Netting off the $50m of Net Debt leaves an equity value of $430m.
@madamswer
Hi - thanks very much for your help and found your workings very insightful.
In your original workings, when you get your enterprise value by extrapolating out by your multiples, wouldn't you then add back the debt (rather than subtracting again) to get your market capitalisation (recognise this isn't shareholder equity), then divide it by the number of shares to get to what you think is your target price?? Wouldn't $480m become $530m to give share price of $2.65? Obviously applying different multiples will affect this, but have I got the above wrong
Appreciate everyone's guidance (already feel as though have learnt alot) and recognise limitations of analysts etc.
However, aren't we basing our research on those analyst's estimates. I'm not sure of how to (or if it's possible) to form my own estimates of earnings. The subjectivity comes in with which multiples (PER, EV/EBITDA) to apply, but isn't it all still based on the "troop of monkeys" estimates in the first place? And relying on reliable company information can be difficult, especially with their spin to put a good slant on things (which is more than capable of fooling me!).
