Latest news with #Analysts
Yahoo
3 days ago
- Business
- Yahoo
LeMaitre Vascular, Inc.'s (NASDAQ:LMAT) Intrinsic Value Is Potentially 17% Below Its Share Price
Using the 2 Stage Free Cash Flow to Equity, LeMaitre Vascular fair value estimate is US$67.98 LeMaitre Vascular's US$82.20 share price signals that it might be 21% overvalued Analyst price target for LMAT is US$105, which is 54% above our fair value estimate In this article we are going to estimate the intrinsic value of LeMaitre Vascular, Inc. (NASDAQ:LMAT) by taking the forecast future cash flows of the company and discounting them back to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To begin with, we have to get estimates of the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$50.0m US$58.8m US$71.3m US$67.4m US$74.8m US$78.9m US$82.6m US$86.0m US$89.3m US$92.4m Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x2 Analyst x1 Analyst x1 Est @ 5.43% Est @ 4.69% Est @ 4.16% Est @ 3.80% Est @ 3.54% Present Value ($, Millions) Discounted @ 7.4% US$46.5 US$50.9 US$57.5 US$50.6 US$52.3 US$51.3 US$50.0 US$48.5 US$46.8 US$45.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$500m The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.9%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 7.4%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$92m× (1 + 2.9%) ÷ (7.4%– 2.9%) = US$2.1b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$2.1b÷ ( 1 + 7.4%)10= US$1.0b The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$1.5b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$82.2, the company appears slightly overvalued at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at LeMaitre Vascular as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 7.4%, which is based on a levered beta of 1.036. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. View our latest analysis for LeMaitre Vascular Strength Earnings growth over the past year exceeded the industry. Debt is not viewed as a risk. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Medical Equipment market. Expensive based on P/E ratio and estimated fair value. Opportunity Annual earnings are forecast to grow for the next 3 years. Threat Annual earnings are forecast to grow slower than the American market. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. It's not possible to obtain a foolproof valuation with a DCF model. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value lower than the current share price? For LeMaitre Vascular, we've compiled three essential aspects you should further research: Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with LeMaitre Vascular , and understanding it should be part of your investment process. Future Earnings: How does LMAT's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Effettua l'accesso per consultare il tuo portafoglio
Yahoo
5 days ago
- Business
- Yahoo
Estimating The Intrinsic Value Of Essential Utilities, Inc. (NYSE:WTRG)
Essential Utilities' estimated fair value is US$42.57 based on Dividend Discount Model Current share price of US$38.12 suggests Essential Utilities is potentially trading close to its fair value Analyst price target for WTRG is US$45.56, which is 7.0% above our fair value estimate In this article we are going to estimate the intrinsic value of Essential Utilities, Inc. (NYSE:WTRG) by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow. We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. We have to calculate the value of Essential Utilities slightly differently to other stocks because it is a water utilities company. Instead of using free cash flows, which are hard to estimate and often not reported by analysts in this industry, dividends per share (DPS) payments are used. Unless a company pays out the majority of its FCF as a dividend, this method will typically underestimate the value of the stock. We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. The dividend is expected to grow at an annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We then discount this figure to today's value at a cost of equity of 6.4%. Relative to the current share price of US$38.1, the company appears about fair value at a 10% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. Value Per Share = Expected Dividend Per Share / (Discount Rate - Perpetual Growth Rate) = US$1.5 / (6.4% – 2.9%) = US$42.6 We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. You don't have to agree with these inputs, I recommend redoing the calculations yourself and playing with them. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Essential Utilities as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.4%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for Essential Utilities Strength No major strengths identified for WTRG. Weakness Earnings growth over the past year underperformed the Water Utilities industry. Interest payments on debt are not well covered. Dividend is low compared to the top 25% of dividend payers in the Water Utilities market. Opportunity Annual earnings are forecast to grow for the next 3 years. Good value based on P/E ratio and estimated fair value. Threat Debt is not well covered by operating cash flow. Paying a dividend but company has no free cash flows. Annual earnings are forecast to grow slower than the American market. Valuation is only one side of the coin in terms of building your investment thesis, and it shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Essential Utilities, we've compiled three pertinent elements you should explore: Risks: For instance, we've identified 2 warning signs for Essential Utilities (1 can't be ignored) you should be aware of. Future Earnings: How does WTRG's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NYSE every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Globe and Mail
6 days ago
- Business
- Globe and Mail
Nvidia Corp: Will Earnings Propel Stock to Average Analyst Target of $169?
