Analyst ValuationsFor those wondering how an analyst estimate can go from $5 to
, it is very simply based on the rate used to discount the cashflows and the EBITDA multiple used for terminal value.
If you take a 5 year cashflow forecast with a terminal value of 6x EBITDA and discount it at 8%, you'll get a positive value.
If you take that exact same 5 year cashflow forecast with a terminal value of 4x EBITDA and discount it at 12%, the value will be gone. No change to liquidity whatsoever.
If you read the analyst reports, that is essentially what they've all done. The cashflow is riskier because of questions about the business prospects so slap on a higher discount rate and a lower terminal value and whammo, no value.
The truth is that any company's valuation would be affected the same. The value of my own company is largely made up of the terminal value multiple and a discount rate that reflects medium risk. If the sell side analysts that cover my company changed either of those variables, we would be worth zero as well.
Be very careful when listening to these analysts and reading their reports. They follow stocks up and down. They never lead the way.
I think YLO has a legitimate shot to de-leverage the company and I think there is equity value here. I think we could see a bounce to 50 to 75 cents.