Stock Valuation Analysis Powerpoint Presentation Slides

So intrinsic valuation is basically digging into what a company's actually worth - cash flow, earnings, assets, all that fundamental stuff. Extrinsic is more about market vibes and what everyone else thinks it's worth right now. Like comparing P/E ratios to similar companies or doing technical analysis. Markets can be pretty crazy sometimes though, so extrinsic doesn't always make sense. I'd probably start with intrinsic to figure out the real value first. Then check extrinsic to see if there's good timing or if the market's being weird about it.

So basically, discount rates and present value move in opposite directions. Higher discount rate = lower present value of future cash flows. Picture it as compound interest flipped around - if you want bigger returns, you're saying future money isn't worth as much today. Stock prices usually drop when rates climb because people are being harsher about what future earnings are actually worth right now. Honestly, this is why I always run different rate scenarios when I'm valuing anything. Even tiny changes can completely flip whether you think something's a buy or not.

So P/E ratio is just stock price divided by earnings per share - shows how much people will pay for every dollar the company makes. High P/E usually means investors expect big growth (or they're being way too optimistic, tbh). Low P/E could be a steal or a red flag that something's wrong with the business. You gotta compare it to other companies in the same industry though. Also check what that company's P/E has been historically. That's when you start seeing if it's actually cheap or expensive.

So comparables are basically your sanity check - they show what the market's actually paying for similar companies. You'll look at P/E ratios, EV/EBITDA, growth rates across peer companies to see if your stock is cheap or expensive. Makes it way easier to defend your analysis too when you've got real benchmarks. The tricky part? Finding truly comparable companies, not just random ones in the same industry. I usually start with 3-5 solid peers and build out from there. It's honestly one of the most useful tools once you get the hang of it.

DCF has some major blind spots you should know about. The biggest issue? You're basically guessing future cash flows, growth rates, and discount rates - and even Wall Street pros get this wrong constantly. Tiny tweaks to these numbers can completely flip your valuation, which is honestly pretty frustrating. Companies with choppy earnings or those in fast-moving industries don't play nice with DCF either. It also misses market psychology and timing stuff that moves stocks day-to-day. Don't rely on it alone - combine it with other methods for better results.

Macro stuff totally screws with your valuation numbers, but it's pretty predictable once you get it. Rising rates jack up your discount rates, which kills P/E ratios and DCF values everywhere. Inflation's weird though - pumps up revenue multiples short-term but wrecks your real returns. GDP growth makes higher P/Es look reasonable since everything's moving up. Oh, and currency swings hit international stocks way harder than most people realize, especially with P/B comparisons. Honestly, I learned this the hard way last year. Don't just use historical averages - you've got to adjust your assumptions for whatever macro environment we're actually in right now.

Terminal value is massive in DCF - usually like 60-80% of your total valuation, so if you screw this up you're basically done. It's what the company's worth after your forecast period ends (year 6+) when projecting specific cash flows gets pretty unrealistic. Most people use either perpetuity growth or exit multiples to calculate it. Here's the thing though - this is where every valuation argument starts because tweaking your terminal growth rate even slightly can completely change your answer. I learned this the hard way in my first banking gig. Always run sensitivity analysis and show different scenarios to whoever you're presenting to.

Management quality can make or break your investment, even if the financials look solid. I've watched decent companies crash because of terrible leadership decisions - WeWork's whole Adam Neumann disaster comes to mind. But great CEOs? They'll often create way more value than the basic metrics show. Check their track record during both boom times and when shit hits the fan. How do they communicate with investors? Are they smart about spending company money? Do they actually know their industry? Strong leadership usually means better strategy and growth, which justifies paying higher multiples. Numbers tell part of the story, but management tells you where it's heading.

Honestly, tech companies are kinda wild with valuation since most don't even make money yet. So you're looking at EV/Revenue and P/S ratios mostly. SaaS companies are literally obsessed with Price/Sales - it's like their holy grail metric. Old school industries? They've got actual profits, so P/E and EV/EBITDA work fine. P/B too since they have real assets you can touch. Once tech companies start making consistent money, PEG ratios become useful for the growth factor. My advice: stick to revenue multiples for unprofitable companies, then switch to earnings-based once they're profitable. Don't mix and match or you'll get confused.

Rates going up? Tech and growth stocks get crushed first - their future profits just aren't worth as much anymore. Banks love it though, they make more on loans. REITs and utilities tank since people treat them like bonds. Consumer stuff struggles too because everything costs more to finance. Honestly, I learned this the hard way in 2022 when my tech holdings got destroyed. Short sentences work better here. Financial stocks are probably your safest bet when rates climb, but don't go crazy with sector bets.

Oh totally, sentiment trumps fundamentals all the time. Like you'll see stocks crash on random news that barely affects their actual business. Or look at those meme stocks - complete garbage companies but they moon anyway because Reddit went wild. Honestly it's just emotions beating logic in the short run. But here's the thing - good fundamentals do matter eventually. Sometimes that's next month, sometimes it's two years later (which sucks if you're impatient like me). So yeah, you gotta watch both. Amazing financials won't help if everyone's panicking.

Yeah, definitely include dividends in your models - they're actual cash going back to you as a shareholder. I usually either do a dividend discount model where you calculate present value of future payments, or just add the expected yield to my total return calculations. DCF gets a bit messy since you don't want to count the same cash twice, but honestly the main thing is staying consistent with whatever approach you pick. Check out their dividend history first though - some companies are way too generous and end up cutting later.

Since you've got no earnings to work with, revenue multiples are probably your best bet - just compare price-to-sales ratios with similar companies. You could also try discounted cash flow using future projections, though that gets tricky with startups. Asset valuation works if they actually own stuff worth something. Honestly? Startup valuation is half art, half science. Look at recent funding rounds for comparable companies - that'll give you a reality check. The venture capital method works too if you can estimate exit value. Just gather data on companies in the same industry and stage first.

Yeah so basically multinationals get crushed because they're exposed everywhere - currency swings, supply chains getting wrecked, new regulations popping up. Investors freak out and assume the worst case scenario (which honestly makes sense). Companies in sketchy regions obviously get hit hardest, but even well-diversified ones see their valuations tank when global stuff heats up. The market just prices in maximum chaos until things calm down. I'd check where each company makes their money geographically. Then just think through how different political disasters would mess with their cash flows in each spot.

So buybacks usually pump up stock prices because there are fewer shares floating around - makes earnings per share look better even when profits haven't actually grown. Management's basically saying "hey, we think our stock is cheap right now" which investors love to hear. But real talk, sometimes they're just doing buybacks because they literally don't know what else to do with their cash lol. You gotta check if they're buying at decent prices though. And make sure the company isn't falling apart underneath. Don't just buy something because they're doing buybacks - that's not enough on its own.