET, RENO NV 89501
Gary L. Carano	director, officer: Exec. Chairman of the Board	100 WEST LIBERTY STREET, 11TH FLOOR, RENO NV 89501
Bonnie Biumi	director	RETAIL PROPERTIES OF AMERICA, INC., 2021 SPRING ROAD, SUITE 200, OAK BROOK IL 60523
Jones Blackhurst Janis L	director	ONE CAESARS PALACE DRIVE, LAS VEGAS NV 89109
James B Hawkins	director	C/O IRADIMED CORPORATION, 1025 WILLA SPRINGS DR., WINTER SPRINGS FL 32708