Hi everyone! The data for Google's stock was accurate when we filmed it, but it will obviously change over time. Here are the resources mentioned in the video: Reverse DCF Calculator: brianferoldi.com/rdcf Stratosphere data on Google: www.stratosphere.io/company/GOOG/ Yahoo Finance Analyst estimates for Google: finance.yahoo.com/quote/GOOG/analysis?p=GOOG Hope this video is helpful!

@dphuntsman

Жыл бұрын

Most definitely; perfect level of explanation. Also first time I’ve understood DCF itself!

Wonderful, thanknyou for this amazing free tool, and simple explanation 🙏

Excellent. I modified my copy to add a Discount Rate calculation (based on Risk-free interest rate, equity premium, stock beta) and also added a second FCF model that allows me to model a decay of the growth rate (rather than assuming that after 10 years it abruptly slows to the Terminal Growth Rate).

@BrianFeroldiYT

11 ай бұрын

Love it

finally the audio is .. right. keep it up!

Thanks

Thank you very much for this calculator. I have been using for the past three hours. I really needed this and adding this element of analysis makes my entire valuation process far more complete. ~ I plugged in some figures for a REIT I am interested in and the results were very strange. I am wondering if I need to use FFO, or AFFO, or some other metric in the FCF box. If you could please advise me that would be magnificent.

Hi Brian (and Brian), You guys were absolutely my favorite hosts on the Motley Fool and Industry Focus show (focus on tech) back then. You did a wonderful job and I was listening to your expertise every time I had the opportunity. Now that you have left the Motley Fool and now that The Motley Fool hardly ever speak about small and mid sized tech I never listen to them any longer. In my eyes they took a wrong decision to turn away from tech into a more conventional direction with solely focus on large tech companies and value/dividend stocks. I understand that 2022 was a very tough yeah for both myself and everybody else who were interested in the companies we like so much. But now that tech and small to mid cap tech is surging while e.g. health, banking and energy are sinking The Motley Fool still recommends those assets. What do I want to say about all this? I think I just want to say that I miss your shows and I want to express ny deepest gratitude for your work. Keep going on, please! What about making a fond that people can invest in? Best regards from Denmark!

@tucoramirez9557

5 ай бұрын

Similar experience here. Nowadays the Live show is a sad corpse of the interesting, engaging, funny, informative and educational show it was in 2020.

Brian, please be aware of a very important topic. When discounting back the Free Cash Flows to the Firm, this will give the estimated Entreprise Value of the company not its Market Value (Equity). After getting the Enterprise Value, if you have to deduct the Net Debt to get the Equity value and subsequenlty divide by the shares outstanding to get the implied share price today.

@BrianFeroldiYT

6 ай бұрын

Good color - there are lots of ways to do dcfs & reverse dcfs. What we presented is optimized for simplicity. Feel free to make it more complex!

Bravo Brians !!!😀

@BrianFeroldiYT

Жыл бұрын

Thanks andrea!

PLease do more earnings videos like Uipath, alteryx etc. I see that you guys reduced the frequency of videos.

Would you explain the assumed underlying connection between the expected stock growth and the FCF growth? Why is it assumed that the average cash flow growth rate would result in the inputed discount rate?

@BrianFeroldiYT

Жыл бұрын

The discount rate is not related to the growth rate at all. We start by assuming a 10% discount rate, which is just a starting point. If you want to go more conservative, choose a higher discount rate. This was just an example!

Keep these videos coming!

@BrianFeroldiYT

Жыл бұрын

Will do! Thanks for watching!

@BlindTakes

Жыл бұрын

@@BrianFeroldiYT Followup question - I am not sure I understand what the future stock price implications are for the Reverse DCF? If the company is able to meet the projected Growth Rate, wouldn't the stock price of the growing company also be simultaneously increasing?

@Martinit0

11 ай бұрын

@@BlindTakes Yes it would, but with a DCF you are trying to answer the question: Is the stock price today on that trajectory or is it below or above? Now the reverse DCF is saying: We assume "the market" correctly prices the share, but in doing that what does "the market" assume the future growth of the company to be? Then you make investment decision based on whether you agree with that implied growth rate.

Would it not be simpler if the spreadsheet solved for the Year 1-10 Growth Rate as opposed to the user having to tinker with the growth rate until the Estimated Intrinsic Value is a close approximation to the Current Share Price?

@Sooooooooooorya

5 ай бұрын

could u elaborate on that? what do u mean "the spreadsheet solved for the Year 1-10 Growth Rate"??

