Unveiling C-Com Satellite Systems' Intrinsic Value: A Deep Dive

C-Com Satellite Systems Inc. (CVE:CMI) is a prominent player in the satellite communication industry, and understanding its intrinsic value is crucial for investors. This article delves into the methodology used to calculate C-Com's intrinsic value, its historical trends, and its comparison with industry peers.

C-Com's intrinsic value is calculated using a valuation model based on normalized Free Cash Flow (FCF) and Book Value. This method smooths out the free cash flow over the past 6-7 years, multiplies the results by a growth multiple, and adds a portion of Total Stockholders Equity. The formula is as follows:

Intrinsic Value: Projected FCF = (Growth Multiple * Free Cash Flow (6 year avg) + 0.8 * Total Stockholders Equity (most recent)) / Shares Outstanding (Diluted Average)

As of October 17, 2024, C-Com's Intrinsic Value: Projected FCF is $0.53, with a stock price of $0.99. This results in a Price-to-Intrinsic-Value-Projected-FCF ratio of 1.9. To assess this valuation, we can compare it to C-Com's historical range and industry median.

C-Com's current Price-to-Intrinsic-Value-Projected-FCF ratio of 1.9 is within its historical range of 0.86 to 4.02. However, it is higher than the industry median of 1.41, indicating that C-Com may be relatively overvalued compared to its peers in the Hardware industry.

The key drivers of C-Com's Intrinsic Value: Projected FCF are its normalized Free Cash Flow and Book Value. Over time, fluctuations in these components have contributed to the changes in C-Com's intrinsic value. For instance, an increase in FCF or Book Value can lead to a higher intrinsic value, while a decrease can result in a lower intrinsic value.

In conclusion, C-Com Satellite Systems' intrinsic value is calculated using a unique valuation model that considers normalized Free Cash Flow and Book Value. While C-Com's current valuation is within its historical range, it is higher than the industry median. Investors should closely monitor the key drivers of C-Com's intrinsic value and consider its relative valuation when making investment decisions.