Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Paramount Global, FCFE calculation
US$ in millions
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial trajectory between 2018 and 2022 is characterized by a severe deterioration in cash generation capabilities, transitioning from a period of strong liquidity to significant cash consumption. This decline is evident in both operating cash flows and free cash flow to equity, with a sharp reversal occurring after 2020.
- Net Cash Flow from Operating Activities
- Operating cash flows remained positive from 2018 through 2020, reaching a peak of 2,215 million US dollars in 2020. However, a substantial downward trend followed, with a decrease to 835 million US dollars in 2021 and a transition to a negative position of 142 million US dollars by December 31, 2022.
- Free Cash Flow to Equity (FCFE)
- FCFE demonstrated extreme volatility over the five-year period. After peaking at 2,659 million US dollars in 2020, the metric plummeted to negative 1,691 million US dollars in 2021 and further declined to negative 2,502 million US dollars in 2022. The total variance between the 2020 peak and the 2022 trough represents a decrease of over 5,100 million US dollars.
- Operational and Equity Cash Flow Divergence
- A critical divergence is observed between operating cash flows and FCFE starting in 2021. While operating cash flow remained positive in 2021, FCFE became deeply negative, suggesting that capital expenditures or debt repayments significantly exceeded the cash generated from core business operations. This gap widened further in 2022 as both metrics entered negative territory.
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Price to FCFE Ratio, Current
Paramount Global, current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 651,557,231 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in millions) | (2,502) |
| FCFE per share | -3.84 |
| Current share price (P) | 16.40 |
| Valuation Ratio | |
| P/FCFE | — |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Alphabet Inc. | 32.86 |
| Comcast Corp. | 5.21 |
| Meta Platforms Inc. | 21.05 |
| Netflix Inc. | 35.29 |
| Walt Disney Co. | 31.35 |
| P/FCFE, Sector | |
| Media & Entertainment | 56.34 |
| P/FCFE, Industry | |
| Communication Services | 68.54 |
Based on: 10-K (reporting date: 2022-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Paramount Global, historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 650,516,853 | 648,584,674 | 619,606,133 | 613,739,990 | 372,969,983 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in millions)2 | (2,502) | (1,691) | 2,659) | 484) | 1,255) | |
| FCFE per share3 | -3.85 | -2.61 | 4.29 | 0.79 | 3.36 | |
| Share price1, 4 | 23.50 | 35.99 | 65.60 | 29.29 | 50.64 | |
| Valuation Ratio | ||||||
| P/FCFE5 | — | — | 15.29 | 37.14 | 15.05 | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Alphabet Inc. | 22.91 | 29.75 | — | — | — | |
| Comcast Corp. | 12.26 | 27.57 | — | — | — | |
| Meta Platforms Inc. | 17.26 | 16.84 | — | — | — | |
| Netflix Inc. | 176.92 | — | — | — | — | |
| Walt Disney Co. | — | — | 18.20 | — | — | |
| P/FCFE, Sector | ||||||
| Media & Entertainment | 23.67 | 29.77 | — | — | — | |
| P/FCFE, Industry | ||||||
| Communication Services | 31.86 | 26.52 | — | — | — | |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
1 Data adjusted for splits and stock dividends.
3 2022 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= -2,502,000,000 ÷ 650,516,853 = -3.85
4 Closing price as at the filing date of Paramount Global Annual Report.
5 2022 Calculation
P/FCFE = Share price ÷ FCFE per share
= 23.50 ÷ -3.85 = —
6 Click competitor name to see calculations.
An analysis of the financial metrics from 2018 to 2022 reveals a period of significant volatility in both equity valuation and free cash flow to equity (FCFE). While the initial years were characterized by positive cash generation and calculable valuation multiples, the latter part of the period shows a sharp deterioration in cash flow performance and a corresponding decline in share price.
- Share Price Volatility
- The share price exhibited substantial fluctuations over the five-year period. After a decline in 2019, the price peaked at US$ 65.60 in 2020. Subsequently, a consistent downward trend emerged, with the price falling to US$ 35.99 in 2021 and reaching a period low of US$ 23.50 by the end of 2022, representing a significant loss in market capitalization from the 2020 peak.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE per share demonstrated a volatile trajectory, remaining positive from 2018 through 2020, with a peak of US$ 4.29 in 2020. A critical pivot occurred in 2021, as FCFE per share turned negative to -US$ 2.61, further deteriorating to -US$ 3.85 in 2022. This shift indicates that cash outflows, likely driven by capital expenditures or debt servicing, exceeded the cash generated from operations.
- P/FCFE Ratio Interpretation
- The P/FCFE ratio remained meaningful only while FCFE was positive. A spike to 37.14 was observed in 2019, driven primarily by a sharp contraction in FCFE per share relative to the share price. By 2020, the ratio normalized to 15.29. For the 2021 and 2022 fiscal years, the ratio is absent, as the transition to negative FCFE renders the P/FCFE metric mathematically non-meaningful for traditional valuation purposes.
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