I tried but I didn’t receive a link to my email! Is there anyway can you send me link? Thank you

Does the reverse DCF assume a terminal P/FCF multiple to arrive at the intrinsic value? If yes, why is it hidden? And what is it defined as in the example? Thx for great content!

@larse2678

Жыл бұрын

godt spørgsmål;-)

@Martinit0

11 ай бұрын

They calculate sum of all future cash flows (i.e. sum of next ten years of FCF + terminal value), discount that to the present using the discount rate and then divide by share count to arrive at the "estimated intrinsic value" i.e. the price you compare against the stock price.

Hi Brian, thanks for your free Reverse DCF Calc. I only got one question about ''Enter the stock ticker'' it don't work in the sheet. I try to place a stock ticker in the sheet but nothing happens.

@BrianFeroldiYT

Жыл бұрын

It should pull up the stock data automatically. It might be after hours and google sheets arent working. It works best when markets are open.

@Martinit0

11 ай бұрын

Sometimes the GOOGLEFINANCE function stop working and it helps to close the browser tab and load the Sheet again from your Google Drive. It should work after hours.

@kleebankliban2296

9 ай бұрын

If you can't type in any field, the linked version is not editable. You need to copy and re-save the file yourself so you can edit. The first version you get actually points to their online sheet, and if you edited it that would edit it for anyone who looked at their copy in the future, so access to edit has to be blocked. It should say "view only" or something similar. Once you save a copy to your own Google drive you can do what you want with it. That's the cloud aspect of Google Sheets, which is different than if you downloaded an offline Excel sheet, that you could edit without it updating the original sheet belonging to whoever sent it to you.

I’ll discount your free cash flow

You guys still active? Miss your great channel

I have lost a lot trying to invest on my own, I keep making loses. Can anyone help me out or at least tell me what I'm doing wrong?

@kenneho

Жыл бұрын

Maybe try investor cloning? Even Mohnish Pabrai recommends this

@kleebankliban2296

9 ай бұрын

The market has been pretty crazy lately. Investors are nervous due to rising interest rates, and fear of recession. This makes investors super fearful and they sell off companies pretty easily. A little minor bad news causes a stock price to shoot down as invetors panic and sell shares short sightedly, regardless of expectations for future growth once the economy improves. I am oversimplifying but the fact is stocks will be very up and down for now, until interest rates stop going up and recession fears fade, or until a recession comes and goes. You could be making great picks but it takes years for real money to be made. If you think the companies you pick will be better off in 5 years than today, don't let the emotional swings of the market bother you. Just buy in small amounts. Periods like this with price drops are when you make the purchases that make you the most money, because fear creates cheap prices, and when fear passes everyone starts buying stocks up again. That being said, pick many stocks, not just a few, cuz not all will go up but the ones that you end up being right about will make up for the losers. If you need a coach to help assure you your picks have been researched thoroughly, I subscribe to Motley Fool's Stock Advisor subscription (these guys are from Motley Fool). They give you 2 stocks a month, and have monthly rankings for 10 other stocks they like. They also teach you about mindset, keeping calm, investing strategies, and they give updates on companies. They do it all by video streams too if you don't like to read. Just listening to them is therapeutic if you are anxious about investing. Helps knowing you are being guided by people who really know what they are doing, and it gives you a sense of community, since you arent picking stocks alone. I got my first 2 years for $200 and just renewed for year 3. I knew NOTHING about investing and I feel really good about my portfolio and my handle on things now. It was worth the money many times over.

Not only is it comical that you're "modeling" using google sheets instead of excel where a simple goal seek function would save you brain cells, but you're not even using the right free cash flow figure. FCF is calculated as after tax operating profit + D&A - CapEx - investment in NWC. Also, I'm just going to take a wild guess and assume you're using basic shares outstanding, or just whatever you got from yahoo finance. Accurately calculating diluted shares outstanding, which is what you actually need, would involve looking at current exercisable stock options on a 10-K and using the treasury stock method. These are only a few things wrong with the nonsense you're spewing, I don't have it in me to watch the whole video. The fact that I took the time to comment this much is almost as ridiculous as you two trying to explain how to model a reverse DCF properly.

@AustinMcClellan

11 ай бұрын

I should've watched your intro video on your channel before making this comment. I made the assumption that you two were claiming to be experts. However, even though you admit that you're still looking to learn yourselves, you should at least know the basics if you're going to "teach".