Discounted Cash Flow Calculation for DB:1P1 using 2 Stage Free Cash Flow to Equity Model
The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value using the 2 stage method.
We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.
Note: Free cash flow to equity valuations ignore the company's cash or debt.
DB:1P1 DCF 1st Stage: Next 10 year cash flow forecast
Amount off the current price
is available for.
Share price is
vs Future cash flow value of
Current Discount Checks
to be considered undervalued it must be available for at least 20% below the
current price. Less than 40% is even better.
Play Communications's share price is below the future cash flow value, and at a moderate discount (> 20%).
Play Communications's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for
it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing
when they are out of season, or how much your home is worth.
The amount the stock market is willing to pay for
is considered below, and whether this is a fair price.
Price based on past earnings
Play Communications's earnings available for a low price, and how does
this compare to other companies in the same industry?
Play Communications's earnings are expected to grow by 4% yearly, however this is not considered high growth (20% yearly).
Play Communications's revenue is expected to grow by 1.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can
be gauged below. We look back 3 years and see if they were any good at
predicting what actually occurred. We also show the highest and lowest estimates
looking forward to see if there is a wide range.
Play Communications's performance over the past 5 years by checking for:
Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the
industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the
past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent
earnings report. Some checks require at least 3 or 5 years worth of data.
has a total score of
5/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
A company's financial position is much like your own financial position,
it includes everything you own
The boxes below represent the relative size of what makes up
Play Communications's finances.
The net worth of a company is the difference between its assets and liabilities.
Play Communications is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
Play Communications's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Play Communications's finances. If any of them are yellow this
indicates they may be out of proportion and red means they relate to one of the
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
High level of physical assets or inventory.
Debt is not covered by short term assets, assets are 0.4x debt.
Nearly all companies have debt. Debt in itself isn’t
however if the debt is too high, or the company can’t afford to pay the interest
on its debts this may have impacts in the future.
The graphic below shows equity (available funds) and debt, we ideally want to
see the red area (debt) decreasing.
If there is any debt we look at the companies capability to repay it, and
whether the level has increased over the past 5 years.
Management is one of the most important areas of a company. We look at
unreasonable CEO compensation, how long the team and board of directors have
been around for and insider trading.
TENURE AS CEO
Mr. Jean-Marc Harion has been the Chief Executive Officer and Chairman of Management Board at Play Communications S.A., since July 1, 2018. He served as Chief Executive Officer at Orange Egypt for Telecommunications S.A.E. since September 1, 2016 and served its Director. Mr. Harion served as the Chief Executive Officer of Mobistar SA/NV (now Orange Belgium S.A.) since December 1, 2011 until August 31, 2016. He served as Executive Director of Orange Belgium S.A. since December 1, 2011. With over 25 years of experience within the telecommunications sector, he previously served as Chief Executive Officer of Orange Dominica. His prior experience includes a wide-range of position across the entire Orange Group, which includes the post of Vice President of the French Business Development for Communications in New York, USA. He also served as Vice President of the commercial sector in Orange France in Paris and Director of operations and data services for Orange group in London. He holds a master’s degree in information management from the Institut d’Etudes Politiques de Paris and a master and post-graduate degree in linguistics from the Université Libre de Bruxelles.
Insufficient data for Jean-Marc to compare compensation growth.
Insufficient data for Jean-Marc to establish whether their remuneration is reasonable compared to companies of similar size in Germany.
Management Team Tenure
Average tenure and age of the
management team in years:
The average tenure for the Play Communications management team is less than 2 years, this suggests a new team.
Chairman of the Management Board & CEO
CFO & Member of Management Board
CTO & Member of the Management Board
Chief Information & Transformation Officer
Investor Relations Director
Chief Marketing Officer
Chief Commercial Officer
Chief Business Development & Regulatory Officer
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Play Communications board of directors is less than 3 years, this suggests a new board.
Board of Directors
Chairman of the Board
Deputy Chairman of the Board
Non Executive Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Play Communications S.A. provides mobile telecommunications services in Poland. The company offers mobile voice, messaging, data, and video services to consumers and businesses on a contract and prepaid basis under the Play brand; and value added services, as well as sells handsets and other devices. As of December 31, 2018, it had approximately 15 million subscribers; and operated 799 dedicated Play branded stores. The company was formerly known as Play Holdings 2 S.à r.l. and changed its name to Play Communications S.A. in June 2017. Play Communications S.A. was founded in 2005 and is based in Luxembourg.
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