Are Silicon Laboratories Inc. (NASDAQ:SLAB) Investors Paying Above The Intrinsic Value?
Are Silicon Laboratories Inc. (NASDAQ:SLAB) Investors Paying Above The Intrinsic Value?
Key Insights
- The projected fair value for Silicon Laboratories is US$115 based on 2 Stage Free Cash Flow to Equity
- Silicon Laboratories' US$140 share price signals that it might be 22% overvalued
- The US$149 analyst price target for SLAB is 30% more than our estimate of fair value
Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Silicon Laboratories Inc. (NASDAQ:SLAB) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. This will be done using the Discounted Cash Flow (DCF) model. Don't get put off by the jargon, the math behind it is actually quite straightforward.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.
Crunching The Numbers
We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we discount the value of these future cash flows to their estimated value in today's dollars:
10-year free cash flow (FCF) estimate
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF ($, Millions) | -US$30.6m | US$79.7m | US$129.5m | US$170.1m | US$208.7m | US$243.2m | US$273.1m | US$298.4m | US$319.8m | US$338.1m |
Growth Rate Estimate Source | Analyst x4 | Analyst x4 | Analyst x1 | Est @ 31.38% | Est @ 22.66% | Est @ 16.55% | Est @ 12.27% | Est @ 9.28% | Est @ 7.18% | Est @ 5.71% |
Present Value ($, Millions) Discounted @ 8.5% | -US$28.3 | US$67.7 | US$102 | US$123 | US$139 | US$149 | US$155 | US$156 | US$154 | US$150 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$1.2b
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.3%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.5%.
Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = US$338m× (1 + 2.3%) ÷ (8.5%– 2.3%) = US$5.6b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$5.6b÷ ( 1 + 8.5%)10= US$2.5b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$3.7b. In the final step we divide the equity value by the number of shares outstanding. Relative to the current share price of US$140, the company appears slightly overvalued at the time of writing. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Important Assumptions
The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Silicon Laboratories as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.5%, which is based on a levered beta of 1.340. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
SWOT Analysis for Silicon Laboratories
- Debt is well covered by earnings.
- Balance sheet summary for SLAB.
- Expensive based on P/S ratio and estimated fair value.
- Has sufficient cash runway for more than 3 years based on current free cash flows.
- Debt is not well covered by operating cash flow.
- Is SLAB well equipped to handle threats?
Moving On:
Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. Why is the intrinsic value lower than the current share price? For Silicon Laboratories, we've compiled three further factors you should consider:
