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As of today (2024-05-19), DZS's intrinsic value calculated from the Discounted Cash Flow model is $-23.59.
Note: Discounted Cash Flow model is only suitable for predictable companies (Business Predictability Rank higher than 1-Star). If the company's predictability rank is 1-Star or Not Rated, result may not be accurate due to the low predictability of business and the data will not be stored into our database.
DZS's Predictability Rank is Not Rated. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.
Margin of Safety (FCF Based) using Discounted Cash Flow model for DZS is N/A.
The industry rank for DZS's Intrinsic Value: DCF (FCF Based) or its related term are showing as below:
The historical data trend for DZS's Intrinsic Value: DCF (FCF Based) can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
DZS Annual Data | |||||||||||||||||||||
Trend | Dec13 | Dec14 | Dec15 | Dec16 | Dec17 | Dec18 | Dec19 | Dec20 | Dec21 | Dec22 | |||||||||||
Intrinsic Value: DCF (FCF Based) | Get a 7-Day Free Trial | - | - | - | - | - |
DZS Quarterly Data | ||||||||||||||||||||
Jun18 | Sep18 | Dec18 | Mar19 | Jun19 | Sep19 | Dec19 | Mar20 | Jun20 | Sep20 | Dec20 | Mar21 | Jun21 | Sep21 | Dec21 | Mar22 | Jun22 | Sep22 | Dec22 | Mar23 | |
Intrinsic Value: DCF (FCF Based) | Get a 7-Day Free Trial | - | - | - | - | - |
For the Communication Equipment subindustry, DZS's Price-to-DCF (FCF Based), along with its competitors' market caps and Price-to-DCF (FCF Based) data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
For the Hardware industry and Technology sector, DZS's Price-to-DCF (FCF Based) distribution charts can be found below:
* The bar in red indicates where DZS's Price-to-DCF (FCF Based) falls into.
This is the intrinsic value calculated from the Discounted Cash Flow model with default parameters. In a discounted cash flow model, the future cash flow is estimated based on a cash flow growth rate and a discount rate. The cash flow of the future is discounted to its current value at the discount rate. All of the discounted future cash flow is added together to get the current intrinsic value of the company.
Usually a two-stage model is used when calculating a stock's intrinsic value using a discounted cash flow model. The first stage is called the growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.
GuruFocus DCF calculator is a two-stage model. The default values are defined as:
1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.42%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.
2. Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year FCF Growth Rate (Per Share). In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year FCF Growth Rate (Per Share). If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year FCF Growth Rate (Per Share).
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=>
DZS's average Free Cash Flow Growth Rate in the past
3 years was 0.00%,
which is less than 5%. GuruFocus defaults => Growth Rate: 5%
3. Years of Growth Stage: y1 = 10
4. Terminal Growth Rate: g2 = 4%
5. Years of Terminal Growth: y2 = 10
6. Free Cash Flow per Share: fcf = $-2.044.
However, GuruFocus DCF calculator is actually a Discounted Earnings calculator, the EPS without NRI is used as the default. The reason we are doing this is we found that historically stock prices are more correlated with earnings than free cash flow.
All of the default settings can be changed and the results are calculated automatically.
DZS's Intrinsic Value: DCF (FCF Based) for today is calculated as
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[(1+g1)/(1+d) | + | (1+g1)^2/(1+d)^2 | + | ... | + | (1+g1)^10/(1+d)^10] |
+ | (1+g1)^10/(1+d)^10 | * | [(1+g2)/(1+d) | + | (1+g2)^2/(1+d)^2 | + | ... | + | (1+g2)^10/(1+d)^10]} |
set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694
Intrinsic Value: DCF (FCF Based) | = | Free Cash Flow per Share | * | {[x | + | x^2 | + | ... | + | x^10] | + | x^10 | * | [y | + | y^2 | + | ... | + | y^10]} |
= | Free Cash Flow per Share | * | [x | * | (1-x^10) | / | (1-x) | + | x^10 | * | y | * | (1-y^10) | / | (1-y)] | |||||
= | -2.044 | * | 11.5406 | |||||||||||||||||
= | -23.59 |
Margin of Safety (FCF Based) | = | (Intrinsic Value: DCF (FCF Based) | - | Current Price) | / | Intrinsic Value: DCF (FCF Based) |
= | (-23.59 | - | 1.52) | / | -23.59 | |
= | N/A |
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
DZS (NAS:DZSI) Intrinsic Value: DCF (FCF Based) Explanation
Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Cash Flow model evaluates the companies based on their future earnings power instead of their assets.
Be Aware
What you need to know about the DCF model:
1. The DCF model evaluates a company based on its future earnings powerYou can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.
Thank you for viewing the detailed overview of DZS's Intrinsic Value: DCF (FCF Based) provided by GuruFocus.com. Please click on the following links to see related term pages.
Gunter Reiss | officer: Chief Customer Officer, AEMEA | 2300 ORCHARD PARKWAY, SAN JOSE CA 95131 |
Justin K. Ferguson | officer: Chief Legal Officer | C/O DZS INC., 5700 TENNYSON PARKWAY SUITE 400, PLANO TX 75024 |
Charles D Vogt | director, officer: President & CEO | TEKELEC, 26580 WEST AGOURA ROAD, CALABASAS CA 91302 |
Misty Dawn Kawecki | officer: Chief Financial Officer | C/O DZS INC., 7500 TENNYSON PARKWAY, PLANO TX 75024 |
Barbara Carbone | director | 120 BROADWAY, SUITE 200, SANTA MONICA CA 90401 |
Min Woo Nam | director | C/O ZHONE TECHNOLOGIES, INC., 7195 OAKPORT STREET, OAKLAND CA 94621 |
David R Schopp | director | C/O DASAN ZHONE SOLUTIONS, INC., 7195 OAKPORT ST., OAKLAND CA 94621 |
Choon Yul Yoo | director | C/O DASAN ZHONE SOLUTIONS, INC., 7195 OAKPORT ST., OAKLAND CA 94621 |
Joon Kyung Kim | director | 3200 WILSHIRE BLVD STE 1400, LOS ANGELES CA 90010 |
Matthew W Bross | director | C/O 4 TECHNOLOGY PARK DRIVE, WESTFORD MA 01886 |
Norman L Foust | officer: SVP of Global Supply Chain | C/O CYAN, INC., 1383 N. MCDOWELL BLVD., SUITE 300, PETALUMA CA 94954 |
Miguel Alonso | officer: Chief Product Officer | 5700 TENNYSON PARKWAY, SUITE 400, PLANO TX 75024 |
Thomas Arthur Carter | officer: Chief Customer Officer, AEMEA | 5700 TENNYSON PARKWAY, SUITE 400, PLANO TX 75024 |
Deok Yeon Won | officer: Chief Customer Officer, Asia | 5700 TENNYSON PARKWAY, SUITE 400, PLANO TX 75024 |
Dasan Networks, Inc | 10 percent owner | DASAN TOWER, 49, DAEWANGPANGYO-RO, 644 BEON-GIL, BUNDANG-GU, SEONGNAM-SI GYEONGGI-DO M5 13493 |
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