Editor's note: This article has been corrected. The original discounted cash flow model on Dell contained an error in determining the stock's implied value. Operating income was erroneously included in the calculation of unlevered free cash flow. As a result, other adjustments were required to arrive at a justifiable price. In this case, that meant changes to the forecasts for gross margin, capital spending and acquisitions. The new implied price is $13.60, compared with the initial per-share value of $13.61.
Dell (DELL) has been making headlines recently following reports it could be nearing a deal to go private for a price in the neighborhood of $13 to $14 a share. Based on Yahoo Finance’s analysis, that’s about the right price. Using a discounted cash flow projection, our model puts an implied value of $13.60 on the PC maker’s shares.
While Dell still has substantial revenue, currently above $60 billion a year, its stock has been sluggish for years and hasn't been above $20 sinceRead More »from What’s Dell Worth? Let’s Call It $13.60 a Share