Valuation
Free Cash Flow TTM ($M) : 7511
With a growth rate of 3% for the next 5 years and a 2% infinite growth rate after that.
You can expect a return of 20% per year for 10 years with a 12.5% margin of safety.
| 10% Return | 15% Return | 20% Return | |
|---|---|---|---|
| Fair Value | $126.66 | $78.23 | $56.84 |
| Margin of safety given | 60% | 35% | 12.5% |
Negatives
Issuing more shares
Negative Book Value
Positives
Good Valuation
Consistent Revenue Growth
Debt no longer an issue
High return on invested capital (17%)
Growing Cash Flow
Side notes
They have recently spun off VMware, resolving their debt issue. However they will suffer with slower growth because of this
They have also recently introduced a small dividend of $1.32, a 2.66% yield which means a payout ratio of 19% from last years earnings.
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