Results a bit underwhelming.
Remember that the franchise runs out in 19 years. This is not an ad infinitum business.
Let's be generous and say $20m per annum cashflow. Let's also assume that the growth rate roughly equals the discount rate of 10%. The cashflow is worth roughly $180m over the life of the franchise, assuming everything holds steady.
Market cap is now $120m, debt is $100m, total EV is $220m which is more than cashflow stream of $180m. I suppose you need to value the probability of Yum extending the franchise after 19 years.
Looks very marginal to me.
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Last
$9.15 |
Change
0.050(0.55%) |
Mkt cap ! $1.079B | |||
| Open | High | Low | Value | Volume |
| $9.11 | $9.19 | $9.07 | $1.837M | 201.3K |
Buyers (Bids)
| No. | Vol. | Price($) |
|---|---|---|
| 1 | 500 | $9.07 |
Sellers (Offers)
| Price($) | Vol. | No. |
|---|---|---|
| $9.19 | 8529 | 2 |
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