Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Axon Enterprise, Inc. (NASDAQ:AXON) as an investment opportunity by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex.
We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.
Check out our latest analysis for Axon Enterprise
The Model
We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.
Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate:
10-year free cash flow (FCF) forecast
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
Levered FCF ($, Millions) | US$135.5m | US$171.4m | US$204.2m | US$232.8m | US$257.0m | US$277.1m | US$294.0m | US$308.2m | US$320.4m | US$331.2m |
Growth Rate Estimate Source | Analyst x5 | Est @ 26.53% | Est @ 19.16% | Est @ 13.99% | Est @ 10.38% | Est @ 7.84% | Est @ 6.07% | Est @ 4.83% | Est @ 3.97% | Est @ 3.36% |
Present Value ($, Millions) Discounted @ 5.4% | US$128 | US$154 | US$174 | US$188 | US$197 | US$202 | US$203 | US$202 | US$199 | US$195 |
("Est" = FCF growth rate estimated by Simply Wall St)
Present Value of 10-year Cash Flow (PVCF) = US$1.8b
The second stage is also known as Terminal Value, this is the business's cash flow after the first stage. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 1.9%. We discount the terminal cash flows to today's value at a cost of equity of 5.4%.
Terminal Value (TV)= FCF2032 × (1 + g) ÷ (r – g) = US$331m× (1 + 1.9%) ÷ (5.4%– 1.9%) = US$9.6b
Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$9.6b÷ ( 1 + 5.4%)10= US$5.7b
The total value is the sum of cash flows for the next ten years plus the discounted terminal value, which results in the Total Equity Value, which in this case is US$7.5b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of US$98.8, the company appears about fair value at a 6.7% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind.

NasdaqGS:AXON Discounted Cash Flow July 27th 2022
The Assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Axon Enterprise as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 5.4%, which is based on a levered beta of 0.825. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Next Steps:
Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. It's not possible to obtain a foolproof valuation with a DCF model. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For example, changes in the company's cost of equity or the risk free rate can significantly impact the valuation. For Axon Enterprise, we've put together three additional elements you should look at:
- Risks: Every company has them, and we've spotted 4 warning signs for Axon Enterprise (of which 1 is a bit concerning!) you should know about.
