What Percentage of Shutterfly’s Stock Price Can Be Attributed To Growth?

June 6th, 2016 by Trefis Team
+0.25%
Upside
50.97
Market
51.10
Trefis
SFLY: Shutterfly logo
SFLY
Shutterfly

In this analysis, we quantify the percentage of Shutterfly’s stock that can be attributed to growth.

We know, that a stock’s valuation can be highly influenced by future expectations of earnings growth. However, in theory, if a company sees no growth opportunities it should distribute all its earnings as dividends to its shareholders. Assuming that a company pays all earnings as dividends for the rest of the period, we can calculate Present Value of Growth Opportunity (PVGO) of a stock from the formula given below:

Screen Shot 2016-05-26 at 3.36.47 pm

Notes: For more details about the calculation for Present Value of Growth Opportunity please refer this link.

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Shutterfly