Price to FCFE (P/FCFE)
Free Cash Flow to Equity (FCFE)
Yahoo! Inc., FCFE calculation
US$ in thousands
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
The financial performance between 2012 and 2016 is characterized by extreme volatility in both operational cash generation and the cash available to equity holders. A pattern of sharp fluctuations is evident, with periods of substantial cash inflows alternating with deep deficits, indicating an unstable cash flow profile over the five-year period.
- Net Cash from Operating Activities
- Operating cash flows shifted from a deficit of US$ 281.6 million in 2012 to a recovery of US$ 1.20 billion in 2013. Following a slight contraction to US$ 896.7 million in 2014, a severe downturn occurred in 2015, where net cash provided by operating activities plummeted to negative US$ 2.38 billion. A strong rebound followed in 2016, with the figure returning to positive US$ 1.25 billion.
- Free Cash Flow to Equity (FCFE) Trends
- FCFE exhibited more pronounced swings than operating cash flows. After an initial deficit of US$ 790.9 million in 2012, FCFE peaked in 2013 at US$ 2.35 billion. This was followed by a sharp decline to US$ 608.2 million in 2014 and a critical deficit of US$ 2.90 billion in 2015. By 2016, FCFE recovered to a positive position of US$ 1.26 billion.
- Cash Flow Correlation and Variance
- A direct correlation is observed between operating cash flows and FCFE, as both metrics trended in the same direction annually. However, the variance between the two is notable; for instance, in 2013, FCFE significantly exceeded operating cash flows, suggesting a substantial influx of cash from sources other than operations, such as net borrowing or the sale of assets. Conversely, in 2015, the FCFE deficit was deeper than the operating cash flow deficit, indicating that capital expenditures or debt repayments further strained the cash available to equity holders during that period.
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Price to FCFE Ratio, Current
Yahoo! Inc., current P/FCFE calculation, comparison to benchmarks
| No. shares of common stock outstanding | 958,198,997 |
| Selected Financial Data (US$) | |
| Free cash flow to equity (FCFE) (in thousands) | 1,258,996) |
| FCFE per share | 1.31 |
| Current share price (P) | 49.49 |
| Valuation Ratio | |
| P/FCFE | 37.67 |
| Benchmarks | |
| P/FCFE, Competitors1 | |
| Accenture PLC | 9.44 |
| Adobe Inc. | 9.27 |
| AppLovin Corp. | 23.19 |
| Cadence Design Systems Inc. | 53.85 |
| Datadog Inc. | 224.73 |
| International Business Machines Corp. | 16.16 |
| Intuit Inc. | 9.20 |
| Microsoft Corp. | 62.20 |
| Oracle Corp. | 21.07 |
| Palantir Technologies Inc. | 177.78 |
| Palo Alto Networks Inc. | 64.95 |
| Salesforce Inc. | 9.24 |
| ServiceNow Inc. | 23.44 |
| Synopsys Inc. | 5.70 |
| Workday Inc. | 17.37 |
Based on: 10-K (reporting date: 2016-12-31).
1 Click competitor name to see calculations.
If the company P/FCFE is lower then the P/FCFE of benchmark then company is relatively undervalued.
Otherwise, if the company P/FCFE is higher then the P/FCFE of benchmark then company is relatively overvalued.
Price to FCFE Ratio, Historical
Yahoo! Inc., historical P/FCFE calculation, comparison to benchmarks
| Dec 31, 2016 | Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | ||
|---|---|---|---|---|---|---|
| No. shares of common stock outstanding1 | 956,487,217 | 946,811,547 | 936,120,954 | 1,009,392,339 | 1,101,295,389 | |
| Selected Financial Data (US$) | ||||||
| Free cash flow to equity (FCFE) (in thousands)2 | 1,258,996) | (2,902,120) | 608,195) | 2,346,910) | (790,860) | |
| FCFE per share3 | 1.32 | -3.07 | 0.65 | 2.33 | -0.72 | |
| Share price1, 4 | 46.24 | 31.79 | 44.28 | 38.67 | 21.94 | |
| Valuation Ratio | ||||||
| P/FCFE5 | 35.13 | — | 68.15 | 16.63 | — | |
| Benchmarks | ||||||
| P/FCFE, Competitors6 | ||||||
| Accenture PLC | — | — | — | — | — | |
| Adobe Inc. | — | — | — | — | — | |
| AppLovin Corp. | — | — | — | — | — | |
| Cadence Design Systems Inc. | — | — | — | — | — | |
| Datadog Inc. | — | — | — | — | — | |
| International Business Machines Corp. | — | — | — | — | — | |
| Intuit Inc. | — | — | — | — | — | |
| Microsoft Corp. | — | — | — | — | — | |
| Oracle Corp. | — | — | — | — | — | |
| Palantir Technologies Inc. | — | — | — | — | — | |
| Palo Alto Networks Inc. | — | — | — | — | — | |
| Salesforce Inc. | — | — | — | — | — | |
| ServiceNow Inc. | — | — | — | — | — | |
| Synopsys Inc. | — | — | — | — | — | |
| Workday Inc. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31).
1 Data adjusted for splits and stock dividends.
3 2016 Calculation
FCFE per share = FCFE ÷ No. shares of common stock outstanding
= 1,258,996,000 ÷ 956,487,217 = 1.32
4 Closing price as at the filing date of Yahoo! Inc. Annual Report.
5 2016 Calculation
P/FCFE = Share price ÷ FCFE per share
= 46.24 ÷ 1.32 = 35.13
6 Click competitor name to see calculations.
The share price exhibited a general upward trajectory between 2012 and 2016, increasing from $21.94 to $46.24. However, this appreciation occurred alongside significant volatility in Free Cash Flow to Equity (FCFE) per share, which fluctuated between positive and negative values throughout the period.
- FCFE per Share Volatility
- Cash flow generation remained inconsistent, characterized by deficit periods in 2012 (-$0.72) and 2015 (-$3.07). Positive FCFE was recorded in 2013, 2014, and 2016, with the highest per-share value occurring in 2013 at $2.33.
- P/FCFE Ratio Trends
- The P/FCFE ratio was not applicable in 2012 and 2015 due to negative cash flows. A moderate valuation of 16.63 was observed in 2013, which surged to 68.15 in 2014. This spike was the result of a simultaneous increase in share price and a sharp decline in FCFE per share from $2.33 to $0.65. By 2016, the ratio settled at 35.13 as FCFE returned to a positive value of $1.32.
- Valuation Divergence
- A notable divergence is observed between the market's valuation of the company and its ability to generate cash for equity holders. Despite the share price reaching its peak in 2016, the P/FCFE ratio remained significantly higher than the 2013 level, indicating that the market price grew at a faster rate than the recovery of free cash flows.
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