Lennar Corporation (LEN)
Discount cash flow analysis
Price history
Sensitivity matrix
-1% |
Discount Rate % 0% |
1% |
||
---|---|---|---|---|
-1% | $5.32 | $5.14 | $4.97 | |
Terminal Growth% | 0 | $5.36 | $5.18 | $5.01 |
+1% | $5.40 | $5.22 | $5.05 |
How does a change in discount rate or terminal growth affect valuation?
This table shows the sensitivity of the valuation to two key variables - the discount rate and the terminal growth rate
Valuations and comments
- Valuecruncher created a new valuation of $55.86 (undervalued by 28.41%) - over 1 year ago
- Valuecruncher created a new valuation of $55.85 (undervalued by 25.96%) - over 1 year ago
- GordonGekko created a new valuation of $8.86 (overvalued by 13.65%) - almost 9 years ago
- GordonGekko created a new valuation of $5.18 (overvalued by 38.99%) - almost 9 years ago
- GordonGekko created a new valuation of $6.35 (undervalued by 7.99%) - almost 9 years ago
Comments
The boring details
All amounts in millions | Figures |
Enterprise Value: | 8,433 |
Net Debt (Long-term borrowings less cash): | 1,453 |
Equity Value: | 1,362 |
Number of Shares Outstanding: | 160,000,000 |
Calculated value per share: | $5.18 |
Enterprise Value is the present value of the post-tax cash flows for a business into the future.
Where:
- C1, C2, C3 - the cash flow in period 1, 2, 3, ...
- r - the discount rate
To capture the cash flows into the future a terminal value is calculated via a perpetuity calculation -
based on the final years forecast post-tax free cash flow.
Where:
- Cn - the cash flow in the final forecast period.
- LTG - the long-term growth rate
- r - the discount rate
- g - the terminal growth rate
The Capital Asset Pricing Model (CAPM) is used to determine the equity component in the discount rate.
Where:
- rt - the risk free rate
- t - the tax rate
- B - the beta of the company
- MRP - the Market Risk Premium
Valuecruncher uses an estimate of Weighted Average Cost of Capital (WACC) to determine the discount rate in the calculation.