Nvidia Corp. (NVDA) Nvidia is once again in the spotlight as investors look ahead to the company's earnings report after market close today (May 28th, 2025). The question on many investors' minds is whether the chipmaker's fundamental strength and continued momentum can drive its stock price to the average 12-month analyst target of $169.29 per share, up from its recent closing price of $135.50. Analyst Consensus: Strong Buy with Room to Run According to a forecast compiled from 30 analysts, Nvidia carries an average price target of $169.29, suggesting an upside potential of more than 22%. The consensus analyst rating is 'Strong Buy,' reflecting high conviction in the company's earnings power and leadership in AI and GPU technologies. Nvidia's earnings are expected to play a pivotal role in determining whether the stock can reach—or exceed—this target. Strong quarterly results, particularly from data center and AI-driven segments, could be the catalyst investors are waiting for. Stock Target Advisor's View: Slightly Bullish Stock Target Advisor's fundamental analysis gives Nvidia a 'Slightly Bullish' rating, based on 11 positive and 7 negative fundamentals. While not as optimistic as the consensus analyst rating, this outlook still reflects an overall positive view driven by Nvidia's fundamentals. Positive Fundamentals Nvidia exhibits several key strengths that place it in the top quartile among its peers: Superior risk-adjusted returns over the past year Positive total and free cash flow in recent quarters High return on assets and invested capital, signaling strong operational efficiency Top-tier revenue and earnings growth over the past 5 years Strong gross profit to asset ratio, favored by value investors Consistently high dividend returns, outperforming sector peers High return on equity, suggesting excellent capital deployment Large market cap, offering added stability These metrics indicate that Nvidia is not just riding the AI wave—it's leading it, with a financial foundation to back it up. Negative Fundamentals Valuation concerns: Nvidia appears overpriced on several fronts, including price-to-earnings, price-to-book, price-to-cash flow, and price-to-free cash flow metrics High volatility: The stock has shown above-average volatility, which may deter risk-averse investors Below median total returns over a five-year horizon, despite recent gains Low dividend growth, which may concern income-focused investors Investors should note that these concerns primarily revolve around valuation and volatility, not operational performance. This highlights the key debate: Is Nvidia's growth priced in, or is there more room to run? Recent Performance Snapshot: 1-week change: +0.83% 1-month change: +22.06% 1-year change: +27.27% Conclusion: Can It Reach $169? Nvidia's ability to hit or exceed the $169 target hinges largely on its next earnings report and forward guidance. Given the strong fundamental profile, continued demand for AI and GPU products, and resilient cash flow generation, there's a compelling case that Nvidia could reach this target in the medium term. However, investors should remain aware of valuation risks and be prepared for volatility, particularly in a macro environment that remains uncertain. For those with a long-term horizon and higher risk tolerance, Nvidia continues to look like a leader worth watching—or holding. Bottom Line: Yes, Nvidia has the fundamental strength and market momentum to reach the $169 average analyst target, but valuation and volatility remain key factors to monitor.
Bloomberg
6 days ago
- Business
- Bloomberg
BMO Beats Estimates on Lending Income Even as Provisions Climb
Bank of Montreal topped estimates as net interest income came in higher than expected even as the company set aside more money than forecast to cover possibly bad loans, highlighting growing concern about the fate of the North American economy. The Canadian bank earned C$2.62 a share on an adjusted basis in its fiscal second quarter, according to a statement Wednesday, beating the C$2.54 average estimate of analysts in a Bloomberg survey. Net interest income, the difference between what the bank earns on loans and pays for deposits, totaled C$5.1 billion ($3.7 billion), higher than the C$5.04 billion expected by analysts.
Yahoo
24-05-2025
- Business
- Yahoo
Is There An Opportunity With InMode Ltd.'s (NASDAQ:INMD) 35% Undervaluation?
Using the 2 Stage Free Cash Flow to Equity, InMode fair value estimate is US$21.85 InMode's US$14.23 share price signals that it might be 35% undervalued The US$17.25 analyst price target for INMD is 21% less than our estimate of fair value Does the May share price for InMode Ltd. (NASDAQ:INMD) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by taking the expected future cash flows and discounting them to their present value. Our analysis will employ the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine. Remember though, that there are many ways to estimate a company's value, and a DCF is just one method. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. Our free stock report includes 2 warning signs investors should be aware of before investing in InMode. Read for free now. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Seeing as no analyst estimates of free cash flow are available to us, we have extrapolate the previous free cash flow (FCF) from the company's last reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF ($, Millions) US$109.8m US$103.2m US$99.8m US$98.4m US$98.2m US$99.0m US$100.4m US$102.3m US$104.6m US$107.1m Growth Rate Estimate Source Est @ -9.83% Est @ -6.00% Est @ -3.32% Est @ -1.44% Est @ -0.13% Est @ 0.79% Est @ 1.44% Est @ 1.89% Est @ 2.20% Est @ 2.42% Present Value ($, Millions) Discounted @ 9.2% US$101 US$86.6 US$76.6 US$69.2 US$63.3 US$58.4 US$54.2 US$50.6 US$47.4 US$44.4 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$651m After calculating the present value of future cash flows in the initial 10-year period, we need to calculate the Terminal Value, which accounts for all future cash flows beyond the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.9%. We discount the terminal cash flows to today's value at a cost of equity of 9.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = US$107m× (1 + 2.9%) ÷ (9.2%– 2.9%) = US$1.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$1.8b÷ ( 1 + 9.2%)10= US$730m The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$1.4b. The last step is to then divide the equity value by the number of shares outstanding. Relative to the current share price of US$14.2, the company appears quite undervalued at a 35% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at InMode as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.2%, which is based on a levered beta of 0.970. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for InMode Strength Currently debt free. Weakness Earnings declined over the past year. Opportunity Good value based on P/E ratio and estimated fair value. Threat Annual earnings are forecast to decline for the next 3 years. Although the valuation of a company is important, it is only one of many factors that you need to assess for a company. DCF models are not the be-all and end-all of investment valuation. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Why is the intrinsic value higher than the current share price? For InMode, we've compiled three relevant items you should further examine: Risks: Every company has them, and we've spotted 2 warning signs for InMode you should know about. Future Earnings: How does INMD's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the NASDAQGS every day. If you want to find the calculation for other stocks just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
