Discounted Cash Flow Calculation for TSE:6560 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.
TSE:6560 DCF 1st Stage: Next 10 year cash flow forecast
The current share price of
is above its future cash flow value.
Often investors are willing to pay a
for a company that has a high dividend or the potential for future growth.
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
LTS's earnings available for a low price, and how does
this compare to other companies in the same industry?
In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as LTS has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.
This is quite a rare situation as 97% of companies covered by Simply Wall St do have past financial data. You can see them here.
Show me the analysis anyway
The future performance of a company is measured in the same way as past
performance, by looking at estimated
and how much profit it is expected to make.
Future estimates come from
professional analysts. Just like forecasting the weather, they don’t always get
Expected Professional Services industry annual growth in earnings.
Earnings growth vs Low Risk Savings
expected to grow at an
Unable to compare LTS's earnings growth to the low risk savings rate as no estimate data is available.
Growth vs Market Checks
Unable to compare LTS's earnings growth to the Japan market average as no estimate data is available.
Unable to compare LTS's revenue growth to the Japan market average as no estimate data is available.
Unable to determine if LTS is high growth as no earnings estimate data is available.
Unable to determine if LTS is high growth as no revenue estimate data is available.
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.
LTS'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
2/6, see the detailed checks below.
Note: We use GAAP Net Income excluding extraordinary items in all our calculations.
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. Hiroaki Kabashima has been Chief Executive Officer and President at LTS, Inc. since December 2002. Mr. Kabashima joined ING Life Insurance Co., Ltd as first career. Then after worked several years for IQ3 Inc, was engaged in Sales General Manager at Learning Technology Consulting Inc. He founded LTS in March, 2002. He has been Director of LTS, Inc since December 2002. He serves as an Outside Director at Fixstars Corp. since December 2019. He Graduated from Keio University.
Insufficient data for Hiroaki to compare compensation growth.
Insufficient data for Hiroaki to establish whether their remuneration is reasonable compared to companies of similar size in Japan.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the LTS management team is over 5 years, this suggests they are a seasoned and experienced team.
Executive VP & Director
Board of Directors Tenure
Average tenure of the
board of directors in years:
The tenure for the LTS board of directors is about average.
Board of Directors
Executive VP & Director
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
LTS, Inc. provides consulting, business process management, and digital utilization services in Japan. It offers business consulting services in the areas of business development, merger and acquisition, business revitalization, formulation of customer strategies and changes in customer channels, and construction of management foundations; IT consulting services in the areas of IT management support, support for IT implementation for project planning and introduction, new business transitions, IT development and construction of infrastructure, and IT outsourcing, as well as ERP system implementation, operation, and operational support; and HR consulting services, such as services related to business process performance measurement, human resource development, e-learning, and human resource development for process management. The company also provides business process management services, including business process modeling, business process performance measurement, business process transformation, outsourcing planning, and business process outsourcing, as well as services related to human resource development for process management. In addition, it offers digital transformation services, such as technology research, advanced technology verification, data analysis, digital marketing, robotic process automation, artificial intelligence, and cloud integration. The company was founded in 2002 and is headquartered in Tokyo, Japan.
Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.