Enterprise Value Calculations

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  • updated
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I'm curious what is going into SA's Enterprise Value calculations for each stock. I'm doing a comps analysis for an article, but it appears the EV totals are not matching up with the standard (Market Value + Debt +Minority Interest + Preferred Stock)-(Cash & Cash Equivalent) calculation. Are other types of liabilities such as capital leases/similar obligations being added to the EV?

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Leonard Nelson

Yes, I agree, from what I can tell, the EV number is flat out wrong for many stocks.  Look at WING (Wingstop, inc.) today.  1.4B market cap + 140M of debt and 9m of cash = 1.54B Enterprise value.  

The key data section shows 1.1B EV.


Here is a screenshot:



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SA Admin Daniel Hochman
  • Under review

Hi,


Thanks for reporting this issue. We will speak with our data provider and get back to you.

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The calculation is:


Market Value           
- Cash                       
+ Total Debt              
+ Preferred Equity     
+ Minority Interest    


The data for WING is outdated and they will update. Which other stocks do you see the wrong data?




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Leonard Nelson

Thanks Daniel.  I only noticed one.  I will keep an eye out, because I like to use EV/EBITDA as my core valuation metric.  Seems odd that one stock would show the wrong calculation and not other stocks.

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Every equity we review on your site has an incorrect Enterprise Value and therefore erroneous EV/Sales, EV/ EBIT, and EV/EBITDA.

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Quote from Extreme Value Investor

Every equity we review on your site has an incorrect Enterprise Value and therefore erroneous EV/Sales, EV/ EBIT, and EV/EBITDA.

Hi,


Our EV value is updated quarterly. Is it possible that's where you see the discrepancies? We are soon going to make this a daily number (as it should be). 


Thanks,

Daniel

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Leonard Nelson

Daniel - 


Enterprise Value is still showing up wrong!!! I posted this error eight months ago.   It is a pretty serious error that should be prioritized.  If that is the issue (only chainging it quarterly), please fix it ASAP.  A lot of people use EV/EBITDA as their primary valuation metric, and it is widely accepted and widely used.  You could be leading people to make bad investment decisions.   


-Leonard 

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This is a high priority issue for us and we are working on it. 

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Was this ever fixed? The EV calculation still appears to be wrong. For example, APPL's current MV is $2301.48. Cash is 76.83, Total Debt is 112.04. They have no preferred stock or minority interest - so this is simple: 2301.48 - 76.83 + 112.04 = 2336.69. However SA has EV at 2217.95. A HUGE difference! I am using the current numbers. I pay a lot for this subscription. I need a service that gets this right as I use EV as my chief metric. PLEASE FIX.

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nka244

Yeah still an issue with virtually every company... will this ever be fixed