Discounted Cash Flow Calculation for TSE:3197 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:3197 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.
Skylark Holdings's share price is below the future cash flow value, and at a moderate discount (> 20%).
Skylark Holdings's share price is below the future cash flow value, but not 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
Skylark Holdings's earnings available for a low price, and how does
this compare to other companies in the same industry?
Skylark Holdings's earnings are expected to grow by 2% yearly, however this is not considered high growth (20% yearly).
Skylark Holdings's revenue is expected to grow by 1.4% 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.
Skylark Holdings'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
1/6, 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
Skylark Holdings's finances.
The net worth of a company is the difference between its assets and liabilities.
Skylark Holdings's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
Skylark Holdings's long term commitments exceed its cash and other short term assets.
This treemap shows a more detailed breakdown of
Skylark Holdings'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 0.3x 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. Makoto Tani has been the Chief Executive Officer at Skylark Co., Ltd since August 2008. Mr. Tani has been the President of Skylark Co., Ltd. since August 18, 2008. Mr. Tani has been a Director of Skylark Co., Ltd. since August 2008. Mr. Tani Entered Former Skylark 1 in April 1977. Mr. Tani served as Director and General Manager of Sales Division of NILAX Inc. since December 1987. Mr. Tani served as the President at Skylark Co., Ltd. since January 2000. He served as President and Chief Executive Officer of NILAX Inc. since January 2000. He served as Managing Executive Officer and General Manager of No. 2 Sales Division of former Skylark 2 since October 2007. He has been Chairman of the Board at Skylark Co., Ltd since March 29, 2018.
Makoto's compensation has increased by more than 20% in the past year whilst earnings fell less than 20%.
Makoto's remuneration is higher than average for companies of similar size in Japan.
Management Team Tenure
Average tenure of the
management team in years:
The average tenure for the Skylark Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.
Executive Officer & MD of Supply Chain Purchasing Division
Executive Officer & MD of Supply Chain Production Division
Managing Exec. Officer
Executive Officer & MD of Store Development Division
Executive Officer & Managing Director of Supply Chain Purchasing Division
Board of Directors Tenure
Average tenure and age of the
board of directors in years:
The average tenure for the Skylark Holdings board of directors is less than 3 years, this suggests a new board.
Board of Directors
Managing Exec. Officer
Independent Outside Director
Outside Corporate Auditor
Who owns this company?
Recent Insider Trading
No 3 month open market individual insider trading information.
Skylark Holdings Co., Ltd. operates restaurants in Japan and internationally. The company operates Western, Chinese, Japanese, Sushi, and Italian restaurants primarily under the Gusto, Bamiyan, Jonathan´s, Syabuyo, Yumean, Steak Gusto, Grazie Gardens, Aiya, S Gusto, Totoyamichi, chawan, miwami, Tonkaratei, Katsukyu, Karayoshi, Bamiyan Ken, MUSASHI NO MORI COFFEE, Tomato and Onion, Jyu-Jyu Karubi, and FLO PRESTIGE brand names. It also provides delivery and take-out services. As of September 30, 2019, it operated 3,235 stores in Japan and internationally. The company was formerly known as Skylark Co., Ltd. and changed its name to Skylark Holdings Co., Ltd. in July 2018. Skylark Holdings Co., Ltd. was founded in 1962 and is based in Musashino, Japan.
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