- Financial Health: Does SLAB have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Future Earnings: How does SLAB's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
關鍵見解
- 根據兩階段股權自由現金流,硅實驗室的預計公允價值爲115美元
- Silicon Laboratories的140美元股價表明其估值可能高達22%
- 分析師對SLAB的目標股價爲149美元,比我們對公允價值的估計高出30%
今天,我們將簡單介紹一種估值方法,該方法通過計算預期的未來現金流並將其折現爲今天的價值,來估計硅實驗室公司(納斯達克股票代碼:SLAB)作爲投資機會的吸引力。這將使用折扣現金流 (DCF) 模型來完成。不要被行話嚇跑,它背後的數學其實很簡單。
我們普遍認爲,公司的價值是其未來將產生的所有現金的現值。但是,差價合約只是衆多估值指標中的一個,而且並非沒有缺陷。如果你對這種估值還有一些迫切的問題,可以看看 Simply Wall St 分析模型。
計算數字
我們使用的是兩階段增長模型,這只是意味着我們考慮了公司增長的兩個階段。在初始階段,公司的增長率可能更高,而第二階段通常被認爲具有穩定的增長率。首先,我們需要估計未來十年的現金流。在可能的情況下,我們會使用分析師的估計值,但是當這些估計值不可用時,我們會從最新的估計值或報告的價值中推斷出之前的自由現金流(FCF)。我們假設自由現金流萎縮的公司將減緩其萎縮速度,而自由現金流不斷增長的公司在此期間的增長率將放緩。我們這樣做是爲了反映早期增長的放緩幅度往往比後來的幾年更大。
通常,我們假設今天的一美元比未來一美元更有價值,因此我們將這些未來現金流的價值折現爲以今天的美元計算的估計價值:
10 年自由現金流 (FCF) 估計
2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | |
Levered FCF(美元,百萬) | -3060 萬美元 | 79.7 萬美元 | 129.5 億美元 | 170.1 億美元 | 208.7 億美元 | 243.2 億美元 | 273.1 億美元 | 298.4 億美元 | 3.198 億美元 | 338.1 億美元 |
增長率估算來源 | 分析師 x4 | 分析師 x4 | 分析師 x1 | 美國東部標準時間 @ 31.38% | 美國東部標準時間 @ 22.66% | 美國東部標準時間 @ 16.55% | 美國東部標準時間 @ 12.27% | 美國東部標準時間 @ 9.28% | 美國東部標準時間 @ 7.18% | Est @ 5.71% |
現值(美元,百萬)折扣 @ 8.5% | -28.3 美元 | 67.7 美元 | 102 美元 | 123 美元 | 139 美元 | 149 美元 | 155 美元 | 156 美元 | 154 美元 | 150 美元 |
(“Est” = Simply Wall St估計的FCF增長率)
十年期現金流(PVCF)的現值 = 12億美元
第二階段也稱爲終值,這是企業在第一階段之後的現金流。出於多種原因,使用的增長率非常保守,不能超過一個國家的GDP增長率。在這種情況下,我們使用10年期國債收益率的5年平均值(2.3%)來估計未來的增長。與10年 “增長” 期一樣,我們使用8.5%的權益成本將未來的現金流折現爲今天的價值。
終端價值 (TV) = FCF2033 × (1 + g) ÷ (r — g) = 3.38億美元× (1 + 2.3%) ÷ (8.5% — 2.3%) = 56億美元
終端價值的現值 (PVTV) = 電視/ (1 + r)10= 56億美元÷ (1 + 8.5%)10= 25億美元
總價值是未來十年的現金流總額加上貼現的終端價值,由此得出總權益價值,在本例中爲37億美元。在最後一步中,我們將股票價值除以已發行股票的數量。相對於目前的140美元股價,在撰寫本文時,該公司的估值似乎略有高估。任何計算中的假設都會對估值產生重大影響,因此最好將其視爲粗略的估計,而不是精確到最後一美分。
重要假設
上面的計算在很大程度上取決於兩個假設。第一個是貼現率,另一個是現金流。投資的一部分是自己對公司未來業績的評估,因此請自己嘗試計算並檢查自己的假設。DCF也沒有考慮一個行業可能的週期性,也沒有考慮公司未來的資本需求,因此它沒有全面反映公司的潛在表現。鑑於我們將Silicon Laboratories視爲潛在股東,因此使用權益成本作爲貼現率,而不是構成債務的資本成本(或加權平均資本成本,WACC)。在此計算中,我們使用了8.5%,這是基於1.340的槓桿測試版。Beta是衡量股票與整個市場相比波動性的指標。我們的測試版來自全球可比公司的行業平均貝塔值,設定在0.8到2.0之間,這是一個穩定的業務的合理範圍。
硅實驗室的 SWOT 分析
- 債務可以很好地由收益支付。
- SLAB 的資產負債表摘要。
- 根據市銷率和估計的公允價值,價格昂貴。
- 根據當前的自由現金流,有足夠的現金流超過3年。
- 運營現金流無法很好地覆蓋債務。
- SLAB 是否有足夠的能力應對威脅?
繼續前進:
雖然重要,但理想情況下,DCF的計算不會是您爲公司仔細檢查的唯一分析內容。DCF模型並不是投資估值的萬能藥。相反,它應該被視爲 “需要哪些假設才能低估/高估這隻股票的價值?” 的指南例如,公司權益成本或無風險利率的變化會對估值產生重大影響。爲什麼內在價值低於當前股價?對於硅實驗室,我們還彙總了您應該考慮的另外三個因素:
- 財務狀況:SLAB 的資產負債表是否良好?看看我們的免費資產負債表分析,其中包含對槓桿和風險等關鍵因素的六項簡單檢查。
- 未來收益:與同行和整個市場相比,SLAB的增長率如何?通過與我們的免費分析師增長預期圖表互動,深入了解未來幾年的分析師共識數字。
- 其他高質量的替代品:你喜歡一個優秀的全能選手嗎?瀏覽我們的高品質股票互動清單,了解您可能還會錯過什麼!
PS。Simply Wall St每天都會更新每隻美國股票的差價合約計算結果,因此,如果您想找到任何其他股票的內在價值,請在此處搜索。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論,我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之,華爾街沒有持有任何上述股票的頭寸。
譯文內容由第三人軟體翻譯。
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