Post by
zack50 on Jan 26, 2022 12:55pm
Interesting numbers...
Simply Wall St. has calculated an intrinsic value for Black Diamond Group, arrived at by discounting future cash flows to the present value using the 2 stage method. They used analyst's estimates of cash flows going forward 10 years for the 1st stage, while the 2nd stage assumes the company grows at a stable rate into perpetuity.
The calculation shows that the value of the next 10 years cash flows is $300M. Further calculations show that the terminal value is $891M and the present value of the terminal value to be $457M.
The total equity value, which is the present value of next 10 years cash flows ($300M) + the terminal value ($457M) is thus equal to $757M. With 59M shares outstanding that puts the equity value per share at $12.83.
So, based on the cah flows the company is expected to generate in thte future, BDI is trading significantly below fair value which is $12.83. With a present price of $4.60, the company is trading at a discount of ~64%.
BDI has already gained ~9.5% since Monday... let's hope for a continued upward trend. Q4 results should move us along quite nicely.