- Future Earnings: How does AXON's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart.
- Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!
PS. Simply Wall St updates its DCF calculation for every American stock every day, so if you want to find the intrinsic value of any other stock just search here.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
今天我們將簡單介紹一下評估Axon Enterprise,Inc.(納斯達克股票代碼:AXON)作為投資機會的吸引力的估值方法,方法是將預期的未來現金流折現為今天的價值。實現這一點的一種方法是使用貼現現金流(DCF)模型。它真的沒有那麼多東西,儘管它可能看起來相當複雜。
我們通常認為,一家公司的價值是它未來將產生的所有現金的現值。然而,貼現現金流只是眾多估值指標中的一個,它也並非沒有缺陷。如果你對這類估值還有一些亟待解決的問題,不妨看看Simply Wall St.的分析模型。
查看我們對Axon Enterprise的最新分析
模型
我們將使用兩階段貼現現金流模型,顧名思義,該模型考慮了兩個增長階段。第一階段通常是一個較高的成長期,接近終值,在第二個“穩定增長”階段捕捉到。在第一階段,我們需要估計未來十年為企業帶來的現金流。在可能的情況下,我們使用分析師的估計,但當這些估計不可用時,我們會根據上次估計或報告的價值推斷先前的自由現金流(FCF)。我們假設,自由現金流萎縮的公司將減緩收縮速度,而自由現金流增長的公司在這段時間內的增長速度將放緩。我們這樣做是為了反映出,增長在最初幾年往往比後來幾年放緩得更多。
一般來説,我們假設今天的一美元比未來的一美元更有價值,因此我們需要對這些未來現金流的總和進行貼現,以得出現值估計:
10年自由現金流(FCF)預測
| 2023 | 2024 | 2025 | 2026 | 2027 | 2028 | 2029 | 2030 | 2031 | 2032 |
槓桿式FCF(百萬美元) | 1.355億美元 | 1.714億美元 | 2.042億美元 | 2.328億美元 | 2.57億美元 | 2.771億美元 | 2.94億美元 | 3.082億美元 | 3.204億美元 | 3.312億美元 |
增長率預估來源 | 分析師X5 | Est@26.53% | Est@19.16% | Est@13.99% | Est@10.38% | Est@7.84% | EST@6.07% | Est@4.83% | Est@3.97% | Est@3.36% |
現值(美元,百萬)貼現@5.4% | 128美元 | 154美元 | 174美元 | 188美元 | 197美元 | 202美元 | 203美元 | 202美元 | 199美元 | 195美元 |
(“EST”=Simply Wall St.預估的FCF成長率)
10年期現金流現值(PVCF)=18億美元
第二階段也被稱為終端價值,這是企業在第一階段之後的現金流。戈登增長公式用於計算終端價值,其未來年增長率等於10年期政府債券收益率1.9%的5年平均水平。我們以5.4%的權益成本將終端現金流貼現到今天的價值。
終端值(TV)=FCF2032×(1+g)?(r-g)=3.31億美元×(1+1.9%)?(5.4%-1.9%)=96億美元
終值現值(PVTV)=TV/(1+r)10=96億美元?(1+5.4%)10=57億美元
總價值是未來十年的現金流總和加上貼現的終端價值,這導致了總股本價值,在這種情況下是75億美元。最後一步是將股權價值除以流通股數量。與目前98.8美元的股價相比,該公司的公允價值似乎比目前的股價有6.7%的折扣。然而,估值是不精確的工具,更像是一臺望遠鏡--移動幾度,就會到達另一個星系。一定要記住這一點。

納斯達克:Axon貼現現金流2022年7月27日
假設
現在,貼現現金流最重要的投入是貼現率,當然還有實際現金流。投資的一部分是你自己對一家公司未來業績的評估,所以你自己試一試計算,檢查你自己的假設。DCF也沒有考慮一個行業可能的週期性,也沒有考慮一家公司未來的資本要求,因此它沒有給出一家公司潛在業績的全貌。鑑於我們將Axon Enterprise視為潛在股東,股權成本被用作貼現率,而不是佔債務的資本成本(或加權平均資本成本,WACC)。在這個計算中,我們使用了5.4%,這是基於槓桿率為0.825的測試版。貝塔係數是衡量一隻股票相對於整個市場的波動性的指標。我們的貝塔係數來自全球可比公司的行業平均貝塔係數,強制限制在0.8到2.0之間,這是一個穩定業務的合理範圍。
接下來的步驟:
雖然貼現現金流的計算很重要,但它只是一家公司需要評估的眾多因素之一。用貼現現金流模型不可能獲得萬無一失的估值。你最好應用不同的案例和假設,看看它們會如何影響公司的估值。例如,公司權益成本或無風險利率的變化可能會對估值產生重大影響。對於Axon Enterprise,我們提供了三個您應該關注的附加元素:
- 風險:每家公司都有,我們已經發現了Axon Enterprise的4個警告標誌(其中1個有點令人擔憂!)你應該知道。
- 未來收益:Axon的增長率與同行和更廣泛的市場相比如何?通過與我們的免費分析師增長預期圖表互動,更深入地挖掘分析師對未來幾年的共識數字。
- 其他穩固的企業:低債務、高股本回報率和良好的過去業績是強勁業務的基礎。為什麼不探索我們具有堅實商業基本面的股票的互動列表,看看是否有其他您可能沒有考慮過的公司!
PS.Simply Wall St.每天更新每隻美國股票的貼現現金流計算,所以如果你想找出任何其他股票的內在價值,只需搜索此處。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。